British Steel: No 10 won’t rule out future Chinese involvement in steel making
No 10 has declined to rule out future Chinese involvement in steel making, amid a race to keep the British Steel furnaces alight in Scunthorpe.
The UK government has now said it is “confident” it will beat a race against time to keep the site running after taking control of the plant from Chinese owners Jingye this weekend.
MPs and Lords passed an emergency law on Saturday giving the UK government control of the Lincolnshire site to prevent the owners closing the furnaces, risking almost 3,000 jobs.
But products including iron ore pellets and coking coal are now expected to be delivered in time to prevent the switch off of the furnaces, which would be extremely costly and complex to restart, with deputy Prime Minister Angela Rayner confirming the goods are “paid for”.
Speaking to journalists on Monday, Sir Keir Starmer’s official spokesman said the government would “like to work with a private sector partner to co-invest to ensure we’ve got a sustainable steel making sector both at Scunthorpe and across the UK”.
But he did not completely rule out working with Chinese companies in the future in the steel sector.
Asked whether the business secretary – who said at the weekend that he “wouldn’t personally bring a Chinese company into our steel sector” – had meant that a Chinese company would not be taking over British Steel, the spokesman said: “Clearly I’m not going to get ahead of future commercial negotiations, it wouldn’t be right, but you’ve got his words.
“Our approach, certainly when it comes to China, is rooted in the UK national interest.”
Reynolds said on Sunday there would be a “high trust bar” to bringing Chinese investment into the UK, and that: “I think steel is a very sensitive area.”
Pressed on the government’s concerns about Chinese involvement in national infrastructure, the No1 0 spokesman said: “We’ve always said that we’ll be taking a consistent, long-term strategic approach to managing our relationship with China.”
He stressed that the UK had an “open eye to any risk and ensuring that we’ve got appropriate measures in place”.
And he said there were no plans to review Chinese involvement in other infrastructure such as Heathrow Airport and Thames Water, but insisted there was a “rigorous regime” already in place “for assessing any involvement in critical national infrastructure”.
He also said the government was “not aware of any deliberate acts of sabotage”.
It comes after Treasury minister James Murray denied China is a “hostile state”, compared to Russia and Iran, and said the Asian nation was not the same as the two countries which are now on the enhanced tier of the government’s foreign influence registration scheme (Firs).
Murray stressed that China is the world’s second-biggest economy, and Britain’s fourth-biggest trade partner, with 450,000 UK jobs dependent on exports, and said: “China’s not a hostile state but China is a country with whom we have a large important relationship.
“We need to be pragmatic about it and understand that we have different ways of interacting with China in different areas of our relationship.
He also insisted “robust processes” are in place to assess Chinese involvement in infrastructure, adding: “We need to make sure there is a high level of scrutiny.”
Murray added: “I think it’s important to make clear that the actions of Jingye, of one company, don’t speak to the actions of all Chinese companies.”
At a weekly press conference in Beijing, Chinese foreign ministry spokesman Lin Jian said: “We hope the British government treats Chinese enterprises investing and operating in the UK fairly and justly, protects their legitimate rights and interests, and avoids politicising and over-securitising economic and trade co-operation, so as not to affect the confidence of Chinese enterprises in investing and co-operating in the UK.”
It comes after Luke de Pulford, of the Inter-Parliamentary Alliance on China, warned: “It is an explicit strategy of the Chinese Communist Party to undermine the industrial base of foreign countries. Yet we keep handing Beijing the tools of our own demise.
“British Steel must be the canary in the coalmine for all Chinese investment in UK critical infrastructure. We should not be handing an adversary state which means us harm access to the services the country needs to run.”
Former Conservative leader Sir Iain Duncan-Smith, who has been a critic of China, wrote in the Telegraph, arguing that the “dream of globalisation and free trade… is over”.
He said: “This is a critical moment for our nation. We need to get energy costs down. We need to stop importing cheap Chinese steel.”
While shadow business secretary Andrew Griffith said this weekend that there should be “heightened” concerns about how China operates, and that the sale in 2020 of British Steel to Jingye was the “only deal in town” at the time, but that the “world has changed”.
He told the BBC: “It is certainly a mistake for the government, particularly in its energy policy, to be going headlong into more dependency on the Chinese.”