British Steel saved as China's Jingye steps in. But what next?

Even though the future remains murky, the Sword of Damocles hanging over thousands of jobs had them cheering in Scunthorpe and perhaps in Tory HQ too

Three were drinks all round at Mulligan’s sports bar in Scunthorpe when a delegation from Jingye Group rocked up and announced they’d bought British Steel. “From us?” joked a bar fly, to gales of laughter.

The video was captured by a customer and uploaded to the local newspaper’s website.

If the sale completes - and there are still a few hurdles to clear - the purchase will actually be from the official receiver who has been running it for several months.

Such niceties won’t much matter in the town, nor in the surrounding area.

Nearly 4,000 people are employed by the company, with 20,000 in the supply chain and 1,000 more in France and the Netherlands where the business also has operations.

They’ve all been working under under a Sword of Damocles, so the occupants of the bar had good cause to cheer the news.

The future, however, still remains a little murky, and the further out you look, the cloudier it gets.

Jingye, founded by a former Communist Party official, has risen in the space of just 20 years to become a major force in steel and in China. Its Facebook page sets out bold plans for expansion while extolling its “extraordinary road of development with wisdom and purpose and perspiration”.

The high grade steel produced in Scunthorpe, used in construction girders, railway tracks, and various other industries including the automotive one, would appear to compliment its existing output.

The plant is also well regarded for having pioneered the development and application of tech facilitating the production of high grade steel with better reliability.

There have naturally been concerns expressed about Jingye being more interested in that than in the plant’s long term future.

The company, however, has invested £70m in the purchase and says it plans to invest more the aim of increasing production. That won’t come cheap.

Cost cutting? It's doubtless coming.

Global markets, and Brexit, played their parts in the company’s latest round of difficulties. It wouldn’t have fallen into liquidation if it wasn’t in need of surgery to cope with those and other issues.

Jingye is not a charity. It won’t to allow the place to become a rod for its own back or its ambitions.

There has been some twittchiness about the buyer’s nationality and how this will be perceived in the US given the tensions between it and China. Huawei, another big Chinese investor in the UK, can speak to how those can cause problems.

But domestic politics are working in Jingye’s favour. Having faced harsh criticism for failing to step in and rescue the plant when it looked doomed, this deal comes as as unexpected gift for the Conservative campaign in a part of the world that heavily backed Brexit.

It’s not only locally that it will be seen as an early Christmas present.