Race to keep British Steel plant alive fuels China trade row
Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailGet our free View from Westminster emailMinisters have secured raw materials needed to keep British Steel furnaces in Scunthorpe alive amid accusations that the plant’s Chinese owners were poised to let it fail.The materials – which have arrived by ship from the United States – are enough to keep the furnaces running for the coming weeks while the government scrambles to secure the long-term future of the Jingye-owned site.A row is now raging over whether China should be banned from investing in critical British infrastructure, with senior ex-ministers saying the crisis over the plant should be a “wake-up call” over Beijing’s reach.But China hit back on Monday, urging Britain to “avoid politicising trade cooperation or linking it to security issues” or risk losing the confidence of firms investing in the UK.open image in galleryBusiness secretary Jonathan Reynolds (PA Wire)Deputy prime minister Angela Rayner visited the site on Monday to express confidence that the government will be able to keep it open.A separate ship containing yet more coking coal and iron ore is on the way to Britain from Australia – cargo that was the subject of a legal dispute between British Steel and Jingye over the weekend that has now been resolved. The materials have been paid for using existing Department for Business and Trade (DBT) budgets.Business and trade secretary Jonathan Reynolds said: “We will always act in the interest of working people and UK industry. Thanks to the work of those at British Steel, and in my department, we have moved decisively to secure the raw materials we need to help save British Steel.”New legislation passed over the weekend following an emergency Saturday sitting gave the government the power to direct the company’s board and workforce, ensure they get paid, and order the raw materials to keep the blast furnaces running. It also permits the government to do these things itself if needed. open image in galleryAngela Rayner during her visit to the British Steel site in Scunthorpe (PA Wire)The government says it acted to protect 37,000 jobs in supply chains and ensure the UK maintained its capacity to produce steel.Mr Reynolds has also confirmed the appointment of Allan Bell as interim chief executive and Lisa Coulson as interim chief commercial officer, both with immediate effect.Once furnaces are turned off, it is extremely difficult to bring them back online. Officials believe Jingye had been planning to let the raw materials run out in a bid to sabotage the plant, shuttering the blast furnaces and making the UK reliant on Chinese exports of so-called virgin steel.A Downing Street spokesperson accused Jingye of “not acting in good faith”. Asked about claims the firm had sought to force the closure of the plant, the spokesperson said he was “not aware" of any “sabotage” but it had become clear that the Chinese owners “wanted to shut the blast furnaces”, adding: “That wasn't an outcome that we wanted to see ... they had decided not to order more raw materials.”China suggested its companies could be put off investing in Britain if they were not treated “fairly”.At a weekly press conference in Beijing, Chinese foreign ministry spokesperson 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 cooperation, so as not to affect the confidence of Chinese enterprises in investing and cooperating in the UK.”Meanwhile, senior figures from Labour and the Tories have added their voices to the government’s over putting “security first”.open image in galleryFormer Conservative leader Sir Iain Duncan Smith (PA Wire)Prior to the issues with British Steel, there had been concerns over Chinese control of the UK’s critical infrastructure and the way China almost got control of the UK’s 5G network with Huawei, and tried to invest in nuclear energy. Most recently, Unite the Union questioned plans for a Chinese merger with Vodafone.Former defence secretary Sir Gavin Williamson, who was sacked by Theresa May over his opposition to Huawei and allegations he had leaked plans to allow it to develop 5G in the UK, pointed out that steel is essential for UK defence and security.He said: “It’s absolutely clear that we have to show such a level of caution allowing Chinese companies to be involved in any form of critical national infrastructure and critical industries. Quite simply, we are going to have to take moves to make sure that they are excluded from such investments in the future.”Tobias Ellwood, a former minister in the Ministry of Defence (MoD) and Foreign Office (FCDO), added: “It’s a wake-up call. It certainly is a very progressive but clandestine approach. China does this very well. It is able to usurp itself into critical national infrastructure capability, able then to turn the taps on and off as they will, blaming the economic circumstances in a particular country. But it’s very dangerous for Britain.”Sir Iain Duncan Smith, founder of the Inter-Parliamentary Alliance on China (IPAC) with 40 countries in it, who has been sanctioned by Beijing, called for China to be put in the top category of the Foreign Influence Registration Scheme (FIRS) to prevent it from investing in critical infrastructure.He warned: “China has completely subverted the World Trade Organisation rules. Of course we need to stop them investing in critical industries but we also need to prevent them from dumping large amounts of steel, electric cars and other goods on us to flood our markets and destroy our industries.“The EU has tariffs to prevent this and we need to do the same.”Meanwhile, Labour chair of the Commons trade and business committee, Liam Byrne, confirmed that his committee wants to “get to the bottom of Chinese ownership of critical infrastructure” in an inquiry.And Dame Emily Thornberry, the Labour chair of the Commons foreign affairs committee, added: “We need to listen to security advice and let that guide us. Security first.”
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