Emergency legislation rushed through Parliament in April 2025 saved British Steel from collapse – but now its Chinese owner is demanding compensation, and the government is signalling it may refuse to pay.
Jingye Group, which bought the Scunthorpe-based steelworks in 2020, has invoked a bilateral investment treaty (BIT) to seek reparation costs after the government nationalised the business on 12 April. The company previously claimed the plant was losing £700,000 a day.
“UK signals it may limit or refuse compensation to Jingye Group 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 would “fully safeguard the legitimate rights and interests of Jingye and other Chinese companies as well as global investors”.
But the Department for Business and Trade (DBT) struck a cautious tone, telling the BBC any payout would be determined independently and only paid “if any, is payable”. A DBT spokesperson said the government would “comply with our international obligations” and that an independent valuer would be appointed to decide compensation under the Steel Industry Bill.
That bill, which has completed its main passage through the House of Commons and is now before the House of Lords, is the legislative vehicle for the nationalisation. It also aims to “secure the future of British Steel and explore possible options to modernise the industry,” the spokesperson added.
The nationalisation came after talks between Jingye and the government about transitioning to electric arc furnaces collapsed between 2022 and 2025, amid accusations the Chinese firm was planning to switch the furnaces off. The government had previously tried to negotiate a commercial sale but failed to strike a deal.
British Steel employs 2,700 staff and costs the government about £1.3m a day, according to a National Audit Office report. Jingye has argued the business was no longer financially sustainable. Despite the turmoil, the plant recently secured major contracts to build a railway in Turkey.
A BIT is an international agreement between two countries to protect investors’ money in both territories. Whether the UK will ultimately pay remains uncertain – the DBT’s carefully worded statement leaves the door open to zero compensation.