The UK government's decision to nationalise British Steel has sparked a bitter dispute with Beijing, after China's commerce ministry condemned the move as a "serious infringement" on Jingye Group's rights and interests. The Chinese conglomerate, which formerly owned the loss-making Scunthorpe steelworks, has vowed to seek full compensation through legal means.
The nationalisation of British Steel marks its return to state ownership for the first time since 1988, when it was privatised under Prime Minister Margaret Thatcher. The UK government's decision, which comes a year after initially taking control in April 2025, has been driven by concerns over the plant's viability and the need to safeguard a "vital national capability". Business Secretary Peter Kyle has pledged continued government support for running costs "for the immediate future", but the move has significant implications for British industry and diplomacy with Beijing.
As part of the nationalisation process, Jingye Group had been in commercial negotiations with the UK government, which failed to yield an agreement that represented "value to the taxpayer". The cost of keeping the plant operational is reportedly around £1.3 million per day, according to a National Audit Office report in March.
The Chinese commerce ministry's condemnation of the nationalisation has added to tensions between Beijing and London. China has indicated it will support Chinese firms in protecting their rights, although the nature of this support remains unclear. The UK government's decision to nationalise British Steel is set against a backdrop of growing concerns over foreign investment in key industries.
A draft compensation regulations, due to be released in the autumn, would establish an independent assessor to determine any payable compensation to Jingye Group. The nationalisation of British Steel has created uncertainty for employees, with around 2,700 people working at the plant and supporting other regional industries.