The Scottish Government’s decisions over crisis-hit Fife engineering firm BiFab could be challenged in the courts, according to a new legal opinion.
Top QC Lord Davidson’s ruling comes as unions continue to vent their anger over the Scottish Government’s handling of lucrative renewables contracts, with the vast majority of work going overseas, rather than to BiFab’s Methil, Burntisland and Arnish yards.
The Scottish Government granted a loan facility to BiFab in 2017 to save the company and subsequently retained a minority stake when it was taken over by Canadian firm DF Barnes.
However, the Scottish Government refused to provide a financial guarantee in respect of BiFab’s bid to manufacture wind turbines for the massive Neart na Gaoithe (NnG) offshore wind farm project, citing EU state aid rules which limit the support which can be offered.
In a legal opinion for the GMB and Unite trade unions, Lord Davidson has described the Scottish Government’s reasoning as “remarkable”, given the looming end of the Brexit transition period and suggested Scottish ministers could have deferred any decision until after Brexit on December 31.
Lord Davidson focused on whether the Government tested the commercial market regarding a guarantee and whether they consulted the UK Government.
He added: “It appears to be an excess of caution for ScGov to inform BiFab a guarantee would be illegal.”
Lord Davidson then suggested the move could be open to judicial review, noting: “If it is correct ScGov did not test the commercial market in respect of the guarantee (and that might include advice from market players), did not at least consult with HM Government and there was no immediacy in respect of delivery of the guarantee then the decision looks to be irrational.”
Trade union secretaries Gary Smith and Pat Rafferty said: “BiFab is on the brink and all the difficult questions are the Scottish Government’s to answer.
“We’ll be asking the Minister why the government has walked away at the eleventh and why it has cited EU state aid rules as a reason for doing so when it had previously committed to guaranteeing this project?
“It is increasingly clear that the Scottish Government has no obligation or reason to do this, fuelling the fear that the Minister is washing her hands of our best chance at building an offshore wind manufacturing supply chain.”
A Scottish Government spokesperson said: “The Scottish Government has exhaustively considered the options for further financial support of BiFab but are prohibited from taking any decisions contrary to State Aid regulations by the Scotland Act. We will continue to do everything possible to support the business while recognising the need for us to remain in line with State Aid regulations.”
