The owners of British Steel in Scunthorpe have asked the government for an immediate package of financial assistance to avoid thousands of staff losing their jobs.
Jingye Group, the Chinese company that bought British Steel in 2020, has asked for “hundreds of millions of pounds,” with insiders claiming that if ministers reject the request, thousands of people will be laid off.
British Steel currently employs approximately 4,000 people, with thousands more jobs dependent on the company in its supply chain.
The amount of financial assistance sought by Jingye Group is unknown at this time.
However, insiders say it will take “hundreds of millions of pounds” to keep the Scunthorpe blast furnaces operational.
Another source said the company was “prepared to lay off thousands of people” if the government rejected the package of aid.
The Chinese company’s request comes after industrial energy consumers have been complaining for months skyrocketing prices are limiting their ability to continue investing.
A British Steel spokesman said: “We are investing hundreds of millions of pounds in our long-term future but like most other companies we are facing a significant challenge because of the economic slowdown, surging inflation and exceptionally high energy and carbon prices
“We welcome the recent announcement by the UK government to reduce energy costs for businesses and remain in dialogue with officials to ensure we compete on a level playing field with our global competitors.”
This weekend, the government confirmed that it was “working at pace with the company to understand the best way forward as it seeks to secure a more sustainable future”.