British steel industry sacrificed to curry favour with China

[Mistigri]

What do we think of this?

Interesting take on the matter in the Telegraph, suggesting that the UK has been using its EU veto to prevent the EU from taking anti-dumping measures against China. The price of a special relationship with China may be 40,000 British jobs.

www.telegraph.co.uk/business/2016/03/30/britain-sacrifices-steel-industry-to-curry-favour-with-china/

Interesting.

The article doesn't say why UK is obstructing the EU measure. OK, it's postulating that the underlying reason is relations with China (how valuable? how many jobs?)

But that won't be the stated reason, and I was wondering what it. And if it's plausible.

If the steel works were banks our government (Tory or New Labour) would give them as much money as they want. But this particular government, who claim to be in favour of 'makers', will throw said 'makers' under the bus whilst spinning otherwise in an attempt to make the Gidiot look credible.

Of course they're blocking tariffs on Chinese steel, to them everything has to run at a profit. Short termists can't see what will happen 20 or 30 years ahead because they only look 3 or 6 months and their own bottom line.

BBC Breakfast is reporting that the Tories have ruled out nationalisation, so yes, they're throwing them under the bus. I'm not surprised, those workers and their industry won't employ our ministers when they leave parliament.

Pressed post too soon. Of course, allowing the steelworks to die is capitalism. Saving the banks is socialism. Successive governments need to determine what is what and which system is better. Do we save an institution because it makes a very few rich or do we save another institution because it provides employment for many, not to mention those employed in ancillary industries that will also go under?

meditrina the UK govt says it's because anti-dumping tariffs would be anti-competitive and disproportionate (curiously, that bastion of free enterprise, the USA, doesn't agree - it has levied hefty penalties on Chinese steel imports).

Other EU countries seem to think it's to do with the Chinese deal over Hinkley Point.

Thanks!

I've just seen on the news that the Government might be considering support for a workers/management buy-out rather than nationalisation. Which could have the same effect of keeping it open, I suppose.

What DoctorTwo said. Every word.

I live 8 miles from Port Talbot and worked for a year in Trostre, the tinplate works in Llanelli. This area will become a wasteland if when the works close. The steelworks employ about 5,500 but probably support other jobs in the region of tens of thousands.

Having also spent a lot of time in Merthyr Tydfil I've seen what happens when governments just pull out of heavy industry with no contingency. I really don't want to see another Merthyr Tydfil in South Wales (apologies to any inhabitants - but I'm hoping you know what I mean).

CaMoron has just said the gov't are ' doing all we can', so you can be sure that's that.

These poor men and women will be left to flounder same as the Miners, Shipbuilders etc...My heart goes out to you Poet Talbot.

Port Talbot even.

I hope to god that the government pull out all the stops to prevent the destruction of yet another manufacturing town.

However I think the comparison with the bank bailouts is unfair. If a big high street bank had been allowed to go under then yes some "fat cat" bosses would have lost their jobs and very few tears would have been shed. But the knock-on effects to account holders, to the entire economy, and to small businesses would have been catastrophic - and the government would still have had to shell out huge amounts on their savings guarantee. You can argue that they could have done it better, could have struck a harder bargain, but to argue that the banks were saved just to help Gordon Brown's rich mates is simply not true.

There were some more specialist financial institutions who fell victim to financial mismanagement, like Baring Brothers and Lehmans, and they were allowed to fold like a house of cards because the impact of their failure on everyday consumers would be minimal: black binbags all round for the staff.

'The article doesn't say why UK is obstructing the EU measure. OK, it's postulating that the underlying reason is relations with China'

I think it has nothing to do with China. I think it is all about globalisation. We are one of the leading proponents of privatisation and globalisation and climate change etc. We argue for those concepts in international bodies in order to "lead by example" and get other countries to go along with these philosophies. If we didn't stand up for them, then there is a possibility that these philosophies would fail, for example if the EU started to become more protectionist as the French have often argued for and imposed tariffs.

Our philosophy is essentially for global governance and globalisation which is why we are the leading proponents who argue against nationalisation or tariffs or checks to global free trade.

We tend to argue for the following philosophy

"Governance and Globalisation: A Cosmopolitan Future?"

"a growing recognition by governments that the national interest is in fact global;"

www.global-politics.co.uk/Archive/A%20Cosmopolitan%20Future.htm

The banks received state subsidies to the value of £35,000 from every man, woman and child in the UK. But not even 0.1% of that can be given to aid our manufacturing industry. Can anyone come up with a legitimate explanation of this duality? Or why Cameron is unwilling to get off of his sun lounger in Lanzarote and deal with it?

Bottom line I'm afraid is : There's no steel mills in Tory constituencies.

'There's no steel mills in Tory constituencies.'

I think it is worse than that. The reality is that the banks call the shots. If it was any other industry in a Tory constituency the same thing would happen as will happen over the steel because the bankers value globalisation above nationalisation.

The banks are returning to profitability, steel never will. The best solution is to encourage the unions to buy the mills on behalf of their workers. Possibly with the help of a government loan.

cdtaylornats, the problem is they are losing £1 million per day. The metropolitan elite's green energy taxes have made energy so expensive that they can't compete with Chinese and European plants. The steel produced is too expensive and there are no buyers. What would have to happen is for the government to buy the steel at a higher price than Chinese steel. But they won't do that because then they won't be able to "lead by example" in world chinwags where they extol the merits of globalisation and free trade.

Corbyn has dared to break the Establishment consensus by daring to mention the word tariffs and daring to suggest that he might do something about the metropolitan elite's holy grail of green carbon taxes. How long he will be allowed to continue mouthing these heresies is yet to be seen before some of the Establishment stooges in his party threaten to resign en masse unless he "leads by example" and bows to the bankers.

And they would still be losing money if privatised. The steel business gets some subsidies for energy. Of course if we started to extract energy by fracking we could cut energy prices.

Tariffs of course cause tariffs to be raised in retaliation and we cannot put a tariff in place without EU approval. One might ask why the steel used in the new Forth Bridge is Chinese rather than Scottish, Welsh or English. We cannot complain on one hand about Chinese steel being cheap and then keep buying it.

Of course, allowing the steelworks to die is capitalism.

It's globalism actually. Buying from whoever is able to produce goods and services at the lowest cost to do so

Great for keeping costs low. Poor for traditional industries undercut by 3rd world pay an 3rd world governments national subsidies

Very dangerous in times of war when those supply routes from your global suppliers are prevented by war, as we discovered in WW2

I don't understand why people think steel-making will "never" be viable/profitable again.

Prices of almost all commodities have gone through the floor in the last two years. Steel prices have additionally been trashed by Chinese over-capacity, and by dumping onto world markets at what is most likely below the (true) cost of production. It's a situation in which anti-dumping tariffs would be a sensible measure against what are fundamentally anti-competitive practices on the part of the Chinese.

In the longer term, it seems that the really big issue for steel production in the UK isn't current losses, but pension liabilities. This is why Tata wants out.

I agree Mistigri. Chinese labour won't be disproportionally cheap for ever, and the Chinese government is clamping down on cheap dirty carbon heavy coal-powered electricity plants so their power won't be cheaper than ours forever. But the scale of losses is so huge that there's a limit to how long the private sector can wait it out.

so who is putting their hands in their pocket for the £1m a day required. Why is no-one running some sort of fundraising scheme to help the buy-out?

I'd happily redirect £1 million of the £55million a day we give the EU.

Bottom line I'm afraid is : There's no steel mills in Tory constituencies.

Corby - former steel making town, now producer of high quality steel tubing. Employs hundreds in the plant. MP? A Conservative.

"Around 600 steel jobs are at risk in Corby in Northamptonshire after Tata Steel announced on Tuesday night that it is considering selling off its UK business, ITV News understands."

www.itv.com/news/central/update/2016-03-30/around-500-steel-jobs-at-risk-in-corby/

Does the UK given foreign aid to China? If so, stop it and use that.
Is Tata an Indian company? If so, do we give foreign aid to India/ if so stop and use that.

Tata Steel paid £6bn for the company and has spent over £2bn so far, propping it up for about 10 years. Many of the high quality steel plants will find buyers as they are profitable, the large scale, low quality steel plants will close.
Wales already gets £500m a year of EU grants.

Good point. Last year we gave China £150 million in aid, it seems and we gave India £279 million in aid last year and £2 billion over the ast five years.

"Foreign aid scandal: Iran, China, Zimbabwe.. why is YOUR cash given to foreign dictators?

China, which has the largest military on earth and its own space programme, also received £150 million of taxpayers’ money at a time when the UK defence budget has been brutally dismantled.

1. INDIA

Last year - £279 million

Since 2009 - £1.95 billion

The largest recipient of British foreign aid, India has raked in almost £2 billion of taxpayers’ cash over the last five years despite being one of the fastest growing economies in the world.

The booming Asian powerhouse has its own space programme and has this week announced it will be spending £10 billion on a fleet of new bullet trains from Japan."

www.express.co.uk/news/politics/626700/UK-foreign-aid-India-China-Zimbabwe-foreign-dictators-Tory-Government-cuts-Cameron