Government Has Spent £94 Million on British Steel So Far, Minister Confirms

Since the government took control of British Steel, some in the Conservative Party have expressed concern over the cost it would have to the taxpayer.

A Save our Steel sign at the British Steel site in Scunthorpe, Lincolnshire, England, on April 15, 2025. Darren Staples/PA Wire

The government has spent £94 million on British Steel since taking control of the Scunthorpe steelworks last month, a minister has confirmed.

Business Secretary Jonathan Reynolds told the House of Commons on Thursday that this figure is “considerably less than if we had given a large amount of money to Jingye, or if we had had to deal with the complete loss of the entire British Steel site and business.”

He said that the working capital which has been invested so far has paid the wages of some 2,700 employees and for the raw materials and the operation of the business.

The statement came in response to a question from the opposition on the potential cost to the taxpayer for the government’s takeover of the steelworks.

Green Steel Fund

In March, British Steel owner Jingye announced that it was planning to shut down Scunthorpe’s blast furnaces and opened a consultation on making the workforce redundant.

However, on April 12, parliamentarians passed the Steel Industry (Special Measures) Act, giving the government special powers to direct the company’s board, ensure workers get paid, and order the raw materials needed to keep blast furnaces running.

The government is looking for a private business to invest in Scunthorpe, but has not ruled out full nationalisation, which minister for industry Sarah Jones admitted last month was the “most likely option.”

Reynolds told MPs on Thursday that the funds to support the steelworks will come out of the government’s £2.5 billion Green Steel Fund, which aims to transition the industry towards producing steel using low-carbon methods, such as replacing traditional blast furnaces with electric arc furnaces (EAFs).

He said that at the time the government decided to take over the steelworks, the alternative options would have been more expensive.

One option included allowing the “total collapse” of British Steel, which would have come at a cost of “well over £1 billion” to the Exchequer. The other was to agree to the request from Jingye for £1.2 billion in investment.

“Or [...] as we have done so far, the provision of working capital to British Steel in order to pay wages and continue the purchase of raw materials and the operation of the business,” Reynolds said.

He continued, “Of course, those costs will be incurred by the company, because they will enable it to produce and sell steel.”

‘Could Run Into the Billions’

Since the government took control of British Steel, some in the Conservative Party have expressed concern over the cost this would have to taxpayer, particularly if the current administration opts for full nationalisation.

Shadow minister for business and trade, Andrew Griffith, said it was “widely agreed that the cost of nationalising British Steel could run into the billions.”

A steel worker at one of the blast furnaces at the British Steel site in Scunthorpe, Lincolnshire, England, on April 15, 2025. Darren Staples/PA Wire

Last week, Griffiths called the government’s actions a “botched nationalisation,” saying the government had no plan, and criticised it for not publishing an impact assessment before committing to British Steel’s rescue.

Others, including Reform UK, are pushing for nationalisation.

Reynolds blamed the previous administration for the state of the industry, telling MPs on Thursday: “When we took office, years of Conservative neglect had left our steel industry on the brink, but while others were willing to let the heart of British industry go cold, we were not.

“I welcome the recent conversion of opposition colleagues to an active industrial policy, but make no mistake: while others may talk tough, only Labour can be trusted to act in the interests of British workers.”

New Energy Industries Not Ready

The rescue of British Steel comes amid major changes in Britain’s industrial sector, some as a result of efforts to decarbonise industry.

Earlier this year, the government committed £500 million for the Tata Steel plant in Port Talbot, Wales, to move to an EAF system.

A general view of blast furnaces at the British Steel site in Scunthorpe, Lincolnshire, England, on April 14, 2025. Peter Byrne/PA Wire

Many MPs have raised concerns that as fossil fuel industries shut down, the transition to green jobs is not happening quickly enough, leaving skilled workers unemployed and communities facing economic hardship.

Last week, the SNP’s Kirsty Blackman said more needs to be done to help North Sea oil and gas workers, or else they will go abroad.

Blackman cautioned that this could lead to a critical skills shortage in her constituency, which could impact the government’s plans to expand the UK’s renewable energy sector.

Brian Leishman, the Labour MP for Alloa and Grangemouth, likewise had expressed his concern over the fate of the workers and community built around Grangemouth oil refinery, which is closing this year.

The Labour MP had warned that “jobs will be lost, and the new energy industries are just not ready.”