Debt under previous ownership
The accounts of British Steel reveal the company owed nearly £1bn to firms associated with its former owner, Jingye Steel, just before it was nationalised. This debt included £500m owed directly to Jingye Steel, £410m to two Chinese subsidiaries—Power Rich Resources and Herbei Jingye Cut Deal Co.—and another £50m to Secure Trust Bank in the UK. These figures highlight the financial challenges inherited by the government as part of the rescue operation.
Call to reject repayment
Reform UK business spokesperson Richard Tice has called for the government to block the repayment of these debts. He stated that rewarding Jingye for its management of British Steel would set a dangerous precedent. Tice emphasized that taxpayers should not be expected to cover the costs of rebuilding the steelmaker’s blast furnaces, which are vital to the company’s operations.
In a recent statement, Tice argued that the Chinese firm should write off the debt in full and be thankful that they avoided larger financial consequences for burdening the public with future liabilities. He added that the taxpayers’ interest should always be the top priority.
Public funding and future of British Steel
The government has already committed £555m to sustain British Steel after its nationalisation. The firm now operates under public ownership, a move made to avert a potential collapse that could cost over 2,700 jobs and eliminate Britain’s last remaining blast furnace.
While no compensation has been offered to Jingye Steel so far, a framework for possible payments is being developed. A government representative explained that the decision to nationalise was made after evaluating the potential damage to the economy, key national infrastructure, and national security. The focus now is on stabilising the company, ensuring the livelihoods of its workers, and developing a sustainable and environmentally friendly steel industry.
According to the official statement, an independent valuation process will determine any potential payments to Jingye Steel. The government is committed to making sure British Steel becomes a competitive and green industry in the future.