Scottish Government under pressure over £10bn Chinese steel deal

First Minister Nicola Sturgeon was accused of cover up over the deal. Picture: Julie BullFirst Minister Nicola Sturgeon was accused of cover up over the deal. Picture: Julie Bull
First Minister Nicola Sturgeon was accused of cover up over the deal. Picture: Julie Bull
The Scottish Government is facing fresh pressure today over its 'secret' £10 billion deal with a Chinese consortium about potential economic growth and investment links.

Labour now want guarantees that it won’t mean buying in cheap Chinese steel to fund Scottish infrastructure projects at a time when the industry is in crisis throughout the UK.

Scottish ministers have come under fire for using Chinese steel to built the new £1.45 billion Forth crossing.

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There are questions over the why the SNP took so long to release details of the “memorandum of understanding” and over the role of SNP donor Brian Souter in the deal.

Labour’s Public Services and Wealth Creation Spokesperson Jackie Baillie said: “The SNP pat themselves on the back for things they aren’t even involved in, so for Nicola Sturgeon to keep quiet about a deal she signed potentially worth £10 billion with a Chinese consortium is quite extraordinary.

“It took pressure from Labour and journalists for the SNP Government to finally publish the details of this deal, almost two weeks after Nicola Sturgeon signed it. We now need the government to publish all documentation in relation to this deal. Only when all the information is out in the open will the people of Scotland be able to make a judgement on it.”

Last night the Scottish Government made a U-turn by agreeing to publish the “memorandum of understanding” with Chinese firms. Ms Sturgeon had been accused of trying to keep the deal under wraps until after the election on 5 May and of seeking to avoid questions about what may have been offered to Chinese business leaders in exchange for the investment package.

The memorandum highlighted moves to “fund major infrastructure projects in Scotland” by promoting talks about potential deals between Scottish and Chinese firms that could reach the “value of £10bn”. It also referred to “building strong working relationships with appropriate leaders and influential decision-makers in China”.

But Ms Baillie said ministers must explain why they took so long to release the Memorandum of Understanding, as well as Mr Souter’s involvement.

She added: “At a time of crisis for British steel the SNP must give a guarantee that, if they are returned to government, any future contract with Chinese firms will not bind Scotland to using Chinese steel for Scottish infrastructure projects.

“The arrogant approach of the SNP Government in this case has been unacceptable. People in Scotland deserve a bit more respect from ministers.”

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The deal was signed on 21 March by Ms Sturgeon and representatives of SinoFortone and construction giant China Railway No.3 Engineering Group. Ministers say they decided against releasing details because of the pre-election purdah period even though this got underway two days later.

An SNP spokesman said: “Once again Labour are ignoring reality to make up their own version of events. The Memorandum of Understanding is an agreement to have preliminary talks about potential opportunities for investment.

“It does not relate to any specific projects or any specific amount of investment. No investment has been agreed.”