‘Blair should apologise to UK steel workers’

Published on Wednesday 20 February 2002 00:00

THE government was under pressure yesterday to apologise to British steel workers for its decision to support a foreign firm which has threatened UK jobs.

Graham Mackenzie, the head of the Allied Steel company, said Tony Blair should say sorry for backing Lakshmi Mittal, a billionaire Labour donor, in his attempt to acquire the Romanian steel industry.

Mr Mittal, whose company LNM is based in the Caribbean, was later revealed to have lobbied in the United States for punitive tariffs to be applied to imported steel - a move that would have disastrous effects in the UK.

There was further embarrassment for Labour last night when Keith Vaz, the ex-Foreign Office minister, was broadcast joking openly about how he could arrange a visa for a Bollywood film producer at a reception attended by the Indian tycoon at the centre of the "steelgate" affair.

A video, obtained by Channel 4 News, showed Mr Vaz, who is currently banned from the Commons, bantering with the producer, Subhash Ghai, at a film launch in London held in July 2000.

"If you want to do any filming in the House of Commons, let me know," he told Mr Ghai, to laughter from the audience.

Mr Mackenzie said the Prime Minister’s decision to support Mr Mittal had been naive "at least" and at worst had been "a deliberate slight on the UK steel sector".

He added: "The very least I’d have thought he owes us [is] an apology and he needs to follow that up with some very specific action by this government to revitalise UK manufacturing and to give some specific help to the hard-pressed steel sector."

However, Mr Blair remained unrepentant over the affair, despite a former minister’s suggestion that it was "a bit fishy". Kate Hoey, the former sports minister, last night signalled she supported the Tories’ demands for an investigation of Mr Blair’s involvement with Mr Mittal - an inquiry the Prime Minister has repeatedly rejected.

Ms Hoey said: "I’d like to see it looked at more. As far as I’m concerned, I don’t like it. It didn’t sound good, it sounded a bit fishy, as we would say."

Downing Street said there were no grounds for an apology to steel workers and insisted the LNM deal had been in British interests, despite the fact Mr Mittal does not even pay tax on his personal fortune in the UK.

A spokesman for Mr Mittal confirmed the billionaire, who gave 125,000 to Labour before last year’s general election, avoids paying UK tax on the bulk of his personal fortune through a loophole the party reportedly pledged to shut before coming to power.

LNM does not pay British corporation tax because it is registered in the Dutch Antilles offshore haven.

Its tycoon owner has had "non-domicile" status since arriving in Britain seven years ago, the spokesman confirmed. That means Mr Mittal is exempted from tax on all personal income and gains generated outside Britain.