The Guardian view on the steel crisis: Port Talbot matters more than China | Editorial


Sajid Javid finally made it to south Wales and said some important things, but government strategy has been badly exposed by the public reaction to the Tata sell-off

The UK’s business secretary, Sajid Javid, visits the Tata steel plant in Port Talbot, Wales, on Friday

The UK’s business secretary, Sajid Javid, visits the Tata steel plant in Port Talbot, Wales, on Friday.
Photograph: WPA Pool/Getty Images

Sajid Javid said some important things on Friday when he finally made it to Port Talbot almost three days after Tata Steel decided to pull out of its UK steel operations. The business secretary said the steel industry is absolutely vital to UK manufacturing. He said there most certainly will be interested buyers of the Tata assets. He said that he was on the steel workers’ side. And he said the UK government supported tariffs against dumping. Warm words were needed and it was important Mr Javid uttered some.

The problem, though, is that such assurances are too little, too late and too flimsy. If the business secretary was as serious as he now claims about finding long-term solutions for the UK steel industry he would have been proving it by trying to find them months ago, when the crisis that made landfall this week was still a gathering storm on the financial oceans, rather than now, when the damage is already being done. The fear, underpinned by Mr Javid’s disturbing infatuation with the libertarian individualist ideas of the American writer Ayn Rand and by his low-profile laissez-faire approach to the steel crisis generally – surely he must have known the Tata situation before he set off to Australia – is that what he brought to Port Talbot were crocodile tears.

The big charge against Mr Javid, and perhaps even more strongly against his patron George Osborne, is that in the end they have always been prepared to let the UK steel industry go rather than fight for it as a strategic national asset. They are willing to do that because their highest priority is neither the protection of the steel industry nor doctrinaire laissez-faire economics so much as ensuring the long-term investment of Chinese capital in British infrastructure projects that, for domestic political reasons, cannot be financed by taxation.

Underlying that is the suspicion that the Conservative government will now always go to extreme lengths to avoid offending China, and will be particularly insouciant if it involves creating employment crises in places where few people are likely to vote Conservative anyway. In the case of steel this has meant an essentially passive policy in the face of the global glut caused by Chinese over-production as its growth slows. The charge of passivity is consistent with the generally relaxed approach taken by Mr Javid since last May – in contrast to the more committed instincts of his junior minister Anna Soubry. If the choice comes down to the steel plant at Port Talbot or the Chinese-backed Hinkley Point C nuclear power station, therefore, the suspicion is that Mr Osborne will go for the latter. In a contest between an existing British industry and the Chinese capital investment connection it is Xi Jinping who will get the nod every time.

An important piece of specific evidence for the charge, though, is Mr Javid’s readiness to block European Union moves to put tariffs on cheap Chinese steel. Mr Javid attempted to muddy the waters on this on Friday. Yet it is a fact that Britain, along with others, has opposed European efforts to overhaul anti-dumping rules that would have helped the EU to raise retaliatory tariffs against Chinese steel similar to the level of those adopted by the US. And it is a fact that Britain led a group of EU nations that voted against higher tariffs. Mr Javid is also on record as welcoming the low price of steel because it helped UK manufacturing. Britain is also arguing that China should be recognised as a market economy within the World Trade Organisation even though the Chinese steel industry is 70% government-owned. Mr Javid’s claim on Friday that he supports tariffs on dumping is a piece of sophistry, since he may think he can argue that China is technically not dumping low-cost steel. If he does believe this, he is on his own.

Ministers have suddenly found themselves in an extremely uncomfortable place over steel this week. Not for the first time, Mr Osborne and his supporters have underestimated the political kickback against a strategy that may have seemed brilliant in the Treasury hothouse but that fails to survive contact with the real world. All those words in Mr Osborne’s budget and autumn statement about industrial policy and the march of the makers now ring hollow. They ring hollow not just in Aberavon, which Mr Osborne may not care about because it will never return a Tory MP, but also, much more threateningly for the chancellor, across a middle Britain that still thinks making things is important and something we do well. The sooner that MPs get the chance to hold both ministers to account the better.

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