UK poised to give £300m in rescue funding to British Steel

Chancellor Jeremy Hunt is poised to grant a £300m funding package for struggling British Steel, the BBC has been told.

The move follows requests from Business Secretary Grant Shapps and Levelling-up Secretary Michael Gove.

It would depend on British Steel’s Chinese owner Jingye committing to securing jobs at the company and making additional substantial investments.

Treasury sources said the money would have to be put towards decarbonisation.

It is unclear when a decision will be announced.

The Department for Business, Energy and Industrial Strategy (Beis), said the government “recognises the vital role that steel plays within the UK economy, supporting local jobs and economic growth”.

It said it was “committed to securing a sustainable and competitive future for the UK steel sector”.

“While we cannot comment on ongoing negotiations, the Business Secretary considers the success of the steel sector a priority and continues to work closely with industry to achieve this,” a spokesperson said.

The support package, which was first reported by Sky, would help British Steel replace blast furnaces in Scunthorpe, North Lincolnshire with electric alternatives.

These electric arc furnaces can run on renewable power, and are best used with recycled steel.

Three years ago British Steel was bought out of insolvency by Jingye, which became its third owner in four years.

But the Chinese steel-making giant has recently been pushing for UK taxpayer funding, which it says it needs to keep the firm running.