Minister's admission

Steel mills deal may have breached state aid rules

LIberty-Steel-Dalzell

Rescued: Dalzell steel mill

Scottish Government ministers may have breached state aid rules in an attempt to save the country’s last remaining steel mills.

The two mills, at Dalzell and Clydebridge, were mothballed by Tata Steel in late 2015.

The following year the Scottish government stepped in to facilitate their sale to Sanjeev Gupta’s Liberty House to save save more than 100 jobs and retain steel plate production in Scotland.

The government bought the sites for £1, then immediately sold them on to Mr Gupta.

The transfer is now being reviewed in light of concerns about GFG Alliance, the parent company of Liberty House.

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Business minister Ivan McKee said the clause had committed the government to protecting Tata from future costs if Liberty were to go bust.

Public spending watchdog Audit Scotland has now been informed of the situation, the minister added.

The Scottish government said the issue was identified during contingency planning undertaken in response to the administration of Greensill Capital UK which financed Liberty House.

There is no adverse impact on the public purse and no money has been paid under the Scottish Government’s indemnity.

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