Nearly 5,000 steelworkers’ jobs and another 20,000 in supply industries could be wiped out after Tuesday’s announcement that British Steel is insolvent.
The company, owned by “vulture fund” Greybull Capital, is the second largest steel producer in the UK after Tata. Its main plant is in the town of Scunthorpe in the Northeast of England where steel production goes back 150 years and where more than 3,000 workers are employed. Other jobs are threatened at the company’s plants in Skinningrove, north Yorkshire and at Blaydon, in Gateshead. The firm also has a research and development facility in Rotherham, South Yorkshire.
Every job lost will be a tragedy for workers and their families in the areas of the country, long blighted by deindustrialisation, joblessness and low-paid work. Scunthorpe, with a population of just 83,000, is heavily reliant on employment at the plant. Unemployment in North Lincolnshire stands at 4.8 percent and would almost double to 8.4 percent (twice the national average) with the closure of the Scunthorpe plant. Workers at present earn around £36,000 ($45,528), compared to the average wage in Scunthorpe of just over £22,000 ($27,827).
Employees turning up for work on Wednesday were uncertain whether they would still be in work in 24 hours. Those who spoke to the media said they were being kept in the dark about what was happening. A 19-year-old employee expressed the fears of many, “It's going to be terrible for the town, everyone in Scunthorpe has a family member who works here so the effect will be huge.”
One of British Steel’s main suppliers, Hargreaves Services, a logistics firm based in the northeast of England, said that 170 jobs could be impacted if British Steel closes.
The Scunthorpe mill is one of only two integrated steel producers in the UK, the other being Tata’s plant in Port Talbot, South Wales that employs more than 4,000 workers.