The Press and Journal (Inverness, Highlands, and Islands)
Accusations of ‘deception’ over steel mill
The Scottish Government has been accused of deceiving MSPs as documents reveal it was warned of potential legal action over the costs of a steel mill.
The Scottish Government obtained the Dalzell steel mills from Tata Steel for £1 in April 2016 in a “back-toback” sale, before it was immediately transferred to metal tycoon Sanjeev Gupta’s Liberty Steel.
But the plant in Motherwell, North
Lanarkshire, has been under pressure as Mr Gupta’s company (GFG) is investigated for alleged fraud. It means the Scottish Government could be liable for all of the clean-up costs if Liberty Steel collapses.
Business Minister Ivan McKee previously told Parliament that discussions around the liability for clean-up costs were still ongoing.
However, documents obtained by the Scottish Liberal Democrats revealed Mr McKee was notified on December 14 2021, the day before he addressed MSPs, that the government could face court action in the event of Liberty Steel’s collapse.
The Scottish Government has disputed claims that they will be eligible for the clean-up costs, but the letter told ministers: “We note that it is not within the Scottish Government’s competence to make a legally binding determination on the existence of state aid.”
Instead, the firm said it would, if necessary, be a “question for determination by the courts”.
Willie Rennie, the Scottish Lib Dem economy spokesman, has urged Mr McKee to apologise for the “cavalcade” of “deception”.
He said: “These documents confirm our long-held suspicion that in the event that Liberty Steel goes bust, and the assets don’t cover the clean-up costs, then it would be Tata’s intention to force (the Scottish Government) to pay for the clean-up costs.”
A Scottish Government spokesperson said: “The Scottish Government acted at pace in 2016 to support a transaction involving Tata Steel and Liberty House.
“Subsequently, ministers were advised that one specific part of the contract arrangement may not comply with state aid rules.
“This finding means in the unlikely event of the indemnity ever being called upon, no money would legally have to be paid out by the Scottish Government.”
GFG Alliance and Liberty Steel declined to comment.