British Steel: Jingye deal could mean 500 job cuts, unions say2 min read

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British Steel Scunthorpe site

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Reuters

Up to 500 jobs could be lost at British Steel if the sale of the business goes ahead, unions have said.

The steel maker, which employs 4,000 people in the UK, is on the cusp of agreeing a rescue deal with Chinese firm Jingye.

However, unions have warned the takeover could involve cutting around 10% of the company’s workforce.

Nevertheless, they have backed the deal, which they say will secure the future of British Steel.

If the sale does not go ahead British Steel would be broken up and sold in parts, the three major steel unions said.

“With British Steel in liquidation it is clear that if the business is to survive change is required,” they said in a joint statement.

The unions’ comments came after they reached an agreement with Jingye over employee pay, terms and conditions.

While they offered unanimous support for the deal, the unions said they could not endorse the job cuts.

“We have made the argument that the business needs to ensure the plant can be run efficiently and safely,” they said.

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Reuters

The unions said there had been “a lot of back and forth” with Jingye during detailed discussions over the past 10 days.

“Everyone wants to see British Steel survive and thrive,” said Harish Patel at union Unite.

Jingye has promised to invest £1.2bn into British Steel.

“If employees are making sacrifices, then they need to see that this is done in return for investment that can make the business successful and secure jobs for the long term,” Mr Patel said.

The unions said a deal with Jingye was now “firmly in sight” and urged the company to get a deal over the line.

However, on Wednesday, the Guardian reported that the government was holding talks with a rival buyer amid fears that Jingye’s deal could still fall through, although securing union backing makes this less likely.

When British Steel collapsed in June last year, control of the holding company passed to the UK Insolvency Service, which is responsible for selling the assets.

In November, Jingye agreed to buy British Steel, paying about £50m to take over the business.

British Steel employs about 4,000 people in Scunthorpe and Teesside.

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