The iron and steal business

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This week saw the Tories in trouble over the risk of a sudden collapse of the UK steel industry. UK steel companies have been under pressure for several years now. And with losses mounting it seems Tata plan to cut their losses and get out. Something which seems to have taken the government by surprise. Even though it was inevitable to anyone who had actually been paying attention.

Of course some tried to blame the EU. The trouble is, its since been revealed that the EU had a plan to save steelmakers in the EU from cheap steel imports, only it was the Tories who acted “as ringleader” in opposition to this plan, no doubt fearful of its impact on their buddies in Bejing. Indeed, its been pointed out that concerns about Brexit have probable worsened the situation surrounding the Port Talbot plant.

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Somewhat ironically, the Chinese have now announced potential tariffs on European and UK made steel imported into China. The Tories responded by telling everyone not to worry their pretty little heads about it….you won’t be in business long enough for this to matter! Far from the defenders of British industry, recently the Tories have sounded more like a branch office for the Chinese communist party.

And one has to contrast with the unwillingness of the Tories to do anything to save UK steelmakers, yet they are willing to lavish vast subsidies and bend over backwards to accommodate Hinkley C (which the Chinese are also a partner on). The only difference between nationalising the steel industry and Hinkley C, is that with Hinkley C we are paying French and Chinese government owned firms (at great expense) to do the nationalisation stuff for us, for a period of fifty years. While the steel industry would probably only need a much lower level of support for a shorter period of time and it would save many times more jobs.

The bad news for steelworkers is that the only reason why the Tories are currently taking any action is all about saving face, in truth they simply don’t care. They have to at least pretend to do something now, because the media are making a big deal about this and defence chiefs are climbing the walls over the strategic implications. But the Tories are a self serving party of the wealthy. Very few Tory voters work in this industry (worse, some steel workers vote UKIP) and very few of their paymasters have a vested financial interest in UK steelmaking. They have nothing to gain from saving jobs at Port Talbot.

Hence Tata’s policy here is quite understandable. Put yourself in their shoes. They are losing £1 million a day. They know that the UK governments cares so little about manufacturing that they will hold an EU referendum just to settle an internal dispute within their own party, despite the disastrous consequences this will have on UK manufacturing. You know they’ve been lobbying to stop any attempt by the EU to help the industry. What would you do? Continue to throw good money after bad, or get out fast?

And I seriously doubt any white knight will ride to the rescue. Likely any buyer the Tories cook up will be akin to the infamous Phoenix Consortium who bought out Rover….then let it crash and burn!

In short the only steel industry the Tories are involved in is the kind where Osborne irons  the statistics and Cameron steals from the poor and the working class. I once worked in Port Talbot (research post in the labs on site) and the sad fact is that myadvice to people there would be to start brushing up on their CV’s, as I don’t think the plant will be there for much longer.

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