World News

UK: Over 2,000 jobs at risk as British Steel faces govt funding crisis

More than half of British Steel’s 3,500 employees are at risk as discussions over a government funding package remain unresolved.

The UK’s second-largest steel producer has begun consultations that could lead to the closure of its two blast furnaces and significant job losses.

This development is expected to increase pressure on the government to improve its financial support for the company.

British Steel held talks with trade unions on Thursday morning regarding a redundancy process that could affect between 2,000 and 2,500 workers. A trade union source confirmed that meetings took place, and a public statement announcing plans to speed up the closure of Scunthorpe’s two blast furnaces was expected shortly after.

The company stated that the consultations are focused on shutting down the blast furnaces, ceasing steel making operations, and reducing steel rolling mill capacity in Scunthorpe.

ALSO READ US: Trump imposes 25% tariff on all foreign-made cars

This redundancy consultation follows a deadlock between British Steel’s Chinese owner, Jingye Group, and the government over financial assistance to help the company transition to greener steel production.

On Wednesday, Sky News reported that Jingye had rejected a £500m offer from the government.

Sarah Jones, the industry minister, informed MPs that discussions were ongoing, and the House of Commons was expected to address an urgent question on the matter on Thursday.

The £500m proposal, designed to support British Steel’s shift to green steel production, follows years of negotiations about the company’s future. The amount matches the sum allocated to Tata Steel as part of a £1.25bn package agreed last year.

According to Whitehall sources, Jingye’s business plan suggests that if the transition to electric arc furnaces goes ahead, fewer jobs would be lost, and redundancies would be spread out over a longer period.

However, they also stated that the Chinese company believes a larger government subsidy is necessary to make the transition feasible.

(Sky News)