British Steel was losing £700,000 a day last year when its Chinese owner announced plans to shut the steelworks at Scunthorpe. After Jingye rejected support to buy raw materials, the UK government stepped in with emergency legislation to take control of the plant.
But that was not the end of the crisis. The cost to the government of propping up British Steel is now more than £1.2m a day. Yet the £359m bill, the latest disclosed to parliament last month, may only be the start.
Nearly a year on, it remains unclear what will happen to the blast furnaces and rolling mills at the North Lincolnshire site, and the 4,000 workers who turn iron ore into the long steels required for buildings, bridges and railways. In the meantime, the government is covering more losses every day.
“In the short term, they are going to cost, so that £350m number is going to get bigger,” said Jon Carruthers-Green, a steel market analyst at MEPS International, a price forecaster. “If you want to keep blast furnaces, if you want to keep rail supply, then it’s going to come at a cost.”
The UK steel industry is in a rut. In 1970, the country produced 28m tonnes of steel.
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