Job loss fears at British Steel

Unions are calling on the Government to help secure the future of British Steel after the company announced it is consulting on closing blast furnaces, raising fears of heavy job losses.

Community, the GMB and Unite said it was “devastating” news that British Steel’s Chinese owner Jingye is launching a consultation on closing the blast furnaces at Scunthorpe steelworks this June, or at a later date if an agreement with the Government can be reached.

Scunthorpe steelworks employs thousands of workers directly and through supply chains throughout the UK.

The company said that since it took over British Steel in 2020 it has invested more than £1.2 billion to maintain operations amid ongoing production instability and “significant” financial losses of around £700,000 a day.

It said: “Despite this, the blast furnaces and steelmaking operations are no longer financially sustainable due to highly challenging market conditions, the imposition of tariffs, and higher environmental costs relating to the production of high-carbon steel.

“The company had sought support from the UK Government for a major capital investment in two new electric arc furnaces (EAFs).

“However, following many months of negotiations, no agreement has been reached.

“As a result, the difficult decision has been made to consult with employees and to consider proposals to close the blast furnaces and steelmaking operations and reduce rolling mill capacity.”

The company will begin formal consultation with its workforce and unions from Thursday.

British Steel chief executive Zengwei An said: “We understand this is an extremely difficult day for our staff, their families, and everyone associated with British Steel.

“But we believe this is a necessary decision given the hugely challenging circumstances the business faces.

“We remain committed to engaging with our workforce and unions, as well as our suppliers and customers during this time.”

Unions published a report last month setting out how to decarbonise steelmaking at British Steel, which would involve the continued operation of Scunthorpe’s two existing blast furnaces while two new EAFs are constructed on site.

The plan, which unions said would secure a move towards greener steelmaking while maintaining primary steelmaking capacity throughout the transition, would require an additional £200 million of Government support to mitigate carbon costs in the interim period, said unions.

Community general secretary Roy Rickhuss said: “This is a dark day for our steel industry and for our country.

“We urge Jingye and the UK Government to get back around the table to resume negotiations before it is too late.

“Crucially, Jingye have not ruled out retaining the blast furnaces during a transition to low-carbon steelmaking if they can secure the backing of the Government.

“The closures at Scunthorpe would represent a hammer blow to communities which were built on steel, and where the industry still supports thousands of jobs directly and thousands more through extensive supply chains.

“Given that we are now on the cusp of becoming the only G7 country without domestic primary steelmaking capacity, it is no exaggeration to say that our national security is gravely threatened.

“This would be catastrophic at any time, let alone in the current era of geopolitical instability and volatility.

“Steel is an essential component of defensive infrastructure, just as it is to wider plans to invest in growth across the country.

“At this critical juncture, the Labour Government must do everything it can to secure the future of steelmaking at Scunthorpe – it would be unthinkable for them to let it die on their watch.

“Labour has made important commitments to steelworkers, including setting aside £2.5 billion towards supporting the steel sector with decarbonisation, and it is now time for Government to deploy these funds to protect the industry.

“If the Government chooses to let Scunthorpe die it would make a mockery of their grand ambitions to deliver growth through massive infrastructure investment, because British Steel is our only steelmaker than can produce the construction steels the country needs for our roads, railways, schools and hospitals.”

Unite general secretary Sharon Graham said: “This announcement of job losses is quite simply a disgrace.

“British Steel is guilty of trying to hold the Government to ransom, while using its dedicated workforce as pawns.

“In discussions with Unite, the Government has clearly moved and has made an offer to invest heavily in British Steel.

“This offer comes with long-term job guarantees, anything less would be a complete misuse of taxpayers’ money.

“British Steel now needs to make the necessary commitments.”

Charlotte Brumpton-Childs, GMB national officer, said: “This is devastating news for the people of Scunthorpe and the whole of UK steelmaking.

“But it’s not too late.

“We urge Jingye and the Government to do everything in their power to save this vital domestic industry.”

Business and Trade Secretary Jonathan Reynolds said: “I know this will be a deeply worrying time for staff and, while this is British Steel’s decision, we will continue working tirelessly to reach an agreement with the company’s owners to secure its future and protect taxpayers’ money.

“We’ve been clear there’s a bright future for steelmaking in the UK.

“We’ve committed up to £2.5 billion to rebuild the sector and will soon publish a Plan for Steel setting out how we can achieve a sustainable future for the workforce, industry and local communities.”

Published: 27/03/2025 by Radio NewsHub