Steel Crisis Is Self Inflicted

What is left of the UK’s steel industry was put up for sale this week by owner Tata Steel of India. At risk are around 15,000 jobs around the country, with perhaps twice that number dependent upon the business. So, with the prospect of over 40,000 being added to the jobless total in short order, Young Dave and his next door neighbour, the Rt Hon Gideon George Oliver Osborne, heir to the seventeenth Baronet, have feigned concern.

There was, however, as Captain Blackadder might have said, only one thing wrong with this idea - it was bollocks. Now, one can argue whether the UK needs to hold on to a rather basic industry like steel production, when other countries can produce and ship the stuff at a lower cost, but 40,000 jobs is still 40,000 jobs. At a time when the wider economy is faltering, this is not the most beneficial of news.

Nor are Cameron and Osborne in any position to blame anyone but themselves: this crisis is entirely of the Tories’ making. They cannot even make the usual default response of blaming the EU: other member states wanted Britain’s assistance in taking measures to prevent the likes of China from dumping cheap steel on the market, but the Government declined to lift a finger. Quite the reverse, in fact.

Osborne in particular has been courting the Chinese as a partner in the HS2 project, which would consume millions of tonnes of steel for its track, many of the lineside structures, and overhead wires. With the Port Talbot plant alone losing around a million notes every day, not only does one have to wonder why Tata did not put the sale sign up earlier, but also who on earth is going to appear and buy the place.

No doubt those arguing that Britain should leave the EU will point to state aid rules and say that it’s all the dastardly Eurocrats’ fault, but those rules have not prevented intervention by Governments in France, Italy and Portugal from taking action to protect and retain steelmaking capacity in those countries. Worse, Tata can point to having successfully lobbied their home Government - in India - to take similar action.

Larry Elliott at the Guardian has cited globalisation and the huge Chinese steel industry. He mentions the EU before admitting that “some countries … have found ways of getting round state aid rules”, and notes the lack of action by our Government.

“UK government action, or rather the lack of it. Whitehall has not only saddled the UK steel industry with higher energy costs than those in Germany or France, it has been blocking proposals by some other EU countries to tackle Chinese dumping through higher tariffs” he tells, before issuing this stark conclusion: “These … issues have come together in a perfect storm that threatens to blow away what remains of the UK steel industry”.

Cameron and Osborne, by their actions, have suggested they aren’t fussed about that industry being blown away. Loss-making steel plants may not be worth the candle, but as with so many other industries that have been lost in the recent past, the problem is providing the workforce with some kind of alternative employment, or prospect thereof.

That, and the problem they have in persuading the public they actually give a damn.