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By Pete Moore On May 22nd, 2019

British Steel has gone into liquidation. Many thousand of jobs in Scunthorpe are about to go. The government has faced pressure to step in, to prop it up, to save the day. But the government did nothing. What has Greg Clark, the Secretary of State for Business, Energy and Industrial Strategy (as if such a thing is needed) got to say?

Negotiations ground to a halt because ministers concluded that the financial assistance would breach EU state aid rules that bar most subsidies, Mr Clark told the House of Commons.

He’s correct of course. EU state aid rules disallow government intervention. Well done Remainers! If we were out of the EU the government could have stepped in, but you’ve had your way (so far). Thanks to you and your EU, the government is powerless to prevent the loss of thousands of jobs.

Not that the government would have done something. Clark is demonstrating one reason why politicians love the EU: they can excuse an action or inaction by way of EU rules while they wring their hands.

(NB: This being ATW, I should say that to explain the situation is not necessary to endorse it. I am simply explaining the situation and neither calling for intervention nor decrying it.)

4 Responses to ““JOBS DEPEND ON THE EU””

  1. “(NB: This being ATW, I should say that to explain the situation is not necessary to endorse it. I am simply explaining the situation and neither calling for intervention nor decrying it.)”

    Yet still decide to have a go at Remainers.

    Another argument is that without the decision of the Brexiteers to leave the EU then the pressure that has pushed British Steel to this point wouldn’t have happened. Firstly their carbon credits would have continued (meaning that the government bailout in March wouldn’t have been necessary and would have given them a stronger position when talking to creditors). Secondly it wouldn’t have caused the same difficulties with supply lines, with their European customers increasingly looking elsewhere so as to not be caught in a bind should the withdrawal cause supply chain disruption.

    Ultimately the decision to Leave, or the willingness for Remainers to insist that if the UK leaves the EU that it does so with a managed withdrawal, is largely irrelevant to the main problem facing British Steel. The collapse in the price of steel means they can no longer competitively produce steel. It costs them more to make steel than they can sell it for.

  2. Brexit is not the cause of this and the EU is not blameless, but it is not the EU that has been dumping steel on world markets for years, causing prices to collapse. Is there anything, a single thing, that China exports at a fair price? No, I don’t think so either.

    “If anything, the fall in the pound since 2016 should have helped British Steel, making its exports to the rest of the EU cheaper. But that has not been enough to counter the mass of cheap steel that is coming out of China. The Scunthorpe plant very nearly closed in 2016, when its then owner Tata Steel, decided to jettison it.

    In the event it instead sold the plant to private equity group Greybull Capital for £1. What has happened since? Global steel prices have fallen by a further 20 per cent. Does anyone seriously think that a plant that was worth a mere £1 when steep prices were a quarter as high again as they are now would be on a sustainable footing even if we had never voted to leave the EU?”

  3. Off-topic, it seems that May’s time is finally up. Her resignation could come as soon as Friday:

    “The upshot of today’s drama is that Graham Brady, chairman of the 1922 committee, will go and see Theresa May on Friday. Now this might not seem like much. But I understand that the ‘22 Executive will meet again if necessary on Friday. In other words, this meeting is Theresa May’s chance to resign rather than be pushed.

    Cabinet and ministerial support for May is draining away at a rapid rate. It is a sign of the end when No. 10 is having to refuse requests for meetings. If May doesn’t go, then it is almost certain that there’ll be a move against her as soon as parliament returns from recess. As one of those involved in today’s discussions tells me, this is now a question of precise timings.”


  4. The end is nigh for the Maybot. This resignation tonight could trigger others as the rats rush to leave the sinking ship and keep their leadership ambitions intact:

    “Commons Leader Andrea Leadsom has quit the cabinet, saying she no longer believes the government’s approach will deliver Brexit. Her resignation comes amid a backlash against Theresa May’s Brexit plan from Conservative MPs. Several cabinet ministers have told the BBC that the PM cannot stay, with one saying it is “the end of the line”.