Government urged to nationalise British Steel if deal cannot be reached
The company has reportedly rejected a £500 million Government offer to help its transition.
The Government is being urged to nationalise British Steel if a deal cannot be reached to secure the business.
Chinese owners Jingye announced on Thursday it was launching a consultation on the proposed closure of blast furnaces at its Scunthorpe plant, raising fears of thousands of job losses.
The company has reportedly rejected a £500 million Government offer to help its transition to a greener form of steel production with a new electric arc furnace.
Closure would mean the end of steelmaking in Scunthorpe after 160 years of production.
Industry body UK Steel warned that the ending of steel production in Scunthorpe would mean the UK loses vital steelmaking capabilities in rail, heavy sections, and light sections, critical to transport, infrastructure, and construction – leaving customers dependent on international supplies.
The Community union’s assistant general secretary Alasdair McDiarmid said: “British Steel is a business of huge strategic importance, not just to the local economy and the wider steel sector, but to the country as a whole.
“There is now a serious risk that the UK will become the only G7 country unable to produce its own virgin steel. This would be a totally unacceptable situation at any time, let alone in the current era of global insecurity and volatility.
“If a deal can’t be reached with Jingye, then the government must move to nationalise the business. This government cannot afford to renege on the commitments it has made to steelworkers, and it is unthinkable that they would allow Britain’s primary steelmaking capacity to die on their watch.”
UK Steel director general Gareth Stace said: “The proposal to close iron and steelmaking at Scunthorpe marks a heartbreaking and pivotal moment for our sector. It is a shocking blow to the 3,400 workers, our sector and to the whole community in Scunthorpe. This gut punch to UK steelmaking will have a profound impact, felt throughout the British economy.
“All options should be on the table, and we need a secure future for our steel industry. The end of steelmaking at British Steel would mean we have a major gap in capacity to meet the future demand of the nation and will be an irreparable break in the armour of national security.
“This devastating decision will cause untold disruption and damage to our supply chains, threatening jobs, businesses and the nation’s economic strengths. The steel industry is officially in a crisis,”
Business and Trade Secretary Jonathan Reynolds said: “I know this will be a deeply worrying time for staff and, while this is British Steel’s decision, we will continue working tirelessly to reach an agreement with the company’s owners to secure its future and protect taxpayers’ money.
“We’ve been clear there’s a bright future for steelmaking in the UK. We’ve committed up to £2.5 billion to rebuild the sector and will soon publish a Plan for Steel setting out how we can achieve a sustainable future for the workforce, industry and local communities.”
