The government has intervened to block a dividend payout by the owner of British Steel, in a landmark use of new national security powers. The decision, announced on Wednesday, prevents Jingye Group, the Chinese conglomerate that acquired the struggling steelmaker in 2020, from transferring hundreds of millions of pounds out of the country.
This is the first time the government has deployed the National Security and Investment Act to stop a dividend payment, signalling a new era of scrutiny over foreign ownership of strategic assets. The move comes amid growing anxiety about the hollowing out of Britain’s industrial base and the loss of control over critical supply chains.
“We will not stand by while vital national industries are milked for profit by overseas owners,” said a spokesperson for the Department for Business and Trade. “This government is committed to protecting British jobs, British steel, and British sovereignty.”
The blocked payout, thought to be worth around £250 million, would have been repatriated to Jingye’s headquarters in China. Instead, the government has ordered that the funds remain within British Steel to be used for investment in the company’s aging furnaces and to safeguard the 4,500 jobs at Scunthorpe and other sites.
The intervention is a clear signal that the era of laissez-faire attitudes to foreign takeovers is over. It follows years of decline in the UK steel industry, with a litany of owners — from Indian conglomerate Tata to the troubled Greybull Capital — failing to secure its long-term future. Workers have faced repeated rounds of redundancy and uncertainty, while communities in Port Talbot, Scunthorpe, and Rotherham have seen their economies devastated.
Union leaders welcomed the government’s action as a “crucial step” towards reindustrialising Britain. Roy Rickhuss, general secretary of the Community union, said: “For too long, steelworkers have been treated as disposable. This is a sign that the government is finally prepared to use the tools at its disposal to protect our national interest. But it must not stop here. We need a long-term strategy for UK steel, including investment in green technology and a level playing field on trade.”
The move is likely to be seen as a test case for other industries critical to national security, such as semiconductors, aerospace, and pharmaceuticals. Under the National Security and Investment Act, the government can scrutinise and impose conditions on any transaction involving a company that could affect national security, including dividend payments. Until now, the power had been used sparingly, primarily to block takeovers by foreign entities considered a security risk.
Critics, however, warn that blocking dividends could deter foreign investment at a time when the UK needs capital to upgrade its infrastructure. Ruth Roseman, director of the Institute of Economic Affairs, said: “The government is sending a worrying signal to international investors. If companies cannot repatriate profits, they simply won’t invest. This is a short-term political stunt that will damage the UK’s long-term competitiveness.”
But for the steelworkers of Scunthorpe, the decision is a lifeline. Mark Turner, a furnace operator with 25 years at the plant, told me: “We’ve been sold off, sold out, and left to rot. Now someone in Westminster is finally listening. But we’ve seen promises before. We need to see the money stay here and be spent on the plant. We want to make British steel for British projects — not line the pockets of billionaires abroad.”
The government has not ruled out further interventions against other foreign-owned firms deemed to be acting against the UK’s economic interests. As the cost of living crisis continues to bite, and as geopolitical tensions reshape global trade, the block on British Steel’s payout is likely to be seen as a watershed moment. Whether it marks the start of a more assertive industrial policy or remains an isolated gesture will depend on the government’s appetite for confronting the forces of global capital.
For now, the steelworkers of Scunthorpe can breathe a collective sigh of relief. But they know the fight to save British steel is far from over.
