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Deal signed to secure future of British Steel in Scunthorpe

A deal has been signed to secure the future of steelmaking in Scunthorpe.

The Chinese firm Jingye Group completed the buying process of the British Steel site this afternoon.

Credit: PA

A condition of the sale was a cost cutting programme, including the loss of around 400 jobs.

The fate of thousands of workers has been hanging in the balance since British Steel went into liquidation last May.

Today though the Chinese firm, Jingye Group, completed its takeover.

The deal with Jingye will save around 3,200 jobs at Scunthorpe and Teesside, but 400 workers were told last week that they will be made redundant.

The sale secures the immediate future of the Scunthorpe steelworks, one of the last two blast furnace operations in the UK steel industry.

Commenting on the sale of British Steel to Jingye, Gareth Stace, UK Steel Director General, said:

The completion of the sales process for British Steel is fantastic news for British Steel and its workforce. British Steel is a major strategic asset, representing over a third of Britain’s steel production, so this news will be also warmly welcomed by their many customers in numerous manufacturing and infrastructure supply chains who rely upon on a strong domestic steel industry.

“After almost a year of huge uncertainty, punctuated by numerous setbacks, to have completed the sale of British Steel to a long term investor with a positive and ambitious plan for the future, is a hugely significant accomplishment and one the Government must be congratulated on. Three successive Business Secretaries have been unwavering in their support for the company, and this must be welcomed and recognised.

“As we turn the page on this particular chapter in the steel industry, I implore the Government to learn the lessons from this narrowly averted crisis and not return to business as usual. It is important we move on from the current reactive approach, to one in which a shared, long-term strategic vision sits front and centre; a New Deal for all UK steel producers. Our thoughts were echoed by the Teesside Mayor, Ben Houchen, last week when he spoke of the uselessness of “sticking plasters”.

“There is no time like the present, and the Chancellor has an opportunity to deliver meaningful action in Wednesday’s Budget, the first major fiscal event since the General Election. Action for steel producers on sky high electricity prices, business rates reform, and much needed innovation funds, can all help start that process of revitalisation and renewal, placing the sector on a clear trajectory towards a low carbon future.

“The Government has its first opportunity this week to truly deliver on its pledge to level up the UK. The steel industry employs tens of thousands of people outside the South East in high skilled, well paid jobs, in exactly the communities that the Government seeks to transform. In a further signal of intent and support, the Government must sign up to the UK Steel Charter ensuring that British steel producers and workers from Scunthorpe, South Yorkshire and South Wales, all benefit from the billions of pounds worth of Government infrastructure investments, including the £100 billion estimated spend on HS2.

“The steel industry is ready to invest in its future in the UK, all it requires is a partnership with Government to help deliver a level playing field that can unlock its potential.”

– Gareth Stace