Subsidy call

Hunt urged to step in to save steelworkers’ jobs

British Steel
The Chinese owner of British Steel may shut one of the furnaces

Steelworkers are demanding a new year pledge from the Chancellor to save their jobs after fellow ministers called for a £300m subsidy to keep the blast furnaces at British Steel’s Scunthorpe works in operation.

Grant Shapps, the Business Secretary, and Michael Gove, the Levelling Up Secretary, want Jeremy Hunt to step in and rescue the plant, owned by Chinese firm Jingye.

The company claims the plant is losing £1m a day and has said it will shut down one of its two blast furnaces as early as next month.

Mr Hunt has been told by Cabinet colleagues that British Steel does not have “a viable business” without taxpayers’ support, Sky News reported.

The letter warns: “Closing one blast furnace would be a stepping stone to closure of the second… ­resulting in a highly unstable business model dependent on Chinese steel imports.”

It warns that failure to support the company may cost the government up to £1bn in plant decommissioning costs.

“The local economic impact of closing both blast furnaces is estimated to be in the region of £360m to £640m, with a further £500m to £1bn liability for HMG through compulsory liquidation, insolvency and land liabilities,” it says.

The plant currently employs nearly 4,000 workers. Closure of a blast furnace, one of four in the UK, would lead to the loss of 1,700 jobs immediately. Thousands more jobs in UK manufacturing industries would also be at risk. Closure would make Britain more reliant on imported steel.

Jingye took over the Scunthorpe plant in 2019 and the Chinese government has poured billions into its steel making. It means Beijing now dominates world steel production and has been accused by the US and Europe in particular of dumping steel products at below cost, undermining local producers.

A spokesman for the Department of Business, Energy and Industrial Strategy, said: “The Government is committed to securing a sustainable and competitive future for the UK steel sector and we are working closely with industry to achieve this.”



Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.