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British Steel considers cutting up to 1,200 jobs at Scunthorpe

Ferrous metallurgy

Unions see the move as a "betrayal" amid talks with the UK government over a potential £300m bailout.

British Steel considers cutting up to 1,200 jobs at Scunthorpe

British Steel is considering cutting up to 1,200 jobs at its Scunthorpe steel plant in what unions say would be a "betrayal" of workers amid talks with the UK government over a potential £300m bailout.

Chinese company executives told union leaders they are considering shutting down the plant's coke ovens and making hundreds more layoffs at its facilities at a meeting Wednesday afternoon. Union Unite said up to 1,200 jobs were at risk.

British Steel, which was bought by China's Jingye in 2020, has been in talks with the government for support for several months along with its Indian rival Tata Steel. Both companies, which each operate two of the four remaining blast furnaces in the UK, are seeking support to upgrade their furnaces to much lower carbon electric arc furnaces.

The UK government has offered both companies £300 million for a piece, though they say the total cost of refurbishing the plants could run into the billions of pounds. Support is expected to be linked to job retention at Scunthorpe and Tata's Port Talbot steelworks.

Unions have been informed that the future of British Steel's coke ovens and their 300 jobs is under consideration, but the company could also cut 600 to 900 jobs on a larger scale. The threat of job cuts on this scale is likely to spark new warnings that British Steel may close one of the blast furnaces.

According to two sources, British Steel has not begun official consultations on job cuts and has not set a deadline at a meeting on Wednesday. However, the plan will cast a shadow over the future of the company's operations in the UK, which employ around 4,000 people, most of them based in Scunthorpe.

Unite General Secretary Sharon Graham said: "The steelworkers are suffering from a catastrophic failure of leadership both from the Jingye Group, which owns British Steel, and from the government."

The community representing the steel workers said the job cuts could put workers in direct danger as they would have no other choice, except to work longer. Alan Davis, the Community's national spokesman, said he was "extremely concerned" about the plan.

"The move would be a betrayal of their loyal employees and [British Steel's] commitment to invest in the business," he said. “We believe this will put employees at risk and is completely unworkable.

“British Steel is already putting employees at risk by forcing them to work overtime every week. Losing hundreds of jobs in this situation will put workers at risk, forcing them to work even longer in extreme temperatures.”

The union vowed to fight the plan and said the steel workers were failing both the company and the side of the UK government. British steelmakers are also struggling with energy costs that are higher than their EU competitors. Companies and unions have lobbied for more government support for the decarburization industry, as well as directing government infrastructure and defense projects to use more UK-made steel.

Jingye took over British Steel in 2020 after it collapsed and the government was forced to step in to keep her job. Jingye has pledged to invest £1.2bn in the plant by the end of the decade, though these plans are believed to have fallen through.

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