SNP DISH OUT £160,813 OF TAXPAYERS MONEY TO LAWYERS
ScotGov spends on legal advice relating to the Dalzell Steelworks. A deal they have since confessed is potentially illegal and could land taxpayers with millions in clean-up
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Our First Minister launched round two of her 'pro-Independence paper-blitz with much fanfare today. The second instalment is amusingly titled ‘Renewing Democracy through Independence’, and boasts only independence can fix Scotland’s current democratic deficit. Yet judging by a Freedom of Information Request concerning the Dalzell Steelworks Gupta deal, it raises the prospect that Scotland’s real democratic deficit is far closer to home than Westminster.
The date was Wednesday 15th of December 2021, and it was a cold day in the Scottish capital as temperatures struggled to kick above 11 Celsius1. In parliament the assembled politicians and Presiding Officer were treated to a blandly named ‘Ministerial Update’ from the Minister for Business, Trade, Tourism and Enterprise Ivan McKee. The topic at hand was about the “Dalzell historical industrial transaction”, where earlier the SNP government had bought the site for £1 from Tata Steel, then immediately sold it to Mr Gupta's business Liberty Steel as part of a deal.
His update began with the usual Scottish Government rhetoric you might expect, defending the SNP governments decision to intervene on an industrial matter to ‘protect jobs’. But a few stumblingly delivered paragraphs in, the SNP Minister dropped a bombshell that really ought to have made more news headlines. It certainly woke me up at the time, I recall writing an article about it. Nicola Sturgeon’s Minister for Business, Trade, Tourism and Enterprise confessed to the Scottish Parliament that
“There is one specific part of the contract arrangement that has arisen during our contingency work, that we are advised may not comply with state aid rules”2
Mr McKee - likely hoping opposition MSPs would fall into his cunning trap be snoozing due to his dreary public speaking skills - added a little more
“This clause granted an enduring indemnity from Scottish Ministers to Longs Steel, whereby Scottish Ministers would be liable to cover the cost of certain liabilities arising from TATA Steel’s ownership of the Lanarkshire plants.”
What that all meant was that the SNP may have been dishing out illegal subsidies. Worse still, Scottish taxpayers were potentially suddenly left on the hook for substantial costs.
You see, the SNP had originally agreed to buy the plants from Tata Steel subsidiary Longs Steel UK for £1 then “immediately” sold them for £1 to Liberty House in a so-called “back to back agreement”. This had helped Nicola Sturgeon boast about “saving” 140 jobs, but now she was nowhere to be found. It was left to poor Ivan McKee to fess up to his peers.
Nicola Sturgeon’s government had granted Longs Steel - the previous owners of the site - an enduring indemnity. An indemnity whereby Scottish Ministers “would be liable to cover the cost of certain liabilities arising from Tata Steel’s ownership of the Lanarkshire plants.” But now the Scottish Government was confessing that actually what they had done was offer illegal subsidies, in violation of EU state aid laws.
Oops. Pity it might dump potential clean-up costs for the site in the future onto taxpayers laps should anything happen to Gupta, the new owner. And for the record, the clean-up to Ravenscraig steel works came to £70million a few decades ago, so we aren’t talking small beans here.
Guess why this had all suddenly came to light on the cold wet morning of Wednesday 15th December 2021? Yeah, that’s right, the new owners GFG Alliance (Sanjeev Gupta) was in crisis. His key funder, the controversial banker Greensill of Greensill Capital - had collapsed. That had sent the SNP government flying into a panic as they realised they could be facing a real financial disaster of their own making. A ‘review’ of their deal was undertaken and they were now confessing to the Scottish Parliament they had been potentially handing out illegal subsidies in breach of the law.
Naturally all of this is in the shadow of the much greater SNP ministerial admission that they had already exposed taxpayers to a possible £586m liability over GFG's Lochaber aluminium smelter3 (Sanjeev Gupta again).
But why mention all of this now? Well we now know how much this Scottish Government has spent on legal advice in relation to the Dalzell Steelworks since 2015. They (that is to say, you and me, taxpayers) paid:
“ In 2016-17, the Scottish Government spent £28,488.61 (excluding VAT) on legal advice pertaining to Liberty Steel Dalzell Ltd. For 2020-21, the total is £25,816.35 (excluding VAT) and for 2021-22 the total is £106,508.25 (excluding VAT). The total spend is £160,813.21 (excluding VAT).”4
£160,813.21 excluding VAT. For legal advise relating to the Dalzell Steelworks. And the contract concerning matters was by their own admission potentially illegal. But the SNP government is still refusing to release under FOI information concerning copy(ies) of the legal advice that the Scottish Government has received since 2015 in relation to (a) the purchase of the Dalzell Steelworks and (b) state aid rules relating to the facilitation of this sale.
The story here is that Scotland does have a democratic deficit, one where we have a First Minister presiding over amateur hour incompetence and relying on obfuscation and legal jargon to hide. Scotland has a government that is allergic to accountability and transparency and no, I do not mean the one down in London. Time we looked much closer to home if we are serious about reforming our broken politics. Let’s start with ejecting Ms Sturgeon and her gang of incompetents from their Ministerial Limousines, independence is not required.
Weather in \Edinburgh, December 15, 2021, https://world-weather.info/forecast/united_kingdom/edinburgh/15-december/
ScotGov (2021, 15 December), ‘Dalzell historical industrial transaction - update: ministerial statement’, Ministerial Update to the Scottish Parliament, https://www.gov.scot/publications/update-dalzell-historical-industrial-transaction-ministerial-statement/
Williams, Martin (2021, 18, November), ‘Anger as Scots ministers admit £586m power purchase 'guarantee' for Sanjeev Gupta firm’, The Herald, https://www.heraldscotland.com/news/homenews/19725403.anger-scots-ministers-admit-586m-power-purchase-guarantee-sanjeev-gupta-firm/
ScotGov (2022, 17, July), ‘Publication - FOI/EIR release: Legal considerations regarding Dalzell Steelworks: FOI release’, Scottish Government, https://www.gov.scot/publications/foi-202200272825/
Incredibly depressing reading, the incompetence is off the scale. This scandal alone should bring them down but it won’t. Their core voters simply don’t care.