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Labour Calls for Review of Chinese Investment in UK Infrastructure After British Steel Scrutiny
Leading figures within the Labour Party have called upon the government to re-examine Chinese investment in crucial UK infrastructure, following concerns raised by the recent British Steel situation. These senior politicians warn that Downing Street’s current approach to relations with Beijing could potentially compromise national security. The appeal for a reassessment comes amidst heightened scrutiny of foreign involvement in key sectors.
Government Defends Openness to Chinese Funding
Government officials maintained on Monday that the UK remains receptive to financial input from Chinese companies. This stance persists despite a dramatic weekend where ministers assumed management of the Scunthorpe steel plant from its Chinese owners, Jingye.
Both Downing Street and the Treasury assert that the controversy surrounding the Scunthorpe site is an isolated commercial matter. This is despite the business secretary, Jonathan Reynolds, not dismissing the possibility of intentional Chinese disruption.
Mounting Pressure for Investment Reconsideration
Ministers are facing increasing pressure, even from within their own party, to rethink their strategy of actively seeking further infrastructure investment from China. This pressure is fueled by concerns about the security implications.
Security Concerns Raised by Labour Peer
Helena Kennedy, Labour peer and co-chair of the Inter-Parliamentary Alliance on China (Ipac), articulated the need for vigilance. “There should be an urgent security evaluation of all Chinese companies operating within our infrastructure,” she stated. She emphasized that such operations could “pose a threat to our national interests,” suggesting the review should not be limited to Chinese entities alone.
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Kennedy added, “This debacle highlights the risks, but there are also numerous risks impacting our digital infrastructure, technological advancements and our core intelligence frameworks.”
Call for Vigilance Over Infrastructure Control
Liam Byrne, Labour MP and chair of the business select committee, stressed the necessity for caution regarding critical infrastructure. “We must now be extremely vigilant about who is entrusted with control of the industries and infrastructure essential to our nation’s functioning,” Byrne stated.
He cautioned, “Not every investor operates with benevolent intentions, and not every investment is aligned with our national interests. Economic security must be a primary consideration. Some investing in Britain today seek more than just profit; they are seeking influence over our nation.”
Need for Enhanced Supply Chain Analysis
A Labour frontbencher further emphasized the need for robust security-driven analysis. “Comprehensive supply chain analysis, prioritizing security, remains inadequate,” they asserted. “We need to conduct this analysis more thoroughly and make it the central guiding principle of our industrial strategy.”
George Magnus, from the China Centre at Oxford University, concurred, stating, “We should be scrutinizing inward investment from China much more carefully.”
Government Attempts to Defuse Beijing Tensions
These warnings emerge despite government efforts to ease potential tensions with Beijing regarding the events at Scunthorpe over the past week.
Downing Street indicated that Jingye had not “acted in good faith,” after revelations surfaced that the company was negotiating a government bailout while simultaneously attempting to sell raw materials intended for the plant.
Government Intervention at Scunthorpe Plant
This revelation prompted swift government action. An emergency legal measure was enacted over the weekend, granting ministers authority to intervene in the company’s operations. This power has been utilized to ensure payment for the crucial raw materials.
Deputy Prime Minister Angela Rayner affirmed during a visit to Scunthorpe, “We have secured the raw materials, payment has been made, and we are confident that the furnaces will continue operating.”
Scunthorpe Issue Deemed Isolated Incident
Despite government displeasure with Jingye’s conduct, both Downing Street and the Treasury reiterated their belief that this was an isolated incident involving a private entity, rather than indicative of broader risks associated with Chinese infrastructure investment.
A prime ministerial spokesperson clarified, “We are not aware of any deliberate acts of sabotage. However, through discussions with the Chinese owners, it became evident that their intention was to shut down the blast furnaces.” The spokesperson added, “This situation pertains to a commercial Chinese company, not a state-owned enterprise.”
Government Remains Open to Investment with Scrutiny
Treasury minister James Murray echoed this sentiment, stating to Times Radio, “We are open to Chinese investment, but we are also acutely aware that foreign involvement in critical infrastructure requires a high level of scrutiny, regardless of the country of origin.”
He emphasized, “It’s crucial to clarify that the actions of Jingye, a single company, do not represent the actions of all Chinese companies.”
UK Seeks Continued Chinese Investment
The government has actively pursued Chinese investment in key UK infrastructure sectors. Notable visits to China by Chancellor Rachel Reeves and Energy Secretary Ed Miliband underscore this effort.
Currently, Chinese investors hold stakes in various British sectors, including water utilities, airports, and energy infrastructure. Furthermore, China General Nuclear Power is involved in the proposed Bradwell B nuclear power plant in Essex.
Trade Minister Douglas Alexander recently concluded a visit to China and Hong Kong. However, officials have not confirmed whether the Scunthorpe situation was discussed during his trip.
Downing Street confirmed that Alexander addressed the case of Liberal Democrat MP Wera Hobhouse, who was recently denied entry to Hong Kong, expressing “deep concern.” However, the Hong Kong administration defended its decision, asserting the immigration officer’s duty to verify the purpose of any visit.