Government urges British Steel to continue talks amid fears for hundreds of jobs

Business Minister Nusrat Ghani criticized the timing of the announcement as a “generous support package” is under discussion with the Chinese-owned manufacturing company.

She encouraged British Steel to resume talks to “help us secure its future in the UK” and offer job protections and guarantees.

The company, owned by China’s Jingye Group, plans to shed hundreds of jobs to close its coke ovens in Scunthorpe, Lincolnshire, and “optimize” several hundred more, a union source said.

British Steel employs around 4,000 people across the UK. The redundancies would be primarily concentrated at the Scunthorpe plant.

Conservative MP Holly Mumby-Croft (Scunthorpe) said British Steel should “immediately reconsider” the potential redundancies and asked if the company could safely operate its blast furnaces in the Lincolnshire city with hundreds of fewer workers.

Ms Ghani said of the company’s decision: “It is odd that this conversation is taking place while we are in the midst of good negotiations and significant taxpayer money is at stake.

“These are tricky negotiations, (but) I don’t think it’s out of place to say that of course the government wants to have some assurances and guarantees, which also come with jobs.”

Her comments came after Ms Mumby-Croft asked a pressing question about the announcement in the House of Commons.

Ms Ghani said in her initial response: “While we all acknowledge that (Vladimir) Putin’s illegal invasion of Ukraine has created challenging global trading conditions for steel, it is very disappointing that British Steel has chosen to take this step for its Government employees during negotiations to undertake are ongoing.

“The Business Secretary (Grant Shapps) and I have always recognized that the success of the UK steel industry is a priority and we will work closely with British Steel to protect and unlock shareholder investment, and we will continue to do so do do this.”

Ms Ghani added: “I would like to encourage the company to continue discussions with us to find a solution. I can indeed confirm that the Government has presented a generous support package which we believe, combined with shareholder action, would put British Steel on a sustainable and decarbonised footing.

“My officials are helping British Steel better understand this package and I am confident that together we will find a solution that protects jobs while setting British Steel up for success.”

She continued: “I would urge British Steel to continue talks to help us secure its future in the UK.”

Ms Mumby-Croft said she was upset with the company’s approach.

She said: “Amid these negotiations with the Government, which have involved hundreds of millions of pounds in further support, Jingye sat down with unions yesterday and discussed the sacking of 800 British steelworkers.

“I don’t want to cut off my communication with British Steel because I will fight for these jobs and will continue to speak to them. Accordingly, I will moderate my language today.

“But I will make it clear: I cannot and will not defend this decision, which is unacceptable in every respect to my constituents.

“This is not behavior, it sends a completely wrong message and goes against the spirit of the negotiations, which I believe are the result of a heavy government focus on steel and its broader issues, including energy and carbon costs, which are really encouraging for us 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 company has struggled over the past decade.

Jingye Group became the manufacturer’s third owner in four years when it bought British Steel out of bankruptcy in 2020. But now Jingye has declared that he needs taxpayer money to keep the doors open.

Conservative former minister Andrew Percy said he was “angry” at the way workers had been treated by Jingye.

The Brigg and Goole MP said: “This is not a way to negotiate with the Government, it is not a way to engage with their workforce or with local MPs at a time when the Government has invested hundreds of millions of pounds in the Sector support table.

“Therefore, I can only join my honorable friend in requesting that Jingye and British Steel show a little more respect to our constituents and negotiate in good faith.”

SNP MP Dave Doogan (Angus) asked the minister “why she doesn’t nationalize the steel industry,” given how much public money she gets.

Ms Ghani said nationalization will not solve the steel industry’s global problems and will not make British steel more “competitive”.