PM demanded vetting of Chinese investors
Prime Minister wanted tighter screening but was overruled by Cameron and Osborne, Sir Vince says
THERESA MAY privately demanded strict new national security checks on Chinese companies seeking to take over British industries, a former cabinet colleague has revealed.
Sir Vince Cable, business secretary until last year, suggested the Prime Minister had a “general prejudice” against Chinese investments in Britain and wanted to emulate American rules banning foreign takeovers that could undermine security.
The disclosure came after Mrs May delayed a decision on whether to allow the China-backed Hinkley Point nuclear project to go ahead.
Speaking to The Sunday Telegraph, Sir Vince detailed Mrs May’s long-held security concerns over China’s involvement in the £18billion nuclear power plant in Somerset and other business links with China.
He said she was “never completely satisfied about Huawei”, the Chinese telecommunications giant, which has a major partnership with BT.
“I and others thought they were a good thing but I think she was worried about them,” he said.
During private cabinet talks, she was also reluctant to relax visa rules for Chinese businessmen, he said.
However, George Osborne, the then chancellor, overruled her and pursued what she saw as a “gung-ho” approach to wooing Chinese investment, Sir Vince said. “She has expressed in sev- eral different contexts severe reservations about China getting too close to the UK,” he said.
Sir Vince argued Mrs May’s stance was “bound to” lead to a cooling in relations between the UK and China, putting in doubt Chinese plans to invest tens of billions of pounds in Britain.
His comments came after the Government announced on Thursday it would delay the final decision on approving the deal on the Hinkley C power station, which would be Britain’s first new nuclear plant for a generation.
Downing Street insists that Mrs May
wants to examine all of the “component parts” of the deal with the French firm EDF before deciding whether to give it the green light.
However, government sources suggest Mrs May has concerns over the security implications of allowing China’s state-owned companies to take a 33.5 per cent stake in Hinkley Point and to have the opportunity to design and build a new reactor in Essex.
Sir Vince, who served alongside Mrs May in the cabinet throughout the 20102015 coalition, said the Prime Minister had been unhappy with the positive attitude of David Cameron and George Osborne towards Chinese investments while she was home secretary.
He said: “Fairly early on in the coalition, she wanted to introduce a more stringent test of foreign investment, based on the American model of screening out projects that threaten national security.”
Mrs May was “very hot” on this issue, he said, but “was basically overruled by Osborne and my own department”.
“Secondly, my recollection was that when approval was sought for Hinkley, she raised objections on grounds of national security issues and China.”
Nick Timothy, Mrs May’s joint chief of staff, has said MI5 held concerns over China because Chinese intelligence services are working “against British interests at home and abroad”.
He warned in an article before he began working in Downing Street that the Chinese could use their role in the Hinkley nuclear programme to “build weaknesses into computer systems which will allow them to shut down Britain’s energy production at will”.
Government sources confirmed that the national security issue was one of many questions the Prime Minister wanted to examine before approving the plan for Hinkley.
But it raised questions over whether she could also object to £40billion of other Chinese investments in the UK, which were announced last year. Mr Osborne had been encouraging Chinese companies to invest in the High Speed 2 rail project.
Sir Vince said Mrs May’s new approach could put other investments in doubt and create difficulties for the relationship between the two countries.
“It’s bound to affect it negatively for two reasons: one that Osborne isn’t there and he was the main champion. I supported him but we are no longer there. Secondly, she has expressed in several different contexts severe reservations about China getting too close to the UK,” he said.
“It came up in all kinds of different ways. Osborne kept pushing for more liberal treatment of visas for Chinese businessmen and she was very reluctant to go along with that. So I think she has form in adopting a more suspicious approach, more in line with the American position.”
Last night, Downing Street declined to comment on Sir Vince’s disclosures.
The chief executive of EDF yesterday attempted to downplay the significance of the Hinkley delay, insisting that he understood the Government’s desire for more time.
Vincent de Rivaz has written to workers in an attempt to reassure them that the project is still “strong” despite the unexpected delay.
The company’s board narrowly voted on Thursday to give the final go-ahead to the long-delayed project but the Government pulled back from signing the contract, saying it would make a decision in the early autumn.
Mr de Rivaz said: “The new Prime Minister has been in post for just 16 days. Her full Cabinet has been in post even fewer.
“We can understand their need to take a little time. We fully respect the Prime Minister’s method. The very good news is that we are ready. The board’s decision means that when the Government is ready to go ahead, we are ready too.”
Mr de Rivaz said he had met Greg Clark, the Business and Energy Secretary, after the minister announced the Government would “consider carefully” all parts of the project before making a decision.
Jason Millett, chief operating officer for major programmes and infrastructure at Mace, a major contractor at Hinkley Point, said the decision to delay it had left people “bewildered”.
‘Osborne kept pushing for liberal treatment of visas for Chinese businessmen and she was reluctant’