The former owner of British Steel has declared it will pursue the British government for “full compensation through legal means to the very end” after the loss-making steelworks was taken into public hands. Jingye Group’s pledge came as China’s commerce ministry said it “firmly opposes and is strongly dissatisfied” with the nationalisation, warning the move had “severely undermined the confidence of Chinese companies investing in the UK”.
The UK fully nationalised the Scunthorpe steel plant on Thursday, a year after the government first stepped in to prevent closure. Jingye, which bought the site in 2020, had launched a consultation on shutting it down in March last year, saying it was losing £700,000 a day. The government took operational control in April 2025 but remained unable to shape the firm’s future until this week, when it said it was taking the firm into public hands to safeguard a “vital national capability”.
“Jingye vows legal compensation fight as China condemns British Steel nationalisation”
The decision threatens to strain relations between London and Beijing just as Andy Burnham prepares to enter Downing Street as prime minister on Monday. A UK government spokesperson said commercial negotiations with the Chinese steelmaker had failed to reach an agreement “that represented value to the taxpayer”. They added: “We highly value our relationship with China and remain open to Chinese investment, and we will continue to work together to deliver a successful trading relationship that provides the best opportunities for British businesses.”
Jingye’s statement on Sunday said it would seek compensation, but the government has yet to set out a process. A government spokesperson said draft compensation regulations due in the autumn would include an independent assessor “would determine what, if any, is payable”. The National Audit Office reported in March that keeping the plant running was costing the government about £1.3m a day. The steelworks employs about 2,700 people and supports other industries in North Lincolnshire, but has faced years of uncertainty. Business Secretary Peter Kyle has argued that letting the operation close was not an option. China’s commerce ministry said Beijing would support Chinese firms to protect their rights, but did not detail what that might involve.