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Department for Business and Trade: Contingent Liability Notification

I wish to make members aware of the details of a contingent liability guarantee, which will be entered into in favour of Npower in accordance with and pursuant to the Steel Industry (Special Measures) Act 2025 to support British Steel Limited and for the purpose of securing the continued and safe use of blast furnace operation in Scunthorpe.

The guarantee will replace the existing substantially similar credit support that is required by the terms of the underlying supply agreement, and would be in respect of British Steel Limited's payment obligations to Npower. Without such guarantee, British Steel Limited would otherwise be unable to access the bespoke rates they need or 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 will terminate immediately where the Steel Industry (Special Measures) Act ceases to be in force in relation to British Steel Limited and/or where the directions issued under the Steel Industry (Special Measures) Act in relation to British Steel Limited are revoked i.e. when British Steel Limited is no longer operating under HMG's direction.

Authority for any expenditure required under this liability will be sought through the normal procedure. I will be laying a Departmental Minute today containing a description of the liability undertaken.

If, during the period of fourteen 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.