By British Steel owner asks for £500m government aid as they face ‘significant challenge’
The Chinese owner of British Steel has reportedly told ministers that two blast furnaces in Scunthorpe are unlikely to be viable without hundreds of millions of pounds of government aid. Jingye Group bought the company out of insolvency in 2020.
The group has asked the government for a ‘rescue package’ of up to £500 million according to The Financial Times.
British Steel employs around 4,000 people with many more working for companies in the supply chain, such as contractors and off-site.
BBC Look North said the company refused to confirm or deny the reports about asking for government aid, but it told them: “Like most other companies we’re facing a significant challenge because of the economic slowdown, surging inflation, and exceptionally high energy and carbon prices.
“We welcome the recent announcement by the UK government to reduce energy costs for businesses and remain in dialogue with officials to ensure we compete on a level playing field with our global competitors.”
The Financial Times also reports that that company warned it is losing about £1 million a day. Representatives of British Steel have met business secretary Jacob Rees-Mogg twice in the past fortnight to discuss the need for aid.
British Steel bosses prepared to ‘make thousands of people redundant’ if ministers reject support
Sky News reported the owners of the site are to seek an unknown amount of financial aid sought, a Jingye Group insider suggested to Sky News that it would need “hundreds of millions of pounds” to keep the Scunthorpe blast furnaces up and running.
Another insider told Sky News that the company was “prepared to make thousands of people redundant” if the package of support is rejected by the government.
It is reported industrial consumers of energy have complained for several months that skyrocketing prices are impacting their ability to continue investing.
A British Steel spokesman said: “We are investing hundreds of millions of pounds in our long-term future but like most other companies we are facing a significant challenge because of the economic slowdown, surging inflation and exceptionally high energy and carbon prices.
“We welcome the recent announcement by the UK government to reduce energy costs for businesses and remain in dialogue with officials to ensure we compete on a level playing field with our global competitors.”
The government confirmed that it was “working at pace with the company to understand the best way forward as it seeks to secure a more sustainable future”.
“We recognise that businesses are feeling the impact of high global energy prices, particularly steel producers, which is why we have announced the Energy Bill Relief Scheme to bring down costs,” a spokesman for the Department for Business, Energy and Industrial Strategy said.
“This is in addition to extensive support we have provided to the steel sector as a whole to help with energy costs, worth more than £780m since 2013.” Sky News reported.
