British Steel: Reynolds would view Chinese firms in ‘different way’
Jonathan Reynolds has said he would “look at a Chinese firm in a different way” from those of other nations on involvement in the UK steel industry.
But the business secretary has insisted the UK government took control of British Steel because of “one specific company”, and did not rule out Chinese firms being involved in the sector in the future, after the breakdown in talks with Jingye over the Scunthorpe plant.
Ministers intervened at the weekend and have been racing to secure supplies to keep the blast furnaces at Scunthorpe running, after talks with Chinese owner Jingye broke down.
Reynolds previously said that he would not want to bring a Chinese firm into the steel sector again, though industry minister Sarah Jones did not rule it out when asked on Tuesday.
It comes as MPs have shared concerns about investment from China into UK industries, with calls for more guidance from government on in which sectors it could or should be allowed.
Speaking to broadcasters from Immingham Port in North East Lincolnshire, Reynolds said: “In this case, our difference of opinion on the future was with a specific company.
“I know there’s a lot of interest in the wider UK-China relationship, understandably so but this was about this company.”
He added: “I think we’ve got to recognise that steel is a sensitive sector. It’s a sensitive sector around the world, and a lot of the issues in the global economy with steel come from over-production and dumping of steel products, and that does come from China.
“So I think you would look at a Chinese firm in a different way but I’m really keen to stress the action we’ve taken here was to step in, because it was one specific company that I thought wasn’t acting in the UK’s national interest, and we had to take the action we did.”
Reynolds has also said he is “delighted” that the raw materials have been secured to keep the British Steel plant running in Scunthorpe.
Necessities such as coking coal procured by the government to keep the Scunthorpe plant running arrived in the UK on Tuesday, following an “incredible cross-government effort”.
The business secretary thanked British Steel staff and “all the people who have been involved in really pulling out the stops to make sure we’ve got that continuity of supply”.
He said he believes “we can improve on the financial performance that we have seen” but the support from the government is “better value for the taxpayer” than if jobs had been lost.
However, he warned there could be a “different employment footprint” at Scunthorpe when asked if the government could guarantee there would be no job losses at the steelworks.
“What we need for the long-term future of British Steel is that private sector partner to work with us as a government on a transformation programme,” he said.
“That might be new technology, new facilities, that might have a different employment footprint. The staff here absolutely know that, they know they need a long-term future.”
And he added: “These blast furnaces have given this country nearly a century of service… so they know they need the future and that might be a different model, different technology.
“What they didn’t want was the unplanned, uncontrolled shutdown of the blast furnaces with thousands of job losses and no plan in place for the future.
“What we’ve been able to do, working with the brilliant team here at British Steel, is secure the possibility of that better future – and I for one am confident that we’ve made the right decision to support the people here.”
Former Conservative leader Sir Iain Duncan Smith has said that the government needs to define which industries are “strategic” and prevent China from being allowed to invest in such sectors.
Sir Iain told the PA news agency: “Personally I think the whole net zero project is an energy project, therefore is strategic including therefore the nuclear industries.
“Steel and steelmaking are a strategic industry, all the arms manufacturers are strategic industries, and anything to do with water and various other areas, they’re all strategic industries.”
He also said China should be placed into the upper tier of the foreign influence registration scheme, which the government has so far not done.
“That will define them as a threat. They are a threat, and we cannot have China investing in our strategic infrastructure,” he added.