Thousands of British Steel Jobs at Risk Due to Funding Dispute with UK Government

More than 2,000 British Steel jobs are under threat as the company begins formal talks with trade unions over the closure of its two Scunthorpe blast furnaces. The potential job cuts come amid a breakdown in negotiations between the UK government and the company’s Chinese owner, Jingye Group, regarding a critical funding package.

British Steel, the UK’s second-largest steel manufacturer, has initiated a consultation process that could lead to between 2,000 and 2,500 redundancies, impacting more than half of its 3,500 employees. The move raises urgent questions about the future of the UK’s steel industry and government support for industrial transition.

Sources close to the discussions said that internal union meetings began Thursday morning, with a formal announcement expected shortly regarding the accelerated closure of the Scunthorpe steelworks, including its blast furnaces and part of its rolling mill operations.

Green Steel Transition Stalls over Rejected £500 Million Government Offer

At the heart of the crisis is a £500 million subsidy offer from the UK government, intended to support British Steel’s shift toward greener, more sustainable steel production using electric arc furnaces.

However, the offer has been rejected by Jingye Group, who argue that the proposed funding is insufficient to facilitate the green transition while preserving jobs.

Government sources indicated that Jingye’s preferred plan involves the gradual replacement of traditional blast furnaces with electric arc technology, which would cut fewer jobs and phase changes over time. However, without additional financial backing, this shift may not be viable.

The looming job losses are expected to intensify pressure on Prime Minister Keir Starmer’s government, with industry leaders and MPs demanding urgent action to protect domestic steelmaking capabilities.

Sarah Jones, Industry Minister, confirmed ongoing negotiations with Jingye and said that an urgent question would be addressed in the House of Commons.

The issue highlights wider concerns about the UK's ability to compete globally and maintain critical industrial infrastructure, especially in the face of international trade pressures and climate targets.

The scale of the government’s current offer to British Steel mirrors part of a £1.25 billion support package awarded to Tata Steel in 2024, further complicating the political optics of Jingye’s rejection.

As consultations progress, the future of the Scunthorpe steelworks and thousands of jobs now hangs in the balance, making this a pivotal moment for the UK steel industry and its role in the transition to a low-carbon economy.
Source: Sky News