Ministers under pressure to clarify confusion around potential multi-million liability connected to Dalzell steelworks sale

Ministers have been urged to clarify their position around a potential multi-million pound liability connected to the botched sale of the Dalzell steelworks.

It comes as the Scottish Government now claims that former owners Tata Steel do not have any liability connected to the site which was sold to Liberty Steel in 2016.

The Scottish Liberal Democrats said this created additional “confusion” around the deal and have demanded clarity.

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The Government owned the plant for mere moments as it brokered the “back-to-back” sale of the facility which it bought for £1 from Tata before selling to Liberty Steel.

Business minister Ivan McKee has been asked to clarify confusion around the sale of Dalzell steelworks.Business minister Ivan McKee has been asked to clarify confusion around the sale of Dalzell steelworks.
Business minister Ivan McKee has been asked to clarify confusion around the sale of Dalzell steelworks.

The Scottish Government agreed an indemnity clause while brokering the deal between Tata Steel and Liberty Steel, owned by Sanjeev Gupta, in 2016 for the purchase of the steel slab plant.

Ministers have claimed this clause is no longer valid due to it potentially breaching state aid laws, although Tata Steel said the contract remained “valid and binding in all aspects”.

This has raised concerns that future costs, such as for environmental clean-up, may have to be covered by the Government should Liberty Steel go bust.

Contingency planning for such a scenario following the collapse of the steel company’s main backer, Greensill Capital, highlighted the state aid issue in the contract.

Willie Rennie, the Scottish Liberal Democrat MSP, said the position of the government around its and Tata’s liability at the site was unclear and requires clarification.

He said: “Back in 2016 the SNP’s amateur handling of the negotiations with Tata and Liberty Steel landed the Government with a liability that was apparently contrary to state aid rules. It took them four years to discover and admit that blunder.

“Then the Scottish Government told Tata they may have a liability for the clean-up of the site, but now apparently the Minister says that they don’t. If Tata are not responsible for clean-up operations does that mean the costs could fall on Scottish taxpayers? This confusion must be cleared up urgently.”

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Freedom of information requests around the deal have been rejected by the Scottish Government, causing concerns over whether the details of the error will ever see the light of day.

Mr Rennie added: “If the SNP government were more open about the bungled deal that may clear up the confusion but in response to a series of questions from me, they have blocked any details from public scrutiny. The SNP refuse to be open about the purpose of the back-to-back sale or any of the details of the discussions.

“When millions of pounds and the credibility of the Scottish Government’s industrial policy are at stake we deserve to be told more.”

The opposition MSP has also asked the government to explain how much the taxpayer could end up paying, whether it will release details of its agreement with Tata Steel, and whether it has assessed the potential of legal action against it by the steel giants in a series of written questions in Holyrood.

A Scottish Government spokesperson said: “In the majority of cases, potential contaminated land is dealt with through the development planning system or voluntary remediation. The responsibility and associated costs for carrying out site investigation and any required remediation lies with the site owner or developer.

“Our intervention in 2016 enabled Liberty Steel to operate the Dalzell steelworks, retaining heavy steel plate production in Lanarkshire and saving more than 100 jobs.”

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