Cut Now, Pay Later – Steel, ‘Patriotic’ Procurement & Tory Ideology

Britain is crying out for a patriotic party that puts UK folk in charge of Rail, Post, Energy & stops Hedge Funds taking over great UK firms.  – @LabourEoin

UKIP certainly are not that party. UKIP to me is an artificial, deliberate creation – funded by former Conservative donors, hedge funds & city bankers – (The Desmonds and other  Tycoons trying to present UKIP as an anti-establishment party) It represents those intent on destroying the welfare state, and undermining ordinary peoples representation in the political sphere. UKIP presents a simplistic and distorted narrative on the problems working people face. They are like the American Tea Party, funded by elites to distort and muddy the water.

The Conservatives certainly are not that party. For a party that drapes itself in the Union Jack, its actions speak louder than its empty rhetoric about ‘British values’ or whatever vacuous, PR sound-bite Thea Rogers or Lyton Crosby has been paid obscene amounts of money to cook up via committee. Patriotism to the Conservatives is a shield – to silence those who criticise their policy positions & actions – ‘terrorist sympathisers‘ or ‘threats to national security‘ – the language of fear. They offer nothing but smoke & mirrors. Their words are not matched by their actions.

This piece of writing will focus on steel.  The Conservative party is letting Britain’s steel industry die.

The economic slow-down in China is in part the cause of this. The Chinese Communist Party (CCP) & it nationalised firms instigated a policy of dumping steel – using its massive overcapacity at steel mills to dump products on the European market, selling them beneath the cost of production. Osborne has courted up the Xi JinPing & the CCP – the very people causing turmoil in Britain’s steel industry.

Government can’t do anything about the slowing economy in China or the Chinese swamping our markets with steel at below market prices …. What government can do is support European initiatives looking into addressing these unfair trade practices. – Gareth Stace, managing director of UK Steel.

With a slowdown in its own domestic industrial demand but also reduced demand more generally in the world economy, many suspect that China is dumping vast quantities into the rest of world – Vicky Pryce, chief economic adviser at CEBR

Demand for steel worldwide has not returned to pre-financial crash levels. With economies – particularly China’s – still seeing weak growth, global demand for steel is set to remain sluggish, falling by 1.7% in 2015 and rising by 0.7% in 2016. Steel exports from China are said to have increased by 28pc to 43.5m tonnes in the first six months of this year, despite production falling by 2pc. China’s own economic slowdown has led Chinese producers to seek export markets as their home demand has stalled.

Stephen Kinnock (MP for Aberavon) stated:

Dumping of Chinese steel is the greatest issue that the British steel industry faces…

20,000 people are employed in the steel sector, and more than one in six are now either losing their jobs or at risk of losing them. Britain’s biggest steel producer, the Indian firm Tata, which employs around 17,000 in the UK, has just announced another 1,050 job losses in steel operations. The cuts come on top of the 1,200 jobs it already axed last October and the 720 jobs it cut in July.

Yet, where the blame should be laid at the door of the Conservative party is in relation of its failure to act. The government should AND can do more. The Conservatives should have intervened, and can intervene. The closure of Redcar, which once made steel for the Sydney Harbour Bridge and the World Trade Center, is a tragic loss to British industry.

I feel the government has thrown the towel in….I cannot believe the government has allowed 170 years of steelmaking to fade away with no fight, no determination and no understanding of what this means to our area, to people’s livelihoods and to the British economy  – Anna Turley, Labour MP for Redcar

Politics seems to have absented itself from the ‘old industries‘ like steel production.  They still employ hundreds of thousands of people, support a highly skilled workforce and contribute millions of pounds in value to Britain’s exports. The steel and metals industry delivers £95bn of the country’s GDP, an estimated £12bn in taxes and levies and £7bn in wages and NI contributions to the exchequer.  At the time of the closure of Redcar Business Secretary Sajid Javid said the closure was ‘disappointing‘ but the government was unable to intervene in the liquidation process.

Hiding behind the EU as an excuse to do nothing will not wash with the tens of thousands of workers whose livelihoods depend on steel-making in the UK. Nothing should be off the table, including a refusal to grant China market economy status (MES) while it fails to abide by EU rules on fair trade ….Sajid Javid needs to use the opportunity to learn from his counterparts in countries such as Germany and Italy and follow their lead in developing an industrial strategy with steel at its heart. The continued failure by ministers to urgently intervene to support UK steel will push the industry into meltdown – Harish Patel, Unite the Union

The steel industry is of vital strategic importance to the UK economy, but it is in full-scale crisis. The Government is sitting on its hands and has shown an unwillingness to take the strategic and decisive action required – Angela Eagle MP, Labour’s shadow Business Secretary

The UK steel industry is of national strategic importance and should be supported by the UK Government.

  • It must engage with the EU Commission on antidumping measures.
  • Looking at temporary action on business rates, reviewing how regulatory frameworks impact the industry
  • Promote local content and sustainability in procurement contacts,
  • Government to publish a full industrial strategy including what level of capacity the Government envisages is needed in the steel industry

It must safeguard a vital strategic asset. It should make a commitment to use British steel for all major infrastructure and construction projects and all government backed contracts should look to use British-made steel. This procurement for government contracts, prioritising British firms would create a multiplier effect, supporting the steel industry and thus the communities around steel plants.

The Government says it is getting more public contracts to UK producers. Yet the Conservatives are doing the opposite. For example, recent contracts for procurement (a £348million deal for three new Royal Navy ships. & £3.5billion order for 589 Ajax armoured vehicles).  Defence Minister Philip Dunne revealed in a written Commons answer that hundreds of military vehicles will be made using Swedish steel. For the Conservative party ‘competitive procurement’ seems to be the highest priority, not securing British jobs in an essential industry.

2Rps

By buying Swedish steel for Royal Navy ships and Army land vehicles, they are turning their back on British jobs and industry. MoD ministers need to pull their finger out and support British steelworkers – Kevan Jones MP, Shadow Defence Minister 

If we were a patient on an operating table, we are bleeding very quickly. And we are likely to die on that table – Gareth Stace, director of trade body UK Steel

British warships should be built using British steel. Big projects like the new Type 26 frigates are the perfect ­opportunity for Cameron to put his money where his mouth is. We make some of the best steel in the world. There is no question over our ability, just over our government’s willingness to support this vital industry. Just this week, David Cameron said he wanted a strong British steel industry, if he really meant it then he must ensure the Type 26 frigates use British steel –  Alan Coombs, Steelworkers’ union Community ­president

A quarter of design and ­manufacture contracts for the ships have gone to foreign firms. British defence giant BAE Systems is awarding sub-contracts. Only six of the eight deals worth £187.4million have gone to UK companies. Another example of this hypocrisy in relation to procurement & British steel can be seen in the railways and a a £490m contract to build  281 vehicles for Arriva Rail North. Bombardier‘s Derby operation was reportedly bidding for the deal; however this contract has been awarded to rolling stock manufacturer CAF.

The order ‘is a fantastic opportunity for CAF to consolidate its position as one of the leading manufacturers of trains within the very competitive UK market’ – Antonio Campos, CAF’s International Commercial Director for Western Europe.

The Conservative party & David Cameron’s claims to be doing everything for Britain’s proud steelworkers ring ever more hollow. As with this government it is a case of words & deeds. Though painting themselves as a party that puts British industry & British workers at the centre of its decision making, the actions of the Conservatives in government show only one thing – short-termism & an ideological adherence to market forces.

This is yet another kick in the teeth to train building, in the nation that gave the railways to the world – Mick Cash, the RMT general secretary

Major infrastructure orders, which could buoy the fortunes of thousands of British workers in the steel industry and associated communities, continue to vanish overseas. The government promise of support, of some level of intervention, are empty. The Conservatives are letting vital infrastructure wither away, for the short-term savings from cheap production abroad. Long term investment & support of British industry such as steel is what is needed to re-balance Britain’s economy. Supporting the industry now, intervening & investing (especially with such vital industries) will reap dividends. Steel is vital for Britain’s economy – if Osborne’s ‘long-term economic plan’ was more than empty words – supporting the steel industry would take priority. But this is not the case and as usual the Conservatives are fiddling whilst the furnaces no longer burn. British firms are over-looked, left to slowly die. This lack of action has externalities which resonate beyond the potential cost or benefit to the exchequer – skilled workers laid off, families facing hardship, supporting industries & communities surround British steel decimated – sacrificed on the altar of austerity. Their cut now, pay later attitude reveals itself time and again. Other countries have intervened to prevent their steel industry from crumbling at the mercy of international markets – Britain should also be prepared to do so – we will always need British steel.

By Frederick Antonio Gallucci | International Law LLM | @gibblegbble

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6 thoughts on “Cut Now, Pay Later – Steel, ‘Patriotic’ Procurement & Tory Ideology

  1. We have to remember that infrastructure is also the people and skills of a country. Osborne has shown himself to be yet another Tory cheap trick, and worse than simply frittering away our assets, he is actively reducing the value of our human infrastructure. As a steel worker in Port Talbot said this week, It;s about time David Cameron got off his knees and stood up for Britain”. Sadly, Cameron would actually have to give a damn.

    Liked by 1 person

  2. Pingback: PoliticalSift

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