Full Repayment of HM Government loan by Celsa Steel UK

I would like to update the House on the outcome of a commercial agreement between the Government and Celsa Steel (UK) Ltd, further to the written ministerial statement laid by my right hon. Friend Sir Alok Sharma MP on 2 July 2020.

Throughout the covid-19 pandemic, the Government provided unprecedented support to protect jobs and businesses across the country. The coronavirus job retention scheme supported 1.3 million employers and 11.7 million furloughed jobs and, overall, £80.37 billion worth of loans were approved through covid-related loan schemes.¹

Furthermore, in exceptional circumstances, the Government were also willing to consider bespoke support on a “last resort” basis where a viable company of strategic importance had exhausted all other options available. The Government set an extremely high bar for using taxpayers’ money in this way, and we were clear that any companies seeking Government support should do so only as an absolute last resort.

In 2020, Celsa Steel UK met all the necessary requirements to access such support, including as a key supplier to the construction industry. The Government agreed to provide support to the company, including with legally binding contractual conditions on employment, climate change, tax obligations, and corporate governance.

I am pleased to confirm today that the loan provided to Celsa has been repaid in full and in accordance with all the terms and conditions agreed by the Government in 2020. Those terms have not only protected UK taxpayers’ money but have provided taxpayers with a strong return, commensurate with the circumstances of the loan, including as a lender of last resort.

The support provided by Government saved 1,500 jobs at Celsa and provided the basis for the company to grow further by creating another 300 jobs. This includes c.850 jobs at Celsa’s main site in South Wales.

I am delighted that the Government’s prompt action in 2020 has made such a positive difference, for Celsa Steel UK, for the companies in Celsa’s supply chain, and for the local economy in South Wales.

We have taken wide-ranging actions to support our UK steel industry more broadly. The British industry supercharger, announced in February 2023, will bring energy costs for energy-intensive industries, including steel companies like Celsa, in line with the world’s major economies. Industrial sectors, including steel, have been able to bid into several Government competitive funds to support energy efficiency and decarbonisation. We have updated the steel procurement policy note to create a level playing field for UK steel producers, and we have implemented a robust trade remedies framework to protect domestic industry as well as acting to resolve market access constraints on steel trade with the US and the EU.

I wish to praise the commitment of Celsa’s workforce and management who have transformed the company’s performance since the 2020 crisis. Our focus is now on working with all steel producers, and the wider steel sector, to ensure they continue to deliver high-quality employment and climate change action for the UK.

¹ Government support across the economy during covid included the coronavirus job retention scheme, coronavirus business interruption loan schemes, bounce back loan scheme, and recovery loan scheme.

In total, £70.0 billion was claimed under the coronavirus job retention scheme (CJRS), for claims up to 21 November 2021. In total 11.7 million jobs were furloughed since the scheme began and 1.3 million employers had claimed under the scheme. Overall, £80.37 billion worth of loans were approved across the CBILS, BBLS, CLBILS and recovery loan schemes as of 25 October 2021.

More information is at https://researchbriefings.files.parliament.uk/documents/ CBP-8938/CBP-8938.pdf

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