UK Government Injects £235 Million to Sustain British Steel Operations

The UK Government has announced that the total cost of taking over British Steel has reached £235 million, amid growing concerns about the impact of potential EU import tariffs that could severely affect the domestic steel industry.

In April 2025, the government enacted emergency legislation to temporarily nationalize British Steel, following fears that its Chinese parent company, Jingye Steel, was preparing to withdraw from the Scunthorpe Steelworks. The intervention safeguarded approximately 3,500 jobs and ensured the continuity of the company’s extensive supply chain, which includes hundreds of small and medium-sized enterprises (SMEs).

According to Industry Minister Chris McDonald, the allocated funds have been used to support working capital, covering raw materials, payroll, and outstanding supplier payments, including those owed to SMEs. This latest support follows the £604 million previously spent to keep the Scunthorpe plant operational between 2019 and 2020, before Jingye Group acquired it in early 2020.

Sustaining production and employment

Charlotte Brumpton-Childs, National Officer at GMB Union, described the investment as “a responsible and necessary use of taxpayers’ money,” highlighting that British Steel has hired over 50 apprentices, created 180 new jobs, and continued producing high-grade steel products throughout 2025.

She contrasted this with previous government policy, noting that £500 million in support to Tata Steel led to over 2,000 job losses at Port Talbot, sparking discontent across the Welsh steelmaking community.

Tariff threat from the European Union

Despite these positive efforts, the UK steel sector faces renewed risks as the European Union considers imposing import tariffs of up to 50% on steel products from the UK.
According to UK Steel, such measures pose an “existential threat” to the industry, as approximately 78% of all British steel exports are currently destined for EU markets.

Minister McDonald — himself a former steel executive — stated that the potential tariff hike “will be highly concerning for many of our steel producers and their workforce.”
He confirmed that the UK government is in active discussions with EU counterparts to establish a special export quota that would allow British steel products to continue flowing into the bloc without excessive duties.

Global oversupply and China’s dominance

The EU’s tariff proposal stems largely from efforts to shield its domestic producers from a global steel glut, driven primarily by China’s oversupply.
Over the past three decades, China has evolved from a minor player into the world’s largest steel producer, accounting for more than 50% of total global output in 2024. This rapid expansion has led to downward pressure on prices and intensified competition in international markets.

Source: Jasper Jolly – The Guardian, October 16, 2025.