Scottish government ministers have been accused of deceiving MSPs after documents revealed warnings of legal action over the costs of a steel mill. Scotsman reported that new documents, obtained by the Scottish Liberal Democrats show Tata Steel UK had already warned ministers of the potential for legal action and of their unhappiness with the unilateral decision of ministers to claim the contract breached state aid rules. The Scottish Liberal Democrats party is now calling for the business minister, Ivan McKee, to apologies to parliament for his “cavalcade of deception”. Mr McKee was first informed of a potential issue with the deal two months before MSPs were updated, but only spoke to Tata days before going public. The steel giant complained of the limited time to respond and requested an opportunity to challenge the conclusion the deal breached state aid rules. In a letter sent to the government on December 14, 2021, the day before Mr McKee’s statement to parliament, Tata told ministers it believed a final conclusion on state aid and therefore whether taxpayers are liable for millions in environmental clean-up would have to be determined by the court. It said: “In any event, we note that it is not within the Scottish Government’s competence to make a legally binding determination on the existence of State aid. Such a proposition would, if necessary, be a question for determination by the courts (or the European Commission) at the appropriate time.” Tata Steel UK sold Dalzell to the Scottish Government in an unprecedented ‘back-to-back’ sale for GBP 1, with the government selling the Dazel plant in Motherwell in North Lanarkshire immediately to Mr Sanjeev Gupta’s Liberty Steel. As part of the deal, Scottish ministers took on all of Tata Steel’s potential liability for all known and unknown liabilities at the site, including around environmental clean-up, costs which could end up in the millions. Ministers agreed an equivalent clause with Liberty, with the aim of ensuring the costs would not pass to the taxpayer. However, as Liberty Steel’s parent company, GFG Alliance, began to wobble last year following the collapse of its main funder, Greensill Capital, due diligence by ministers appeared to suggest the deal broke state aid rules. This, ministers said, meant the deal was unenforceable and that the taxpayer would not be held liable for any costs associated despite the contract with Tata Steel.
Scottish government ministers have been accused of deceiving MSPs after documents revealed warnings of legal action over the costs of a steel mill. Scotsman reported that new documents, obtained by the Scottish Liberal Democrats show Tata Steel UK had already warned ministers of the potential for legal action and of their unhappiness with the unilateral decision of ministers to claim the contract breached state aid rules. The Scottish Liberal Democrats party is now calling for the business minister, Ivan McKee, to apologies to parliament for his “cavalcade of deception”. Mr McKee was first informed of a potential issue with the deal two months before MSPs were updated, but only spoke to Tata days before going public. The steel giant complained of the limited time to respond and requested an opportunity to challenge the conclusion the deal breached state aid rules. In a letter sent to the government on December 14, 2021, the day before Mr McKee’s statement to parliament, Tata told ministers it believed a final conclusion on state aid and therefore whether taxpayers are liable for millions in environmental clean-up would have to be determined by the court. It said: “In any event, we note that it is not within the Scottish Government’s competence to make a legally binding determination on the existence of State aid. Such a proposition would, if necessary, be a question for determination by the courts (or the European Commission) at the appropriate time.” Tata Steel UK sold Dalzell to the Scottish Government in an unprecedented ‘back-to-back’ sale for GBP 1, with the government selling the Dazel plant in Motherwell in North Lanarkshire immediately to Mr Sanjeev Gupta’s Liberty Steel. As part of the deal, Scottish ministers took on all of Tata Steel’s potential liability for all known and unknown liabilities at the site, including around environmental clean-up, costs which could end up in the millions. Ministers agreed an equivalent clause with Liberty, with the aim of ensuring the costs would not pass to the taxpayer. However, as Liberty Steel’s parent company, GFG Alliance, began to wobble last year following the collapse of its main funder, Greensill Capital, due diligence by ministers appeared to suggest the deal broke state aid rules. This, ministers said, meant the deal was unenforceable and that the taxpayer would not be held liable for any costs associated despite the contract with Tata Steel.
