Labour’s plans for British Steel have been thrown into confusion after a government minister said a Chinese firm could be allowed to help run the business again. Industry minister Sarah Jones insisted the Government had not ruled bringing in a Chinese partner to oversee British Steel. However, the comments contradict a statement by Business and Trade Secretary Jonathan Reynolds on Sunday, when he said Chinese businesses should not be allowed to control “sensitive” UK industries such as steel.
British Steel is currently still owned by Chinese firm Jingye but the UK Government has taken control of it, using emergency laws approved on Saturday. The Government is expected to nationalise British Steel fully, taking ownership of it too, before finding a new private sector partner to help run the business.
Ms Jones was interviewed on Sky News by presenter Anna Jones, who asked her: “Will you rule out another Chinese partner for this plant?”
The minister replied: “We’ve had conversations that have been in good faith with Jingye up till recent times, and recently obviously we know that that has broken down. The relationship with China is a really important one and it’s really key that I say that. The second largest economy in the world, our fourth largest trading partner, hundreds of thousands of jobs in the UK.”
The presenter asked her: “So you are comfortable with another Chinese partner for this plant?”
The minister replied: “Whenever we look at any investment there are stringent tests that must be met and they would apply to a Chinese company as they would to any other company.
“So of course we will be careful. We will make sure we do the right thing. Security is the number one issue and when we’re looking at critical infrastructure it’s very important. But we have a trading relationship with China and that will continue to be the case. It’s why the Chancellor is there and it’s why my colleague Douglas Alexander has been there last week.”
Anna Jones tried again to get an answer, asking: “So you are not ruling out the possibility of another Chinese partner for this plant?”
Sarah Jones said: “Well we’re not at the moment. I’m not going tto say yes or no for anything that isn’t at the moment on the table or being looked at.”
Her comments appeared to contradict the statement made by her boss, Business and Trade Secretary Jonathan Reynolds, when he was interviewed by presenter Trevor Phillips on Sky News on Sunday.
Mr Reynolds said: “I wouldn’t personally bring a Chinese company into our steel sector.”
Mr Phillips asked him: “You would not bring a Chinese company?” And Mr Reynolds replied: “I wouldn’t, no. I think steel is a very sensitive area.”
Some MPs have accused Jingye of deliberately undermining the UK’s steel industry. But a trade union leader said he was “not convinced it was sabotage” of the Scunthorpe steel works by Chinese firm Jingye.
Roy Rickhuss, general secretary of the Community union, told Sky News: “It’s great to see the raw materials coming in, that was a question mark last week when the Government stepped in.
“I’m optimistic about the whole of the steel industry in the UK. There’s growth in the industry, there’s growth forecast.”
“What I want to see is us replacing some of our current imports. We import 60% of our requirement of our steel, that’s unacceptable.
“The moves that were taken at the weekend were not full nationalisation, that’s clear. There was not time to do that. The Government has to come to terms with energy costs and procurement, and investments will follow.”
Raw materials secured by the Government will be transported to British Steel’s Scunthorpe plant today to keep its blast furnaces burning.
Mr Reynolds will visit the port in Immingham, North Lincolnshire, as supplies from two ships are unloaded and transported to the plant.
The materials, sent from the US, are enough to keep the furnaces running for weeks, the Department for Business and Trade said, adding that they have been paid for out of its existing budget.
It comes after Downing Street said the Government was “confident” it would be able to secure the products necessary to keep the site running, and that work was ongoing to get a “steady pipeline” of materials.
A third ship with coking coal and iron ore is on its way to the UK from Australia after a legal dispute between British Steel and Chinese owner Jingye was resolved.
Mr 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.
“Our industries depend on UK steel and – thanks to our Plan for Change – demand is set to shoot up: helping build the 1.5 million homes, railways, schools and hospitals we need to usher in a decade of national renewal.”
The raw materials are necessary to prevent the cooling of the blast furnaces, which would risk irreparable damage to the plant systems.