The government has raised the prospect of blocking a dividend payment to the owner of British Steel, in a move that would mark a significant intervention in the struggling industry. Sources close to the negotiations confirmed that ministers are considering using powers under the new National Security and Investment Act to prevent a payout to Jingye, the Chinese conglomerate that acquired the steelmaker in 2020.
The potential block comes amid growing concern over the viability of British Steel, which employs 4,000 workers directly and supports thousands more in the supply chain. The company has been in talks with the government for months over a £300 million support package to help it transition to greener production methods. However, officials are alarmed that any cash injection could be used to reward shareholders rather than secure jobs and investment.
“The taxpayer is not a cash machine for foreign owners,” one Whitehall insider said. “If they want our money, they have to show they are committed to the future of steelmaking in this country.”
Jingye acquired British Steel in 2020 for £50 million, after the previous owner Greybull Capital put it into liquidation. Since then, the company has faced soaring energy costs, cheap imports, and the challenge of decarbonising its ageing furnaces. Workers have already accepted a pay freeze and changes to working patterns to keep the business afloat.
Union leaders welcomed the government’s signal but urged caution. “Our members have made huge sacrifices,” said Steve Turner, assistant general secretary of Unite. “Any public money must be tied to cast-iron guarantees on jobs, investment, and sustainability. We cannot have a repeat of the past, where subsidies vanish into offshore accounts.”
The potential intervention is the latest sign of a more muscular approach to industrial policy under the current government. Earlier this year, ministers blocked the sale of Newport Wafer Fab to a Chinese-owned company on national security grounds. But applying similar logic to a dividend payment would be unprecedented and could set a contentious precedent.
Business groups warned that such a move might deter foreign investment. “Investors need certainty,” said a spokesperson for the Confederation of British Industry. “Changing the rules after the event could damage the UK’s reputation as a stable place to do business.”
Yet for workers in Scunthorpe and Teesside, the stakes could not be higher. British Steel’s two blast furnaces are among the most carbon-intensive in Europe. Without state support, the company may be forced to close them, leading to mass redundancies and a devastating blow to local economies already reeling from decades of deindustrialisation.
“We’ve been sold out before,” said Dave Henson, a steelworker of 30 years. “They promise the earth, then the money disappears. If the government is serious about levelling up, this is where they have to act.”
The Treasury declined to comment on the specifics of the case but reiterated that the National Security and Investment Act exists to protect critical national infrastructure. A decision is expected within weeks.
