Chinese government suspected of ‘sabotage’ over British Steel plant

Beijing has been accused of deliberately trying to undermine the UK’s critical industry and energy infrastructure over the threat to halt steel production in Scunthorpe.

Chinese firms should be excluded from “very sensitive” industries in the UK after the government was forced to take emergency control of British Steel at the site on Saturday, Business Secretary Jonathan Reynolds said.

The minister said he was not alleging the Beijing regime was deliberately interfering to “sabotage” steelmaking at the Scunthorpe site, but warned that there was now a “high trust bar” for the British government dealing with Chinese companies.

But critics of China, including former Tory leader Sir Iain Duncan Smith, went further and suspected Beijing of interference in British Steel.

Reynolds refused to rule out blocking Chinese involvement in sectors such as nuclear, but said areas like agriculture, life sciences and motoring manufacturing were “non-contentious” where the UK would continue to trade with firms from that country.

MPs were recalled to parliament on Saturday to pass emergency legislation allowing the government to take control of operations at British Steel from Jingye after the Chinese firm threatened to turn off the blast furnaces at the Scunthorpe site.

And on Saturday police had to be called to the plant when workers refused to allow executives into key areas of the site, fearing they would try to shut it down.

It raised questions over whether the Chinese state asked owners Jingye to switch off the furnaces.

Duncan Smith told The i Paper: “I don’t know for sure, but given the Chinese government’s close links with the company, I wouldn’t be surprised if they did.”

And Luke de Pulford, executive director of the Inter-Parliamentary Alliance on China, said: “It has been an explicit strategy of the Chinese Communist Party to undermine the industrial base of democratic countries for years, and interference in critical national infrastructure is a well documented part of this strategy.

“This is not surprising. What is worrying is that those of us who warned this would happen were ridiculed, and despite Jingye’s appalling behaviour over British Steel, we are still seeking to increase Chinese investment into the UK. 

“Beijing is a malevolent actor and no good can come of allowing authoritarian Xi access to UK energy. The Government needs to wake up and tell the country how they intend to rip the Chinese Communist Party out of UK industry.”

Asked by BBC’s Laura Kuenssberg on Sunday whether he suspected sabotage was at play, Reynolds said: “I don’t want to make what is already a fairly dramatic situation more than it is. I think there were concerns, quite reasonable concerns, about the gap between the government indicating it was going to step in and take control and being in the control that I am in control of now on the site today. 

“And the risk is, having made the decision, something happens, it might not be sabotage, it might be neglect.

“The conscious decision not just to not order raw materials but to sell existing supplies of raw materials is the significant change that required the government to step in.”

In an interview with Sky News’s Sunday Morning with Trevor Phillips, the Business Secretary did not rule out Chinese involvement in nuclear energy projects like Sizewell C.

Asked if he believed the Chinese government was behind Jingye’s actions, Reynolds said: “Look, with any major Chinese industrial company there are always direct links to the Chinese Communist Party. 

“I mean, you couldn’t run – you wouldn’t be allowed to run a company in China without that kind of link. I’m not accusing the Chinese state of being directly behind this…

“I’m not alleging some sort of foreign influence.”

He added: “A lot of UK-Chinese trade is in non contentious areas. You know agricultural products, life sciences or automotive, it’s not difficult…

“I think you’ve got to be clear about what is the sort of sector where actually we can, you know, promote and cooperate and ones, frankly, where we can’t. I wouldn’t personally bring a Chinese company into our steel sector.

“I think steel is a very sensitive area.”

Asked whether there was a “high trust bar” for dealing with firms from the country, he said: “Yes, we have got to recognise that.”

Reform leader Nigel Farage told Laura Kuenssberg: “This is a big strategic decision by the CCP.”

Asked for his evidence to support that claim, he said: “You can call it intuition if you like.

“I am 100 per cent certain they bought British Steel to close British Steel.”

Shadow business secretary Andrew Griffith said the episode should heighten concerns over how China operates, telling the BBC: “It is certainly a mistake for the Government, particularly in its energy policy, to be going headlong into more dependency on the Chinese.”