British Steel jobs fears as Chinese owner Jingye ‘broke promises’ to back ailing industry

British Steel’s Chinese owner has been slammed for ‘broken promises’ amid reports it wants £300 million of Government cash.

Jingye rescued Scunthorpe-based British Steel in early 2020, months after it collapsed and was taken into Government hands. 

The take-over by the Chinese conglomerate was controversial. But it was sealed with Jingye’s insistence it would plough money into the group.

It is now understood to be considering shutting down one of the site’s two blast furnaces within weeks if it does not receive state help. 

Burnout: Jingye, chaired by Li Ganpo, pledged to revitalise the Scunthorpe site

There are just four blast furnaces left in the entire UK. Experts fear that if British Steel – which employs 4,000 people – shuts one furnace, its other could follow suit later this year.

Scunthorpe makes many of the UK’s rail tracks and steel for construction. When Jingye was bidding for British Steel, it appeared to signal that it had a blank cheque for keeping the steelworks going.

In a presentation seen by The Mail on Sunday, the Chinese group said: ‘Need funds? No problem. Jingye is here to invest.’ It added that it would ‘revitalise the glory’ of British Steel and ‘impress the world’.

Sir Iain Duncan Smith, former Conservative leader and a founder of the Inter-Parliamentary Alliance on China, said: ‘There’s clearly a trail of broken promises here.

‘When Jingye was bizarrely permitted to take over British Steel, it clearly made a host of sweeping promises to gain control. Before the Government countenances any kind of intervention, there needs to be a full inquiry into why a pledge made only three years ago appears to have come to nothing.’

Soaring energy prices have put a strain on costs, forcing steel firms to seek short-term cash.

Business Secretary Grant Shapps and Levelling Up Secretary Michael Gove have both urged Chancellor Jeremy Hunt to ensure the two blast furnaces at the site are kept running, according to reports.

But Paul McBean, of the Community steel union, said negotiations over Government support had been going on since August.

He told the Yorkshire Post that British Steel’s ‘very impatient’ Chinese owners were not used to ‘our slow Government’ and ‘are not going to wait much longer’. 

Funds requested ‘to invest in green energy’ 

British Steel is widely reported as asking for £300 million. It is unclear what Jingye’s next move will be as it also pledged to ‘never sell’ British Steel.

Jingye promised to invest £1.2 billion to reinvigorate the business when the takeover was completed in March 2020, but did not say how long this would take. British Steel said it had spent £330 million on major investments so far and wanted help to switch to green energy.

Tata Steel, which runs the UK’s other two blast furnaces, also wants funds to help it shift to electric or hydrogen-based plants. The industry says France and Germany receive state assistance to make the transition on top of other subsidies.

The price of carbon credits – certificates that firms buy to allow them to emit greenhouse gases – has also spiralled. That has placed an additional burden on an industry that has been heavily reliant on fossil fuels as a time when it is coping with sky-high energy prices.

The UK steel industry employs 34,500 people. Ministers have said they are committed to securing a ‘sustainable and competitive’ future for it.

A British Steel spokesman said Jingye had made ‘significant’ investments in the business, adding: ‘Jingye is committed to our long-term future, but we also require the UK Government to provide the necessary support, policies and frameworks to back our drive to become a clean, green and sustainable company. 

‘We are not asking for a Government bailout. We are asking for support to aid our transition to net zero as per targets set by the UK Government.’

This post first appeared on Dailymail.co.uk