It is feared up to 800 jobs could be lost at British Steel in Scunthorpe.
The company is currently battling the dual impact of soaring energy prices and shrinking demand, while also seeking support from government to enable a transition to Net Zero production.
Reports on the potential losses - more than half the original number highlighted when the need for help first emerged - come as it is understood ministers and the company are closing in on some form of rescue package. Sources close to the negotiations have suggested a £300 million deal was on the table, providing investment and employment securities are forthcoming from the Chinese owner, Jingye Group.
Read more: Strong support for green steel deal as Humber revealed as Net Zero hot spot
Sky News is now reporting that unions could be approached imminently on a plan to axe 800 roles from the 4,000 strong workforce, with the focus on Scunthorpe. It is claimed 300 focus on the coke ovens in the town, with afurther 600 to 900 roles being 'optimised'.
It is claimed talks with unions could, however, be delayed as negotiations with the Government continue. It is reportedly considering cash injections into both British Steel and Tata Steel UK, with decarbonisation support helping to structure funding. It would equal that put in by Jingye since it acquired British Steel out of liquidation in early 2020.
British Steel declined to comment to PA when asked about the potential cuts, with no response as yet to Business Live approaches.
Paul McBean, Scunthorpe site multi-union chair, has not been approached by the business as yet. He said: “We are hearing rumours. Even though over the last couple of months we have asked time and time again, and been told it isn’t happening, and it has been said it is untrue, for this to come all of a sudden is extremely concerning. Reports, if true, that they are looking to cut an immense number of jobs would represent a betrayal of the loyalty of the workforce, the country and interests in the business.”
He has already expressed concerns about levels of overtime being worked to keep the plant operating, and describes a loss of jobs with output maintained as “unthinkable”.
BEIS and the Treasury have yet to confirm a solid offer to the business, with British Steel chief executive Xifeng Han having opened up on the need for support last month.
Scunthorpe MP Holly Mumby Croft said: "I have seen reports claiming that plans have been drawn up to make 800 redundancies at our steelworks.
I’m disappointed and quite frankly outraged at these alleged plans, especially since the negotiations between the Government and Jingye on a support package are still ongoing and live. Jingye here are sending the entirely wrong message, the level of government focus on the steel industry in recent months has been excellent and follows hundreds of millions of pounds of support provided to the industry over recent years. I have done all I can to support the sector and local steel workers - as someone from a steel family myself I well understand the importance of these jobs and skills.
"Families in Scunthorpe will be very worried indeed to see this news and it will bring anxiety and fear. This is people’s livelihoods. It would have a disastrous effect on the economy both locally and nationally were so many jobs to be lost. Since these reports surfaced, I have again spoken to the Government, trade unions and the steelworks.
"I have also submitted an urgent question to the Speaker of the House of Commons for tomorrow [Thursday, February 3] to ask for an urgent update on the ongoing live negotiations and how they might be impacted. I hope this will be granted so we can get the clarity that everyone working at steelworks and in the supply chain, and their families, deserve."
Labour’s Shadow Business Secretary, Jonathan Reynolds MP, said: "This is deeply worrying news for British Steel workers and their families who need urgent clarity on the future of the site.
“Endless sticking plasters from the Conservatives have left our UK steel sector on the brink. Britain needs a long-term solution not just another bailout with no plan to keep UK steel internationally competitive or deliver a return on taxpayers investment. Labour has a plan for steel. Investing alongside industry over the next ten years to deliver green steel. Steelworkers need a Government on their side and industry needs a partner that can provide stability not sticking plasters."
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