Tuesday, 5 April 2016

The Betrayal of Steel

As a son of a steel city I am feeling particularly unhappy about the travails into which the UK industry has been forced by problems not of its own making.

It seems steel is suffering the consequences of four related problems:

  1. The last Labour government (specifically Energy Secretary Ed Miliband) unwisely decided to set an example to the world by running well ahead of the field in anti-climate-change policy. As a result British manufacturing industry pays the highest energy costs in the world, far more than Germany or France and twice as much as China or the USA. In other words, metal manufacture, as a very heavy energy-user, was deliberately disadvantaged by our own government. This achieved negative results for climate change since it exported British jobs to China where the metals are produced by coal-generated electricity.
  2. The present UK government is so keen on developing trade links with China that it wants to go ahead with the absurd Chinese-backed Hinkley Point power station project that will (if it is ever built) compromise our national security in order to produce electricity at triple the current wholesale price.
  3. Sheffield tram
    And to make sure the Chinese stay on board with that and other trade schemes our government has led the way in blocking EU attempts to impose effective tariffs against the huge quantities of Chinese steel currently being dumped on the world market as a result of the economic slowdown in China itself. Moreover we are helping the Chinese achieve a fraudulent market economy status to make it even easier for their state-subsidised production to enter western markets. Meanwhile the Chinese themselves erect huge tariffs against Welsh Steel despite the fact that it is not state-subsidised and should therefore be entitled to free trade.
  4. Domestic discrimination in public sector contracts or business rates in favour of British steel is outlawed under EU rules as long as we remain an EU member. Remarkably enough, the EU has managed to complete the single market in manufactured goods, in which the UK has a comparative disadvantage, but has not managed to complete the single market in services where the opposite applies. Needless to say, the same government whose energy policy has contributed so greatly to our problems in manufacturing trade is urging us to remain in the EU. No doubt they are worried that if the EU erected tariffs against us, obliging us to retaliate, it might even help us get a handle on our crushing Balance of Payments deficit.
Doing all we can, they say?