The British government has intervened to block a dividend payout by British Steel, the ailing industrial giant owned by the Chinese conglomerate Jingye Group. The move, announced by the Department for Business and Trade, signals a hardening of the UK's stance towards foreign ownership of critical national infrastructure.
According to official sources, the government used powers under the National Security and Investment Act to prevent the transfer of £15 million from the company to its parent. The payout was due to be made on Monday, but was halted by a ministerial order citing potential risks to national security and economic stability.
The decision marks the first time the government has vetoed a dividend payment since the act came into force in January 2022. It reflects deepening concerns about the long-term viability of British Steel, which employs 4,000 people directly and supports thousands more in supply chains.
British Steel entered administration in 2019 and was acquired by Jingye in 2020. Since then, the company has struggled with high energy costs, weak demand, and competition from cheaper imports. The government has provided hundreds of millions of pounds in support, including loans and grants for green steel initiatives.
But the relationship with Jingye has grown strained in recent months. Whitehall sources have expressed frustration at the lack of investment and transparency from the Chinese owner. The dividend payout, the first since the acquisition, was seen by officials as a step too far.
The government's intervention will be seen as a signal that it is prepared to use its powers to protect strategic assets. The National Security and Investment Act allows the government to scrutinise and, if necessary, block transactions and other actions that could harm national security.
The Business Secretary said in a statement: "The government is committed to supporting the UK steel industry and ensuring its long-term future. We have acted decisively to protect the interests of the company, its employees, and national security."
Industry analysts have noted that the move could set a precedent for other foreign-owned firms in sensitive sectors. It also raises questions about the future of British Steel, which is expected to require further government support to transition to low-carbon production.
Reaction from Jingye has been muted. A spokesperson confirmed that the company was aware of the government's decision and was reviewing its options. The Chinese embassy in London declined to comment.
The news has been welcomed by trade unions representing steelworkers. The Unite union said the government had "finally shown some backbone" in standing up to foreign ownership that had failed to deliver on its promises.
The development comes amid a broader reassessment of economic security by the UK government. A white paper on critical infrastructure is expected later this year, and the steel industry is likely to feature heavily.
For now, the blocked dividend is a clear message: the UK is prepared to act unilaterally to protect key industries and national security, even if that means direct confrontation with foreign investors.
