Government urged to refuse £1bn British Steel repayment to Chinese former owner
Business secretary Jonathan Reynolds has been urged to refuse to pay back almost £1bn in loans to the Chinese former owners of British Steel after it was nationalised earlier this year.
British Steel owed just under £1bn to companies connected to its owner Jingye Steel before it was taken into public ownership in an emergency deal last month, according to its 2024 accounts filed last week.
Reform UK business spokesman Richard Tice, who backed government plans to take over operations at the steelmaker, said the government should “stand firm” in the face of debts owed.
“Taxpayers should not be rewarding Jingye for their failed ownership of British Steel,” Tice said. “They will already be saddled with billions of pounds worth of investment that will be needed to rebuild the blast furnaces.”
The near-£1bn figure consists of around £500m owed to Jingye, the overall parent group that owned British Steel.
Two other Chinese companies, Power Rich Resources and Herbei Jingye Cut Deal Co., subsidiaries of Jingye, were owed a further $410m in 2024. A further £50m was owed to Secure Trust Bank.
The company accounts suggested that British Steel needed hundreds of millions of pounds in fresh funding. Some £555m has been provided by the government to the Scunthorpe-based business.
CityAM reported in June last year that British Steel would cost the taxpayer about £900m a year, according to the Office for National Statistics.
The government’s dramatic intervention came within the first year of the Labour being in power when it took over operations. This came after lengthy talks sparked fears that the plant’s closure, which contains Britain’s last remaining blast furnace, would put over 2,700 jobs at risk. The government opted to fully nationalise British Steel in July after a bill was passed by Parliament.
Steel ‘compensation’ framework being drafted
Reform UK’s Tice, who is currently facing a parliamentary investigation, said the Chinese company should be forced to take a full write down on their debt” and also “be grateful to get away so lightly” for leaving taxpayers with liabilities.
It is understood that no compensation has been paid and a scheme for any payout would be drafted later this year.
A government spokesperson said: “After assessing the impact on our economy, critical national infrastructure, and national security, we concluded that public ownership was the best way to secure British Steel’s future and protect the future of UK steel production.
“An independent valuer would determine what, if any, is payable to Jingye, and our focus is now on stabilising the business, backing the communities that rely on it and building a sustainable, competitive and decarbonised steel sector for the years ahead.”