The potential closure could lead to 2,700 jobs at risk, with British Steel’s total workforce totalling 3,500. British Steel stated that the furnaces were not financially sustainable due to tough market conditions, tariff imposition, and higher environmental costs.
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Government Support and Challenges
The BBC reported that the company was expecting a £1bn injection from the government to support the business but was offered £500m. The Prime Minister's official spokesperson said the government had made a "generous offer" to British Steel, and it would continue to work with the company and its Chinese owner Jingye to secure its future.
Unions’ and Critics’ Concerns
Unite general secretary Sharon Graham said: “British Steel is guilty of trying to hold the government to ransom, while using its dedicated workforce as pawns.” Jingye has owned British Steel since 2020 and has allegedly invested more than £1.1bn into British Steel, losing around £700,000 a day. British Steel says it will still work with the British government to find alternative options for the business.
Details of the Consultation Process
The company’s consultation with its workforce and unions will focus on:
- The closure of the blast furnaces, steelmaking operations, and Scunthorpe Rod Mill by early June 2025
- The closure of the blast furnaces and steelmaking operations in September 2025
- The closure of the blast furnaces and steelmaking operations at a future point beyond September 2025
Government’s Commitment to Steel Industry
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 £2.5bn 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."
The Need for Nationalisation if No Deal is Reached
The government has also been urged to nationalise British Steel if a deal cannot be reached to secure the business. The loss of British Steel furnaces would mean the UK loses vital steelmaking capabilities in rail, heavy sections, light sections, and construction. This will leave customers dependent on international supplies.
Strategic Importance of British Steel
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.
Urgency for Government Action to Protect Steelmaking
“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.”
