This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.theguardian.com/business/2016/apr/21/conservative-government-part-nationalise-steel-eu-referendum
The article has changed 3 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| How did a Conservative government come to part-nationalise steel? | How did a Conservative government come to part-nationalise steel? |
| (35 minutes later) | |
| It would have seemed beyond belief at the start of the year: a Conservative government wedded to free-market principles with a dyed-in-the-wool Thatcherite as business secretary announcing that it is prepared to part-nationalise Tata Steel’s UK assets. | It would have seemed beyond belief at the start of the year: a Conservative government wedded to free-market principles with a dyed-in-the-wool Thatcherite as business secretary announcing that it is prepared to part-nationalise Tata Steel’s UK assets. |
| So let’s start with the obvious. There has been no Damascene conversion to the need for a more interventionist industrial strategy. This is not the start of a rolling back of the privatisations undertaken in the 1980s and 1990s. David Cameron has not morphed into Ted Heath, the last Tory prime minister to embrace state ownership. | So let’s start with the obvious. There has been no Damascene conversion to the need for a more interventionist industrial strategy. This is not the start of a rolling back of the privatisations undertaken in the 1980s and 1990s. David Cameron has not morphed into Ted Heath, the last Tory prime minister to embrace state ownership. |
| Related: Tata Steel: government offers to part-nationalise UK plants | Related: Tata Steel: government offers to part-nationalise UK plants |
| What’s happened is that the government found itself in a dirty great hole, partly but not entirely owing to its own failings. Ministers were asleep at the wheel as the steel industry found itself struggling to cope with cheap Chinese imports, and did their best to thwart European attempts to mount an aggressive anti-dumping action against Beijing. | |
| They also delayed too long in taking steps that might have mitigated the financial losses faced by Tata: lower business rates and reductions in energy bills. | They also delayed too long in taking steps that might have mitigated the financial losses faced by Tata: lower business rates and reductions in energy bills. |
| Still, it is amazing how a looming, knife-edge referendum on EU membership concentrates the mind. The government was faced with a situation where the loss of thousands of steel jobs would be blamed either on Westminster or Brussels, and most likely both. | Still, it is amazing how a looming, knife-edge referendum on EU membership concentrates the mind. The government was faced with a situation where the loss of thousands of steel jobs would be blamed either on Westminster or Brussels, and most likely both. |
| So a decision has been taken that steel must be saved. No matter how it came to be made, the commitment to provide hundreds of millions of pounds in debt financing or an equity stake of up to 25% in order to keep the plants operating is the right one. | So a decision has been taken that steel must be saved. No matter how it came to be made, the commitment to provide hundreds of millions of pounds in debt financing or an equity stake of up to 25% in order to keep the plants operating is the right one. |
| It would have been bizarre to allow the steel industry to die at a time when the government has plans to invest more in major infrastructure projects. Instead, ministers have accepted that steel is a strategically important part of the economy and, by putting taxpayers’ money at risk, will now have an incentive to tackle Chinese dumping. | It would have been bizarre to allow the steel industry to die at a time when the government has plans to invest more in major infrastructure projects. Instead, ministers have accepted that steel is a strategically important part of the economy and, by putting taxpayers’ money at risk, will now have an incentive to tackle Chinese dumping. |
| There is the risk that the decision by the business secretary, Savid Javid, will fall foul of EU state-aid rules. The view from Brussels in recent years is that there is over-capacity in the European steel sector and that support from EU governments should be reduced rather than increased. | There is the risk that the decision by the business secretary, Savid Javid, will fall foul of EU state-aid rules. The view from Brussels in recent years is that there is over-capacity in the European steel sector and that support from EU governments should be reduced rather than increased. |
| But is Brussels really going to kibosh the government’s rescue plan if the consequence is that Europe gets the blame and the referendum is lost? It will see the bigger picture. Presumably. | But is Brussels really going to kibosh the government’s rescue plan if the consequence is that Europe gets the blame and the referendum is lost? It will see the bigger picture. Presumably. |