Steel

It is disingenuous of Greybull, the owners of British Steel, to blame Brexit for their losses. They had already lost £19m in the year to March 2018 long before delays to Brexit were even announced. The company had been profitable as recently as 2017.

The real reasons are firstly the EU’s refusal to grant the company its proper quota of emissions trading licenses until Theresa May’s Withdrawal Agreement has been passed, and secondly China’s increased dumping of inefficiently produced steel onto world markets following Donald Trump’s imposition of tariffs.

Once we are out of the EU (properly – without any sort of ‘free-trade’ deal either before or after – that would just increase our deficit as any mathematician could tell you) we can either ditch the emissions trading scheme or ensure that British Steel uses a green energy supplier. The green taxes can be removed because green energy is now cheaper than fossil fuel energy. Panic over. That will reduce British Steel’s costs significantly.

Secondly we can impose our own import tariffs after Brexit. We have a massive trade deficit with the other EU countries which we must turn around and eliminate if we are to recover economic growth. That requires import tariffs which a No Deal Brexit will enable to prevent dumping as well as manage our trade balance.

Steel is not a dying industry. There is huge demand for it both in this country and potentially as exports. Investment in it makes a lot of sense. New technology is currently available and continues to develop alongside artificial intelligence. Yes, that will lead to a gradual loss of jobs, but there is no need for a cliff-edge collapse now. We can nationalise or part-nationalise the company just as we did with the banks. That was in fact very successful with the benefit of hindsight. The capital came from QE and the taxpayer profited from the rise in the share price.

I am not suggesting that the taxpayer or QE fork out for the new investment required. That way lies inflation, as they have discovered most recently in Venezuela. It worked for the banks because it was offsetting a fall in the money supply due to the writing off of bad debts (and also, it is now apparent, the financing of our rapidly increasing trade deficit with the EU). A new share issue can be raised for that if the investment is genuinely viable, and the City is in the best position to judge that. Either way new management is needed.

Finally Brexit will enable us to put in place a proper regional policy aimed at achieving an even level of percentage employment across the land. Those released from work as technology raises living standards generally can then find new jobs much more easily. It just needs to be given time.