Government urges British Steel to continue talks amid fears for hundreds of jobs
British Steel has been urged to continue talks with the Government and reconsider its “peculiar” plans to axe 800 hundred jobs.
Business minister Nusrat Ghani criticised the timing of the announcement given a “generous package of support” is under discussion with the Chinese-owned manufacturing company.
She encouraged British Steel to resume discussions to “help us secure its future in the UK” and offer protections and guarantees over jobs.
The company, owned by the Chinese Jingye Group, plans to cut hundreds of jobs in plans to close its coke ovens in Scunthorpe, Lincolnshire, and will “optimise” several hundred more, a union source has said.
British Steel employs about 4,000 people across the UK. The redundancies would focus mainly on the plant in Scunthorpe.
Conservative MP Holly Mumby-Croft (Scunthorpe) said British Steel should “immediately reconsider” the potential redundancies and questioned if the company could safely run its blast furnaces in the Lincolnshire town with hundreds of fewer staff.
Ms Ghani said of the company’s decision: “It is peculiar for this conversation to take place while we’re in the middle of good negotiations and as negotiations involve substantial taxpayers’ money.
“These are sensitive negotiations, (but) I don’t think it is inappropriate for me to say of course Government would want some assurances and guarantees that are linked to jobs too.”
Her remarks came after Ms Mumby-Croft tabled an urgent question in the Commons on the announcement.
Ms Ghani, in her initial answer, said: “While we all recognise (Vladimir) Putin’s illegal invasion of Ukraine has created challenging global trading conditions for steel, it’s very disappointing that British Steel has chosen to take this step for its employees while negotiations with Government are ongoing.
“The Business Secretary (Grant Shapps) and I have always been clear that the success of the UK steel industry is a priority and we’ll work intensively with British Steel on support to help safeguard and unlock shareholder investment, and we’ll continue to do so.”
Ms Ghani added: “I would encourage the company to continue discussions with us to reach a solution. I can indeed confirm the Government has put forward a generous package of support which, we believe, combined with shareholder action, would put British Steel on a sustainable and decarbonised footing.
“My officials are helping British Steel to understand that package in more depth and I’m hopeful that together we will find a solution which protects jobs whilst setting British Steel up for success.”
She went on: “I would urge British Steel to continue discussions to help us secure its future in the UK.”
Ms Mumby-Croft said she was angered by the company’s approach.
She said: “In the midst of these negotiations with Government involving hundreds of millions of pounds of further support, on top of what (Ms Ghani) has listed, Jingye sat down yesterday with the unions and talked about laying off 800 British steelworkers.
“I don’t want to break down my communications with British Steel because I will fight for these jobs and continue to talk to them. Accordingly I will temper my language today.
“But I will be clear: I cannot and will not defend this decision which is unacceptable in every possible way for my constituents.
“This is not a way to behave, it sends entirely the wrong message and breaches the spirit of negotiations, which I believe are the result of a level of Government focus on steel and its wider issues, including energy and carbon costs, that are genuinely encouraging for the industry.
“Hundreds of families in Scunthorpe are now worried sick wondering if and when they will lose their jobs.”
Once a giant of British manufacturing, the business has struggled over the past decade.
Jingye Group became the manufacturer’s third owner in four years when it bought British Steel out of insolvency in 2020. But now Jingye has said it needs taxpayer funding to keep the doors open.
Conservative former minister Andrew Percy said he was “angry” at the way workers had been treated by Jingye.
The MP for Brigg and Goole said: “This is no way to conduct a negotiation with Government, it is no way to engage with their workforce or with local Members of Parliament, at a time when the Government has put hundreds of millions of pounds on the table to help support the sector.
“So I can only join with my honourable friend in demanding that Jingye and British Steel show a little bit more respect to our constituents and negotiate in good faith.”
SNP MP Dave Doogan (Angus) asked the minister “why doesn’t she nationalise” the steel industry given how much public money it receives.
Ms Ghani said nationalisation would not solve global problems for the steel industry, and would not make UK steel “more competitive”.