Has British Steel been rescued – or has China gained a foothold in the western industry?

British Steel in Scunthorpe: It seems one reason the plant here has lost a large amount of income was Brexit uncertainty.

China has found a way around high EU tariffs on its steel, by buying British Steel for the bargain price of just £70 million.

It seems that country’s strategy has paid off – the UK industry has been struggling for years after it was said that China was flooding the international market with cheap, inferior steel.

In 2016 the EU imposed tariffs of up to 73.7 per cent on Chinese steel after an influx of cheap imports from Asia forced European manufacturers to cut jobs and lower prices.

But it seems that the damage was done, and it seems the only way the UK could protect 4,000 jobs in the industry, and 20,000 in the supply chain, was to allow a Chinese company to buy British Steel.

Won’t this be a way around those huge EU tariffs – even with Brexit, if a UK government negotiates a favourable trade deal?

And won’t this mean more inferior steel flooding the market, with the safety risks this entails?

From a political point of view, this is a slap in the face for the right-wing parties.

They attack Jeremy Corbyn’s Labour as far-left amateurs who don’t understand economics – but now they are being forced to accept help from the ‘tiger’ economy of the far east, which is run by communists.

It is clear that these Chinese left-wingers know far more about economic imperialism than the Tories.

British Steel is set to announce a rescue deal with China’s Jingye Group, which could safeguard up to 4,000 jobs in the UK.

Jingye Group has agreed in principle to buy British Steel for £70m.

It is understood that the government will help in the form of loan guarantees and other financial support.

British Steel has been kept running by the government via the Official Receiver since May, when the company went into liquidation.

As well as employing 4,000 people at its Scunthorpe and Teesside sites, British Steel supports an additional 20,000 jobs in the supply chain.

Another 1,000 jobs are based in France and the Netherlands – those are included in the deal too.

Source: British Steel to be rescued by Chinese firm in £70m deal – BBC News

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3 thoughts on “Has British Steel been rescued – or has China gained a foothold in the western industry?

  1. trev

    Sad that it has come to this. The majority of the world’s steel used to be made in Sheffield (by many of my ancestors), best quality in the world. Same with the woollen textiles industry in West Yorkshire. All gone now. The country flogged to foreign companies and flooded with cheap imports. The older generations must be turning in their graves.

  2. Gary

    The folly of previous Tory governments, and Labour inaction when in office, is now coming home to roost.

    Add to this the government giving contracts for the building of nuclear power stations to the Chinese too. Huawei phones are considered too dangerous in the US but we can have a nuclear power station??

    There are some things that really SHOULD be kept in public ownership. Nuclear power stations are a no brainer but your ONLY steel producer is another. No European country has gone as far down the road of privatisation as this. Only the US has gone further and look where they are, no job security, no employee rights, no healthcare and lots of poverty. Just what the Tories want for us!

    Corbyn MUST implement his policies and reverse decades of bad decisions. If we’re not careful the BBC will have us turkeys voting for Christmas – again, and have Boris straight back into No 10…

  3. rotzeichen

    What I would like to know is why the anti communist media aren’t jumping up and down tearing their hair out at the take over of a strategic industry such as steel. It would appear that they prefer a communist take over rather to nationalise an important sector of our industry.

    In other words capitalist market theology doesn’t care who owns companies in our economy, just so long as it isn’t the state.

    I have no objection to rescuing any company that protects the standard of living of people in this country, but experience tells us that since private enterprise has been the driving force, we see nothing but private failure.

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