Tata Steel: Why Did the UK Government Block EU Attempts to Save the Steel Industry?

by Leighton Evans

30 March 2016

It sure does feel like we’ve been here before. As a proud South Walian with a family steeped in the now defunct coal industry, there is a palpable sense of déjà vu as I ingest the news of the giant Tata Steel plant in Port Talbot once again sitting on the precipice, along with the jobs of 15,000 steelworkers across the UK in what’s left of the UK steel industry.

Casting aside questions about the role of steel in historic industrial disputes both locally and nationally, the current situation is beyond grim. I worked with young, homeless or at-risk-of-being-homeless people in Port Talbot in 2013 and 2014 – it is already a place with limited to no prospects for the young beyond becoming insecure wage slaves at the vast Amazon distribution centre across the bay in Jersey Marine. Those limited prospects would suffer a hammer blow should the Tata plant close, with the auxiliary service industry likely to be decimated along with the 4,000 high-skilled jobs on site.

The discourses currently being developed across the media in regard to the unfolding situation fill me with as much dread as the news coming from Mumbai about the sale of the industry in the UK. The sale of steel at below-market value on global markets by a Chinese government that is prepared to subsidise huge losses is a root cause of this situation, so when inspecting the Tata Steel situation, it might be worth questioning why the UK government blocked the ‘lesser duty rate’ which would have allowed the EU to raise tariffs on Chinese steel. Yet not only has the government not backed EU partners in protecting the European steel industry, it has offered preferential bidding to Chinese steel for major UK infrastructure projects.

The dumping of steel is a deliberate attempt by the Chinese government to eliminate international competition for steel in the same manner that Saudi Arabia has targeted the fracking industry in North America through the deliberate and economically disastrous overproduction of oil. Yet this ten tonne elephant in the room has been studiously ignored, as we are bombarded with news that the Port Talbot site is ‘losing £1m per day’ – with no analysis of why this is the case, or how the reduction in global steel prices through deliberate market manipulation by the Chinese state has led to a state of affairs where these colossal losses are a reality of the operation of steel plants globally.

Equally pertinent is how the behaviour of the British government has been ignored. While the nation frets over the EU and Brexit, the government is allowing the Chinese state to dictate industrial and national policy, affecting jobs, futures and communities. The irony has not been lost on me that the EU was actively looking to protect the steel industries in member states – but the UK government has no interest in such concerns.

This could be seen as a taste of things to come should the UK electorate decide to fulfil its questionable destiny in the forthcoming EU vote. Watching Sky News this morning, blame was placed on the EU for not acting while the US government has to increase tariffs on Chinese steel in response to the dumping of the commodity on global markets – yet no mention that it was the UK government that vetoed EU action, nor any mention that George Osborne has actively touted HS2 to Chinese steel interests.

A sceptic might read this as a favour returned for China devouring UK government debt in the wake of the 2008 bailouts. Of course, such a cynical reading would not be part of the discourses currently being spun about the steel crisis, what with so many other pertinent factors being omitted.

Photo: Grubb/Wikimedia Commons

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