UK Government urged to reject £1bn debt repayment claim by Chinese former British Steel owners

Business Secretary Jonathan Reynolds has received strong advice from Reform UK to deny repaying nearly one billion pounds in loans owed to the previous Chinese controllers of British Steel. The state-owned steelmaker was nationalised earlier this year following an emergency intervention designed to save the industry and protect thousands of jobs at its Scunthorpe plant, which houses Britain’s final blast furnace.

According to accounts filed last week, the company owes just under one billion pounds to entities linked to Jingye Steel before public ownership took effect. Reform UK business spokesman Richard Tice argued that taxpayers should not reward a failed private owner for their exit. He noted that the government would already be burdened with billions required to rebuild essential infrastructure like blast furnaces.

The total debt figure comprises approximately five hundred million pounds owed directly to Jingye, its overall parent group. Additional subsidiaries of Jingye were owed four hundred and ten million dollars in 2024, while Secure Trust Bank held a further fifty million pound claim. The accounts indicated the business required hundreds of millions more in fresh funding, with some five hundred and fifty-five million pounds already provided by the state.

This dramatic government action occurred within Labour’s first year in power after prolonged negotiations sparked fears that closing the plant would endanger over 2,700 positions. A bill passed through Parliament enabled full nationalisation in July to secure the future of UK steel production and critical infrastructure.

Mr Tice suggested the Chinese company should be forced to write down its debt entirely rather than receive compensation for leaving liabilities behind. It is understood no payment has been made yet, with a scheme for any potential payout expected later this year. A government spokesperson stated that after assessing impacts on national security and economy, public ownership was deemed best for securing the business’s future.

An independent valuer will determine if anything is payable to Jingye while officials focus on stabilising operations and supporting local communities dependent on the facility.