The potential closure of the last blast furnaces in the UK has brought out politicians in force to condemn the deindustrialisation of the country. Even the Reform Party has commented on it with Richard Tice saying that the UK will be world leading in “naive stupidity”. The main question is should the Government protect “strategic” industries by subsidising loss-making businesses out of taxation. By “strategic” they mean an essential element in the engineering sector which is a cornerstone on which other companies rely.
I exchanged comments on X (Twitter) on this issue where I said “if other countries can make steel cheaper, let them” which got a vigorous response. The Telegraph even claimed that the Government was considering using terror laws to nationalise British Steel.
Now I recall debating the question of whether the Government should interfere in declining industries to protect UK engineering and other “key” industries with a Professor at Cranfield University when I was doing an MBA in 1985 – yes many years ago! The issues are still live it seems.
I do have an engineering degree but at the time I worked for a retailing company. My view has not changed. Our taxes should not be used to prop up declining industries even if there are a few votes to support it.
The Government published a consultation on a strategy for the steel industry in February – see here: https://www.gov.uk/government/consultations/input-into-the-steel-strategy/the-steel-strategy-the-plan-for-steel
There are alternative ways of producing steel instead of using blast furnaces – such as electric arc furnaces which can use scrap steel. And there are many alternative countries who can produce steel and who wish to protect their production as they are fool enough to do so. The world is not going to run out of steel.
If the Government is going to interfere in industries they should be supporting growth sectors not declining ones.
Roger Lawson (Twitter: https://x.com/RogerWLawson )
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