British Steel is examining more than 800 job cuts at its flagship UK plant, according to trade unions, in a move that raises questions over a proposed £300mn support package from the government.
Although the company, which is owned by China’s Jingye, has not yet started formal consultations on the potential job losses, workers were informed of the proposals at a meeting on Wednesday afternoon, union officials told the Financial Times.
British Steel was unavailable for comment.
The company employs about 4,000 workers in the UK, the majority working at its Scunthorpe site, which operates two of Britain’s remaining four blast furnaces.
British Steel’s coke ovens and 300 related jobs are under review, according to union officials, while uncertainty remains over the future of another 600-900 posts across the operations.
Jingye and India’s Tata, the owner of Tata Steel UK, which owns the Port Talbot works in Wales, are in talks with the government over a combined £600mn support package to help them upgrade their blast furnaces to electric arc furnaces with lower carbon emissions. The offers are contingent on further investment from both companies and a guarantee over jobs up to 2030.
News of the looming job cuts prompted consternation and disappointment within the government on Wednesday. Ministers had hoped that the offer of generous state intervention could prevent major closures or job losses.
The government delivered details of its support packages to both Jingye and Tata in letters sent last week.
Tata confirmed at the time that it had received “communication from the UK government in relation to a framework for the continuity and decarbonisation of steel making in the UK”.
“We are studying it and will consider it carefully prior to strategic decisions on the future of our UK business,” it added.
Industry executives privately indicated that the offer of £300mn for each steelmaker is significantly below what they had expected — and far below what other European governments have offered their own industries to help invest in greener technologies.
Unite general secretary Sharon Graham said on Wednesday that the union rejected the plans by British Steel’s “multibillion-pound Chinese owners to cut over 1,000 jobs at its plant in Scunthorpe”.
“The government have also got to sort out the total lack of any industrial strategy in this country . . . At the moment steel workers are suffering from a catastrophic failure in leadership from both the Jingye Group, who own British Steel, and by the government.”
The Community union, which represents steelworkers, said the proposed job cuts would “represent a betrayal of [British Steel’s] loyal workforce and their commitments to invest in the business”.
The business department said the government “recognises the vital role that steel plays within the UK economy, supporting local jobs and economic growth and is committed to securing a sustainable and competitive future for the UK steel sector.
“The business secretary considers the success of the steel sector a priority and continues to work closely with industry to achieve this.”