There is much debate this week regarding the likely sale by the Indian conglomerate Tata of its steel making plants in the UK and the threat to the thousands of jobs at its plant in South Wales. Tata has already made many hundreds of workers across the UK redundant or sold on other loss making plants. Twenty five years ago, 50,000 people were employed in the UK steel industry but now it’s fewer than 20,000.
The business is in steep decline and has lost £2 billion over the last five years: Steel production now makes up just 1% of Britain’s manufacturing output and 0.1% of all the UK’s economic output. The steel industry has been hit by a combination of factors: high UK energy prices, the extra cost of climate change policies, and competition from China - Chinese steel is being sold in the UK at unrealistically low prices as a slump in demand in China means the “dumping” of cheaper steel in Europe and the UK provides an alternative export market. With a glut of steel in the global market and high and rising energy prices in this country, then the future looks pretty bleak and it’s not an industry which looks to be made profitable anytime soon by either a private sector company nor and certainly not via nationalisation and an injection of taxpayers’ cash.
The sad thing is there isn’t a lot we can do, apart from tinkering around the edges with things like capital allowances and reducing business rates on plant and machinery and a vague commitment to buy British steel in Government infrastructure projects but like so many areas, Ministers are impotent due to the impact of European Union law. Unlike the United States government, which put its own workforce first and foremost by promptly slapping steep tariffs on dumped Chinese steel, British Ministers have effectively no control over UK trade policy as this has been outsourced to the European Union. By pledging to cut carbon emissions by “at least 40%” in 2030, Brussels has forced energy companies into a spate of divestments and costly climate change related investments, causing instability and sending electricity prices shooting up. The Climate Change Act 2008 and its exhorbitant “green taxes” (thank you Ed Miliband) has also clobbered the industry. It’s now impossible for UK steel producers to compete in an already tough marketplace with countries like Norway and the United States where energy prices are massively lower.
In addition, as a sovereign country, we have had to grovel to the unelected EU Commission even to offer just a fraction of government help for Energy Intensive Industries like steel which is needed, as we did at the end of last year. Any further attempt to bail out the UK steel industry is likely therefore to be blocked once again by the European Union.
It’s all very well those who favour remaining in the EU to speculate about future job losses when the EU is costing us real jobs today and is hurting our economy and our own workforce across the UK. The steel crisis lays bare the reality of what it means in practical terms to be no longer running our own country and contracting its trade policy out to the bureaucratic and unaccountable EU elite.
Surely another reason to vote to get out of this quagmire on June 23rd and restore democratic self-government to the UK in the interests of British taxpayers and citizens?