Chinese-owned British Steel has reportedly requested a £600 million package of taxpayer support to upgrade to less polluting technology.
According to the Sunday Times, government officials are set to review the plans, which outline the costs of transitioning from blast furnaces to electric arc furnaces at the company's Scunthorpe steelworks in Lincolnshire. The steel industry stands to be significantly impacted by a potential change in government following the upcoming general election. Labour leader Keir Starmer, who is favoured in polls to become the next prime minister, has maintained a commitment to invest £3 billion in decarbonising the steel industry, despite scaling back other environmental spending plans.
Post-election, ministers will have the final say on any support for British Steel, with any deal likely to face close scrutiny due to the company's Chinese ownership. China, which produces over half of the world's steel, has been accused of dumping steel in other countries to gain market share.
The new government will also decide on the continuation of a previously agreed £500 million subsidy for Indian-owned Tata Steel. Rishi Sunak’s government had approved this deal to convert production at Port Talbot in South Wales from two blast furnaces to a single electric arc furnace.
Should Labour come to power, the UK’s capacity for primary steelmaking—producing steel from iron ore—would be a significant factor in deciding support for individual companies. However, Labour is also keen for private sector investment to accompany government support.
