British Steel to consult on closure of Scunthorpe blast furnaces with thousands of jobs at risk

It blamed the imposition of tariffs from Mr Trump and higher environmental costs as two reasons to push ahead with the closure.

Unions described the news as a “dark day for our steel industry and for our country” and urged the Government to get back to the negotiating table.

Ministers have been locked in talks with the company’s owners, Jingye, for months over a potential rescue plan, which would keep the plant open during the transition to electric arc furnaces.

Yesterday afternoon, Industry Minister Sarah Jones told MPs that Jingye had rejected a deal made by Business Secretary Jonathan Reynolds.

Sky News reported this was worth £500m, the same amount that was accepted by Tata in Port Talbot.

The Yorkshire Post understands that the Government believes this is a “generous offer”, and it would have required support for the local area.

Scunthorpe is the UK’s last primary steelmaking facility, and the Prime Minister recently announced a deal for the plant to provide steel to build Heathrow’s third runway.

However, the rejection of the support package earlier this week appears to have triggered the consultation over the blast furnaces.

Jingye said the plant was currently operating with losses of around £700,000 a day.

According to the consultation, the furnaces will either close in June, September or at a later date.

British Steel said between 2,200 and 2,700 jobs are at risk.

The company’s CEO Zengwei An said: “We understand this is an extremely difficult day for our staff, their families, and everyone associated with British Steel.

“But we believe this is a necessary decision given the hugely challenging circumstances the business faces.

“We remain committed to engaging with our workforce and unions, as well as our suppliers and customers during this time.”

British Steel said it would continue to negotiate with the Government about future options.

Business 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.”

Steel unions, including Community, GMB and Unite, called on the government to do everything possible to secure steelmaking in Scunthorpe.

Community general secretary Roy Rickhuss said the closure would lead to Britain’s national security being threatened.

He explained: “This is a dark day for our steel industry and for our country. We urge Jingye and the UK Government to get back around the table to resume negotiations before it is too late.

“Crucially, Jingye have not ruled out retaining the blast furnaces during a transition to low carbon steelmaking if they can secure the backing of the Government.

"The closures at Scunthorpe would represent a hammer blow to communities which were built on steel, and where the industry still supports thousands of jobs directly and thousands more through extensive supply chains.

"Given that we are now on the cusp of becoming the only G7 country without domestic primary steelmaking capacity, it is no exaggeration to say that our national security is gravely threatened.

“This would be catastrophic at any time, let alone in the current era of geopolitical instability and volatility.

“Steel is an essential component of defensive infrastructure, just as it is to wider plans to invest in growth across the country.”

The unions recently put forward a proposal by industry experts Syndex, that would ensure the continued operation of two existing blast furnaces, while two new electric arc furnaces are constructed on the abandoned plate mill site.

Labour MPs Anna Turley and Luke Myer, and Coun Alec Brown said in a joint statement: "We are deeply concerned by reports that Jingye Group, the Chinese owners of British Steel have reject a generous offer from the Government.

“This development raises the possibility of impacts on workers at Lackenby and Skinningrove, as well as their families, and our communities.

“Negotiations are ongoing, and we urge all parties to work in good faith to secure a positive outcome.

“This is not the end of negotiations and there is still a path to a deal, and we will do everything in our power to support those discussions and ensure the best possible future for our steel industry.

“Should talks fail, we stand ready to support anyone affected and will work tirelessly to ensure multi-agency support for those who need it.”

The Government has not been able to get an exemption to the 25 per cent tariffs imposed by US President Mr Trump on imported steel and aluminium.

Sir Keir Starmer has said he is hopeful of agreeing an economic partnership, before a whole host of additional tariffs come into force next week.

Allan Bell, the chief commercial officer at British Steel, told MPs recently that the company supplies around 50,000 tonnes of steel into the US market.

He said earlier this month where there is a domestic producer in the US for the same products supplied by British Steel, they have had to “exit that business immediately”.

He added: “We’ve got customers that are concerned about the impact of the tariffs and, at the moment, are considering order cancellation.”

Mr Bell added that in cases where British Steel is the sole supplier, its customers have told the group they are “making moves to purchase that steel elsewhere”.

“It will take them nine months to develop tooling capabilities with domestic producers.

“It won’t hurt us immediately, but we anticipate that there will be damage done in circa nine months’ time.”