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Sturgeon must explain herself over China deal

Terry portrait with tieWhen Nicola Sturgeon put pen to paper with a state-backed Chinese investor and the world’s biggest engineering group she must have thought she was sitting on a potential goldmine.

The Memorandum of Understanding agreed with the Scottish government should have been an occasion for the First Minister to celebrate. After all, it promised to deliver £10 billion from an overseas investor to support the building of Scottish infrastructure.

That is serious money, particularly for Scotland. Compared to the paltry £200 million that would be raised by hiking the top rate of income tax by 5p to 50p, it was also a potential vote winner over Labour’s budget plans.

So why wasn’t anyone in Scotland told about it?

The Scottish government had used the election “purdah” – when statements have to be neutral – as a reason for saying nothing.

But it was signed on 21 March at Bute House – two days before election purdah.

It was left to the Chinese media on 23 March to alert the world to the signing ceremony, while the Scottish media and everyone else in Scotland was kept in the dark until this weekend. Last night, the SNP decided to issue the document, but continued to play down its importance – an extraordinary position to take when you have just agreed a potentially massive injection of capital.

The agreement with the state-backed investor SinoFortone and China Railway No 3 Engineering Group is proving to be embarrassing for Ms Sturgeon, with speculation that the timing of the deal could not have been worse, given the crisis besetting the British steel industry and the fury over cheap Chinese imports.

Sturgeon signs China dealChinese investment into the UK is said to be conditional on Chinese plants supplying the steel. And much more. In the case of Scotland, it would mean China providing rolling stock and other equipment for a promised high speed rail line.

Yesterday, in the latest move to save the Port Talbot steelworks in South Wales the UK government extended its requirement to include British steel in all procurement tenders from central government departments to the whole of the public sector.

But just as this new edict to “buy British” was being issued by Westminster Ms Sturgeon knew she had signed up, potentially, for more imports.

It also begs questions as to why she would agree to import steel having just rescued two plants in Scotland which had also complained about their inability to compete with foreign steelmakers.

Instead of trumpeting her £10bn investment agreement, Ms Sturgeon has been downplaying its importance by saying no orders have been placed. That may be true, but there would be little point in signing such an agreement unless the intention is for orders to follow.

For her to turn around and say that no deals with the Chinese are imminent is not likely to impress her new friends in Beijing who will be sitting by the phone waiting for instructions so that the first shipment can be despatched to these shores.

 

 

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