The business secretary has refused to rule out redundancies at the Scunthorpe steelworks, despite calls from trade unions to end the programme of job losses started by its former owners.
Jonathan Reynolds said on Tuesday the plant might need to have a “different employment footprint” after the government’s takeover, even as he promised to try to save the plant’s two blast furnaces.
Reynolds was speaking during a visit to Immingham docks to oversee coal and iron ore being unloaded on its way to the Scunthorpe plant. The government took control of the plant after finding out its Chinese owner, Jingye, was attempting to sell the supplies and hasten the closure of the furnaces.
“What we need for the long-term future of British Steel is that private sector partner to work with us as a government on a transformation programme,” Reynolds said.
“That might be new technology, new facilities, that might have a different employment footprint. The staff here absolutely know that, they know they need a long-term future.”
He added: “These blast furnaces have given this country nearly a century of service in one case, so they know they need the future, and that might be a different model, different technology. What they didn’t want was the unplanned, uncontrolled shutdown of the blast furnaces with thousands of job losses and no plan in place for the future.
“And by what we’ve been able to do, working with the brilliant team here at British Steel, is secure the possibility of that better future – and I for one am confident that we’ve made the right decision to support the people here.”
Reynolds made his comments even as the GMB union called for an end to the formal redundancy programme, which British Steel began last year. Those plans could have meant the closure of both blast furnaces and more than half of the site’s 3,500 workers losing their jobs.
Charlotte Brumpton-Childs, national officer at GMB, said: “We are expecting the immediate threat of redundancies to be taken off the table, and we are looking to work with the secretary of state on planning the longer-term future for Scunthorpe and the steel making there.”
Reynolds has the task both of securing immediate supplies to keep the furnaces running and looking for a longer-term bidder for the Scunthorpe site. Ministers want to find a private sector company to help the government pay for a new electric furnace at the plant, which forms the central part of British Steel’s £1.25bn decarbonisation plan.
Reynolds said over the weekend he would not “bring a Chinese company into our steel sector” again, but on Tuesday he appeared to change his mind and refused to rule out the possibility that a Chinese company could take over the site once more.
“I think you would look at a Chinese firm in a different way but I’m really keen to stress the action we’ve taken here was to step in, because it was one specific company that I thought wasn’t acting in the UK’s national interest, and we had to take the action we did,” he said.
Reynolds’ change of tone comes amid a broader push by the UK government to limit the political fallout from the crisis surrounding British Steel.
Over the weekend, the business secretary refused to rule out the possibility that Jingye’s actions might have been part of a deliberate act of sabotage to undermine the British steel industry. But by Monday, officials and ministers were insisting that was not the case, saying they believed the company had been acting purely out of commercial considerations.
The government’s push to secure Chinese investment in British infrastructure has begun to alarm some senior figures within Labour.
Liam Byrne, the chair of the business select committee, told the Guardian this week: “We must now be fiercely vigilant about just who is granted the keys to the industries and infrastructure that keep our nation moving.”
