China’s out to destroy our steel industry? We can do that on our own.
The two remaining furnaces at the Scunthorpe steel plant, known as Anne and Bess, have blasted through plenty of crises over the course of their long lives and now, thanks to an emergency effort by ministers to source enough materials to keep them fed, it seems they’ll roar for a few more years. But it was a close run thing.
The Times reported that the government swooped on British Steel over the weekend after becoming concerned that the Beijing-based owner of the plant, Jingye, was deliberately running it into the ground in order to increase the UK’s reliance on imported Chinese steel. Ministers have stopped short of confirming this assessment, though business secretary Jonathan Reynolds has acknowledged that it’s “a sensitive area.”
When Jingye completed its acquisition of the troubled British Steel five years ago, its CEO Li Huiming said the deal would “mark the beginning of a new illustrious chapter in the history of British steelmaking.” British Steel’s boss at the time, Ron Deelen, described it as “an incredible opportunity” while then business secretary, Alok Sharma, claimed it marked “the start of a new era.”
So what went wrong?
According to Luke de Pulford, executive director of the Inter-Parliamentary Alliance on China, Beijing’s rescue of UK steel-making was part of “an explicit strategy of the Chinese Communist Party to undermine the industrial base of foreign countries.” This seems like exactly the kind of policy China would pursue (Jingye rejected a £500m government grant to assist in transition to cleaner production) but we’ve proved perfectly capable of sabotaging our own steel industry without any help from Beijing.
The UK’s mad dash towards Net Zero has contributed to punishingly high industrial energy costs (a problem facing the entire manufacturing sector) while the raw materials required to feed Scunthorpe’s furnaces will be shipped in from Asia rather than dug out of the ground in Cumbria after a viable mine was sacrificed on the altar on decarbonisation.
It’s enough to make you weep. Speaking of which, Alok Sharma – the former business secretary who heralded the Chinese takeover of UK steelmaking – was last seen sobbing at the COP climate summit in 2021 after India and China altered the final text of the conference to ensure that coal was merely “phased down” rather than “phased out.”
Now that ministers find themselves running a blast furnace, they’re probably grateful for that.