The Conservative show of dashing home to look after the British steel industry is just smoke and mirrors. Savid Javid was fully aware it was being collapsed by subsidised and dumped Chinese imports, but argued that this cheap Chinese steel was beneficial to the UK economy more generally. Arguing against higher EU tariffs on Chinese steel dumping, Javid stated to MPs only six weeks ago
“The responsibility of government is to look at the overall impact on British industry and jobs,” the Business Secretary said.
“If duties get disproportionate it would have an impact in Britain and elsewhere on consumers of steel. Those businesses tell us it will cost jobs and exports if duties got out of control…
“To go further might in the short term look the right way to go to protect industry but you have to remember in Britain there are also companies that consume steel as part of the production process.”
This is pure Thatcherism. On Javid’s instruction, last year the British diplomatic mission to the EU (UKREP Brussels) was lobbying the EU commission against higher punitive tariffs on Chinese steel than the 13% the UK supported – even though the Commission found that dumped Chinese steel had an effective state subsidy of up to 72%. I have this from a British diplomatic source.
So the apparent flurry of activity now is a blind. This is a situation the government was quite happy to see develop. Of course, the effects are in Wales, Scotland and Northern England. There are no steel mills in Tory constituencies.
The banks received state subsidies to the value of £35,000 from every man, woman and child in the UK. Yet it is unquestionable dogma that not even 0.1% of that can be given to aid manufacturing industry. I can think of no legitimate explanation of this duality.
Hi Craig. A group of us in Rochdale are starting a socialist, tabloid, print newspaper. Publication 27th May. Not any money to begin with but we are a democratic collective project. Come and join us.
The government’s approach to Tata is entirely consistent with the steady conversion of the UK economy from one in which manufacturing played a significant role to one based largely on rent and usury. It will certainly help the 1% increase their return on capital whilst impoverishing millions. In the long run the rentiers will destroy the UK version of democracy and return us to something like pre-Revolutionary France.
Yep -this is pretty much the case. Some commentators now refer to the self liquidating British economy. It will not end well.
Really? Those are my options? “Manufacturing” and “rent and usury”? Isn’t there also something called services? Like hairdressers, software engineers and every single government civil servant?
Bank balance sheets are different from those of non-bank companies and some accounting practices in banking are different.
Banks distinguish between two main types of transaction:
1. Loans and deposits are recorded at historical cost and their balance sheet value remains constant throughout their life
2. Derivatives and assets held for trading are marked to market, which means they’re re-valued every day and changes are reflected in the income statement.
Do keep up. There is a long series of tedious posts on this blog entry that sets out how to mark to market accounting was abandoned in 2009.
Really? I bet that’s news to the people who issued IFRS 13 in 2013: http://www.ifrs.org/IFRSs/IFRS-technical-summaries/Documents/English%20Web%20Summaries%202013/IFRS%2013.pdf
Second page, so I can go off topic.
Global Research: Intelligence Accounts Raise More Questions on Origins of Brussels, Paris Attacks:
I was struck at the time of the Charlie Hebdo shootings how easy it was for the shooters (at least the alleged shooters) to drive out of the center of Paris in broad daylight on a weekday, when it was known what car they were in.
Er…. EU law.
Indeed. I assumed we were having this conversation based on a hypothetical world where EU state aid law doesn’t exist. For the record, this is what it says in the Treaties:
Article 107
(ex Article 87 TEC)
1. Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.
2. The following shall be compatible with the internal market:
(a) aid having a social character, granted to individual consumers, provided that such aid is granted without discrimination related to the origin of the products concerned;
(b) aid to make good the damage caused by natural disasters or exceptional occurrences;
(c) aid granted to the economy of certain areas of the Federal Republic of Germany affected by the division of Germany, in so far as such aid is required in order to compensate for the economic disadvantages caused by that division. Five years after the entry into force of the Treaty of Lisbon, the Council, acting on a proposal from the Commission, may adopt a decision repealing this point.
3. The following may be considered to be compatible with the internal market:
(a) aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment, and of the regions referred to in Article 349, in view of their structural, economic and social situation;
(b) aid to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of a Member State;
(c) aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest;
(d) aid to promote culture and heritage conservation where such aid does not affect trading conditions and competition in the Union to an extent that is contrary to the common interest;
(e) such other categories of aid as may be specified by decision of the Council on a proposal from the Commission.
“Heard deputy ed of the Torygraph referring to Steel as a 19th century industry…”
And, of course, Agriculture is an even older industry but, as people found out in 1914, after decades in which the ancestors of today’s Tories justified neglect of agriculture, the depopulation of the countryside, the reduction of grain production and the devotion of tens of thousands of acres to “shooting” and hunting with food production a secondary use, you can’t eat banknotes.
Another really antiquated industry is building houses which is why we should welcome homelessness and rough sleeping as indications that the economy has moved to the cutting edge of the new order.
Those who really believe that There Is No Alternative to neo-liberalism believe that the purpose of the government is to protect property from the people. The rest of us believe that government’s primary purpose is to protect the people, their lives and well being from the uncontrolled greed of property owners.
In the particular case of the steel industry there are a few salient facts to bear in mind. The first is that the industry was long in the hands of the state, and, throughout its existence, has been regarded as crucial to the economy as a whole. It has benefited from massive public investment, both directly and indirectly. And, no doubt, when it was ‘privatised’ it was virtually given away.
If Tata Steel wish to walk away and leave thousands unemployed-throwing tens if thousands more into poverty- the plant should be taken into public ownership without a penny of compensation being paid. If the government refuses to do this the workers should occupy the plants.
If Tata Steel wish to walk away and leave thousands unemployed-throwing tens if thousands more into poverty- the plant should be taken into public ownership without a penny of compensation being paid. If the government refuses to do this the workers should occupy the plants.
Yeah, that’s not how human rights law works.
(There’s a reason why the right to property is in the First Protocol to the ECHR, rather than in the main convention. When they drafted the main convention, they were still hoping to get the Communists on board.)
Bankers are just loan sharks, in suits. But around the world they are a protected species!
Yes, we’d be much better off if borrowing money were forbidden!
Interesting…very interesting. Why did you have to spoil it by bringing non-tory and non-English victimhood into it?
I have had a sneaky feeling that this is the case for some time. Buy cheap now from China with no thought for the future. Jobs in south Wales are not important for the Tories. They did this with the miners and got away with it. They do not see, or care, about the devastation they leave behind for the soth Wales community. Not many Tory voters there.
When Margaret Thatcher was originally elected, she won plenty of seats in Wales.
https://en.wikipedia.org/wiki/United_Kingdom_general_election,_1979
It is simplistic to compare bank bailouts to subsidising a declining steel industry. One thing the left consistently ignore is the crippling g green energy policy of ed milk and, continued by ed davey together with carbon floor etc and the lack of a rebate thus far. Tories are equally culpable, but the decline of steel has more to do with these factors than a silly notion of’ ‘Fatcher’
Leaving to one side this issue of “crippling”, I’m amazed by the notion that, because the Chinese don’t have an environmental policy – and reap the benefits in downtown Beijing on a daily basis, we shouldn’t have one either.
So, your alternative plan is to pay taxpayers money out in almost limitless amounts to keep factories open to produce goods that nobody wants? Jeezo, great plan, amazing to think that no one has thought of that before now.
It would at least make more sense than paying out almost limitless amounts of taxpayers’ money just to bail out the banksters.
paying out almost limitless amounts of taxpayers’ money just to bail out the bankstersso that taxpayers get to continue to enjoy the use of current accounts and, generally, a functioning economy.
FIFY
That could have been done by bailing out the banks, changing their management, and prosecuting the banksters.
Under which law(s)?
The TARP law that bailed out the U.S. banks could have conditioned any financial relief to the banks on their allowing the government to change their management.
The banksters could have been prosecuted for fraud. As a matter of fact, since the fraud was so systematic and arguably concerted, I wonder if the RICO laws could have been used. Treble damages.
Borrowing fine but creation of money is really what happens -pumping up house and financial asset bubbles is ruinous this is unless you subscribe to the economics myth of loanable funds
Private debt @ 5 Trillion.
I wouldn’t have bailed them out either.
Well, I should qualify that by saying I wouldn’t have bailed them out in the manner it was done.
Tata can use any steel it wants for its UK made cars. We import cheap milk from Poland, why not Steel from China?
Answer – because Tories are like hedge funds, they make profit from our losses, then they come on the BBC to explain to us that it isn’t competitive to support UK workers.
The mind boggles that David Cameron can think it’s in UK interests to invest in the collapse of Libya and Syria. We have just sent a London -based government to rule Libya.
Can we outsource our government to Vladimir Putin, please. Since sanctions he has revitalised Russian agriculture and defeated Al Qaida in the same time that Cameron has wrecked 4 countries, the UK, Ukraine, Libya and Syria.
Can we outsource our government to Vladimir Putin, please. Since sanctions he has revitalised Russian agriculture and defeated Al Qaida in the same time that Cameron has wrecked 4 countries, the UK, Ukraine, Libya and Syria.
Does anyone else want to admit that they’re a pro-Putin troll?
All is not well in the garden of Confucius, as China’s government tries to reduce it’s steel output, with a overproduction surplus of around 400 million tonnes.
Thousands of Chinese steel jobs are at risk, even though China produces a staggering 50% of the worlds steel requirements.
China will probably carry on just as it is, using aggressive price undercutting to drive its competitors out of business until there is no overproduction, only production. Then steel prices will rise as sure as eggs is eggs and China will have won.
Wait, Chinese taxpayers subsidise everything that is made using steel, and that means China wins how, exactly?
High prices, monopoly power. Steel is not obsolete, it’s an essential. Way things are going, those Chinese taxpayers have been making a wise investment.
Tata steel crisis Sajid Javid reassures workers in Port Talbot –
https://www.youtube.com/watch?v=3R3ev-Urzxc
Good stuff. More please… Have you ever looked at the #GreatBritishPubcoScam It’s everywhere, endemic and is changing the face of British society irreversibly
What a lot of twaddle, had the banks been allowed to go bankrupt then every business and family in Britain would have been devastated. Yes the Banks and Bankers would have lost out, but so would many millions of normal people. British steel in not even competitive with other European Steel manufacturers. Because of very high energy costs introduced by labour, over unionisation leading the high personnel costs, supported by labour. very high local government taxation and as you point out all steel manufacturer is in labour controlled area’s. Typical left wing BS.