Thousands of British manufacturing jobs have today been secured
as the Transport Secretary visited Scunthorpe to finalise a major
rail steel deal between Network Rail and British Steel.
The £500 million five-year contract will see British Steel supply
over 337,000 tonnes of rail track, helping cement the company's
future just two months after the Government took emergency action
to save the Scunthorpe plant from closure.
Visiting the historic steelworks today, Transport Secretary
announced details of a
landmark deal signed between Network Rail and British Steel in an
agreement representing the first major public procurement since
the Government's unprecedented April intervention.
This saw the Prime Minister requesting the recall of Parliament
to pass emergency legislation preventing the immediate shutdown
of Scunthorpe's blast furnaces, protecting vital British
manufacturing jobs.
That decisive action came after British Steel's owners, Jingye
Group, announced plans to shut down the site's blast furnaces and
some other key steelmaking operations, despite months of
negotiations and a £500 million co-investment offer from the
Government.
This news complements the announcement of a new trade deal
between the UK and US which, once implemented, will lower tariffs
and protect thousands of jobs across key sectors, including
steel. The UK was the first and is currently the only country to
have secured such a deal.
The deal demonstrates progress with the Government's wider
industrial strategy to strengthen domestic manufacturing and
supply chains as part of the Plan for Change commitment to drive
economic growth across all regions of the UK.
Transport Secretary said:
"This landmark contract truly transforms the outlook for British
Steel and its dedicated workforce in Scunthorpe, building on its
decades-long partnership with Network Rail to produce rail for
Britain's railways.
"After taking urgent action to step in and save these historic
blast furnaces from closure, we've now helped secure their
long-term future by backing British Steel with meaningful
Government contracts, protecting thousands of skilled
manufacturing jobs in the process.
"This crucial investment in our railway infrastructure shows we
are delivering on our Plan for Change commitment to raise living
standards in every part of the UK and ensure economic growth is
felt by working people in our proud industrial heartlands."
Business Secretary said:
“This is great news for British Steel and a vote of confidence in
the UK's expertise in steelmaking, which will support thousands
of skilled jobs for years to come.
“Following our decisive action to step in and save steelmaking at
Scunthorpe in April, this contract will give the sector the
security to supply the steel we need for the infrastructure of
the future, as part of our Plan for Change.”
Today's Network Rail contract, worth an estimated £500 million,
will start on 1 July, providing the company with 80% of its rail
needs, and builds on the Government's £2.5 billion steel fund
established to revitalise UK steel production over the next five
years.
It forms part of Network Rail's rail supply contracts for the
provision of almost 450,000 tonnes of rail for the next 5 years.
To ensure security of supply, Network Rail is set to award
smaller contracts to some European manufacturers, who will supply
specialist rail products alongside British Steel.
The contracts will see:
- British Steel supply a minimum of 337,000 tonnes of long and
short rail
- A further 80-90,000 tonnes will be provided by other European
manufacturers with deals expected to be announced shortly.
The strategic partnership builds on decades of collaboration
between Network Rail and British Steel, whose Scunthorpe plant
has been producing rail for Britain's railways since 1865.
Network Rail's Group Director for Railway Business
Services, Clive Berrington, who joined the Transport Secretary
for the signing ceremony, said:
“We are committed to buying British where it makes economic sense
to do so and British Steel remain extremely competitive in the
provision of rail and will remain our main supplier in the years
ahead.”
British Steel's Commercial Director for Rail, Craig
Harvey, said:
“We're exceptionally proud to be extending our long-term
strategic partnership with Network Rail with an agreement
demonstrating British Steel's importance to the UK's economy and
infrastructure.
“The contract represents a huge vote of confidence in UK workers
and British industry, underpinning the vital role we play in
ensuring millions of passengers and freight operators enjoy safe,
enjoyable, and timely journeys on Britain's railways.”
