British Steel halts redundancy plans after Government rescue

British Steel has said it will end a consultation on up to 2,700 redundancies without action, after the Government took control of the firm earlier this month.

In March, Chinese firm Jingye, which bought British Steel in 2020, proposed to close Scunthorpe’s two blast furnaces.

As a result, it launched a consultation which it said was due to affect between 2,000 and 2,700 jobs.

Earlier this month, the UK Government used emergency powers to take control of British Steel and continue production at the site.

British Steel confirmed it has officially withdrawn HR1 consultation forms previously submitted by the company, bringing the potential redundancy process to an end.

After a scramble over the Easter holidays to obtain the coal and iron needed to keep the plant going, the company also confirmed that both the Scunthorpe blast furnaces will continue to operate.

A so-called “salamander tap”, where one of the furnaces would be drained of molten material to safely shut it down, will no longer go ahead, British Steel said.

Lisa Coulson, interim chief commercial officer at British Steel, said: “This has been a difficult and worrying time for British Steel staff and their families.

“I can, however, confirm that we are closing the redundancy consultation without action.

“Since the Government passed its legislation on Saturday, we have been working day and night to ensure we are able to stabilise our operations.

“The work done to secure the raw materials we need for both Queen Anne and Queen Bess blast furnaces means we are able to run both continuously.”

Industry minister Sarah Jones said: “The action this Government took on April 12, and the measures we’ve taken since, matter greatly for this country – and are of huge importance to thousands of steelworkers and their families.

“We will always stand up for our steel industry.

“Now, thanks to our decisive action to protect steelmaking at Scunthorpe, British Steel has cancelled the redundancy consultations started by its owners Jingye, bringing certainty for thousands of hard-working staff for the long term.”

The minister later told the Commons: “It’s not the end of the work, and it’s not the end of the negotiations, but thanks to the actions we have taken, it is also not the end of British Steel.”

“All options” remain on the table for the future of British Steel’s ownership, she added, insisting there was a need for a “modernisation programme, ideally with a private sector partner”.

Shadow business secretary Andrew Griffith described the Government’s decision to take control of British Steel as a “botched nationalisation” which he claimed would lead to a “potential bill for the taxpayer stretching into the billions”.

Ministers need to find ways of reducing energy costs for heavy industries as they chart a new industrial strategy for the UK, he said, adding: “Any industrial strategy that does not tackle that is a waste of time.”

A spokesman for the Unite union said: “Unite are pleased that British Steel have come to their senses and realised that job losses are not the way to ensure Britain remains an industrial power.

“This should be just the first step to begin the process of nationalisation.

“The Government now needs to implement a wholesale overhaul of its energy policy with a commitment to invest in renewables to lower energy prices for heavy industry like steel production.”

Alun Davies, national secretary for steel at the Community Union, said: “We welcome these positive developments, which follow constructive discussions between steel unions, the Labour Government and British Steel management.

“We look forward to continuing these productive relationships going forward.

“Through this collective effort, backed up by the commitment and resolve of the workforce, Scunthorpe steelmaking was saved from a disastrous cliff edge.

“We will now continue to work tirelessly to ensure the business gets the bright future it needs and deserves.”