Senior Labour figures call for review of Chinese investment in UK infrastructure

The Guardian

14-04-2025

Senior Labour figures have urged the government to review Chinese investment in UK infrastructure in the wake of theBritish Steel crisis, warning that a rapprochement with Beijing could risk national security.
Government officials insisted on Monday the country remained open to funding from Chinese companies even after a dramatic weekend which saw ministers wrest control of the Scunthorpe steel making plant from the Chinese owners Jingye.
Both Downing Street and the Treasury said they believed the row over the Scunthorpe plant to be an isolated commercial dispute, even though the business secretary, Jonathan Reynolds, has not ruled out deliberate Chinese sabotage.
But ministers are now coming under mounting pressure to reconsider their drive to secure further infrastructure investment from China, including from members of their own party.
Helena Kennedy, the Labour peer and co-chair of the Inter-Parliamentary Alliance on China (Ipac), said: 'There should be an urgent security review of all those Chinese companies operating within our infrastructure which could pose a threat to our national interests – and maybe not just confined to China.'
She added: 'This fiasco shows the risks, but there are also many which affect our digital infrastructure and technological progress – and our very intelligence arrangements.'
Liam Byrne, the Labour MP who chairs the business select committee, said: 'We must now be fiercely vigilant about just who is granted the keys to the industries and infrastructure that keep our nation moving.
'Not every investor comes with goodwill in their heart, and not every cheque is written with our interests in mind. Economic security can no longer be an afterthought because some now investing in Britain are seeking more than profit from our nation – they are seeking power over our nation.'
One Labour frontbencher added: 'Serious supply chain analysis, driven by security, is still lacking. We don't do it enough or clearly enough and it should be the guiding analysis that drives our industrial strategy.'
George Magnus, an associate at the China Centre at Oxford University, added: 'We should be running the rule much more carefully over any inward investment coming from China.'
The warnings come despite the government's attempts to smooth over any friction with Beijing over what has happened at Scunthorpe in the last week.
Downing Street on Monday said Jingye, the Beijing-based steel making conglomerate, had not 'acted in good faith' after it emerged the company had been negotiating over a government bailout while also trying to sell raw supplies destined for the plant.
That revelation prompted the government to pass an emergency law over the weekend to give ministers the power to interfere in how the company is run, a power they have now used to pay for the raw supplies in question.
Angela Rayner, the deputy prime minister, said during a visit to Scunthorpe on Monday: 'We've got the raw materials, they've been paid for, and we're confident that the furnaces will continue to fire.'
Despite government anger over Jingye's actions, however, both 10 and the Treasury said they believed this to have been a one-off issue with a private company rather than a sign of the broader risks of Chinese infrastructure investment.
A spokesperson for the prime minister said: 'We're not aware of any deliberate acts of sabotage. But as the business sector, and I think the industry minister, said over the weekend, in the talks that we were engaging with the Chinese owners, it became clear that they wanted to shut the blast furnaces.
'Obviously this relates to a commercial Chinese company, rather than a state-owned company.'
James Murray, the Treasury minister, echoed that message, telling Times Radio: 'We are open to [Chinese] investment, whilst being also open-eyed about saying that when there's foreign involvement in critical infrastructure, whatever country that comes from, we need to make sure there is a high level of scrutiny.'
He added: 'I think it's important to make clear that the actions of Jingye, of one company, don't speak to the actions of all Chinese companies.'
The government has made a major push to secure Chinese investment in key parts of British infrastructure, with the chancellor, Rachel Reeves, and the energy secretary Ed Miliband both having made high-profile visits to China in recent months.
Chinese investors already hold stakes in British water companies, airports and energy infrastructure, while the proposed nuclear power plant at Bradwell B in Essex is being developed in part by China General Nuclear Power.
Douglas Alexander, the trade minister, has spent the last few days in China and Hong Kong, though British officials would not say whether he discussed the situation at Scunthorpe.
Downing Street said Alexander did raise the case of Wera Hobhouse, the Liberal Democrat MP who was denied entry to Hong Kong last week. But while Alexander expressed 'deep concern' over the incident, the Hong Kong administration later put out a statement defending the decision, saying: 'It is the duty of immigration officer to ask questions to ascertain that there is no doubt about the purpose of any visit.'