The UK was “naive” to let a Chinese company take control of its steel industry, according to Business Secretary Jonathan Reynolds. His remarks follow the government’s recent move to take control of British Steel.
Reynolds said he does not believe the Chinese state aimed to damage the Scunthorpe plant. This site is the UK’s last facility capable of making steel from scratch.
Government acts to save British steel plant
On Saturday, the government rushed emergency legislation through Parliament. This move aimed to prevent the shutdown of blast furnaces at the Scunthorpe site. Jingye Group, the Chinese owner, had said the plant was no longer financially viable.
Jingye bought British Steel in 2020. The company claimed to have invested over £1.2 billion but said it was losing about £700,000 per day.
Reynolds criticised previous Conservative governments for allowing foreign ownership of key infrastructure. “As a country, we’ve got it wrong in the past,” he told Sky News. “We were far too naive about some of this.”
He added that some sectors are more sensitive than others. However, he noted that much of UK-China trade happens in less contentious areas.
Nationalisation a possible next step
Reynolds said he did not believe the Chinese government was behind the plant’s issues. “I think they will understand why we could not accept the proposal put forward. We need to protect this essential national capacity,” he explained.
In a BBC interview, he said Jingye had refused a support package worth £500 million. Instead, the company requested over twice that amount. There were few guarantees the furnaces would stay open.
Reynolds could not confirm whether enough raw materials would be available to keep the furnaces running in the short term.
Political backlash and support for nationalisation
Prime Minister Keir Starmer recalled Parliament for a rare Saturday session to pass urgent legislation. Without action, the plant faced imminent closure. Thousands of jobs were at risk.
The government sees British Steel’s survival as crucial to long-term economic security. The UK’s steel industry has declined significantly in recent decades.
The Labour government has faced criticism from the Conservative Party over its handling of the matter. Trade unions and some MPs have called for full nationalisation. Reynolds said that step was not part of the emergency bill but could be “likely” in future.
Nigel Farage, leader of Reform UK, also backed nationalisation. On Sunday, he claimed the Chinese Communist Party wanted to shut the plant down, though he offered no evidence.
