Whitehall sources have confirmed that the government is preparing to intervene in a planned £1.73 billion dividend payment from British Steel to its parent company, Hugo Boss. The payment, which would represent the largest single repatriation of profits from a UK steelmaker in a decade, has triggered alarms over national security and industrial capacity.
A senior official at the Department for Business and Trade said the payout risked “hollowing out” a strategic asset at a time when global supply chains are under strain. British Steel, which produces specialist steels for defence and infrastructure, has been operating under a state-backed restructuring plan since 2021. The government holds a special share in the company, giving it veto powers over certain financial transactions.
Industry analysts estimate that the dividend would strip the company of more than half its cash reserves, hampering investment in decarbonisation and leaving it vulnerable to a takeover by a foreign rival. One source described the proposal as “shortsighted and potentially catastrophic for national resilience.”
The intervention would mark a significant escalation of the government’s use of the National Security and Investment Act, which was tightened last year to cover critical minerals and advanced manufacturing. A decision is expected within the next 48 hours.
Executives at Hugo Boss have argued that the dividend is a contractual obligation and reflects the company’s right to repatriate profits. However, the prime minister’s office has indicated that “national interest” considerations will take precedence. The Treasury is said to be preparing secondary legislation that would impose a temporary freeze on large capital outflows from companies deemed essential to national security.
Labour’s shadow business secretary accused the government of “playing politics with a vital industry,” but stopped short of opposing the block. Union leaders welcomed the move, calling it “long overdue protection for British jobs and skills.”
British Steel employs 4,700 people directly, with thousands more in its supply chain. The dividend payment was originally scheduled for next Tuesday.
This is a developing story.
