Written statement: British Steel - May 20

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 (“The Act”).

Government Landmark Achievements and Actions

Since the Oral Ministerial Statement on British Steel on 22 April in the House of Commons, and the repeat Statement on 24 April in the Lords, Minister Gustafsson and I have written to a number of Members to respond to specific questions. I can also confirm that work is underway on developing an impact assessment and on bringing forward regulations under Section 7 of the Act, which allow the Secretary of State to introduce a compensation scheme for steel undertakings affected by the exercise of powers under the Act. The Secretary of State will also reply to correspondence from the Chair of the Business and Trade Committee to enable ongoing scrutiny of the Government's use of these powers.

We have prioritised securing the future of the UK steel sector since our first days in office. As we have shown with the passing of the Act on 12 April, in what was a unique and unprecedented situation, we will not hesitate to take steps to safeguard the future of UK steelmaking, protecting jobs and supply chains.

On 8 May we reached agreement on an Economic Prosperity Deal with the United States, which will save thousands of well paid, high skilled jobs that are vital for our economy. For the steel sector, this deal will see the US remove 25% s232 tariffs on steel for UK exporters.

Yesterday, on 19 May, as part of the substantial package agreed at the EU Summit, we also agreed to work towards linking the UK and EU Emissions Trading Systems, creating the conditions to exempt UK exporters from the EU CBAM – something the steel industry has been seeking to lower the cost of decarbonisation, avoid competitive distortions and boost market confidence. The European Commission has also confirmed that, in a specific product category subject to the EU Steel Safeguard measure, they will restore the UK's country-specific steel quota to historic levels and that this will be reflected in a post-2026 regime. This will ensure that UK producers including British Steel – the UK's largest producer of these goods – will continue to be able to export tariff free at historic trading levels.

British Steel Ltd

Our intervention in British Steel under the Special Measures Act has enabled us to secure the raw materials required to maintain a two-blast furnace operation in Scunthorpe for the coming months. The redundancy consultation initiated by British Steel's owners, Jingye, has also been cancelled, removing the immediate risk to 2,700 jobs.

Government officials remain on-site in Scunthorpe. Our priorities are continuing production, remedying critical health and safety issues, and stabilising operations.

We recognise the considerable interest from Members across both Houses regarding the funding that will be required for the Scunthorpe site. We have been clear 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 remain non-negotiable.

To date, we have provided £94m 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. The Department for Business & Trade's accounts for 2025/26 will reflect the financial support that the department has given to British Steel.

We have also been clear that there will need to be investment to secure British Steel's long-term future – including private investment – in modernisation. That position has not changed. Work continues at pace to develop the optimal policy and strategy approach.

Steel Strategy

This Government stands by our manifesto commitment to spend up to £2.5 billion to rebuild the UK's steel sector, in addition to the £500m we have committed to Tata Steel UK for the transformation of Port Talbot. This is being delivered in part though the National Wealth Fund. The National Wealth Fund is operationally independent, and financing is already accessible to projects that meet the investment principles. Companies across the UK are already engaging with them on projects within the steel sector.

We continue to develop our thinking on the steel strategy. The recent developments in the UK steel industry, including at British Steel, have underscored the need for a steel strategy which represents a long-term vision for a revitalised and sustainable industry and the actions needed to get there. Understanding how the future of British Steel fits into this is crucial – and will take some time to work through.

I have engaged extensively with the steel sector in recent months, visiting sites across the country and participating in roundtable discussions with producers, buyers, and metal recyclers. This has given me insight into emerging opportunities and significant challenges the UK steel industry faces. I have been left with no doubt that the sector is at a critical junction, and it cannot afford to wait any longer for decisive action.

That is why we are now looking at what actions we could take under the steel strategy. We sought views on the issues which we know are important to the sector in the green paper we published on 16 February, such as electricity prices. We are also looking at ways to increase demand for domestic steel (including through public procurement). We are thinking about the best ways to defend the sector from challenging global market conditions on UK producers and unfair trading practises, and how to support the sector through the transition to greener steelmaking to deliver economic growth. Steelmaking is essential for our modern economy, supporting jobs and living standards in the UK's industrial heartlands. We are confident that steel has a bright future in the UK and the full strategy will be published later this year.

We will provide a further update to Parliament on British Steel in June.