British Steel’s Chinese owners are demanding hundreds of millions of pounds for a company that is losing nearly a million every day.

No wonder the UK’s Labour government is stalling. It is caught in a trap not of its own making.

The formerly-nationalised British Steel was privatised by Margaret Thatcher in the 1980s. People who still sing her praises should bear in mind that by selling off strategic assets like this company – and its blast furnaces – to foreign powers, the UK opened itself up to exactly this kind of industrial blackmail.

Jingye’s demand: a ransom for a rusting asset?

British Steel is described by ministers as being “worth effectively zero” yet its owner, China’s Jingye Group, is demanding hundreds of millions of pounds from the UK taxpayer before handing it back. Why?

The answer is: because they won’t sell the company at its book value — they’re selling it at its strategic value.

• Book value is the accounting worth of assets minus liabilities. With British Steel haemorrhaging around £700,000 per day, that’s as near to nothing as makes no difference.

• Strategic value is the value of a company to national security, infrastructure, jobs, and sovereignty. For British Steel, that is much, much higher.

Jingye knows this.

Its bosses know the UK can’t let its last blast furnaces shut down.

They know the government is desperate to preserve thousands of jobs in Scunthorpe and keep sovereign steel production alive.

So they’re treating the UK government like a hostage negotiator: Pay us to leave, or we close up and destroy the furnaces.

It’s worth bearing in mind that Jingye is also between a rock and a hard place:

• Jingye bought British Steel in 2020, claiming to save 3,200 jobs.

• They likely invested hundreds of millions since then.

• Now that the UK government is forcing their hand (or may take the company by force), they want out with some cash — and maybe even to recoup losses or save face politically in China.

Also:

• The Chinese state likely backed Jingye’s original buyout, at least in spirit.

• This steel plant is symbolic — part of China’s ambition to expand its industrial footprint abroad.

• Letting this go for free would be a domestic embarrassment for Jingye and, by extension, Beijing.

• They don’t want to be seen as getting strong-armed by the UK government, especially during a time of rising UK-China tensions.

The original sin: selling off strategic assets

This situation is entirely self-inflicted.

No government that valued national resilience would have sold off a company like British Steel to foreign interests in the first place — especially not to a company from a geopolitical rival like China.

But this wasn’t a one-off.

Over the last four-and-a-half decades since Thatcher took office, successive governments have flogged off assets that should have remained in public or at least UK-based hands.

What we’re seeing now is a case study in the long-term consequences of short-term thinking.

What other strategic assets did we sell?

If you don’t think being ransomed over British Steel is bad enough, here’s a shortlist of privatised or foreign-owned UK infrastructure that could pose similar risks:

1. Energy

• Large chunks of the UK energy market — including gas and electricity networks — are owned by foreign state-backed firms, such as EDF (France) and E.ON (Germany).

• This gives other countries leverage over our energy pricing and infrastructure planning.

2. Water

• Almost all UK water companies are privately owned — and many are controlled by foreign investment groups, such as Australia’s Macquarie or Canadian pension funds.

• These companies can extract profits while neglecting infrastructure — and good luck getting them back without paying a fortune.

3. Transport and Rail

• Foreign governments run services on our privatised railways — for profit. Arriva (owned by Germany), Abellio (Netherlands), and Keolis (France) all operate UK train services.

4. Ports, Airports, Telecoms

• Critical infrastructure like Heathrow and BT Openreach have foreign investors with significant control.

• In moments of national crisis — war, cyberattack, or economic collapse — how do you nationalise them without a fight or a fortune?

What happens if we want these back?

The British Steel debacle offers a preview:

• You’ll have to pay. A lot.

• Even if the asset is worthless on paper, its strategic role makes it a priceless bargaining chip.

• Foreign owners will ask not just for repayment of capital, but also for “compensation” for forced exit or reputational loss.

In the worst case, we’ll see Parliament forced to legislate to take control — with all the legal battles and investor backlash that brings.

Another ‘black hole’ for public cash?

Adding insult to injury, British Steel isn’t even profitable.

It hasn’t been for years.

The government has already offered £500 million, rejected by Jingye, who want closer to £1 billion. Meanwhile, taxpayers are already covering day-to-day losses through a £2.5 billion steel support fund.

Jingye is likely bluffing high to negotiate a golden handshake, and may settle for hundreds of millions less than the opening ask, but not zero.

The UK government, meanwhile, is stalling to avoid political fallout from handing taxpayer money to a Chinese company, nationalising a major industry asset (again), or losing the last blast furnaces in the country.

The biggest irony of all is that the government doesn’t even want to own the company.

Ministers are desperately trying to find another private buyer — but can’t do that until the Jingye standoff is resolved.

We are spending a fortune just to hold the line.

Can this be turned around?

The situation can be changed — but only with vision, leadership, and a break from failed ideology. Here’s how:

1. Invest for long-term transformation

• Steel can be made profitably — if it’s green, modern, and efficient.

• The UK must commit to electrification of steel production, carbon capture, and new technologies like hydrogen-based steelmaking.

• That means upfront cost — but long-term security.

2. Secure domestic supply chains

• The war in Ukraine and pandemic supply chain shocks showed us what happens when you can’t produce critical materials at home.

• Strategic steel is essential for shipbuilding, infrastructure, defence, and nuclear power.

3. Make public ownership work

• Let’s stop pretending nationalisation is a dirty word. Countries like France, Germany, and Sweden have thriving state-involved industries.

• The goal isn’t bureaucracy — it’s stability, investment, and public accountability.

Nationalisation: the only real answer?

The UK’s Labour government is looking for another buyer because it doesn’t want to nationalise British Steel due to what we may described as “bad optics”. Let me explain:

Nationalisation is associated with old-school socialism

• It is historically linked to Labour Party policies from the post-war era — railways, coal, steel, telecoms.

• Since the 1980s – the Thatcher era, the political and media consensus in Westminster has often portrayed nationalisation as:

  • Inefficient

  • Expensive

  • Anti-business

• Even if it’s practical, it feels ideological, especially to pro-market audiences. Saying “nationalise” in the UK still triggers memories of strikes, bureaucracy, and economic decline — fair or not.

It can scare off foreign investors

• Governments worry that nationalising a foreign-owned business sends a “hostile to business” signal internationally.

• Investors may ask:

  • Will my assets be safe in the UK?

  • Could the government seize something if politics shift?

• This is particularly sensitive when the owner is from a major power like China.

Investor confidence is like oxygen for economies — and nationalisation is often seen (rightly or wrongly) as choking it.

It exposes the government to financial and political risk

• If you nationalise:

  • You own the debt

  • You inherit the problems

  • You take the blame if it goes wrong

• British Steel reportedly loses £700,000 per day — if nationalised, that becomes the government’s problem indefinitely. Imagine the headlines: “Taxpayers now funding a Chinese steel failure.” Not a vote-winner.
  

It undermines “market-based solutions”

• Especially for a Labour government (like the current one), nationalisation may alienate centrists and business leaders they’re trying to court.

• Keir Starmer has tried to portray Labour as pro-growth, pro-business, and not ideologically rigid.

• A forced nationalisation could be painted as a return to “old Labour” instincts.

It also sets a precedent

• If you nationalise British Steel, what’s next?

  • Tata Steel in Port Talbot?

  • Energy companies?

  • Water?

• It opens a door that opponents and media can easily weaponise.

But it isn’t always bad

The trouble is, some would argue that nationalisation is the only rational move:

• Public ownership of strategic infrastructure is standard in many countries.

• Voters often like nationalisation — especially of rail, energy, and water — in polling.

• If the market fails, the state stepping in isn’t ideology — it’s necessity.

For many on the left (and even some centrists), nationalising a failing, strategically vital asset like British Steel is not a sign of weakness — it’s a sign of leadership.

And att this point, nationalising British Steel may be the only logical step:

• The government already pays the bills.

• No private buyer will come forward while Jingye holds it hostage.

• Without it, we lose sovereign steel production forever.

Yes, nationalisation has its risks — financial, political, and diplomatic.

But the greater risk is doing nothing.

Or worse, paying a geopolitical rival to return something that should never have been sold.

A lesson for the future

British Steel is the canary in the coal mine. The next time a foreign-owned water company poisons rivers or a foreign energy firm hikes prices — and the government says it can’t do anything — remember this moment.

When you sell your strategic assets, you sell your sovereignty.

When you try to buy them back, don’t be surprised if the price is blackmail.