MPs were recalled for an emergency debate on legislation on Saturday to enable the company to be nationalised following the collapse of talks to keep the steelworks going.
Industry minister Sarah Jones confirmed in broadcast interviews on Saturday morning that Chinese owners Jingye have not been allowing raw materials into the plant and there is a risk the furnaces may run out of fuel and cannot be reopened.
Business secretary Jonathan Reynolds told MPs: “Over the last few days it became clear that the intention of Jingye was to refuse to purchase sufficient raw material to keep the blast furnaces running, in fact, their intention was to cancel and refuse to pay for existing orders.
“The company would therefore have irrevocably and unilaterally closed down primary steel making at British Steel.”
‘We lose steel, we lose the town’
Tony Gosling has been a proud steelworker at the British Steel plant in Scunthorpe since 1981.
Mr Gosling is one of around 2,700 workers at the plant operated by the Chinese owners of British Steel, Jingye, who announced that it was starting consultations on redundancies amid plans to close two blast furnaces and steelmaking operations.
Mr Gosling, a Community trade union representative at Scunthorpe’s blast furnaces, said that it has been “a very worrying time” since the news broke.
“My wife also works in the steel industry in the Rail Service Centre, so it’s both of our jobs that are under threat,” the 59-year-old told The i Paper.
“I’m in a more mature stage of my working life, but it’s devastating for young people who are setting out in life, with their mortgages, their young families, or plans to have young families.”
There are roughly 4,500 jobs that are directly related to the steel industry, the companies that supply the steelworks and the local businesses that support the workers.
“There are a lot of small businesses that rely on the money and the income that you generate from the steel industry to support them – the cafes, the restaurants, the pubs, the shopping centre,” Gosling explains. “There’s a lot of fear within the community, a lot of worry, because nobody knows what the future holds.”
But a deal could not be reached and the government has now accused Jingye of failing to act “in good faith”.
Sources claim Jingye have been using cheaper, poorer quality coaking coal for some time at Scunthorpe which has reduced its inefficiency and making its financial losses appear worse than they would have been otherwise.
British Steel had planned to close its two blast furnaces and steelmaking operations in Scunthorpe (Photo: Christopher Furlong/Getty Images)
The government has now made orders for raw materials but some of it comes on boats from as far as Africa and must then be transported via freight trains, it is understood.
“Yesterday was the last time you could make an order, so the government has essentially gone and made orders now, but they need the steelworks staff to make arragenments to move the stuff,” a source said.
The proposals to close Scunthorpe’s furnaces has sparked fears of thousands of job losses at the plant and those in its supply chain.
“It’s like watching a fuse burn down and waiting for the explosion – I’m just desperate for an update,” she told The i Paper.
“People are scared, not just people in Scunthorpe that will lose their jobs, there’s going to be a big knock-on effect. The surrounding areas all benefit from the steelwoorks too.
The British Steel plant in Scunthorpe (Photo: Lindsey Parnaby/AFP via Getty)“They’re still getting up and doing their shifts, their jobs aren’t easy, they are really hard and really dangerous – I really hope they do something.
Alasdair McDiarmid, Assistant General Secretary of Community Union, said his organsiation “wholeheartedly” backs the Government’s actions.
“Moreover, Jingye has not consulted in good faith with the unions, and they now need to get out of the road to give space to all those who want to see British Steel succeed.”
square POLITICS British Steel set to be nationalised to 'save UK jobs, economy and security'
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Saturday’s legislation is intended to provide an urgent temporary solution in the face of the threat to close the blast furnaces at Scunthorpe until a longer-term plan is agreed, and full nationalisation remains an option.
“The government will now be able to have raw materials be delivered and accepted at the steel works, and make sure workers are paid for coming weeks and months.
“That will give breathing space to work out how we secure long term virgin steel making sustainably, environmentally and financially, or make a move to electric arc furnaces. “
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