The UK government has signalled it could limit or refuse compensation to the Chinese owner of British Steel, as the company seeks reparation costs under a bilateral investment treaty (BIT) following the nationalisation of the Scunthorpe steelworks.
Jingye Group, which bought British Steel in 2020, said it had begun the process to seek compensation after the government took control of the business on 12 April 2025 to prevent the last two remaining blast furnaces from closing. The company previously claimed the plant was losing £700,000 a day.
“UK signals it may limit compensation to Jingye after nationalising British Steel, which cost £1.3m a day to run.”
The Department for Business and Trade (DBT) told the BBC any payout would be determined independently and only paid “if any, is payable”. In a statement on Friday, a DBT spokesperson said it would “comply with our international obligations”, while stressing that the government’s priority was revitalising the steel sector.
“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,” the spokesperson said. “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.”
According to Reuters, Jingye said in a statement on its WeChat account: “Jingye has recently initiated consultation procedures under the bilateral investment treaty with the UK government.” The statement added that the company hoped the UK government could fully safeguard the legitimate rights and interests of Jingye and other Chinese companies as well as global investors.
British Steel, which employs 2,700 staff, was bought by Jingye in 2020. However, the company has since claimed the business was no longer financially sustainable. Before the government stepped in, Jingye and DBT had been in talks about transitioning to electric arc furnaces between 2022 and 2025, but that collapsed amid accusations the Chinese firm was planning to switch the furnaces off.
The development comes as legislation to enable the nationalisation makes its way through Parliament. The Steel Industry Bill has completed its main passage through the House of Commons and is set to be considered by the House of Lords. A report from the National Audit Office noted that British Steel is costing the government about £1.3m a day.