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As an advocate of free trade and the free market, The Independent might be tempted to argue against the use of taxpayers’ money to prop up an uneconomic steelworks.
Indeed, if Donald Trump’s tariffs on Chinese steel exports to the United States continue to apply – and his list of duties seems to change by the day – it could be argued that the United Kingdom government should allow the Scunthorpe furnaces to shut down and let the country enjoy the benefits of the cheap Chinese steel that will be diverted here.
However, The Independent is not naive about trade. Chinese steel is subsidised by the Chinese government, and the Chinese government is not a benign player in world affairs. For both those reasons, the UK should seek to preserve some domestic steel-making capacity if it can.
The economics of steel-making in the UK is further confused by poorly designed environmental policies. These seem to have made it too expensive to produce steel using coking coal before the greener electric arc furnaces are ready to take over. All that did at Port Talbot, and all it threatened to do in Scunthorpe, was to close coal-fuelled steel-making capacity, which means we import more steel, also made with coal, from other countries. That achieves nothing in the battle to limit climate change.
Hence the welcome urgency of the first recalled parliament to sit on a Saturday since the invasion of the Falkland Islands. Perhaps the government should have acted sooner, but it has ensured that it keeps the plant – and the nation’s options – open.
The Independent has always been agnostic on the subject of public ownership, adhering to the dictum of the German Social Democratic Party: the market where possible; the state where necessary. Jonathan Reynolds, the business secretary, admitted in the House of Commons on Saturday that renationalising British Steel “may well be the likely option”. That seems the sensible and pragmatic, but not necessarily permanent, way forward.
Mr Reynolds made a convincing case that he was clearing up the mess the Conservatives had left. Iain Duncan Smith, the former Tory leader, said that the Tory government should never have let Jingye, a company with an unknown relationship with the Chinese Communist Party, buy British Steel in the first place, and he was right.
It would be better for the plant to be in public hands while the government rethinks its green policies on more realistic lines.
It would, in any case, be unwise to make firm and possibly irreversible decisions about the plant while the squalls and reversals of the global trade war continue to blow across the Atlantic.
As Sir Keir Starmer and Rachel Reeves have said, the era of global trade as we have known it is over. That does not mean that “globalisation is dead”, as the prime minister and chancellor have sometimes said, too emphatically, but it does mean a shift from a presumption in favour of free trade to a recognition that some players in international markets cannot be trusted, and that some strategic national industries deserve limited and temporary protection.
English (US) ·