Business Minister Nusrat Ghani has rapped British Steel’s decision to enter into talks with unions about job cuts as the government negotiates a support package.
Questioning the conduct, with up to 800 jobs understood to be at risk in Scunthorpe, it was described as “peculiar”, “disappointing” and “not the way to do business,” underlined in the "strongest terms".
Her reprimand of the Chinese Jingye Group owned business from the despatch box was quickly followed by further condemnation from town MP Holly Mumby-Croft, who described the move as indefensible. She had tabled an urgent question to confirm support on offer as speculation intensified over proposed redundancies at a significant scale.
Read more: British Steel confirms jobs are at risk as it enters early talks with unions
British Steel has declined to confirm numbers, issuing a statement an hour after the MPs started to discussthe issue in the House of Commons.
Ms Ghani said: “I understand this must be a very concerning time for British Steel employees following discussions which took place between the company and union representatives yesterday. Of course these are commercial decisions taken privately between the firm, and these conversations are private between the unions.
“While we all recognise Putin’s illegal invasion of Ukraine has created challenging global trading conditions for steel, it is very disappointing that British Steel has chosen to take this step for its employees while negotiations with the government are ongoing.
“The Business Secretary and I have always been clear that the success of the UK steel industry is a priority, and we will work intensively with British Steel on support to help safeguard and unlock shareholder investment and will continue to do so. Steel is important for our economy, supporting local jobs and economic growth, and we are committed to securing a sustainable and competitive future for the steel sector.
Thanking Ms Mumby-Croft for her “insight and advice,” and describing her as “our lady of steel,” she said: “We have already taking action to protect the industry from unfair trade and reduce the burden of energy costs, including £800 million in relief for electricity costs for the steel industry just since 2013, this is on top of a range of other support funds worth £1.5 billion to support efforts to cut emissions and become more energy efficient across the sector.
“It is firmly in the interests of the sector that we continue our engagement. We want British Steel production to continue in the UK, to protect our steel sovereignty as a nation and build a sustainable, decarbonised and competitive industry. It is in the interests of their employees, their communities in all those areas of the UK that benefit from the UK supply chain, and I would encourage the company to continue discussions with us to reach a solution.”
Having been asked about the ongoing negotiations to prompt the debate, Ms Ghani said: “I can indeed confirm the government has put forward a generous package of support which we believe combined with shareholder action would put British Steel on a sustainable and decarbonised footprint. My officials are helping British Steel to understand that package in more depth and I’m hopeful that together we will find a solution that protects jobs while setting British Steel up for success. Obviously decisions that the company takes are their commercial decisions, but I will continue to work with colleagues across government to ensure there is a strong package of support available, including Jobcentre Plus and rapid response service if needed.”
Outlining the offer, she highlighted a £120 million grant under ‘exceptional’ Regional Growth Fund money, UK export finance to help with new export contracts and access to pots worth more than £1 billion for strategic long-term decarbonisation work.
It comes on top of recent extended steel safeguards and industry-wide electricity price compensation worth £800 million over the past decade.
Responding, Ms Mumby-Croft said: “I cannot and I will not defend this decision, which is unacceptable in every possible way for my constituents. This is not a way to behave, it sends entirely the wrong message and breaches the spirit of negotiations which I believe are the result of a level of government focus on steel and its wider issues, including energy and carbon costs, which are genuinely encouraging for the industry. Hundreds of families in Scunthorpe are wondering if and when they will lose their jobs.
“I’m very capable of challenging the government if I don’t think they are going far enough on steel, but this is not what is happening here, and I hold the company entirely responsible for the way they decided to act yesterday.”
She urged the government to “challenge the company on whether it is credible to run their operations with 800 less people”, adding, “I’ve been told it wouldn’t be possible to safely run the blast furnaces if they lost that many members of their team”.
Ms Mumby-Croft added: “Can I ask her to express in the strongest terms this is not the way to do business, and ask them to immediately reconsider these potential redundancies. If it is in their gift to do that I think it would send a very welcome and strong message to the community that they are a part of, it they were to publicly halt these redundancies.
“These are decent hardworking skilled members of our community. We value their skills, we understand the importance of steel, understand we need it for every single thing we do in this country from defence to growth, and we are determined to do whatever it takes to makes sure we do not become the only country in the G20 that can’t make its own steel.”
Watch: Debate following urgent question in the House of Commons today
Ms Ghani added: “Our lady of steel sums up the whole argument in her two minutes and I don’t disagree with much she has said. It is peculiar for this conversation to take place in the middle of good negotiations, and as these negotiations involve substantial tax payers money, of course government would want some assurances and a link to jobs.
“We will continue to be available to ensure discussions and negotiations continue.”
Cleethorpes MP Martin Vickers described British Steel's approach as "most inappropriate" stating the company was acting in a "high handed manner," expressing concerns about the supply chain, which includes Port of Immingham, in his constituency.
Calls to nationalise from across the benches were dismissed, stating it ruled out private investment and put the risk on the tax payer, with anticipated growth in demand at 20 per cent stated.
Brigg and Goole MP Andrew Percy called on the opposition not to use his constituents as "political pawns in some game to try and bash the government", as full House support was sought for the stance.
He said: "Everything British Steel has asked us to do as local MPs in the past few years, we have done," he said. "We have gone out and fought for them to ensure our steel safeguards are protected, to ensure when the site ownership changed that hundreds of millions of pounds of UK taxpayers' money was offered to support the new buyers and pay the salaries of our constituents during that period, and of course, we have done everything since they asked us to do on energy costs so I am as angry as my honourable friend and neighbour in Scunthorpe at the way in which our workers are being treated by Jingye.
"This is no way to conduct a negotiation with government, it is no way to engage with their workforce or with local MPs at a time when the government has put hundreds of millions of pounds on the table to help support the sector. I can only join with my honourable friend in demanding that Jingye and British Steel show a little more respect to our constituents and negotiate in good faith."
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