The UK government has signalled it could limit or refuse compensation to the Chinese owner of British Steel, as Jingye Group begins a process to seek reparation costs under a bilateral investment treaty (BIT) following the nationalisation of the steelworks.
Emergency legislation passed in April 2025 allowed the government to seize control of the business on 12 April, preventing the last two remaining blast furnaces from closing. Jingye, which bought British Steel in 2020 and employs 2,700 staff, has claimed the Scunthorpe plant was losing £700,000 a day and was no longer financially sustainable.
“UK may limit compensation to Jingye after nationalising British Steel in April 2025.”
In a statement on its WeChat account, Jingye said it had “recently initiated consultation procedures under the bilateral investment treaty with the UK government” and hoped the UK could “fully safeguard the legitimate rights and interests of Jingye and other Chinese companies as well as global investors”.
The Department for Business and Trade (DBT) told the BBC any payout would be determined independently and paid only “if any, is payable”. A DBT spokesperson said on Friday: “We will always respect and comply with our international obligations, and where the powers in the Bill are used, an independent valuer will be appointed to determine what compensation, if any, is payable.”
The development comes as the Steel Industry Bill, which enables the nationalisation, makes its way through Parliament. It has completed its main passage through the House of Commons and is set to be considered by the House of Lords.
Before the government stepped in, Jingye and DBT had been in talks between 2022 and 2025 about transitioning to electric arc furnaces, but those collapsed amid accusations that the Chinese firm was planning to switch the furnaces off. The government had also tried to negotiate a commercial sale but failed to strike a deal.
The National Audit Office has noted that British Steel is costing the government about £1.3m a day. The plant recently secured major contracts to build a railway in Turkey.