UK government backs British Steel with £500 million rail deal
- The UK Government announced a £500 million deal for British Steel to supply rail track.
- The deal will secure thousands of jobs and stem potential closure of the Scunthorpe steelworks.
- This contract is seen as a crucial investment for the UK steel industry, emphasizing domestic manufacturing.
In March 2025, the Chinese firm Jingye, which had acquired British Steel in 2020, proposed to shut down the Scunthorpe steelworks, which included two blast furnaces critical for steel production. This threat of closure arose despite the UK Government's prior offer of a £500 million co-investment plan aimed at safeguarding jobs and operations at the plant. Following the announcement, the UK Government utilized emergency legislation in April 2025 to take control of British Steel and ensure continued production, as the potential job loss ranged between 2,000 and 2,700 positions. To further solidify the future of the Scunthorpe plant, a landmark £500 million contract between Network Rail and British Steel was finalized. This contract will require British Steel to supply 337,000 tonnes of rail track over five years, significantly contributing to the supply chain for the UK's railway infrastructure. The deal is set to begin on July 1, 2025, with British Steel expected to meet 80% of Network Rail's rail needs, while additional support from other European manufacturers will supplement this supply. Transport Secretary Heidi Alexander emphasized that this agreement signals a transformative shift for British Steel and its workforce in Scunthorpe, marking a continuation of a partnership that has dated back to 1865. The British government's intervention aims to protect thousands of skilled jobs and ensure the long-term future of steel production in the area. Further contracts with European providers are being anticipated to meet specific needs for rail products. Business Secretary Jonathan Reynolds also expressed confidence in this major investment, highlighting its significance not only for British Steel but for the entire UK steelmaking industry. GMB union officials echoed this sentiment, urging for similar commitments in future infrastructure projects to stabilize and grow British Steel’s order base. The overarching goal is to reinforce the UK’s manufacturing capabilities and develop resilient supply chains for essential materials like steel.