China’s Jingye Group has pledged to pursue the British government for full compensation after the UK nationalised British Steel. The company said it would use legal channels “to the very end,” while the government said an independent assessor would decide whether any payment is due.
The UK transferred British Steel into public ownership on July 16 after the Steel Industry (Nationalisation) Act received Royal Assent. The government had controlled operations at the Scunthorpe steelworks since April 2025, but Jingye retained ownership until the nationalisation.
Compensation to Be Independently Assessed
Jingye said the decision disregarded its investment and contributions while offering almost no compensation. China’s commerce ministry said the nationalisation infringed the company’s rights and could damage Chinese businesses’ confidence in investing in the UK.
The government said compensation regulations would be introduced in the autumn. Under the process described in British Steel’s official announcement, an independent valuer will assess the company and determine what, if anything, should be paid.
A government spokesperson said commercial negotiations with Jingye had failed to produce an agreement that offered value for taxpayers. The UK said it remained open to Chinese investment and would continue working with Beijing on trade relations.
Government Seeks to Preserve Steel Production
Jingye acquired British Steel’s UK operations in 2020. It began consulting on the possible closure of the Scunthorpe plant in March 2025, saying the business was losing about £700,000 a day.
The government intervened the following month to prevent the closure of the site’s blast furnaces. Its nationalisation announcement described domestic steel production as a vital national capability supporting infrastructure, defence, energy and supply chains.
British Steel employs about 2,700 people and supports other businesses across North Lincolnshire. Business Secretary Peter Kyle said allowing the operation to close would leave the UK entirely dependent on overseas supplies for primary steel.
Running Costs Reach £1.3 Million a Day
A National Audit Office report found that the government spent £377 million between April 2025 and January 2026 to maintain production. Operating costs had reached about £1.3 million a day, with no fixed budget, repayment schedule or end date.
Kyle said the government would continue covering immediate operating expenses while deciding the plant’s future. British Steel was previously state-owned until Margaret Thatcher’s government privatised it in 1988.
The dispute could add pressure to relations between London and Beijing as Andy Burnham prepares to become prime minister. A Reuters report said Jingye was considering further action to recover its investment losses.
Featured image credits: Polites News
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