The government has sent a clear signal that it is prepared to intervene in the sale of British Steel, potentially blocking any payout to its foreign owners in a move that would mark a significant shift in industrial policy. Sources close to the Department for Business and Trade confirmed that ministers are exploring legal avenues to prevent shareholders from benefiting from the sale of the struggling steelmaker, which employs 3,500 workers in Scunthorpe and Teesside.
The intervention would be a direct challenge to the rights of Jingye Group, the Chinese-owned company that bought British Steel out of liquidation in 2020 for £50 million. Jingye has been seeking a buyer for the business since late last year, citing mounting losses and high energy costs. The government’s potential block on payouts could reduce the sale price and deter future foreign investment, but ministers argue that taxpayers should not subsidise the profits of overseas owners after years of support.
Unions have welcomed the government’s stance, calling it a necessary step to protect jobs and the UK’s steelmaking capacity. “For too long, workers and communities have been left to pay the price for corporate failure,” said Roy Rickhuss, general secretary of the Community union. “The government must ensure that any sale prioritises the future of the industry, not the pockets of shareholders.”
However, business groups have warned that the move could damage the UK’s reputation as a stable place to do business. “Changing the rules after the fact is a dangerous precedent,” said a spokesperson for the Confederation of British Industry. “It will make it harder to attract the investment we desperately need to decarbonise heavy industry.”
The government has not yet confirmed whether it will use legal powers or introduce new legislation. A Whitehall insider said the options include blocking the transfer of subsidies or using the new National Security and Investment Act to impose conditions on any sale. The Treasury is also reviewing the £600 million in loans and guarantees provided to British Steel since 2020.
For the workers on the shop floor, the news offers a glimmer of hope after months of uncertainty. “We’ve been in limbo,” said Gary Thompson, a crane operator at the Scunthorpe plant. “If the government steps in, maybe we’ll finally get a future.”
The decision comes as the UK steel industry faces a triple threat of high energy prices, cheap imports, and the need to transition to greener production methods. British Steel’s furnaces are among the oldest in Europe, and the company has been in talks with the government over a £300 million package to build an electric arc furnace. Those talks are now entwined with the sale negotiations.
Industry analysts say the government’s intervention could force Jingye to accept a lower price, possibly from a UK-based buyer like Liberty Steel or a sovereign wealth fund. “This is a test case for whether the state is willing to use its leverage to keep strategic industries in domestic hands,” said Professor Kate Barker, a former member of the Bank of England’s Monetary Policy Committee.
The government is expected to make a formal statement within days. Any block on payouts would be the most significant industrial intervention since the nationalisation of British Steel in 1967. For now, the future of the steelworkers, and the message it sends to foreign investors, hangs in the balance.
