Dalzell steelworks dealings must be 'dragged into the light' - Lib Dems

The dealings of the Scottish Government with the Dalzell steelworks must be “dragged out into the light”, according to the Scottish Liberal Democrats.

It comes after it was revealed last month that a deal to save Scotland’s last remaining steel plant may have breached state aid rules.

The Scottish Government bought the plant for £1 from Tata in 2016, with the business then sold on to Liberty Steel, which continues to operate it.

In December, business minister Ivan McKee told MSPs the Government had been advised that one specific part of the contract arrangement in the sale of the Dalzell and Clydebridge steelworks to Liberty Steel in March 2016 “may not comply with state aide rules”.

McKee insisted the deal to save the steelworks was the “right decision at that time and continues to be so”.

Now, Scottish Liberal Democrat MSP Willie Rennie has submitted more than 20 written parliamentary questions covering aspects of the deal.

Amongst the questions being raised by his party, Rennie has demanded to know when the Government became aware that it had broken state aid rules.

He also asked what the Government’s exposure to environmental remediation costs is, and why information related to potential Scottish Government liabilities is redacted in official documents.

Rennie has also probed whether other contracts may have broken state aid rules.

The former Scottish Liberal Democrat leader explained that major investors will be questioning whether the Government is a “reliable and competent partner”.

“Hot on the heels of the scandals at BiFab and the Lochaber aluminium smelter, this is another industrial failure from the Scottish Government,” he said.

“First they drew up a contract that breached state aid rules and then they claimed there is no risk to taxpayers’ money but refused to release key documents in full.

“Why would the Scottish government go to the trouble of redacting information which they claim does not exist?

“Major investors will be questioning whether the Government is a reliable and competent partner, which in turn has major implications for jobs here in Scotland.

“If this government was a private sector operator they would have crashed and burned years ago.

“The Scottish Government’s business dealings need to be dragged out into the light.”

A Scottish Government spokesman said: “As part of the rescue deal facilitated by the Scottish Government in 2016 which prevented closure of the Dalzell and Clydebridge steel works, saved more than 100 jobs and retained steel plate production in Scotland, ministers agreed to indemnify the former owner Tata Steel against any future claims relating to the sites.

“It is now considered that the arrangement may not comply with state aid rules and would therefore be unenforceable.

“This means that in the unlikely event of the indemnity ever being called upon, no money would be paid out by the Scottish Government.

“The issue was identified during contingency planning undertaken in response to the administration of Greensill Capital UK.

“We proactively informed the Scottish Parliament and all other interested parties as quickly as possible after advice had been sought, prepared and considered.

“There is no impact on the ongoing operation of the steel plants by Liberty Steel or any cost to the Scottish Government as a result of this matter.”