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British Steel could cut 800 jobs in Lincolnshire

By Nagasunder in UK Business News, posted February 2, 2023

British Steel is considering cutting 800 jobs at its factory in Scunthorpe.

The BBC reported the paperwork needed for a consultation on redundancies has not yet been submitted but the corporation has begun to prepare the plans.

According to a source, the move has happened at the same time when a representative of British Steel's Chinese owner Jingye branded negotiations over a £300 million government rescue package as "unsatisfactory."

In the UK, the corporation has about 4,500 employees.

The plans could result in the shutdown of the coking ovens at the company's Scunthorpe facility, endangering 300 jobs.

But there could be a total of 800 job losses as a result of hundreds more roles being re-evaluated.

Rising energy costs have been a problem for British Steel, leading to worries that some of its facilities may need to be shut down.

The UK government had agreed to provide a £300 million support package for the struggling steelmaker to help with its decarbonization efforts.

This was "poised" to be approved last month by the Chancellor, subject to job assurances and investment from Jingye.

The company's plan to eliminate 800 jobs could have thrown that government assistance programme into doubt.

In a meeting with senior union leaders on Wednesday, a Jingye representative reportedly said the package for decarbonization discussions was "unsatisfactory."

Speaking through a translator, a corporate representative reportedly said the money pledged was for investments and was the same sum that steel producers had been promised in the past.

They said: "The investment does nothing to address the obstacles currently causing high costs which are energy, carbon costs, labour and low domestic demand."

The representative also said: "High production costs are also meaning that British Steel is unable to be competitive in the international market."

The government said the steel industry played a "vital role" in the UK economy and said it was "committed to securing a sustainable and competitive future for the UK steel sector".

A spokesperson said: "The Business Secretary considers the success of the steel sector a priority and continues to work closely with industry to achieve this."

The Community Union, which represents steelworkers, expressed its concern at the planned cuts.

National officer Alun Davies said: "This move would represent a betrayal of [British Steel's] loyal workforce and their commitments to invest in the business.

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"Steelworkers played their part to protect our steel industry and are being failed by both the government and British Steel who are abdicating their responsibilities to the workforce and our country."

Jingye became British Steel's third owner in four years when it purchased the company three years ago to save it from bankruptcy.

However, the world's largest producer of steel in China has recently made a drive for cash from UK taxpayers, which it claims is necessary to keep the company afloat.

Steel production is expensive, especially given the present energy price levels.

British Steel chose not to respond.

Source: BBC News

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