Scottish Government accused of ‘deception’ over controversial steel plant deal

THE SNP trade minister has been accused of a lack of transparency over a fleeting business deal that may have exposed Scots taxpayers to huge financial costs.

The Scottish Liberal Democrats criticised Ivan Mckee after obtaining new documents about the sale of the Dalzell steel mill in 2016.

The Libdems claimed they helped prove “a cavalcade of Scottish Government deception”.

SNP ministers agreed to buy the plant from Tata Steel subsidiary Longs Steel UK for £1 then “immediately” sell them for £1 to metal tycoon Sanjeev Gupta’s Liberty Steel in a so-called “back to back agreement”.

But the plant in Motherwell, North Lanarkshire, has been under pressure as Mr Gupta’s firm, Gupta Family Group (GFG) Alliance, is investigated for alleged fraud.

The Scottish Government could be liable for all of the clean-up costs if Liberty Steel collapses.

Last December the Scottish Government admitted the deal was “untested due to the novel approach of the transaction in the UK”.

Mr Mckee told MSPS that when the deal was struck, the Scottish Government believed the arrangement complied with European state aid rules.

However, it later revised that opinion, saying a clause in the deal that could leave taxpayers liable for millions in clean-up costs broke state aid rules and was “no longer valid” and therefore unenforceable.

The change of heart followed the collapse of Greensill Capital – the key funder to the GFG Alliance.

However the files released by the Libdems show Tata Steel correctly pointed out that “it is not within the Scottish Government’s competence to make a legally binding determination” on whether a clause is state aid compliant or not.

“Such a determination would, if necessary, be a question for determination by the courts (or the European Commission) at the appropriate time,” it added.

Despite Tata pointing this out the day before Mr Mckee addressed MSPS, he failed to mention their concern or the correspondence in the Holyrood chamber.

Instead, he merely said the Government had informed Tata Steel it would be making a statement and the company would “need time to reflect on and consider its position”.

Libdem MSP Willie Rennie said: “The minister should come to parliament to apologise for his parade of obstructionism and set out the potential cost to the public purse if Tata follow through on their threat of legal action.”

The Scottish Government said it “acted at pace in 2016” to save steel jobs, saving the Dalzell and Clydebridge steel works.

“Subsequently, ministers were advised that one specific part of the contract arrangement may not comply with state aid rules.”