British steel to cut 2,500 jobs despite £600 million taxpayer-funded green initiative

British Steel will close its blast furnaces in Scunthorpe by the end of the year, putting 2,500 jobs at risk. The move comes as the Chinese company looks to accelerate its transition to greener steel production, despite receiving £600 million in taxpayer support.

The company is in talks with the UK government to reduce coking coal imports, originally planned for a further two years, as part of its £1.3 billion decarbonisation strategy. This could lead to the replacement of the three million tonnes of steel produced in Scunthorpe with imports from China, potentially spelling the end of large-scale British steel production.

British Steel, bought by China’s Jingye Group in 2020, is struggling financially and is reportedly losing £1m a day. While the company initially planned to keep the blast furnaces operational while building a new electric arc furnace in Teesside – an initiative that would have saved jobs – the revised plan now threatens significant job losses.

Union leaders expressed their outrage, with GMB’s Charlotte Brumpton-Childs stating that the early closure of the Scunthorpe kilns would be devastating for both the local community and the workforce. Unions claim they have not been consulted on the latest developments and are demanding immediate cooperation with British Steel and the government to secure jobs.

The closure comes amid wider concerns about the strategic implications of the loss of domestic steel production, which plays a crucial role in the UK’s construction, rail and energy sectors. British Steel’s production is crucial for projects ranging from nuclear reactors to wind turbines, raising concerns about Britain’s dependence on foreign steel.

Labor’s recent talks with Jingye over a possible bailout deal have added a political dimension to the issue. Critics, including Kevin Hollinrake, the shadow business secretary, have accused Labor of betraying the British steel industry by supporting a shift to imported steel despite promises to invest in domestic production.

The government’s decision on British Steel’s decarbonisation plans and the future of its Scunthorpe operations is still pending, leaving thousands of jobs and the future of British steelmaking at stake.