The proposed sale of British Steel to the Turkish military’s pension fund triggered alarm at Westminster last night.

The Commons defence committee chief said industries with a ‘strong defence dimension’ should remain under British control.

Prospective buyer, the Turkish Armed Forces Assistance Fund – known as Oyak – has been chosen above several other bidders including British-based Liberty, which already owns several steelworks in the UK.

The proposed sale of British Steel to the Turkish military's pension fund has triggered alarm at Westminster with the chief of the Commons defence committee stating that industries with a 'strong defence dimension' should remain under British control. (Pictured: 180-foot steel sections laid out at British Steel's Scunthorpe plant, Lincolnshire, in 2016)

The Turkish Armed Forces Assistance Fund, known as Oyak, was chosen above other prospective buyers including British-based steel company Liberty

The deal is expected to be signed in two months, once the company’s finances have been checked, and could save all 4,000 jobs at risk if a buyer can’t be found.

Oyak, which also owns steel mills in Turkey, is believed to be offering around £70million for the business, alongside a promise to invest £900million to double production. The Government has previously offered loans and grants worth £300million to sweeten any potential deal.

British Steel owns the Scunthorpe steelworks where 3,000 people work and it employs another 700 on Teesside.

The firm was put into compulsory liquidation in May after rescue talks with the Government broke down. Another 20,000 jobs in the supply chain were put at risk by the collapse of the talks between the Government and British Steel’s owner, private equity firm Greybull.

Unions cautiously welcomed the announcement. But defence experts raised concerns over the apparent ties between Oyak – whose chairman is former army general Mehmet Tas – and President Recep Erdogan’s government in Turkey. The country’s defence minister and head of armed forces attended Oyak’s annual general meeting in May, the Financial Times reported.

The deal with Oyak is expected to be signed in two months once the company's finances are checked. (Pictured: Oyak's logo)

The military pension fund also owns steelworks in Turkey and is believed to have offered around £70million for the business in a deal that could save almost 4,000 jobs. (Pictured: Red hot steel being rolled out at British Steel's Scunthorpe plant, Lincolnshire, in 2016)

Turkey remains an ally through Nato but it has cosied up to Russia in recent years, forging defence ties over Syria.

Dr Julian Lewis, defence committee chairman, said: ‘No industry with a strong defence dimension should pass out of the control of British firms and jurisdiction.

‘Turkey was once a strong and reliable Nato ally, as far as Russia is concerned, and a Muslim country that separated religion from politics. What’s particularly concerning is that neither of those things is true today.

‘While the proposed deal is better than seeing the industry collapse completely, it is much less desirable than having the company under British control.’

Oyak has also been accused of corruption by a parliamentary commission in its home country.

Dr Andrew Foxall, of think-tank, the Henry Jackson Society, said: ‘Recep Erdogan has set the country on a course toward authoritarianism in recent years.

‘Flirting with Russia and China while oppressing its people, Turkey is increasingly turning its back on the West.

‘Given that British Steel is crucial to our national infrastructure, the Government should consider extra steps to safeguard it under Turkish ownership.’

British Steel was put into compulsory liquidation in May after rescue talks with the Government broke down. (Pictured: The British Steel plant in Scunthorpe in 2008, where 3,000 people are currently employed)

Turkey remains an ally through Nato but it has cosied up to Russia in recent years, forging defence ties over Syria.(Pictured: British Steel logo at the Scunthorpe plant in 2019)

Steel is considered a strategic industry, because companies like British Steel provide materials to build warships and railways.

Oyak, which will purchase the plants through subsidiary Ataer Holdings, offered around £70million in line with other bidders including Liberty Steel, which rescued mills in Wales, Yorkshire and Scotland in 2017.

Roy Rickhuss, of union Community, said: ‘This is an important milestone, and will be hugely encouraging to the workforce.

‘We will want to be assured that Ataer has a long-term strategy to invest in the assets and develop the business.’

Business Secretary Andrea Leadsom said: ‘This is an important and positive step forward in securing the future of British Steel. I am committed to a modern and sustainable future for the industry that is productive and supports a skilled and highly valued workforce.’

Oyak said it is run by independent managers, does not receive contributions from the Turkish government and adheres to strict corporate governance principles.

RUTH SUNDERLAND: My family of steelworkers built the world. How they would loathe this sell-off

Commentary by Ruth Sunderland

Steel is not just another industry, not to me. It’s in my soul, my blood, my DNA. Generations of men in my family worked in the blast furnaces on Teesside, including my late father and my maternal granddad.

So when I say I feel for the people of Scunthorpe, a steel town just like my own, it runs deep.

I know that there are thousands of families who have lived through months of agonising fear since British Steel went into receivership in May. There are some in Teesside too, where it still has around 700 staff, the remnant of an operation that once sustained an entire region.

Believe me, then, when I say I understand the relief, even jubilation at the news that the Turkish army pension scheme has offered to buy the business and save those jobs. But I’m genuinely sorry to say that the deal fills me with a deep sense of unease and foreboding.

Steel is not just another industry, not to me. It’s in my soul, my blood, my DNA, writes Ruth Sunderland. (Pictured: A view of British Steel's plant in Scunthorpe, Lincolnshire, in 2019)

Generations of men in my family worked in the blast furnaces on Teesside, including my late father and my maternal granddad, writes Ruth Sunderland. (Pictured: The British Steel plant in Scunthorpe, Lincolnshire, pictured in 2019)

My fear is that a Turkish takeover will prove yet another chapter of despair for the gallant steelmen who have endured so much. The army is, of course, closely tied to President Erdogan, Turkey’s authoritarian leader, who has recently been holding talks over arms deals with Russian president Vladimir Putin.

Why does the Turkish military, via its pension scheme, want to get its hands on our steel? Is it just an investment, or is another agenda in play?

And why, given we have our own pension funds controlling trillions of pounds of assets, can’t it be sold to one of our own?

Perhaps potential British buyers are influenced by the pervasive myth that steel in this country is dying and not worth propping up. Nothing could be further from the truth. Despite all the woes inflicted in the past four decades, our manufacturers produce 8million tonnes of high-quality steel a year. The industry employs 32,000 people directly and more than 52,000 on top of that in the supply chain.

Of course, the sector is much smaller than in the past. As recently as the early-Seventies, it employed more than 300,000 people, my dad and granddad among them.

The sad reality is we have allowed it to wither away through a combination of short-sighted government policies and shoddy ownership, not through inherent problems with the workforce or the product. The Scunthorpe steelworks has been passed like a parcel from one unsatisfactory owner to another and there is nothing about the proposed Turkish takeover to suggest this shameful record has changed.

So when I say I feel for the people of Scunthorpe, a steel town just like my own, it runs deep, writes Ruth Sunderland. (Pictured: British Steel's Scunthorpe plant in 2015)

Most recently it was owned by Greybull Capital, a company founded and run by a group of super-rich private equity barons. They took it over for a token £1 in 2016, revived the old British Steel brand name and promised to restore its fortunes. This spring, just three years later, the Official Receiver was called in. Before that, it was owned by Indian conglomerate Tata.

Steel-making is by its nature a cyclical business and there are times when it needs a helping hand, yet successive UK governments have failed to offer one.

Instead, they have pursued policies that put our industry at a grave disadvantage.

Plants are subjected to heavy business rates and they are forced to pay 51 per cent more for the electricity they use than German producers and 110 per cent more than French steelmakers. The uncertainty over Brexit has not helped. If there is No Deal, much of our steel exports could be subjected to big tariffs.

Yet demand is rising around the world and could be filled by UK producers. Steel is needed to make virtually everything from wind turbines to trains, buildings, cars and coins. It is also, of course, key to our defence industry.

Surely this gives pause for thought that a Turkish army retirement fund, run by a former general, is being hailed as a saviour?

If British Steel is sold off, at the very least the UK government should insist on keeping a golden share and a seat on the board so we have some control.

There are things the Government can do now even now to save our steel. Boris Johnson has said he wants to kick-start infrastructure projects.

He should set a priority on buying British steel for all of them. Only 43 per cent of the steel procured by the UK government is sourced domestically at present.

My father was made redundant from the steelworks in the 1980s. It broke his heart, and it makes me sad and angry even now, but it is a consolation that the steel he and other Teessiders made is everywhere from the Sydney Harbour Bridge to Churchill’s War Rooms in Whitehall.

When I took my niece there a couple of years ago, my heart thumped in my chest when I pointed out the manufacturer’s name on the girders, a marker of her heritage and mine.

Yes, I am emotional about this, but there are hard facts to support my belief that steel in this country not only has a great past but could also have a great future. Will it be achieved through this Turkish deal? Sadly, I doubt it.