British Steel: Hundreds of jobs at Scunthorpe plant at risk despite tax-funded aid

Hundreds of jobs could be cut at British Steel’s Scunthorpe plant as ministers consider a multi-million dollar bailout for the company.

Jingye’s Chinese owner is reportedly considering cutting up to 1,200 jobs, mostly at a steel plant in Lincolnshire. British Steel employs about 4,000 people in the UK, most of them in Scunthorpe, where the company operates two blast furnaces.

Ministers are considering a package of measures to save the ailing company. The deal is valued at $300 million.

The ministers have reportedly demanded that the companies involved – British Steel and Tata Steel, which run the Port Talbot plant in Wales – protect jobs if they want state aid.

Community-based steelworkers union Alan Davis called reports of job cuts “dangerous” and urged the company to “clear up its position urgently.”

“We are deeply concerned by reports that British Steel plans to cut hundreds of jobs. This move would be a betrayal of their loyal employees and their commitment to invest in the company,” he said. “We believe that this puts personnel at risk and is completely impossible.”

After negotiations with the owners, Unite suggests that up to 1,200 jobs are at risk.

Unite General Secretary Sharon Graham said: “This offer comes from a greedy employer and a chaotic government. Unite has vehemently rejected the multi-billion dollar plan by Chinese owners British Steel to cut more than 1,000 jobs at its Scunthorpe plant. We will support our members 100 percent in protecting their jobs, including any strikes.

“The government must also address the complete lack of an industrial strategy in their country, including the massive use of imported steel in our own infrastructure projects. The steelworkers are currently suffering from a disastrous leadership failure both from the Jingye Group, owned by British Steel, and from the government.”

“If this plan is implemented, it will seriously affect the future of steel production in this country.”

Jingye became the third owner of British Steel in four years when the company bought it out after bankruptcy in 2020. The company told ministers that high energy, carbon and labor costs, as well as lower demand, make steel production unsustainable and plans to build one of its two blast furnaces at Scunthorpe.

The spokesman also said: “High production costs also mean that British Steel cannot be internationally competitive.”

A government spokesman said the steel industry in the UK plays a “vital role” and ministers are “committed to ensuring a sustainable and competitive future for the UK steel sector”.

“The Business Secretary considers the success of the steel sector a priority and will continue to work closely with the industry to achieve this.”