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Tories too busy kowtowing to China to save industry

Published 05/04/2016

It is not just the trade union movement that has concerns about the Conservative government's laissez-faire attitude to the British economy. On March 2, manufacturers' organisation, the EEF, issued a press release which foretold the crisis now evident in British steelmaking.

In it, EEF supported calls on the government "from UK Steel, manufacturers and unions to reverse its opposition to higher tariffs for unfairly traded steel", and noted "the US Department of Commerce has slapped prohibitive provisional tariffs of 266% on Chinese cold-rolled coil".

The response of the US was contrasted with the apparent timidity of the EU, which has put provisional tariff measures of between 13.8% and 16% in place.

But then we learned (in a blog from Oxford Economics Professor Simon Wren-Lewis) that "the EU have been trying to raise tariffs against Chinese steel producers for three years, but have been blocked by a coalition of countries led by the UK".

Professor Wren-Lewis continued: "The UK Business Minister, Sajid Javid, has been quite explicit about this - he prefers cheap steel, because it helps other parts of UK industry. It may also have something to do with wanting to curry favour with China because of other matters."

Unfortunately, the Conservative government remains wedded to a neo-liberal model of economics. In this, markets are left "free" from "state interference" and will, apparently, self-regulate and "correct" themselves, as though operating within a closed economic ecosystem.

This viewpoint is even legislated for in the (UK) Enterprise Act 2002, which specifically limits intervention in the market by the state, on grounds of "public interest," to only three areas: attempted takeovers in defence, water or media companies.

The professor has a more realistic view on such matters: "One set of producers (in China) are trying to eliminate their competitors by flooding the market at a loss because they have the 'deep pockets' of a state behind them."

It is difficult to argue with his conclusion: "This is not Javid upholding the principles of a free market, but instead allowing a large state to rig a market."

MICHAEL ROBINSON

Newtownabbey, Co Antrim

Belfast Telegraph

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