Taxpayers could end up paying as much as £4billion to fix Government "mistakes" that allowed Chinese investment into sensitive parts of the economy, according to a report by the China Strategic Risks Institute.
The money has had to be spent on the bailout of British Steel and the cost of removing Chinese firms from strategic nuclear and communications deals. The institute said the bill reflected the mistakes of previous governments who failed to put the economic and national security of the public first.
Breakdown of the bill
- At least £2billion spent removing telecoms company Huawei from the UK's 5G mobile phone network rollout
- £600million spent so far on British Steel's renationalisation
- £100million to buy China Nuclear General out of the Sizewell C nuclear power station project in Suffolk
The bill could rise further if the Government has to pay compensation to British Steel's former owner, Jingye, which bought the blast furnaces in Scunthorpe under Boris Johnson. The latest accounts show British Steel owed Jingye £960million at the end of 2024 in the form of inter-company loans. The institute said Jingye could demand repayment of these loans as part of an ongoing independent assessment of compensation for the state's takeover.
Institute's warning
Sam Goodman of the China Strategic Risks Institute said the British taxpayer had far too often been asked to pick up the tab for questionable and failed Chinese investments in sensitive parts of the economy, referring to a potential £3.7billion bill. He said the money could have been spent on improving public services, including new schools, hospitals and clearing the backlog of court cases.
The findings mark a shift from the Sino-British relationship of just over a decade ago, when prime minister David Cameron took President Xi Jinping for fish and chips and a pint at a pub in his Oxfordshire constituency during a state visit.
Political reaction
Edwina Currie, a minister in the Thatcher government, defended past Conservative decisions, saying hindsight was never available when it was most needed and that China had become a lot more aggressive under Xi in recent years, prompting Britain to adapt. Leading economists and Clive Betts MP, deputy chairman of the Public Accounts Committee, said no compensation for British Steel should be given to the Chinese.
The Government said the analysis wrongly suggested it had spent £2billion removing Huawei equipment and confused commercial decisions with Government action. It said it valued its relationship with China and remained open to Chinese investment, adding that it would continue working to provide the best opportunities for British business that benefit the taxpayer, cooperating where it can and challenging where it must while engaging on trade that supports the national interest.
