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The owners of Britain’s second-biggest steel producer are seeking an urgent package of financial support from taxpayers amid renewed fears for thousands of industrial jobs in the north of England.

Sky News has learnt that Jingye Group, which bought British Steel out of insolvency in 2020, has told ministers that the company’s two blast furnaces are unlikely to be viable without government aid.

British Steel, which is headquartered in Scunthorpe, north Lincolnshire, employs about 4,000 people, with thousands more jobs in its supply chain dependent upon the company.

The request from Jingye poses a major headache for Jacob Rees-Mogg, the new business secretary, on the eve of the Conservative Party’s annual conference in Birmingham.

While the precise scale of the support being sought by the Chinese industrial group was unclear this weekend, insiders suggested that it would need “hundreds of millions of pounds” to keep the Scunthorpe blast furnaces operational.

It was also unclear whether any financial subsidy would be in the form of a loan or grant.

One insider said that Jingye was prepared to make thousands of people redundant if ministers rejected its request.

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It would then plan to import steel from China to roll at British Steel’s UK sites, according to the insider.

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”.

“We recognise that businesses are feeling the impact of high global energy prices, particularly steel producers, which is why we have announced the Energy Bill Relief Scheme to bring down costs,” a spokesman for the Department for Business, Energy and Industrial Strategy said.

“This is in addition to extensive support we have provided to the steel sector as a whole to help with energy costs, worth more than £780m since 2013.”

Industrial consumers of energy have complained for months that soaring prices are imperilling their ability to continue investing, with continuing uncertainty about the duration and cost of a recently announced government subsidy scheme.

For Mr Rees-Mogg, who took over as business secretary less than a month ago, a decision over government support presents a politically undesirable menu of choices.

If no state funding is made available and significant numbers of jobs are axed, it would undermine a key tenet of the ‘levelling-up’ strategy that became a doctrine of Boris Johnson’s administration.

An agreement to provide substantial taxpayer funding to a Chinese-owned business, however, would almost certainly provoke outrage among Tory critics of Beijing.

China’s role in global steel production, after years of international trade rows about dumping, would make any subsidies even more contentious.

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.”

It is the second time in little more than three years that serious doubt has been cast over British Steel’s future.

In May 2019, the Official Receiver was appointed to take control of the company after negotiations over an emergency £30m government loan fell apart.

British Steel had been formed in 2016 when India’s Tata Steel sold the business for £1 to Greybull Capital, an investment firm.

As part of the deal that secured ownership of British Steel for Jingye, the Chinese group said it would invest £1.2bn in modernising the business during the following decade.

Jingye’s purchase of the company, which completed in the spring of 2020, was hailed by Mr Johnson as assuring the long-term future of steel production in Britain’s industrial heartlands.

“The sounds of these steelworks have long echoed throughout Yorkshire and Humber and the North East,” he said.

“Today, as British Steel takes its next steps under Jingye’s leadership, we can be sure these will ring out for decades to come.

“I’d like to thank every British Steel employee in Scunthorpe, Skinningrove and on Teesside for their dedication and resilience which has kept the business thriving over the past year.

“Jingye’s pledge to invest £1.2 billion into the business is a welcome boost that will not just secure thousands of jobs, but ensure British Steel continues to prosper.”

Tata, which owns the vast Port Talbot steelworks in Wales, remains Britain’s biggest steel producer.

It, too, has sought government support in recent months, with the Financial Times reporting in July that the Indian-owned group was seeking £1.5bn of taxpayer funding to help it decarbonise its operations.

Liberty Steel, the third-biggest player in the industry, saw a bid for £170m in state aid rejected last year by Kwasi Kwarteng, the then business secretary.

As chancellor, Mr Kwarteng will play a key role in determining the fate of Jingye’s request for support.

This weekend, it was unclear how quickly a decision would be reached by ministers or whether advisers had been drafted in to help negotiate on either side.

A government insider pointed out that a range of support schemes aimed at heavy industry remained operational.

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US government shuts down after last-ditch funding votes fail

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US government shutdown to begin within hours

The US government has shut down for the first time in almost seven years after last-ditch Senate votes on funding plans fell short.

Hundreds of thousands of federal workers deemed not essential for protecting people or property – such as law enforcement personnel – could be furloughed or laid off after the shutdown began at midnight (5am UK time).

Critical services, including social security payments and the postal service, will keep operating but may suffer from worker shortages, while national parks and museums could be among the sectors that close completely.

Explained: What is a shutdown and who does it impact?

It comes after rival Democrats and Republicans refused to budge in their stand-off over healthcare spending.

A Democrat-led proposal to keep the government funded went down by 53 votes to 47 in the Senate, before the Republicans’ one notched up 55 in favour – five short of the threshold needed to avert a shutdown.

Unlike legislation, a simple majority isn’t enough to pass a government funding bill.

Following the votes in Washington DC on Tuesday night, the White House’s budget office confirmed the shutdown would happen and said affected agencies “should now execute their plans”.

It blamed the Democrats, describing their position as “untenable”. The opposition party wants to reverse cuts to the government’s health insurance programme, Medicaid, which were passed earlier this summer.

Senate majority leader John Thune, a Republican, accused the Democrats of taking federal workers “hostage”.

His Democrat counterpart, Senate minority leader Chuck Schumer, said the Republicans’ funding package “does absolutely nothing to solve the biggest health care crisis in America”.

Republican senators blamed the Democrats for not keeping the government open. Pic: Reuters
Image:
Republican senators blamed the Democrats for not keeping the government open. Pic: Reuters

Trump threatens layoffs

President Donald Trump was defiant ahead of the votes, and warned he could make “irreversible” cuts “that are bad” for the Democrats if the shutdown went ahead.

He threatened to cut “vast numbers of people out” and “programmes that they (the Democrats) like”.

“We’ll be laying off a lot of people,” he told reporters in the Oval Office on Tuesday.

Tens of thousands of government employees have already been laid off this year, driven by the “DOGE” initiative spearheaded by Elon Musk upon Mr Trump’s return to the White House.

Donald Trump spoke in the Oval Office ahead of the shutdown. Pic: Reuters
Image:
Donald Trump spoke in the Oval Office ahead of the shutdown. Pic: Reuters

The last shutdown was in Mr Trump’s first term, from December 2018 to January 2019, when he demanded money for his US-Mexico border wall. At 35 days, it was the longest on record.

Mr Thune has expressed hope the latest shutdown will come to a much quicker conclusion, telling reporters: “We can reopen tomorrow – all it takes is a handful of Democrats to join Republicans to pass the clean, nonpartisan funding bill that’s in front of us.”

Before this week, the government had shut down 15 times since 1981. Most only last a few days.

The Senate will hold further votes on the Republican and Democrat stopgap funding bills on Wednesday. The former would fund the government through to 21 November.

Analysis: This shutdown is a huge deal – and it’s hard to predict when it might end

This is a huge deal.

This shutdown happened because the Senate is deadlocked on two competing funding bills, one proposed by Republicans and one by Democrats.

Neither got the requisite amount of votes.

But this is not just about the politicians – real people will feel the impact of this shutdown.

National parks like the Grand Canyon, like Yosemite, will go unstaffed – some might close indefinitely.

Flights could get cancelled. The National Mall in DC, the iconic stretch between the Capitol – where these politicians work – and the Lincoln Memorial, could be chained up.

Trump has threatened mass layoffs of federal workers, who he says “will be Democrats”. It’s a scary time for them.

Trump is trying to spin this to his political advantage. He claims, falsely, that Democrats are trying to fund free healthcare for “illegal aliens”.

Democrats are pushing to improve government help on affordable healthcare, but this would not extend to undocumented immigrants.

Republicans say Democrats have sacrificed the interests of the American people to have a public showdown with the president.

It would be folly to predict how long this stand-off will last.

What happens now?

Immigration enforcement, air-traffic control, military operations, social security and law enforcement are among the services that will not be brought to a halt.

However, should employees miss out on payslips as a result of a prolonged shutdown, they could be impacted by staffing shortages. For example, delays at airports.

Cultural institutions deemed non-essential, like national parks and museums, will be more directly impacted from the very beginning, with large cuts to the workforce.

The popular Smithsonian, for example, has said it only has enough funding to stay open for a week.

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The show might not go on: Broadway stars ready to strike

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The show might not go on: Broadway stars ready to strike

Broadway actors are preparing to exit the stage in a strike that would shutter more than 30 productions ahead of its peak season.

Actors’ Equity, a union representing 900 performers and stage managers in New York’s iconic theatre scene, said a walkout was on the cards due to a dispute over healthcare.

It’s negotiating with the Broadway League, a trade body representing theatre owners, producers, and operators. A previous three-year contract expired earlier this week.

The union wants the league to increase its contribution to its healthcare fund, which is expected to fall into a deficit before next May. The rate of contributions has remained unchanged for more than a decade.

Actors’ Equity president Brooke Shields said: “Asking our employers to care for our bodies, and to pay their fair share toward our health insurance is not only reasonable and necessary, it’s an investment they should want to make toward the long-term success of their businesses.”

She added: “There are no Broadway shows without healthy Broadway actors and stage managers. And there are no
healthy actors and stage managers without safe workplaces and stable health insurance.”

The Broadway League said it was “continuing good-faith negotiations” to “reach a fair agreement” that works for “shows, casts, crews, and the millions of people from around the world who come to experience Broadway.”

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Should Broadway fall victim to strike action, it would follow in the footsteps of Hollywood – where writers walked out in 2023, curtailing a number of major productions – and the US video game industry in 2025, with concerns around the use of AI a key driver.

Actors’ Equity has not carried out a major strike since 1968, when a three-day dispute shut down 19 shows. An intervention from the New York City mayor helped both sides come to a deal.

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Energy price cap warning as latest rise takes effect

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Energy price cap warning as latest rise takes effect

The energy price cap is on course to remain steady through this winter but may jump in six months’ time, according to a respected industry forecast.

Ahead of the 2% rise in the default tariff, which is imposed from Wednesday until the end of December, Cornwall Insight said it was currently predicting that the latest increase would be eradicated for the January-March quarter.

It saw a £30 drop to average annual bills at the start of 2026 despite, the specialist said, the expected addition of a £10 per year levy to support the next generation of new nuclear power stations.

Money latest: House thinner than a bus on sale for £1.1m

Cornwall Insight warned that further government-imposed policy costs could add £100 more a year to bills from April, building on higher charges in place to pay for the green energy future and help for households through the expanded warm home discount.

Its prediction, which is subject to wholesale market movements and regulatory consultations on how to apply such charges to bills, would see the cap hit £1,855 from the October-December average £1,755.

Policy costs to assist the battle against climate change are playing an increasing role in determining the level of the price cap.

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Why is the energy price cap rising?

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There are 34 million households, including those on pre-payment meters and other standard variable arrangements, on the energy price cap.

There are a further 20 million unaffected by the price cap shift as they are on fixed rate deals.

They are only exposed to changes in raw energy prices and new policy costs when their term ends.

Wholesale prices – volatile since Russia’s invasion of Ukraine back in February 2022 – have been the main driver of rising bills since the end of the COVID pandemic.

But they are making little contribution to October’s increase as gas prices have remained stable recently due to weaker demand in the global economy and higher flows.

Much, however, depends on a lack of global shocks. The government wants to remove that volatility from our bills through a focus away from gas towards wind and new nuclear, including through modular reactors.

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Energy boss makes case for nuclear future

The problem for household bills in the interim is that it means even higher charges to help pay for the new infrastructure to support that shift in electricity provision.

Minister for energy consumers, Martin McCluskey, said: “Wholesale gas costs remain 75% above their levels before Russia invaded Ukraine. The more renewables on the system, the cheaper the wholesale price of electricity, which is why the only answer for Britain is this government’s mission to get us off the rollercoaster of fossil fuel prices and onto clean, homegrown power we control.”

He said of efforts to support struggling households: “We are taking urgent action to support vulnerable families this winter, expanding the £150 Warm Home Discount to more than six million families, which helps one in five households with their energy bills.

“In the coming weeks, we will be announcing details of the biggest home upgrade programme in British history to improve up to five million homes, making them cheaper and cleaner to run.”

Recent figures by Ofgem showed a record sum for household energy debt.

The regulator revealed a £4.4bn total during the second quarter of the year – up by £750m on the same period in 2024.

The government has said it is working with Ofgem to find solutions. Ideas include the possibility of a debt relief scheme.

Will Owen, energy expert at Uswitch.com, said of the Cornwall Insight predictions: “The predicted rise is driven by the increasing costs of making our energy grid fit for the future, and these charges are being passed on to bill-payers.

“If you’re on a standard variable tariff, you can beat these expected rises and save on bills by switching to a well-priced fixed deal now.

“There are currently 26 fixed deals priced below the October price cap, with savings of around £234 for the average household.”

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