I wish to make Members aware of the details of a contingent liability guarantee, which will be entered into in favour of SEFE, in accordance with and pursuant to the Steel Industry (Special Measures) Act 2025, to support British Steel Ltd, and for the purpose of securing the continued and safe use of blast furnace operation in Scunthorpe.
The guarantee will replace the existing credit support, be of the same value, is a policy requirement for SEFE, and would be in respect of British Steel Ltd’s payment obligations to SEFE. Without such guarantee, SEFE would not extend the underlying supply contract with British Steel Ltd, leaving British Steel Ltd unable to access a key supply, or British Steel Ltd would only be able to do so on materially worse terms.
The terms of the guarantee ensure that the impact to the public purse is reduced. The guarantee may be terminated by the Department by providing SEFE with 10 business days’ written notice. The effective date of the guarantee is 31 March 2026.
Authority for any expenditure required under this liability will be sought through the normal procedure. I will lay a departmental minute before Parliament today, containing a description of the liability undertaken.
If, during the period of 14 parliamentary sitting days, a member signifies an objection by giving notice of a parliamentary question or by otherwise raising the matter in Parliament, final approval to proceed with incurring the liability will be withheld pending an examination of the objection.
[HCWS1102]