Taxpayers dropping £1m a day on British Steel

Losses at British Steel’s flagship plant have deepened since it was nationalised, The Mail on Sunday can reveal.

Taxpayers are now on the hook for more than £1 million a day after the Scunthorpe site was taken over from Chinese owner Jingye earlier this year.

The news comes as ministers were berated for delaying a long-awaited plan to save the steel industry, which employs 34,000 workers and supplies crucial sectors such as defence and critical infrastructure.

Jingye had wanted to close Scunthorpe, which houses Britain’s last blast furnaces, claiming it was losing £700,000 a day.

But the site was rushed into public control in April under emergency legislation that saw MPs recalled to Parliament on a Saturday. Since then losses have mounted as British Steel struggles to compete with cheap Chinese imports and the threat of European trade tariffs.

Junior business minister Chris McDonald revealed last week the Government had already spent £274 million, or more than £1 million a day, supporting the loss-making Scunthorpe plant.

Feeling the heat: Losses at British Steel’s flagship plant have deepened since it was nationalised

Britain has a range of steel import quotas but bosses say they are set at higher levels than actual consumption, so they have no effect.

They are also angered by the Government’s delay in publishing a steel strategy that will detail support for the sector over the rest of the decade.

Former business secretary Jonathan Reynolds had planned to release the document by this autumn. And less than three weeks ago, McDonald told The Mail on Sunday the strategy would be published ‘later this year’. But it is now not expected to see the light of day until early 2026, McDonald said in a written statement to MPs.

Trade body UK Steel has already said the situation poses an ‘existential threat’ to the industry, which has also been hit by high energy prices and 25 per cent US tariffs.

Russell Codling, sales director for Tata Steel, urged the Government ‘to act fast’.

‘We are approaching the last straw on this,’ he said. ‘We are running out of time. Steel purchase lead times are three to six months. Customers we sell to in Europe say they are at serious risk of being exposed to 50 per cent tariffs.’

Carles Rovira, boss of 7 Steel UK, which operates an electric arc furnace in Cardiff, said the delay was ‘frustrating’ and urged ministers to ‘move swiftly so the sector could plan with confidence’ on ‘a level playing field’.

Shadow business secretary Andrew Griffith accused ministers of leaving the industry in ‘limbo’ and being ‘incapable of delivering a timely plan’.

‘Labour’s delay of the steel strategy is another admission of failure,’ Griffith said. In his statement, McDonald said: ‘The Government remains committed to supporting the UK steel sector and delivering a steel strategy. We are prioritising developing robust measures to protect our domestic sector, making sure there are healthy levels of imports, and engaging with our partners.

‘We will therefore publish the steel strategy in early 2026.’

McDonald added the money spent on Scunthorpe has provided ‘working capital’ for raw materials, salaries and addressing unpaid bills’.

Tories branded the nationalisation of British Steel ‘botched’ – as the taxpayer has to prop up the firm when its sites, including the country’s last blast furnaces at Scunthorpe, are still owned by the Chinese.

Griffith said: ‘The Government has failed to publish its long-promised steel strategy but is already managing to lose an escalating amount per day of taxpayers’ money on their botched nationalisation – they bear the losses but the Chinese still own the plant.’

Steel boss Sir Andrew Cook believes the ballooning losses at British Steel are due to the impact of dumping on the global market. He called for punitive tariffs to be imposed – plus action on high energy costs.

He said: ‘China’s strategy is to sell its steel at any price, destroy all competition and gain a monopoly. It has already succeeded in many other products.

‘Punitive tariffs are the only protection – and Britain should join Europe and the US in imposing them. Do this, and state support can be removed.’