The UK government has indicated it could limit or refuse compensation to Jingye, the Chinese owner of British Steel, as the company seeks reparation costs after the steelworks were nationalised. Emergency legislation passed in April 2025 allowed the government to seize control of the Scunthorpe plant on 12 April, preventing the last two blast furnaces from closing.
Jingye Group said it had begun the process to seek compensation under a bilateral investment treaty (BIT) with the UK. The company, which bought British Steel in 2020 and employs 2,700 staff, previously claimed the plant was losing £700,000 a day. In a statement on its WeChat account, Jingye said it had “initiated consultation procedures under the bilateral investment treaty with the UK government”. It added that it hoped the UK government would “fully safeguard the legitimate rights and interests of Jingye and other Chinese companies as well as global investors”.
“UK signals it may limit compensation to Chinese owner Jingye after nationalising British Steel.”
The Department for Business and Trade (DBT) told the BBC that any payout would be determined independently and only paid “if any, is payable”. In a statement on Friday, a DBT spokesperson said: “Revitalising our steel sector is a top priority for this country, and the Steel Industry Bill is the first step to securing our steelmaking capability which will allow us to secure the future of British Steel and explore possible options to modernise the industry. 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. A National Audit Office report noted that British Steel is costing the government about £1.3m a day. Despite the turmoil, the plant recently secured major contracts to build a railway in Turkey.