Future of British Steel still up in the air despite Tata agreement

The government has unveiled a “new and improved deal” for workers in Port Talbot, however there are still fears that British Steel in Scunthorpe could close by Christmas with no agreement in place.

Ministers said workers at Tata Steel’s giant site in south Wales, will get improved redundancy terms and the offer of a skills package.

Around 2,800 jobs are still set to be lost as a result of the shutdown of blast furnaces and switch to using an electric arc system of production.

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The government confirmed it will contribute £500 million to the transition, but said investment can be clawed back if the company does not retain 5,000 jobs across its UK business after the change.

However Business Secretary Jonathan Reynolds blamed the lack of progress on an agreement at British Steel in Scunthorpe on the previous government.

The company’s Chinese owners announced it would close its blast furnaces in Scunthorpe late last year, and unveiled plans to roll out electric arc steel manufacturing if it gets “appropriate support from the UK Government”.

The British Steel plant in Scunthorpe. PIC: Scott MerryleesThe British Steel plant in Scunthorpe. PIC: Scott Merrylees
The British Steel plant in Scunthorpe. PIC: Scott Merrylees

However, there are fears in the industry that if an agreement isn’t reached then thousands of jobs could be lost by Christmas.

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Mr Reynolds said: “When it comes to somewhere like Scunthorpe I do not have in place things like the carbon capture infrastructure yet, that would be necessary for the kind of solution I would ideally want.

“I would love to be in a position to look at that, but all the time that we could have done and could have worked on that was under the Conservative government, and you didn’t do it, and therefore the options available to us are far less and the situation is far more challenging now.”

He added: “We have been clear that we want there to be a transition in Scunthorpe, that we want to put up Government money alongside what that company may do, but it’s got to be a transition.”

The cooling towers, water tower, chimneys and conveyors at British Steel in Scunthorpe (Chris Allen)The cooling towers, water tower, chimneys and conveyors at British Steel in Scunthorpe (Chris Allen)
The cooling towers, water tower, chimneys and conveyors at British Steel in Scunthorpe (Chris Allen) | Chris Allen

British Steel said officials are “in ongoing discussions with the Government about our decarbonisation plans and the future operations of our UK business”.

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However a spokesperson added: “While progress continues, no final decisions have been made.”

The Community Union, which represents steelworkers, said: “It is vital that unions are consulted ahead of any further developments. 

“Scunthorpe is of critical strategic importance to the UK steel industry and Community will continue to stand up for our members on site.”

Shadow Business Secretary Kevin Hollinrake told the Yorkshire Post: “Labour are too busy giving out bumper pay rises to their union paymasters to notice that thousands of good jobs are at risk.

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“Having let the steel workers in Port Talbot down, they must now do everything possible to keep the blast furnaces in Scunthorpe open.

“Once again, Labour are presiding over the demise of our steel sector with working people paying the price.”

A DBT spokesperson said: “We’re working in partnership with trade unions and businesses, including British Steel, to secure a green steel transition that’s right for the workforce and safeguards the future of the steel industry in Britain. 

“Decarbonisation does not mean deindustrialisation, which is why we’ve committed to £2.5 billion of investment to rebuild the UK steel industry and support communities for generations to come.”

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