Government plans to sell British Steel to the Chinese firm Jingye would probably lead to job losses, according to trade union officials who met the prospective buyers this week.

The National Trade Union Steel Co-ordinating Committee, which includes the Community and Unite unions, said that while it welcomed Jingye’s plan to invest in the stricken company, including the Scunthorpe steelworks, it was concerned at the effect on more than 4,000 staff.

In a statement, the union umbrella group said Jingye’s proposals did “include impacts on employment”. Detailed discussions will now take place to fully understand Jingye’s plans and complete a deal.

The group said: “As we have said before, if the business is to succeed it must retain high-quality jobs with good terms and conditions and this will guide our position through the ongoing talks.

“It cannot be just employees who are asked to make sacrifices for the success of the new business. For the company to succeed then everyone involved needs to make a contribution, including key suppliers,” it said.

Jingye was named as the preferred bidder for British Steel after an offer from the Turkish military pension fund Oyak collapsed in October.

The government has been funding the company’s estimated £1m-a-day losses since it collapsed into liquidation last May.

The wider UK steel sector has also been struggling, with industry figures blaming high energy costs and crippling business rates, as well as a glut of cheap state-subsidised steel from China on international markets.

Liberty Steel, which has seen its own interest in British Steel rebuffed repeatedly, announced plans this week to cut up to 355 jobs in the UK, although it promised to redeploy staff elsewhere in the business.

Labour called on the government to move faster to come to the aid of the ailing sector. The shadow steel minister, Gill Furniss, said: “The prime minister has a chance to prove he is more than warm words. He recently said that he would repay the trust put into him by northern towns to deliver for them.

“The UK steel industry is teetering on the edge of collapse,” she said. “The sector employs tens of thousands of highly skilled workers and over half of these jobs are concentrated in Wales, Yorkshire and the Humber. The time for excuses is up and the Tories need to act now to save the UK steel sector.”

A spokesperson for Jingye said: “Jingye has held constructive discussions with union representatives during which the company outlined its ambitious investment plans for British Steel.

“We look forward to working together further with the unions and employees over the coming weeks, as well as continuing talks with the government and other stakeholders. We firmly believe in the opportunities at British Steel and are committed to its long-term future.”

The Guardian has approached the government for comment.



