What next for British Steel in Scunthorpe after 11th hour rescue?

In April, the government took emergency control of Chinese-owned British Steel after legislation was rushed through Parliament in a single day. Six months on, the blast furnaces in Scunthorpe are still firing but are we any closer to knowing what the future holds?

In stark contrast to the heavy, grey skies over Scunthorpe’s steel plant, Ian Linklater, from the Community union, appears upbeat.

Behind the gates, his union has a strong presence, representing more than 1,000 of the 2,700-strong workforce.

“The government are running it and they’re running it well at the moment,” reflects Mr Linklater.

The move, applauded by swathes of Scunthorpe and unions, prevented Jingye shutting down the site’s blast furnaces, which would have ended primary steel production in the UK.

However, optimism and back-slapping will not part the proverbial dark clouds that remain over this Lincolnshire town whose skyline is dominated by the sprawling steelworks.

“The longer-term solution is clearly we need to own the land ourselves and we need to look for an investor so we’re not a burden on the taxpayer,” says Mr Linklater.

“We want to be paying our own way. We’ve done it successfully in the past and we can do it again – this place will always survive. We’re waiting for the government to do their part with Jingye [the Chinese owners, which bought British Steel in 2020].”

Within the plant, there is said to be optimism that a full owner takeover will be agreed imminently.

Mr Linklater said: “The government is in talks with Jingye to come up with some deal for taking over the land.

“My glass is always half full. This place has always survived, we transitioned out of Corus into Tata, they didn’t want us. Greybull Capital took us over, didn’t want us. Jingye stepped in – and they didn’t want us either. The government’s now stepped in, and it will make money for the right investment.”

Mr Linklater says fresh shoots are emerging.

“Everything’s on the up,” he says.

“We’ve increased our head count by over 100 people and we’ve got 80 active vacancies. We’ve taken on our first set of apprentices for the first time in three years. Things are looking up.

“What I would like to see done is somebody make the decision and take full ownership of this site, potentially get us a new investor. This is the home of construction steel – we’d like to see an investment.”

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In March, Jingye said the plant was losing about £700,000 a day and launched a consultation on its closure, arguing the blast furnaces were “no longer financially sustainable”.

The blast furnaces had been earmarked for closure in 2023, amid a planned switch to more energy efficient electric arc furnaces.

Could electric arc furnaces still be installed?

“Jingye wanted us to go electric arc furnaces, that’s potentially still on the cards here until we get a new owner, a new investor, we just don’t know,” says Mr Linklater.

Meanwhile, Scunthorpe’s Labour MP Sir Nic Dakin says he wants the issue of ownership of the plant “resolved as soon as possible”.

“I’m certain that’s what the workforce and the management of British Steel also want,” he says.

“But it needs to be done in a proper process, which is good for the country, and that’s what the government is focused on.

“This government has stepped in to save British Steel, and secure the steel industry. The workforce have stepped up and are doing a magnificent job, and the future is bright for British Steel, but it’s not without its challenges.”

On the streets of Scunthorpe, residents are in no doubt that they are not out of the woods yet.

“It’s the biggest employer in the area,” says one woman. “If the steelworks go down, the town’s had it, hasn’t it? We need to save the steelworks.”

Another resident adds: “It’s been struggling for years. If that goes, this will be a skeleton town.”

In a statement, the government said: “We took bold action to protect the blast furnaces in Scunthorpe and protect thousands of jobs.

“We will ensure a bright and sustainable future for steel-making and steel jobs in the UK and are continuing discussions with Jingye over the long-term future of the site.”