Cost of taking over British Steel rises to £235m, government says

Taxpayers have been footing bill for loss-making company since April as minister acknowledges threat of EU tariffs

The cost of taking control of British Steel has risen to £235m, the UK government has said, as it acknowledged concern over the threat of EU tariffs that could significantly harm the business.

The government passed emergency legislation in April to take control of British Steel amid fears that its Chinese owner, Jingye Steel, was planning to walk away from its Scunthorpe steelworks.

The takeover preserved the jobs of 3,500 workers at British Steel but it has left the government footing the bill for the loss-making company. The industry minister, Chris McDonald, said the government had paid for “working capital, covering items such as raw materials, salaries, and addressing unpaid bills, including for SMEs (small and medium-sized enterprises) in the supply chain”, in a written statement to parliament published this week.

The latest costs add to the £604m spent on keeping the Scunthorpe plant going in 2019 and 2020, when it collapsed into insolvency under its previous owner, the private equity fund Greybull Capital. Jingye bought it in early 2020.