Up to 2,000 jobs are put at risk as British Steel announces the closure of blast furnaces in Scunthorpe

Coal-fired furnaces to be replaced with green alternatives in £1.25 billion plan

By JESSICA CLARK

DAILY MAIL
6 November 2023

British Steel today announced plans to close its blast furnaces, putting up to 2,000 jobs at risk.

China's Jingye Group, which owns the firm, unveiled proposals to replace the coal-fired blast furnaces in Scunthorpe with green alternatives as part of a £1.25billion decarbonisation drive.

Between 1,500 and 2,000 jobs could be axed, according to reports, on top of the 3,000 roles already under threat at rival Tata Steel.

Unions said the proposals would be a 'hammer blow' for the UK steel industry.

The blast furnaces are set to be replaced with two electric arc furnaces – one at British Steel's headquarters in Scunthorpe, Lincolnshire, and another at its Teesside manufacturing site.

British Steel has announced it will close its blast furnaces in Scunthorpe, putting up to 2,000 jobs at risk

The coal fired blast furnaces will be replaced by greener alternatives as part of a £1.25 billion project

The Chinese Jingye Group, which owns the firm, said the proposals would be subject to 'appropriate support' from the Government

It said the proposals are 'subject to appropriate support from the UK Government', worth at least £300million.

A Government spokesman said: 'Our commitment to the UK steel sector is clear, and we continue to work closely with industry, including British Steel, to secure a sustainable and competitive future for the sector and its workers.'

British Steel, which is planning to open the new furnaces by late 2025, has kicked off preliminary talks with unions and agreed for an external specialist to review the plans.

READ MORE: Rishi Sunak must save British Steel's last blast furnace or risk relying on hostile states for high-quality steel, northern Tory MPs warn

Chief executive and president Xijun Cao said: 'Decarbonisation is a major challenge for our business but we are committed to manufacturing the home-made, low-embedded carbon steel the UK needs.

'We have engaged extensively with the public and private sector to understand the feasibility of producing net zero steel with our current blast furnace operations. However, thorough analysis shows this is not viable.'

He said Jingye Group is 'committed to the unprecedented investment our proposals require'.

In September, Tata Steel secured a £500million government bailout to fund its green strategy, which includes closing its blast furnaces in Port Talbot and the loss of thousands of jobs.

Unions warned that the combined closures mean the UK will no longer be able to manufacture virgin steel.

Instead, the sector will be able to repurpose scrap steel using the new electric furnaces.

Community Union general secretary Roy Rickhuss said it 'would leave the UK unable to make steel from raw materials and dangerously exposed to international markets'.

He said: 'All options for decarbonisation must remain on the table and Community will do whatever it takes to protect our members' interests.'

Together with job losses at rival Tata Steel, over 5,000 British jobs could be lost following the proposals

Around 5,000 British jobs will be axed in total following the proposals by British Steel and Tata Steel.

India's Tata Group is expected to make 3,000 workers redundant, although a statement on its Port Talbot plans was cancelled last week.

GMB national officer Charlotte Brumpton-Childs said the proposals are a 'hammer blow for UK steel'.

'Potential job losses on this scale would be devastating for the people of Scunthorpe,' she said.

'Formal consultation has not begun – although the business has started to talk to GMB and other unions about the various options on the table.

'GMB remains committed to decarbonising the industry in a way that protects virgin steelmaking in the UK and the jobs it supports.'

Jobs at risk as British Steel considers electric arc furnaces

The Engineer
06 Nov 2023

Jobs are set to be lost if British Steel builds two electric arc furnaces as part of a £1.25bn programme to accelerate its decarbonisation programme.

British Steel's plant in Scunthorpe - AdobeStock

The proposals, which are subject to appropriate support from the UK government, could see British Steel install two electric arc furnaces (EAFs) at its headquarters in Scunthorpe, and its manufacturing site in Teesside. The proposal follows analysis of the company’s current operations, available technology and market conditions.

British Steel said the new furnaces could be operational by late 2025 and would replace the aging iron and steelmaking operations in Scunthorpe that account for most of the company’s CO2 emissions. The company proposes maintaining current operations until a transition to electric arc steelmaking.

British Steel has started preliminary talks with trade unions about electrification, and said it will support employees affected by the decarbonisation plans. It has agreed for its proposals to be reviewed by an external specialist on behalf of the trade unions.

The company is also working with North Lincolnshire Council on a masterplan to attract new businesses and jobs to the Scunthorpe site, parts of which could become vacant if the proposals go ahead.

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In a statement, British Steel CEO and president, Xijun Cao, said: “Decarbonisation is a major challenge for our business but we are committed to manufacturing the home-made, low-embedded carbon steel the UK needs.

“We have engaged extensively with the public and private sector to understand the feasibility of producing net zero steel with our current blast furnace operations. However, thorough analysis shows this is not viable.

“Detailed studies show electrification could rapidly accelerate our journey to net zero and drive British Steel towards a sustainable future. It would also ensure we can provide our customers with the steel they require.”

British Steel unveiled its Low-Carbon Roadmap in October 2021, pledging to invest in technologies to deliver net-zero steel by 2050, and significantly reduce its CO2 intensity by 2030 and 2035. The company is now proposing to accelerate decarbonisation with the potential new operating structure able to reduce its CO2 intensity by around 75 per cent.

Xijun said: “Our desire to dramatically reduce our carbon footprint, coupled with current market conditions, means we can’t wait and need to transform our business as quickly as possible. And while decarbonisation will not happen overnight, it’s imperative we take swift and decisive action to ensure a sustainable future for British Steel.

“We studied having one large electric arc furnace based in Scunthorpe, one which was capable of manufacturing all of the steel we require for our rolling mills in the Humber and the North East. However, such a large furnace would require a new National Grid connection and it is anticipated this would not be available until 2034. We therefore believe the most viable and timely option is to have two smaller furnaces which combine to produce the volumes of steel we require.”

Commenting on British Steel’s announcement, Unite general secretary Sharon Graham said: “There is absolutely no need for mass redundancies at British Steel. We do not accept the need for one single job cut. Taxpayers should not be footing the bill for new investment unless that is linked to binding job guarantees. Only by the government taking a stake in the company will the right choices be made for the UK’s economy.”

In the UK and the US, populism can’t stop a declining steel industry

By Cristina Maza December 2019

A billboard for British Steel photographed in Scunthorpe,

 England on 25 September 2019.
(Joseph M. Giordano)


Michael Murphy, 61, was born and raised in Scunthorpe, a small industrial city in the north of England that sprang up in the late 19th century following the discovery of large deposits of iron ore.

The steel industry is a vital part of the global economy that each year transforms iron ore into products worth around US$2.5 trillion. The material is used to make everything from home appliances to cars to skyscrappers.

For over 100 years, labourers flocked from around the British Isles to work in Scunthorpe’s steelworks. Michael’s late father, a manual labourer from Ireland, arrived in the city as a young man to work for the British Steel Company. The job allowed him to support his children and purchase a semi-detached house for his growing family.

When Michael was a young man, he too worked for British Steel during the summers, shoveling piles of fine steel dust. And Michael’s sister started her career as a secretary working for the company. Michael remembers his childhood in Scunthorpe fondly, and he says that British Steel played a central role in his upbringing.

“We were a working-class family,” he tells Equal Times. “I had a perfect childhood because I had loving parents. Once a year we would go on a trip to the coast organised by British Steel.”


“Almost every family in this town has some connection to British Steel,” Michael, a longtime Labour Party activist, continues. “If the company folds this town will become a ghost town, or heroin central.”

For months, this was the cloud of fear that hung over Scunthorpe after British Steel, the country’s second largest steel producer, went into liquidation in May. Between the main production site in Scunthorpe and rolling facilities in Teeside in the north-east of England, an estimated 4,000 jobs were at risk, not to mention 20,000 jobs in the supply chain. Last month, affected workers were able to breathe a sigh of relief after the Chinese firm Jingye announced plans to purchase the plant for £70 million (approximately US$90 million) and invest over £1.2 billion (approximately US$1.5 billion) in British Steel over the next decade.

Scunthorpe’s predicament is familiar to people living in what was once the centre of the steel industry in the United States. Places like Pittsburgh, Pennsylvania were, like Scunthorpe, built on the steel industry and ultimately transformed when forced to face the industry’s decline. The Bethlehem Steel steelworks in Sparrows Point outside of Baltimore, Maryland provided high wages and union-protected jobs that supported tens of thousands of families in the mid-20th century. The company shuttered for good in 2012. Places like Youngstown, Ohio and Gary, Indiana had their economies decimated in the late 1980s after steel plants closed. And these are just a few examples.

Andrew Morton, a 67-year-old former steel worker from Baltimore, was one of the last people working for Bethlehem Steel before it closed its doors in 2012, slashing the roughly 2,000 jobs that remained. He had been working for the company since he was 18 years old.

“A lot of people lost their jobs. It caused a lot of hardship,” Morton says. “Bethlehem Steel played a major part in the economy and allowed middle income families to do things like pay for college. When they lost those incomes some people adapted, but some people committed suicide. Most people didn’t do very well.”
Trump’s trade war and the UK’s Brexit-related chaos

The steel industry has been in decline in both the United Kingdom and the United States since the 1980s, thanks to shifting global markets, new technologies and governments that have been reluctant to prop up a struggling industry. China now dominates global steel production, an industry that the US and UK commanded together in the 19th century. But right-leaning populists on both sides of the Atlantic recently promised that the steel industry could be revived with the right policies.

Populists have attempted to win political points by exploiting the discontent of workers who see their wages stagnate as living costs rise. They have promised to revive struggling industries for steel and coal workers, even though economists say that their goals are unrealistic in the current global economy.

US president Donald Trump levied tariffs of up to 25 per cent on steel imports in an effort to boost the US steel industry. Meanwhile, the UK’s Brexit Party leader Nigel Farage claimed that British Steel could have avoided going into liquidation if the United Kingdom had left the European Union sooner, citing the European Union’s Emissions Trading Scheme – which incentivises heavy industry to cut carbon emissions – as a factor contributing to the industry’s decline.


Instead, Trump’s trade policies and the UK’s Brexit-induced political turmoil have thrown their respective steel industries into chaos. The US Steel Company lost around 70 per cent of its market value, or around US$5.5 billion, and shuttered several mills after the Trump administration levied its tariffs on steel imports.

The US Steel Company did not respond to requests for comment.

Much of the turmoil is thanks to competition from Beijing. Last year, China produced around 51 per cent of global steel output, or 928.3 million metric tons. By comparison, the US comes in fourth globally, producing 86.7 million metric tons of steel in 2018. The United Kingdom, meanwhile, only produces between five and six million metric tons annually, according to recent data. It is the fifth largest steel producer in the European Union, but it does not make the top ten list of global steel producers.

In early October, the US credit ratings agency Moody’s downgraded its outlook for the entire US steel industry from ‘stable’ to ‘negative’ and released a statement affirming that the situation is not expected to improve. Prices that hovered above US$800 a ton dropped to US$520 a ton in the last half of 2018.

Meanwhile, economists note that the uncertainty caused by Brexit has sped up the decline of the UK’s steel industry. Many buyers of British steel have opted to cancel their contracts until it becomes clear which tariffs they will pay in the wake of the UK’s eventual exit from the European Union.

Steel unions have warned that a no-deal Brexit, in which the country would leave the European Union without a deal, would leave their industry vulnerable. EU regulations against steel dumping from China have long protected British steelworkers.

“British Steel would not have gone into liquidation but for the threat of a no-deal exit from the EU. That’s an incontrovertible fact,” says Nic Dakin, who is standing to be re-elected as a Labour Member of Parliament for Scunthorpe during the upcoming UK general election on 12 December.

Hit hard by voting to leave

Still, 68.68 per cent of the people in Scunthorpe who voted in the Brexit referendum voted to leave the European Union.

Denise Thompson, who runs a hotel near the British Steel plant, says she voted in favour of Brexit because she didn’t want money that could be spent on the UK’s National Health Service to line the pockets of diplomats in Brussels. She still wants the United Kingdom to leave the European Union, but she admits that business has been bad since the Brexit referendum. The number of contractors that British Steel employs has dropped precipitously, leading to fewer guests at the hotel, she says.

“People come for one night instead of for three or four weeks,” she tells Equal Times. “We used to have a couple of thousand guest workers stay every season. Now it’s virtually none, perhaps between 40 and 50.”

Thompson says that a lot of her friends and acquaintances in Scunthorpe are reluctant to spend money because they don’t know if they’ll still have a job tomorrow. And many worry that their working conditions will become more precarious.

Gwylim Glyndwr Williams, 60, began working for British Steel at the age of 19 and rose to become a team leader and a union member on the National Trade Union Steel Coordinating Committee. He recently retired after 40 years with the company, but he voted for the UK to remain in the EU because he trusts the employment laws made in Brussels more than those established by the ruling Conservative Party, which he says has abandoned British Steel’s workers.

“Over the years, the Conservatives have been in power more times than Labour. It’s just the way it is,” Williams says. “But the European Union had some great employment laws over the years. The laws that came in were far superior to our old health and safety laws. In this country the government has always watered down the legislation, but under the European banner we’ve been protected.”

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Labour promises £3bn to support British steel industry as 2,000 job cuts loom

Jonathan Leake
Mon, 23 October 2023

British Steel's plant in Scunthorpe, north Lincolnshire - LINDSEY PARNABY/AFP

Labour wants to build hydrogen-powered factories that produce green steel as part of Sir Keir Starmer’s plans to invest £3bn in the sector if he wins the next election.

This forms part of the Labour leader’s pledge for Britain’s steel industry to be “the future, not the past”, as he said he will “back, not abandon” steelworkers.

Labour’s bid for hydrogen-powered steel will mean Britain could make so-called green steel from scratch, rather than recycling old scrap.

Details of the £3bn plan follow revelations that 2,000 jobs may go at British Steel’s Scunthorpe plant.

Mr Starmer made his announcement during a visit to Tata’s giant Port Talbot plant in South Wales on Monday, as he said he wants the UK to retain its steelmaking industry and become a world leader in “green steel production”.

He said: “We have ambitious plans for the steel industry. We see this as the future, not the past. That requires strategic thinking about our economy. We want to go to clean power, that will bring down energy costs.”

The Government last month announced it will pump up to £500m into Port Talbot as part of plans to produce “greener” steel. Tata employs 8,000 people, 4,000 at Port Talbot. Up to 3,000 jobs could eventually be lost.

Over the weekend it was reported that Jingye Group, the Chinese owners of British Steel, want a similar deal, seeking an estimated £300m to help switch its Scunthorpe plant’s coke-fired blast furnaces to electric arc versions, which can run on zero-carbon electricity.

However, British Steel is drawing up plans to cut up to 2,000 workers as it grapples with losses of up to £30m a month, the Sunday Times first reported.

Keir Starmer reaffirmed his party's commitment to the steel industry during a visit to Tata’s Port Talbot steelworks - Ben Birchall/PA Wire

Sir Keir met with representatives of the three main steelworkers’ unions – Community, GMB and Unite – during his visit to Port Talbot.

He said: “If we are able to put in place our mission for clean power 2030, that will require more steel – and therefore we want the demand for steel to go up.

“Of course, we need to transition to green steel. But we must do this transition very carefully, protecting the jobs and the skills and the history that we have here in South Wales. Connecting and bridging that to the future, which is green steel.

“So, we have been having productive discussions this morning about what I think will be a very bright future for steel. But only with strategic thinking around it.”

A government spokesperson confirmed it was already in negotiations with Jingye, and said: “Our commitment to the UK steel sector is clear, including announcing a major package of support on energy costs and government financing to enable greener steel production by Tata Steel at Port Talbot.

“We continue to work closely with industry, including British Steel, to secure a sustainable and competitive future for the UK steel industry.”

British Steel’s headquarters are based at the 2,000-acre Scunthorpe site in Lincolnshire, along with its main iron and steelmaking operations. Its four blast furnaces produce about three million tonnes of steel a year – about half the UK total.

It also has rolling mills in Teesside and Skinningrove in the UK and in Alblasserdam in the Netherlands.

A British Steel spokesman said it was committed to transforming British Steel into a “green and sustainable company”. He added: “As part of our journey to net zero, it is prudent to evaluate different operational scenarios.”

British steel ‘the future, not the past’, Keir Starmer vows during Port Talbot visit

David Hughes and Dominic McGrath
Mon, 23 October 2023 



SIR Keir Starmer said that he had “productive” talks during a visit to Port Talbot, as he promised to make the UK a world leader in clean green steel.

The Labour leader visited Tata’s giant Port Talbot plant, promising that the industry was “the future, not the past”.

Tata also runs sites in Llanwern and Caerphilly.

Sir Keir, who was meeting with representatives of the three main steelworkers’ unions – Community, GMB and Unite – during his visit, made the vow as the industry faces job cuts as part of the drive to lower emissions.

He has made delivering clean power by 2030 one of his five missions for a Labour government.

“We have ambitious plans for the steel industry. We see this as the future, not the past. That requires strategic thinking about our economy. We want to go to clean power, that will bring down energy costs,” Sir Keir said.

He added: “If we are able to put in place our mission for clean power 2030, that will require more steel – and therefore we want the demand for steel to go up. Of course, we need to transition to green steel. But we must do this transition very carefully, protecting the jobs and the skills and the history that we have here in South Wales. Connecting and bridging that to the future, which is green steel.

“We have been having productive discussions this morning about what I think will be a very bright future for steel. But only with strategic thinking around it.”

The UK Government last month announced it will pump up to £500 million into Port Talbot as part of plans to produce “greener” steel – but as many as 3,000 jobs could be lost.

The taxpayer funding will help switch the plant’s two coal-fired blast furnaces to electric arc versions, which can run on zero-carbon electricity.

The firm, which employs around 8,000 people across the UK, will also invest about £750 million in the project.

Electric arc furnaces (EAF) are mainly used to melt scrap metal for conversion into new products, while blast furnaces are used to create steel from iron ore and coke.

Around 2,000 jobs are also reportedly at risk at Scunthorpe-based British Steel, according to the Sunday Times, although final decisions have not been made.

A UK Government spokesman said: “Our commitment to the UK steel sector is clear, including announcing a major package of support on energy costs and recent Government financing to enable greener steel production by Tata Steel at Port Talbot.

“We continue to work closely with industry, including British Steel, to secure a sustainable and competitive future for the UK steel industry.”

A Labour spokesman said: “We’ll invest in the communities that are at the heart of the future by investing £3 billion over a decade to greening steel across the UK, from Port Talbot, to Rutherglen, to Scunthorpe.

“Our long-term plan for steel will see a 10-year commitment to invest in the new green technologies we need to keep UK steel competitive, ensure jobs stay in the UK and reduce our carbon emissions.

“That’s the difference between Labour and the Conservatives, they lurch from crisis to crisis while Labour has a plan for a decade of national renewal.”

Community’s general secretary Roy Rickhuss said: “It is clear that Labour is on the side of steelworkers, and we need a Keir Starmer-led Labour government that will deliver the investment needed for our industry to thrive.

“After three years of discussions, the deal that Tata and the UK Government have cooked up – with no input from the unions – is a botched plan for decarbonisation on the cheap.”

He called for a “long, robust consultation” on the plan with the chance for the union to put forward alternative proposals, adding that “we will do everything in our power to support our members and all options should be on the table”.

The Unite union called for Sir Keir to back its plan for the industry, which includes a £12 billion, 12-year phased transition to green steel and changes to procurement rules to allow public contracts to use 100 per cent British metal.

Unite general secretary Sharon Graham said: “Port Talbot can remain at the centre of a vibrant UK steel industry if Keir Starmer commits a future Labour government to supporting Unite’s plan for steel.

“Unite’s workers’ plan for steel shows politicians have the opportunity to make the UK a world leader in steel production – we will be doing everything in our power to make sure they grasp it.”

Labour promises UK steel industry will be ‘backed not abandoned’

David Hughes, PA Political Editor
Sun, 22 October 2023 

The UK can be a world leader in clean steel production, Labour vowed as the industry faces painful job cuts as part of the drive to lower emissions.

Sir Keir Starmer will visit Tata’s giant Port Talbot plant in South Wales where he will promise the UK’s steelmakers are “backed, not abandoned”.

The Government last month announced it will pump up to £500 million into Port Talbot as part of plans to produce “greener” steel – but as many as 3,000 jobs could be lost.

The taxpayer funding will help switch the plant’s two coal-fired blast furnaces to electric arc versions, which can run on zero-carbon electricity.

Labour leader Sir Keir Starmer is set to visit Port Talbot (Stefan Rousseau/PA)

The firm, which employs around 8,000 people across the UK, will also invest about £750 million in the project.

Electric arc furnaces (EAF) are mainly used to melt scrap metal for conversion into new products, while blast furnaces are used to create steel from iron ore and coke.

Around 2,000 jobs are also reportedly at risk at Scunthorpe-based British Steel, according to the Sunday Times, although final decisions have not been made.

A Government spokesman said: “Our commitment to the UK steel sector is clear, including announcing a major package of support on energy costs and recent Government financing to enable greener steel production by Tata Steel at Port Talbot.

“We continue to work closely with industry, including British Steel, to secure a sustainable and competitive future for the UK steel industry.”

Sir Keir is expected to meet representatives of the three main steelworkers’ unions – Community, GMB and Unite – during his visit to Port Talbot.

A Labour spokesman said: “The UK can be a world leader in clean steel and our long-term programme of investment will safeguard jobs and help us lead the pack, not lag behind our competitors.

“Labour won’t stand aside. We will ensure the UK’s steel industry is backed, not abandoned.

“We’ll invest in the communities that are at the heart of the future by investing £3 billion over a decade to greening steel across the UK, from Port Talbot, to Rutherglen, to Scunthorpe.



“Our long-term plan for steel will see a 10-year commitment to invest in the new green technologies we need to keep UK steel competitive, ensure jobs stay in the UK and reduce our carbon emissions.

“That’s the difference between Labour and the Conservatives, they lurch from crisis to crisis while Labour has a plan for a decade of national renewal.”

Community’s general secretary Roy Rickhuss said: “It is clear that Labour is on the side of steelworkers, and we need a Keir Starmer-led Labour government that will deliver the investment needed for our industry to thrive.

“After three years of discussions, the deal that Tata and the UK Government have cooked up – with no input from the unions – is a botched plan for decarbonisation on the cheap.”

He called for a “long, robust consultation” on the plan with the chance for the union to put forward alternative proposals, adding that “we will do everything in our power to support our members and all options should be on the table”.

The Unite union called for Sir Keir to back its plan for the industry, which includes a £12 billion, 12-year phased transition to green steel and changes to procurement rules to allow public contracts to use 100% British metal.

Unite general secretary Sharon Graham said: “Port Talbot can remain at the centre of a vibrant UK steel industry if Keir Starmer commits a future Labour government to supporting Unite’s plan for steel.

“Unite’s workers’ plan for steel shows politicians have the opportunity to make the UK a world leader in steel production – we will be doing everything in our power to make sure they grasp it.”

IMPERIALISM THE HIGHEST STAGE OF CAPITALI$M

UK Government officials fly to China to win support for British Steel bailout

CAP IN HAND

Tue, 21 February 2023

Government officials will this week fly to China in an effort to convince the owner of British Steel to finalise plans for a state funding package amid hundreds of job cuts at the company.

Sky News has learnt that civil servants from the Department for Business and Trade are travelling to meet executives from Jingye Group amid protracted talks about a £300m grant to the Scunthorpe-based company.

Sources said the talks were expected to focus on the value of an energy subsidy package, which could take the overall value of government support for British Steel to approximately £1bn.

It comes just days after Kemi Badenoch, the new business and trade secretary, told Sky News' economics and data editor, Ed Conway, that "nothing is ever a given" when asked whether Britain needed a steel industry.

A government spokesperson 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 decarbonised, sustainable and competitive future for the UK steel sector.

"Government officials are engaging with Jingye regularly as part of the ongoing discussions with the company and our routine work with businesses across the steel sector.

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

Sky News revealed last month that Jingye was drawing up plans to cut around 800 jobs at British Steel, with the BBC reporting on Tuesday night that 300 redundancies would be announced this week arising from the closure of coking ovens at the Scunthorpe plant.

Mrs Badenoch's predecessor, Grant Shapps, told Jingye last month that proposals to make hundreds of workers redundant were "unhelpful" amid negotiations over a £300m taxpayer support package.

British Steel confirmed recently that it was "reluctantly having to consider cost-cutting" but did not specify the number of jobs that were at risk.

Nusrat Ghani, the business minister, had told MPs that talks between the government and British Steel were ongoing, even though the conditions attached to the taxpayer aid include a six-month moratorium on redundancies and a guarantee to preserve an unspecified proportion of the company's workforce for the next decade.

Jingye said in January that steelmaking in Britain was "uncompetitive" in an international context.

"Unfortunately, like many other businesses we are reluctantly having to consider cost cutting in light of the global recession and increased costs," the company said.

Sky News revealed last month that British Steel and larger rival Tata Steel would be required to guarantee thousands of jobs until 2033 in return for £600m of government support to help decarbonise the industry.

Any taxpayer funding is to be linked to the replacement of blast furnaces at the company's sites with greener electric arc furnaces, while Jingye would be obliged to invest at least £1bn in the business by 2030.

A decision to grant the state aid would not be without controversy, given British Steel's Chinese ownership and doubts about its adherence to financial commitments made when it bought the business out of insolvency proceedings in 2020.

In a letter to Jeremy Hunt, the chancellor, in December, Mr Shapps and Michael Gove, the levelling-up secretary, warned that British Steel's demise could cost the government up to £1bn in decommissioning and other liabilities.

They cautioned Mr Hunt that British Steel "does not have a viable business without government support".

"Closing one blast furnace would be a stepping-stone to closure of the second blast furnace, resulting in a highly unstable business model dependent on Chinese steel imports," Mr Shapps and Mr Gove wrote.

"Given the magnitude of the liabilities due to fall on HMG in the event of blast furnace closure, and following the PM's steer, we would like officials to test whether net Government support in the region of £300m for British Steel could prevent closure, protect jobs and create a cleaner viable long-term future for steel production in the United Kingdom."

British Steel employs about 4,000 people, with thousands more jobs in its supply chain dependent upon the company.

Tata Steel employs substantially more people in the UK, including more than 4,000 at its Port Talbot steelworks in Wales.

According to the ministers' letter, British Steel had already informed the government that it could close one of the Scunthorpe blast furnaces as soon as next month, with the loss of 1,700 jobs.

This would be "followed by the second blast furnace closing later in 2023, creating cumulative direct job losses of around 3,000", Mr Shapps and Mr Gove wrote.

In May 2019, the Official Receiver was appointed to take control of the company after negotiations over an emergency £30m government loan fell apart.

British Steel had been formed in 2016 when India's Tata Steel sold the business for £1 to Greybull Capital, an investment firm.

As part of the deal that secured ownership of British Steel for Jingye, the Chinese group said it would invest £1.2bn in modernising the business during the following decade.

Jingye's purchase of the company, which completed in the spring of 2020, was hailed by Boris Johnson, the then prime minister, as assuring the future of steel production in Britain's industrial heartlands.

Up to 1,200 jobs impacted by British Steel shake-up, says union source

August Graham, PA Business Reporter
Wed, 1 February 2023 

British Steel plans to axe hundreds of jobs in plans to close its coke ovens in Scunthorpe and will “optimise” several hundred more, a union source has said.

The Chinese-owned manufacturing company was said to be cutting 300 jobs from the coke ovens, with another 600 to 900 being “optimised”. It was unclear what this optimisation would mean.

It comes as ministers are considering a multimillion-pound rescue package for the struggling business.

Earlier on Wednesday, Sky News reported that the business had a plan which could see around 800 workers made redundant.

The redundancies would focus mainly on the plant in Lincolnshire. British Steel employs around 4,000 people across the UK.

The Government is reportedly considering cash injections into both British Steel and Tata Steel UK.

British Steel declined to comment when asked about the potential cuts.

Last month the Financial Times reported that Chancellor Jeremy Hunt was close to signing off on the support package, which could funnel around £300 million to British Steel, with an “equivalent” sum going to Tata.

But it is unclear what the latest threat of redundancies could mean for this negotiation.

Ministers had reportedly demanded that the companies had to protect jobs if they wanted the Government handout.

The funding is reportedly also set to be linked to decarbonisation efforts from the steel giants. It will help replace British Steel’s blast furnaces with electric alternatives, officials hope.

Once a giant of British manufacturing, the business has struggled over the past decade.

China’s Jingye Group became the manufacturer’s third owner in four years when it bought British Steel out of insolvency in 2020. But now Jingye thinks it needs taxpayer funding to keep the doors open.

Charlotte Brumpton-Childs, national officer at the GMB union, said: “This is devastating news for the people of Scunthorpe and all British steel workers across the UK.

“With grim predictability, the Government’s investment is a sticking plaster that does nothing to help the long-term structural issues affecting our steel industry.

“Now, steel workers, their families and communities will once again be asked to pay the price.

“GMB urges British steel and the UK Government to continue talks. Ministers need to decide if they want the UK to have a future in steel or whether they want it to wither and die like so much of our proud manufacturing heritage.”

Alun Davies, national officer at the steelworkers’ union Community, said: “We are extremely concerned about the reports that British Steel is looking to cut hundreds of jobs.

“This move would represent a betrayal of their loyal workforce and their commitments to invest in the business. We believe this would put staff at risk and is completely unworkable.

“British Steel is already putting staff at risk by making them work overtime every single week. Cutting hundreds of jobs in this situation will endanger workers by pushing them to work even longer hours in extreme temperatures.

“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.

“British Steel should urgently clarify its position and know that we will use any means at our disposal to fight this dangerous plan.”

The Prime Minister’s official spokesman said: “Any reports of prospective job losses would be of concern. I can’t necessarily comment on speculation but the Government always stands ready to provide or signpost assistance for anyone who needs it.

“In terms of long-term support for UK steel, this is a Government that has taken a number of steps in this space.”

NATIONALIZATION REDUX

UK MPs pass emergency bill to rescue troubled British Steel

Bloomberg News | April 13, 2025 | 

Credit: British Steel via LinkedIN


The UK Parliament passed an emergency bill to give ministers control over Jingye Group’s British Steel, as Keir Starmer’s Labour government fights to preserve Britain’s last virgin steelmaker.


The legislation was approved on Saturday by the House of Commons and the Lords after both chambers were recalled from their Easter recess. It hands Business Secretary Jonathan Reynolds extensive powers to direct British Steel’s staff and operations and order raw materials to keep production going in Scunthorpe, the site of the UK’s last remaining blast furnaces that make steel from primary materials.

Neither Jingye nor British Steel responded to emailed requests for comment on Saturday. On Friday, the UK unit declined to comment about Parliament’s recall.

The new government powers were steamrollered through Parliament after Prime Minister Keir Starmer’s Labour government became concerned that Jingye was preparing to shutter the unprofitable furnaces, putting thousands of jobs at risk and leave the birthplace of the industrial revolution as the only Group of Seven nation without primary steel-making operations.

Jingye last month rejected a £500 million ($650 million) UK government rescue package. Opening the debate on Saturday, Reynolds told lawmakers that despite the government negotiating “tirelessly” with the Chinese firm, including making a “generous offer” to help keep the plant operational, the company had wanted an “excessive” amount.

“Over the last few days, it became clear that the intention of Jingye was to refuse to purchase sufficient raw materials to keep the blast furnaces running,” he said. “In fact, their intention was to cancel and refuse to pay for existing orders. The company would therefore have irrevocably and unilaterally closed down primary steel making at British Steel.”

Under the terms of the bill – which covers all steel facilities in England, not just those run by British Steel — any employee who fails to comply with the business secretary’s directions could face fines or as long as two years in prison. The legislation also provides for compensation for costs incurred by companies in complying with government orders.

Reynolds’ department said in a statement that the legislation meant that “anyone employed at the plant who takes steps to keep it running, against the orders of the Chinese ownership, can be reinstated if sacked for doing so.”

The move is the latest instance of the UK government falling out with a Chinese company over investments in critical national infrastructure. In 2022, the then-Conservative government announced it was buying out China General Nuclear Power Corp.’s investment in the Sizewell C nuclear plant in Suffolk, while the UK also in recent years excluded Huawei Technologies Co. from supplying next-generation technology to Britain’s 5G wireless networks.

Funding to keep the Scunthorpe plant running will come from an existing government pot for the steel industry totaling £2.5 billion, according to the Department for Business and Trade. Reynolds said he didn’t want to keep the new powers that would result from passing the bill “longer than necessary,” though he also added that the full nationalization of British Steel is an option that remains “on the table.”

Nevertheless, Labour rejected proposals from the Conservatives and Liberal Democrats to add a sunset clause laying out when the business secretary’s new powers would end. Similar efforts in the Lords were withdrawn following assurances from Labour.

Summing up for the government at the end of the Commons debate, Industry Minister Sarah Jones said adding a sunset clause risked reducing the government’s leverage in negotiations with Jingye. She promised, however, that the government would “repeal this legislation as quickly as we can” and that Reynolds would update Parliament about its implementation every four working weeks. In the Lords, another business minister, Maggie Jones, said she would keep the upper chamber updated every four weeks, promising the powers would only be used “judiciously.”

Britain’s steel industry had been struggling even before the announcement of US President Donald Trump’s 25% tariffs on imports of the alloy, with furnaces at Port Talbot shuttering last year. The closing of British Steel’s UK operations would jeopardize thousands of jobs in Scunthorpe and Teesside, also in northern England. The company employs around 3,500 people in total.

Trade unions last week warned that Jingye had canceled orders for iron ore, coking coal and other raw materials needed to make steel, raising concerns the Scunthorpe plant could effectively close within days.

Fuel shortages pose major operational and financial risks for steel mills, because blast furnaces need to be kept running continuously in order to stop molten metal from cooling and solidifying inside the furnace. Such events can severely damage the interior lining of a furnace and knock plants offline for months, and the cost of repairs can be sizable.

Recalls of Parliament from recess are rare events, with the last one taking place in August 2021 for a debate on the situation in Afghanistan. Saturday marked the 35th time it’s happened since 1948.

(By Alex Morales)

DURING SATURDAYS EMERGENCY DEBATE AND VOTE WELSH & SCOTS MP'S  SKEWERED THE LABOUR GOV OVER THEIR FAILURE TO SAVE STEEL WORKS IN THOSE COUNTRIES

UK

Scaffolders warn Rope Access company over British Steel strike breaking

By

 Scaffmag Newsdesk

 -

 Dec 8, 2021

Protesters outside Rope Access Trade Solutions in South Shields. Credit: Unite

A GIANT INFLATABLE RAT has joined British Steel scaffolders and strike campaigners outside a South Shields company.

Scaffolders and Unite the union has accused Rope Access Trade Solutions of supplying workers to help British Steel break a strike by scaffolders employed by Actavo (UK) at its site in Scunthorpe.

The protest took place outside Rope Access Trade Solutions South Shields address this morning (Wednesday 8 December).

The union has warned British Steel that engaging with the firm could be in breach of criminal law which prevents workers from being supplied to cover the duties of workers engaged in lawful industrial action.

62 scaffolders have been on continuous strike action for 9 weeks in a long-running dispute with their employer Actavo (UK). They are significantly underpaying their workers.

Unite says this breaks a national agreement that sets fair rates for the job and prevents a race to the bottom for construction workers. But Unite says that the client, British Steel, must also take responsibility for this long-running dispute.

Unite General Secretary Sharon Graham said: “We believe Rope Access Trade Solutions have been engaged by British Steel specifically to carry out works which would normally be done by our members who are on lawful strike. This may well be in breach of criminal law.  We also have evidence that other workers are being pressured into working for British Steel’s scaffolding contractor Actavo.

 “The workers on strike have their union’s steadfast support. Any attempt to break this strike will be fiercely resisted. My priority is to defend Unite members’ jobs, pay and conditions.

“Unite will not allow employers to use strike breakers to help erode workers’ pay. We will fight tooth and nail to stop the race to the bottom.”

Striking scaffolders at British Steel. Credit: Twitter/United Scaffs

The dispute, which began in 2019, is a result of the scaffolders not being paid in line with the National Agreement for the Engineering Construction Industry (NAECI).

The rates for the workforce are currently between 10-15 per cent (depending on specific roles) below these rates.

The workers maintain over 500 scaffolding structures at the British Steel site.

British Steel owner preparing to cut as many as 2,000 jobs, report says


China’s Jingye Group said to be considering move as part of switch to using greener electric arc furnaces


Sarah Butler
@whatbutlersaw

Sun 22 Oct 2023 

A worker at British Steel’s Scunthorpe plant in north-east England Photograph: Lindsey Parnaby/AFP/Getty Images

British Steel’s Chinese owner is preparing to cut as many as 2,000 jobs as it battles losses believed to be running at £30m a month, according to reports.

The potential cuts, which amount to almost half of the Scunthorpe-based firm’s 4,500 workforce, are part of a switch to greener steel production using electric arc furnaces instead of polluting blast furnaces, which use coke to melt iron ore.

The cuts, first reported in the Sunday Times, are still under consideration and it is understood that no firm decision on the restructure has been made.

The UK government has offered the company’s owner, Jingye Group, £300m to support a shift to electric arc furnaces, but negotiations on finalising the deal are understood to be ongoing. The cash was reportedly linked to protecting jobs and a £1bn investment by the Chinese group, and it is not clear how job cuts might affect the government’s investment.

The government recently agreed a £500m support package for Tata Steel to fund the transition to electric arc at the Port Talbot steelworks in Wales.

A spokesperson for the Department for Business and Trade said: “We continue to work closely with industry, including British Steel, to secure a sustainable and competitive future for the UK steel industry.”

The UK’s steel industry – which is one of the most difficult to decarbonise because of its huge energy requirements and the use of coking coal in iron smelting, a process that emits carbon dioxide directly – is suffering from rising costs and competition from cheap steel made in China and elsewhere.

A British Steel spokesman said: “While decarbonisation is a major challenge for our business, we’re committed to transforming British Steel into a green and sustainable company providing long-term, skilled and well-paid careers for thousands of employees and many more in our supply chains.

“As part of our journey to net zero, it is prudent to evaluate different operational scenarios to help us achieve our ambitious goals and we are continuing to assess our options.”

The restructure emerged after British Steel, which was rescued from collapse by Jingye in 2020, admitted in an industry meeting with other organisations last week that it was losing up to £30m a month, according to the Mail on Sunday.

Steel production has been hit by the increased cost of carbon credits as well as much higher energy prices after Russia’s invasion of Ukraine.

The company did not confirm its financial position, but admitted it was struggling with a “temporary production issue” and said it was “taking decisive action to minimise the potential impact on customer orders”.

It said in a statement: “The matter will be resolved at the earliest opportunity. We are manufacturing iron and steel and continue to work closely with our customers to satisfy demand and ensure they get the high-quality products they require.”

'A town killer' - businesses' fear over steel jobs

By Lucy Parry, BBC Yorkshire and Lincolnshire investigations
Share

BBC


Steel workers, their families, and small businesses say their lives are on hold as the threat of significant job losses at Scunthorpe steelworks continues to hang over them.

As part of a £1.25bn decarbonisation plan, British Steel would close the plant's two blast furnaces, replacing them with a greener electric arc furnace.

Trade unions said the move would result in 2,000 redundancies in steel and iron making.

The new Labour government said it would be working to safeguard jobs as part of its negotiations with British Steel, which also said it would support affected employees.

Jessica Lane/ BBC
Scunthorpe steelworks dominate the town's skyline


Around a quarter of the workforce in Scunthorpe is employed in manufacturing - including 4,000 at British Steel, according to North Lincolnshire Council.

And much of the private sector is involved in logistics and supply chains for the plant.

That worries those in the hospitality and leisure industry, who depend on disposable incomes, including Stuart Ross, the owner of Ashby Bowl in Scunthorpe.


Stuart Ross worries his customers will stop spending on leisure activities


Mr Ross said a lot of his customers were steel workers, or connected to the steel works in some way: "They're very worried. People are coming up to retirement age and they don't know what is going to happen to them.

"If they haven't got the money, they won't spend. That will be the entertainment industry, the leisure industry. Everything, everything will be affected.

"It could be a town killer."


Former steel worker, Steve Barnes, now runs a sweet shop in Scunthorpe


As Steve Barnes scooped fizzy cola bottles into a bag at his High Street sweet shop, he remembered what it was like to lose his job at the steel works: "It was absolutely gutting at the time and it's going to be the same for these people."

Mr Barnes was one of 4,000 steel workers made redundant in 1981, when large parts of the Scunthorpe plant were shut down.

He said his business is going well, for now: "We're riding on a little bit of a crest of a wave because sweets are almost fashion because of Tik Tok, but it's only good while people have got money."

He is worried customers will cut back on treats: "The steel works provide many of the better paid jobs in Scunthorpe, so obviously it's a huge chunk of spending power coming out of the town."

Green steel making

British Steel said replacing Scunthorpe's blast furnaces with an electric arc furnace, would help with its Low Carbon Roadmap, which aims to deliver net-zero steel by 2050.

However, the move depends on what its Chinese owner, Jingye, described as “appropriate support” from the UK government, widely reported to be a request for £300m in subsidies.

As negotiations continue, business secretary, Jonathan Reynolds said: "Steel is vital for a vibrant, secure economy.

"Our steel sector needs a government working in partnership with trade unions and business to secure a green steel transition that’s both right for the workforce and delivers economic growth.

"Decarbonisation does not mean deindustrialisation, and I will be working to safeguard jobs as part of these negotiations, securing the future of steelmaking communities for generations to come.”

British Steel said it would support employees affected by its plans, adding: "The new government is well-briefed on the challenges our business faces, and the timely support we require for decarbonisation.

"We look forward to working together to build a clean, green, and sustainable future for British Steel.”

Simon Spark/BBC
Sir Nic Dakin (centre) was re-elected as Labour MP for Scunthorpe in July



Meanwhile, Scunthorpe's Labour MP, Sir Nic Dakin, said he was concerned about the closure of the blast furnaces:

"What the Labour party made clear during the election period was that we wish to retain primary steel making capacity in the UK.

"There's no reason that couldn't be retained here in Scunthorpe where we've got good blast furnaces and obviously there needs to be a move to cleaner, greener technology over time, but these are the discussions that need to take place.

"What we need is a sensible transition and we may be able to retain the blast furnaces for way longer than was envisaged in the plans that are being talked about."

Paula Gouldthorpe says small business must be supported



The Federation of Small Businesses' regional development manager, Paula Gouldthorpe, said support must be there for those facing redundancy.

She added: "Some might look for alternative roles, some might take the decision to look at starting their own business, and I think for the local authorities and for the government, it's really important to look at that wider package of support."

Jamie has been a steel worker for 19 years

Jamie Stringer works in the continuing casting section of the works: "We take liquid steel and make it into hard steel, it gets rolled into different products like rails."

Like many others, his family came to Scunthorpe because of steel: "My grandad travelled down from London in the 60s to work in the plant, so it runs in the family.

"I did an apprenticeship and have been there about 19 years now."

He said morale was low because of the uncertainty: "People are just after answers really and want to know what's happening with blast furnaces, because they are a major part of the steel plant."

Professor Ian Barnes believes Scunthorpe can continue to adapt to change

But Prof Ian Barnes, from the University of Lincoln's school of economics, believes Scunthorpe can cope with yet more change: "When you think that 40 odd years ago, you had 30 odd thousand people working in the steel industry, it's adjusted very well to the current situation.

"One of the great things about Scunthorpe, it's got good connections to the road and railway network.

"It's got a lot going for it, provided it gets the right kind of jobs coming in over time, but it will be an adjustment period."