Politics

Nicola Sturgeon Under Fire Over ‘Murky’ £586M Loan Deal

Published on May 22, 2025

A controversial £568 million deal brokered by former First Minister Nicola Sturgeon with steel magnate Sanjeev Gupta has returned to the spotlight, amid mounting concerns over the future of Liberty Steel and its impact on Scotland’s struggling steel sector.

In 2016, the SNP-led Scottish Government facilitated the purchase of two Lanarkshire steel mills—Dalzell and Clydebridge—from Tata Steel for just £1, later transferring ownership to Mr Gupta’s GFG Alliance. The move was sweetened with a £7 million taxpayer-funded loan, touted at the time as a major intervention to save Scotland’s steel industry.

However, new revelations reported by the Scottish Daily Express show workers at the Dalzell and Clydebridge plants were later furloughed on 80% pay, with operations at the last working mill left idle.

In the same year, the Scottish Government backed Mr Gupta’s acquisition of the Lochaber aluminium smelter near Fort William with a staggering £600 million in loan guarantees—fueling fresh debate over the risks of taxpayer-backed industrial rescue efforts.

Now, Speciality Steels UK (SSUK), a Gupta-owned firm within Liberty Steel Group, is facing a winding-up petition in the High Court. While the case does not directly involve Liberty’s Scottish operations, concerns are mounting over the stability of the wider GFG Alliance empire.

At a hearing on May 21, a specialist judge adjourned the winding-up petition for eight weeks to allow time for a potential sale of SSUK, which employs 1,450 people. Liberty’s legal team confirmed that “urgent meetings have been taking place” with a “third party purchaser.”

A Liberty Steel Group spokesperson sought to reassure Scottish stakeholders, stating: “The proceedings with regards to Speciality Steel UK have no relation to and effect on the Scottish businesses.”

But Scottish Liberal Democrats remain unconvinced. Economy spokesperson Jamie Greene said: “Workers at the Dalzell plant will be very worried about what this news could mean for them. My party has repeatedly warned about the possibility that Liberty Steel operations could collapse.”

Greene urged both the Scottish and UK governments to “come together and agree a joined-up strategy” for safeguarding the industry, adding, “The Dalzell plant has huge potential, including in the wind industry. Ministers must act urgently.”

The Department for Business and Trade responded cautiously, saying it was “closely monitoring developments” and reaffirmed that commercial decisions lie with Liberty Steel.

Jeffrey Kabel, Liberty Steel’s Chief Transformation Officer, said the adjournment was “a positive development” and that the company would use the time to pursue debt restructuring and potential sale options, aiming to “preserve EAF steelmaking in the UK.”

With millions in public funds tied to the future of Liberty’s Scottish assets, pressure is mounting on ministers to deliver transparency—and a viable plan forward.

(Photo Credit: Getty Images)