The Chinese owner of British Steel, Jingye Group, has turned down a £500m financial aid package from the UK government, casting uncertainty over thousands of steel industry jobs.
SurgeZirc UK has learned that Business Secretary Jonathan Reynolds extended the offer in a letter sent on Monday, aiming to support British Steel’s transition to greener production methods.
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Industry Minister Sarah Jones confirmed the rejection while speaking to a parliamentary committee on Wednesday. “We are still in talks with them at the moment,” she told the Business and Trade Select Committee.
Though she did not disclose the exact amount of the offer, Whitehall sources revealed it matched the sum provided to Tata Steel last year as part of a £1.25bn steel industry package.
Funding Dispute Puts Jobs at Risk
Despite months of discussions between government officials and industry stakeholders, the proposed aid falls significantly short of what Jingye has been requesting. Reports suggest the company has been seeking at least £1bn—double the government’s current offer.
The rejection raises concerns about the future of British Steel’s 3,500 employees at sites in Scunthorpe, Teesside, and beyond.
Jingye has been pushing for government support to transition from blast furnaces to cleaner electric arc technology, essential for the UK’s green steel ambitions. Without the necessary financial backing, British Steel’s Scunthorpe operations remain in jeopardy.
Future Uncertain Amid National Security Concerns
As discussions continue, questions loom over whether the government will increase its financial support. Minister Jones emphasized the government’s preference for maintaining steel production but did not guarantee additional funding.
“Our preference would be for them to keep going, at least until they have secured the volume of steel imports to keep the mills operational,” she stated.
The rejection of aid comes at a critical moment for the UK steel industry. Rising concerns over US tariffs and increasing pressure from unions, including Unite, have led to renewed calls for steel to be classified as critical national infrastructure.
Unite’s General Secretary, Sharon Graham, urged decisive action: “Our government must act to protect the steel industry and its workers. This is a matter of national security.”
Meanwhile, the government has announced a Plan for Steel consultation, pledging up to £2.5bn for the sector. Reynolds reinforced the government’s commitment to safeguarding the industry, stating, “Britain is open for business, and we are investing in our steel industry to protect jobs and drive growth.”
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