The Chinese government is crying foul after the UK moved to nationalize British Steel, claiming the move infringes upon the rights of the Jingye Group. While Beijing threatens to monitor the situation, the reality is that the British government has stepped in to take control of a massive financial sinkhole.
Despite Jingye’s ownership, the Scunthorpe plant has been hemorrhaging cash, with the National Audit Office reporting daily losses of roughly £1.3 million. Business Secretary Peter Kyle has confirmed that taxpayers will be forced to foot the bill for these mounting running costs for the foreseeable future.
The government justifies this massive expenditure as a matter of 'national security' and 'vital capability,' fearing that the loss of virgin steel production would leave the UK dependent on imports.
While the state claims it needs to keep the blast furnaces running until greener alternatives are available, the move marks a significant shift away from the free-market principles that once defined the British steel industry.
As the incoming administration prepares to take power, they are left holding the bag on an expensive, state-run operation that the private sector could no longer sustain.
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