UK Business Secretary signals openness to Chinese investment in British Steel, with caution

UK Business Secretary Jonathan Reynolds has suggested that the government may consider Chinese investment in British Steel, but he emphasized that any such bids would be subject to thorough scrutiny, particularly due to national security and economic concerns.

During a visit to British Steel’s Scunthorpe plant, where production is running with newly delivered raw materials, Reynolds discussed the need for a long-term private sector partner to support a significant transformation of the UK’s steel industry. “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 program,” he said. This transformation could involve new technology, upgraded facilities, and possibly changes to the employment structure at the plant.

Acknowledging the potential for job losses in the future, Reynolds noted that the current workforce understands the need for a sustainable future, even if it involves a "different employment footprint."

On the topic of potential investors, particularly Chinese companies, Reynolds pointed out global concerns related to steel overproduction and the dumping of steel products, which he linked to China. "Steel is a sensitive sector around the world," he said, underlining that while the government would evaluate Chinese involvement carefully, it would not categorically reject all Chinese investments in the sector.

Reynolds also defended the government's recent intervention in British Steel, arguing that the financial support provided offered better value for taxpayers compared to the cost of potential job losses, and reiterated his belief that there was room for improvement in the company’s financial performance.

His comments come amid growing political pressure from parties such as the Liberal Democrats, who have urged the government to rule out Chinese involvement in UK steel production due to security and economic independence concerns.

British Steel, which has faced ongoing uncertainty over its ownership, remains at the heart of the UK government’s strategy to secure a more sustainable and modernized domestic steel industry.

Copied