Defence fears as Turks set for buy-out of British Steel

THE proposed sale of British Steel to the Turkish military’s pension fund triggered alarm at Westminster last night.

The Commons defence committee chief said industries with a ‘strong defence dimension’ should remain under British control.

Prospective buyer the Turkish Armed Forces Assistance Fund – known as Oyak – has been chosen above several other bidders including British-based Liberty, which already owns several steelworks in the UK, including two in Lanarkshire – Clydebridge in Cambuslang and Dalzell in Motherwell.

The deal is expected to be signed in two months, once the company’s finances have been checked.

It could save all 4,000 jobs which are under threat if a buyer cannot be found.

Oyak, which also owns steel mills in Turkey, is believed to be offering around £70million for the business, alongside a promise to invest £900million to double production.

The Government has previously offered loans and grants worth £300million to sweeten any potential deal.

British Steel owns the Scunthorpe steelworks where 3,000 people work and it employs another 700 in Teesside.

The firm was put into compulsory liquidation in May after rescue talks with the Government broke down.

Another 20,000 jobs in the supply chain were put at risk by the collapse of the talks between the Government and British Steel’s owner, private equity firm Greybull.

Unions cautiously welcomed the announcement but defence experts raised concerns over apparent ties between Oyak – whose chairman is former general Mehmet Tas – and Recep Erdogan’s government in Turkey.

The country’s defence minister and head of armed forces attended Oyak’s annual general meeting in May, the Financial Times reported.

Turkey is an ally through Nato but it has cosied up to Russia in recent years, forging defence ties over Syria.

Dr Julian Lewis, defence committee chairman, said: ‘No industry with a strong defence dimension should pass out of the control of British firms and jurisdiction.

‘Turkey was once a strong and reliable Nato ally, as far as Russia is concerned, and a Muslim country that separated religion from politics. What’s particularly concerning is that neither of those things is true today.

‘While the proposed deal is better than seeing the industry collapse completely, it is much less desirable than having the company under British control.’

Oyak has also been accused of corruption by a parliamentary

‘Crucial to our infrastructure’

commission in its home country.

Dr Andrew Foxall, of thinktank the Henry Jackson Society, said: ‘Recep Erdogan has set the country on a course toward authoritarianism.

‘Flirting with Russia and China while oppressing its people, Turkey is increasingly turning its back on the West.

‘Given that British Steel is crucial to our infrastructure, the Government should consider extra steps to safeguard it under Turkish ownership.’

Steel is considered a strategic industry, because companies such as British Steel provide materials to build warships and railways.