UK business secretary signals openness to Chinese investment in British Steel, but with caution

LONDON 

UK Business Secretary Jonathan Reynolds Tuesday indicated that the government may consider offers of involvement in British Steel from Chinese companies, but warned such bids would be scrutinized more closely due to national security and economic concerns.

Speaking during a visit to British Steel's Scunthorpe plant, where blast furnaces are running with newly delivered raw materials, Reynolds emphasized the need for a long-term private sector partner to support a major transformation program for 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," Reynolds said. "That might be new technology, new facilities, that might have a different employment footprint. The staff here absolutely know that—they know they need a long-term future."

Reynolds did not rule out the possibility of job losses, acknowledging that future plans could result in a “different employment footprint” at the Scunthorpe site.

On the issue of potential partners, Reynolds highlighted global concerns about steel overproduction.

“Steel is a sensitive sector around the world,” he said. “A lot of the issues in the global economy with steel come from overproduction and dumping of steel products, and that does come from China. So I think you would look at a Chinese firm in a different way.”

However, he stressed that the government’s recent intervention in British Steel was targeted at a specific company whose actions he deemed inconsistent with the UK’s national interest, and not necessarily a blanket rejection of all Chinese investment.

Reynolds also defended the financial support the government has extended to the steelmaker, saying it offered “better value for the taxpayer” than the cost of potential job losses, and that he believed there was room to improve the company’s financial performance.

His remarks come amid growing political pressure.

The Liberal Democrats have called on the government to categorically rule out any involvement from Chinese firms in the future of UK steel production, citing concerns over security and economic independence.

British Steel has faced ongoing uncertainty over its ownership and future operations, as the government seeks to secure a more sustainable and modernized domestic steel industry.