MP fears Turkish military may be ‘enriched on the backs of the labour of UK steelworkers’

This article is more than 11 months old

This article is more than 11 months old

Trade union officials and MPs have voiced fresh concerns about the prospect of British Steel being sold to the Turkish military pension fund.

Ataer Holdings, owned by the Turkish army retirement fund Oyak, is in exclusive talks to buy British Steel out of liquidation, with the result of discussions likely to be announced within weeks. If it goes ahead, the takeover is expected to secure the future of a site in Scunthorpe, one of the UK’s last two blast furnace steelworks, as well as the jobs of more than 4,000 staff.

But reports of alleged atrocities committed during the Turkish army’s incursion into Syria have resulted in misgivings among campaigners, trade union officials and MPs about the prospect of British Steel being subsumed into the investment portfolio of Oyak, which funds soldiers’ retirement payouts.

UK suspends arms exports to Turkey to prevent use in Syria Read more

Union staff are also seeking assurances the Scunthorpe site will not be used to supply the Turkish military in future.

The Labour MP Lloyd Russell-Moyle, who chairs a cross-party group on the Kurdish region of northern Syria, said: “The Turkish military is committing war crimes in north-eastern Syria. It is wrong that they be enriched on the backs of the labour of Scunthorpe steelworkers.”

Trade unions have been wary of publicly voicing misgivings about Oyak, for fear of disrupting negotiations that could save members’ jobs. But union sources said behind the scenes they were seeking assurances about Oyak, which also jointly owns a Turkish car plant where striking workers were allegedly mistreated.

Union officials have written a report for local shop stewards outlining ties between Oyak’s leadership and the army, as well as to the Turkish president, Recep Tayyip Erdoğan.

One union source said there were fears Scunthorpe could eventually be used to produce steel that might be used in Turkish military operations.

“Our first priority is to secure 4,000 jobs,” the source said. “Ataer Holdings is the buyer, but the parent company’s direct links to the Turkish military and political connections to Erdoğan are a concern and something we want to stay separate from. We want to see detailed investment plans and be assured that British steel isn’t going to end up supplying the Turkish military machine.

“There’s no suggestion of that yet, but we want guarantees that our members’ future will be in supplying high quality steel for exclusively civilian use.”

Talks between Oyak and the official receiver, which is managing the sale of British Steel, are understood to be at an advanced stage. Oyak has reportedly offered to pay up to £70m for the company and invest up to £900m.

But the success of a deal could depend on the extent to which the government is able to offer grants, indemnities and loan guarantees to British Steel, with negotiations ongoing over a package potentially worth £300m.

The government’s British Steel taskforce, led by the business minister, Andrea Leadsom, met earlier this week to discuss progress on sale talks.

The MP Anna Turley, whose Redcar constituency suffered the closure of its local steelworks, said she had raised the issue of Oyak’s links to the Turkish army and asked whether the halting of arms exports to Turkey would affect the deal.

She said Leadsom had “made clear that this is a separate issue around an economic transaction and a long-term investment commitment”.

Some campaign groups believe the government should call a halt to talks with Oyak.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

Stephen Smellie, the trade union liaison at campaign group Peace in Kurdistan, said: “The Turkish military have been part of some appalling abuses over the years and at the moment they, at the behest of President Erdoğan, are being used to attack civilians and to ethnically cleanse hundreds of thousands of Kurdish people from their homeland in northern Syria.

“British Steel workers should not be working to profit military personnel who are responsible for such atrocities. At this stage the British government should suspend the processes leading to Ataer taking over British Steel whilst the Turkish military are engaged in an illegal invasion of Syria.”

If talks with Oyak do not result in a deal, the Chinese steel firm Jingye has reportedly expressed an interest in stepping in to buy British Steel.

A Department for Business, Energy and Industrial Strategy spokesperson said: “British Steel do not make any products that could reasonably be considered a threat to national security. Ataer is already an established player in the global steel industry, and the sales process is run by the Official Receiver.”