The Minister for Industry (Sarah Jones)
The Government committed to updating Parliament on British Steel every four weeks for the duration of the period of special measures being applied under the Steel Industry (Special Measures) Act 2025.
As the Chancellor set out at spending review on 11 June, this Government faced a choice in April: to let British Steel collapse, or to intervene. We were not prepared to tolerate a situation in which Britain’s steel capacity was critically undermined, or to see another community with a deep industrial heritage lose the pride, prosperity and dignity that industry provides. We are proud of our decision to intervene to save British Steel in Scunthorpe, and the jobs that come with it.
Since my last written ministerial statement on British Steel on 20 May, I have written to several Members to respond to further questions. Work continues to develop an impact assessment and bring forward regulations under section 7 of the Act, which allow the Secretary of State to introduce a compensation scheme for steel undertakings that have received a notice under the Act. We are committed to facilitating ongoing scrutiny of the Government’s use of these powers and, to that end, the Secretary of State has replied to correspondence from the Chair of the Business and Trade Committee, and Baroness Jones will shortly write to the Lords Constitution Committee in response to their report entitled “Fast-track legislation and the Steel Industry (Special Measures) Act 2025”, published on 8 May.
Our intervention in British Steel under the Act has enabled the company to continue to operate two blast furnaces in Scunthorpe, and we have secured sufficient supplies of raw materials to maintain this asset configuration for the coming months. As hon. Members are aware, the redundancy consultation initiated by British Steel’s owners, Jingye, was cancelled shortly after the Government’s legislative intervention, removing the immediate risk to 2,700 jobs, and I am pleased to confirm that British Steel is now seeking to enrol its first apprentices in over 3 years. More than 200 people have applied to become British Steel apprentices as the business seeks to develop its next generation of engineers and technical experts, all based in Scunthorpe.
I am also delighted that British Steel, the UK’s only manufacturer of rail, has secured a new £500 million long-term supply contract with Network Rail. The 5-year agreement has an option to extend for a further 3 years and ensures that British Steel retains its position as principal supplier to Network Rail, the organisation which operates and maintains Britain’s rail infrastructure. British Steel will deliver between 70,000 and 80,000 tonnes of rail a year, all manufactured at Scunthorpe.
Government officials continue to work onsite in Scunthorpe, supporting British Steel’s management team. Our priorities remain continuing production, stabilising operations and remedying critical health and safety issues. Since the Government took control of operations, significant progress has been made to improve safety standards.
We recognise the ongoing interest from Members across both Houses regarding the funding that will be required for the Scunthorpe site. The position remains that all funding will be drawn from existing budgets, within the spending envelope set out by the Government at spring statement 2025. As the Prime Minister and the Chancellor have made clear, the UK's fiscal rules are non-negotiable.
To date, we have provided approximately £100 million for working capital. This covers items such as raw materials, salaries, and addressing unpaid bills, including for SMEs in the supply chain. This does not take into account future revenue. As previously confirmed, the Department for Business and Trade’s accounts for 2025-26 will reflect the financial support that the Department has given to British Steel.
As spending review 2025 has highlighted, this Government are investing for the long-term future of UK steel—from £500 million for Tata Steel in Port Talbot to new nuclear-grade capacity at Sheffield Forgemasters—and we will invest in Scunthorpe’s long-term future. However, we have been clear that there also needs to be private investment to modernise British Steel. Work continues at pace to develop the optimal policy and strategy approach, and we are working closely with Jingye to inform that process.
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