UK government says British Steel's planned job cuts 'very disappointing'

MP Nusrat Ghani speaks in Parliament in London
MP Nusrat Ghani speaks during a session in Parliament in London, Britain May 12, 2021. UK Parliament/Jessica Taylor/Handout via REUTERS

LONDON, Feb 2 (Reuters) - The British government is disappointed privately-owned British Steel is looking to cut jobs at its plant in northern England while discussions are still ongoing about a state-funded support package, junior business minister Nusrat Ghani said on Thursday.

The local lawmaker for the steelworks in Scunthorpe, Conservative Holly Mumby-Croft, told parliament British Steel's Chinese owner Jingye had held discussions with trade unions on Wednesday about cutting around 800 jobs.

"I understand this must be a very concerning time for British Steel employees following discussions which took place between the company and union representatives yesterday," Ghani, Minister for Industry and Investment Security, said.

"It is very disappointing that British Steel has chosen to take this step for its employees while negotiations with government are ongoing."

British Steel, which was bought out of insolvency by Jingye in 2020, said it had discussed with the trade unions the challenges it faces, including an economic slowdown, rising inflation and "exceptionally" high energy prices.

"We are reluctantly having to consider cost cutting in light of the global recession and increased costs. We have discussed this in preliminary talks with the trade unions," a spokesman said.

Last month, Sky News reported the government was close to agreeing a 300 million pound ($367 million) funding package for British Steel, which would likely be conditional on investment from Jingye and commitments on job retention.

Ghani said the government had put forward a "generous package of support" and was working with the company to find a solution that protects jobs.

($1 = 0.8123 pounds)

Reporting by Kylie MacLellan and Muvija M; editing by William James

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