More than 150 staff will accept half their previous wage in a bid to keep the firm in business

More than 150 workers at Lincolnshire steel firm Caparo Merchant Bar (CMB) are taking a 50% pay cut to help the company stay in business.

Staff at the Scunthorpe-based firm have also agreed to take an extended holiday over Christmas and the New Year.

When they return on 3 January after a longer than usual break, many will be earning half their previous wage.

Andy McGarrigle from the Community Trade Union said the workers hoped their sacrifice would help the firm ride out the recession.

He said: “We do see this as a short-term problem, we’re hopeful that we can see the company through these difficulties and by working with the company we can hopefully come out in the new year and see the company begin to grow.

“We understand the economic realities and … the problems across the economy, across steel-making in particular. It is a difficult time.

“It’s not an easy decision to take but we’ve got a strong business down there and we’ve got some really high skilled workers.

“It’s in manufacturing, it’s in the private sector and these are the jobs that we need to take our economy out of the current difficulties.”

Labour MP for Scunthorpe Nic Dakin said: “These are very difficult times and … people understand that it’s far better to have a job at the moment and to work together with your employer to get through these difficulties than to find yourself without a job.

“They’re working together to get through difficulties, which is a very sensible thing to do and I’m sure they’ll get through.”