The former owner of British Steel has threatened to take the UK government to court, vowing to pursue “full compensation through legal means to the very end” after the loss-making Scunthorpe steelworks was nationalised.
Jingye Group, which bought the Lincolnshire plant in 2020, issued the warning on Sunday, days after the government took the firm into public hands on Thursday. The Chinese steelmaker had previously announced plans to close the site, saying it was losing £700,000 a day.
“Jingye vows to seek full compensation through legal means after UK nationalises British Steel”
A government spokesperson said draft compensation regulations due in the autumn would set out a process in which an independent assessor “would determine what, if any, is payable”.
The nationalisation has strained relations between London and Beijing just as Andy Burnham prepares to enter Downing Street as prime minister on Monday. China’s commerce ministry hit out on Friday, saying it “firmly opposes and is strongly dissatisfied” with the decision, which it said “seriously infringed” Jingye’s rights and “severely undermined the confidence of Chinese companies investing in the UK”. The ministry added that Beijing would support Chinese firms to protect their rights, but did not detail what that might involve.
The UK government took control of British Steel’s operations in April 2025, but the plant remained under Jingye’s ownership, limiting the government’s ability to shape its future. On Thursday, the government said it was taking the firm into public hands to safeguard a “vital national capability”, giving it the power to decide the plant’s future.
A UK government spokesperson said on Friday that commercial negotiations with Jingye 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.”
The steelworks employs about 2,700 people and supports other industries in North Lincolnshire, but has faced significant uncertainty in recent years. A National Audit Office report in March found it was costing the government about £1.3m a day to keep the plant running. Business Secretary Peter Kyle has said letting the operation close was not an option.