Chinese job cuts threat to Government’s £300m British steel rescue

The Government is set to scrap a £300million support package for British Steel if its Chinese owners axe jobs.

Whitehall sources said the funding, expected to be announced within days, was dependent on Jingye promising to invest £1billion into Britain’s second-biggest steel maker and protect jobs until 2030.

But the company is preparing to launch a consultation on around 800 redundancies, focusing mainly on the plant in Scunthorpe, which employs 3,500 of its 4,500 staff.

British Steel has struggled over the past decade. 

Jingye became its third owner in four years when it bought it out of insolvency in 2020. 

But it now thinks it needs taxpayer funding to keep the doors open.

Last month Chancellor Jeremy Hunt was said to be close to signing off a support package of £300million.

Asked if that would be jeopardised by cuts, a Whitehall source said: ‘It would, yes.’ British Steel said last month it would shut one of the site’s two blast furnaces within weeks without support.

Hunt was expected to tell it that the Government will pay the support package over the next few years.