20th Jul 2026 04:52
(Alliance News) - The Chinese company which owned British Steel prior to its nationalisation last week has demanded compensation from the UK government.
On Thursday, the government announced British Steel had been brought under public ownership to protect "the future of steel production".
China's government said it was "strongly dissatisfied" with the decision and now previous owner Jingye Group has threatened legal action.
The company had previously planned to close its Scunthorpe blast furnaces in North Lincolnshire before the government took operational control after Parliament intervened in April last year to approve special measures legislation to keep the plant open.
Jingye Group said in a WeChat statement that the nationalisation tarnished the government's credibility and would damage the future chances of securing international investment.
It also demanded that the government stop "trampling on international investment rules".
"The UK disregarded Jingye's continuous investment and significant contribution and was only willing to provide almost zero compensation," it said in quotes reported by the Associated Press.
The Department for Business and Trade said the move was essential to maintain steel production at the company's site in Scunthorpe, Lincolnshire, to protect both the company's future and UK supply chains.
China's Ministry of Commerce, Mofcom, said the move dealt "a severe blow to Chinese companies' confidence in investing in the UK".
Prime Minister Keir Starmer said on Thursday: "British Steel is part of the fabric of our nation and a cornerstone of Britain's industrial strength.
"Today's decision secures the future of steelmaking in the UK, protects skilled jobs and safeguards a vital national capability."
He continued: "This government will always act in the national interest to support British industry, strengthen our economy and ensure the industries we rely on can thrive long into the future."
The announcement followed the Steel Industry (Nationalisation) Act 2026 receiving royal assent and becoming law. The new law allows ministers to transfer steel businesses' shares or property into public ownership.
By Dave Clark, Press Association
Press Association: Finance
source: PA
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