British Steel to end consultation on up to 2,700 redundancies after government intervention | Money News
British Steel has said it will end a consultation on up to 2,700 redundancies, after the government took control of the firm earlier this month.
An emergency bill to save British Steel‘s Scunthorpe blast furnaces became law after MPs were recalled to the House of Commons for an urgent debate on 12 April.
It meant the steel plant in Scunthorpe, North Lincolnshire, continued to operate as the government decides on a long-term strategy, and steelmaking in the UK more broadly.
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The announcement that jobs are secure follows confirmation of a stable supply of raw materials and the appointment of new leadership at British Steel. The plant was due to run out of raw materials, requiring production to stop at Britain’s only virgin steel furnace.
Other steelworks, such as in Port Talbot, Wales, produce steel from scrap metal using electric furnaces.
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Chinese owner Jingye had cancelled its orders for raw materials.
It said the blast furnaces were “no longer financially sustainable” due to “highly challenging” market conditions, tariffs and costs associated with transitioning to lower-carbon production techniques.
On paper, Jingye is the owner of British Steel, but the UK government has inserted itself into the inner workings of the company to legally override the wishes of the Chinese business.
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Tariffs imposed by President Trump put a 25% tax on all steel imports to the US, pushing up costs even further and sparking calls for countries to secure their own supplies of critical materials, especially those like steel used for defence and infrastructure.
The Scunthorpe works are “vital for both the UK’s national security and manufacturing”, the government said when debating the emergency bill. A total of 3,500 people work at the Scunthorpe site.
British Steel has been contacted by Sky News over how long the 2,700 jobs are safe for.
Union reaction
The union Unite said it is “pleased that British Steel have come to their senses and realised that job losses are not the way to ensure Britain remains an industrial power”.
“The government now needs to implement a wholesale overhaul of its energy policy with a commitment to invest in renewables to lower energy prices for heavy industry like steel production.
“This needs to be alongside a massive investment in electric arc furnaces and a national strategic plan to get British steel users to buy domestically for large-scale infrastructure projects.”
GMB’s national officer Charlotte Brumpton-Childs described the announcement as “fantastic news for steel workers and the people of Scunthorpe”.
“It’s like a cloud has been lifted from above the whole community. It confirms the government is serious about saving 2700 jobs and the UK’s vital steel industry.”
Alun Davies, from the Community Union, said: “We welcome these positive developments, which follow constructive discussions between steel unions, the Labour government and British Steel management.
“Through this collective effort, backed up by the commitment and resolve of the workforce, Scunthorpe steelmaking was saved from a disastrous cliff edge.”