05 Dec FORMER TORY CHANCELLOR SAYS BRITISH STEEL INDUSTRY WILL NEED PUBLIC MONEY
FORMER Chancellor Kwasi Kwarteng has said that the UK should look at subsidising domestic steel production, bringing it in line with other countries in the G7.
Speaking to GB News, he said: “So the issue with nuclear was that we discovered the curse of oil, actually. It was because we discovered North Sea oil, effectively, in the 70s. Because if you go back to the 60s, we had the best civil nuclear in the world.
“We had about 25 sites where we had nuclear power, and then we discovered oil. And it’s in Nigel Lawson’s book, great guy that he was, he said, ‘well, why spend money on nuclear when it’s so much cheaper to get oil and gas out of the North Sea?’
“Well, of course, 50 years on we realise that we should have spent more money on nuclear power.
“It’s not all about renewables. If we had a system where we wanted to subsidise energy for industrial uses, we can do that.
“There’s no country in the world that produces steel on a kind of market basis. Every steel industry in the industrialised world is subsidised or protected to some degree.
“I agree that the cost of energy is too high. Where I disagree is that I don’t think there’s a market-based solution.
“If you look at Germany, if you look at the US, you look at China, the Chinese produce this stuff at a great loss. I think that’s all that’s commercial.
“I’m afraid the government has to use UK PLC money, balance sheet, to protect the industry.
“We don’t have to give it to the Chinese. The Chinese are playing an obvious game. Tata basically held the government to ransom, got their money, and the Chinese are thinking, well, if Tata can do this in Port Talbot, why can’t we do this?
“There isn’t a single British company, or very few, like Sheffield Forgemasters, there are some small-scale ones. But if you look at the big sites, they’re all foreign owned.
“You’re not going to have a steel industry in this country without subsidy, without government support. Because the reality is, if you look across the G7, every single one of those countries, they don’t have a God given right to produce steel.
“And it’s not like the old days where everything was the market and all that sort of stuff. They’re protecting these industries as strategic industries because they want to be able to build battleships and military hardware.
“I’ve always believed that [primary steel production is a strategic industry]. When I was Secretary of State for BEIS I argued that all the time and actually Boris was very supportive of it.
“There were voices in the Treasury that were more sceptical, because they believed in global free trade, which I do, to an extent. But they are key strategic assets.
“The Americans would never rely on a global supply chain to produce steel. They would never do that. And most other countries in the G7 don’t…
“But as I say to you, and a lot of my kind of right wing Conservative free trade friends, said there’s no steel industry in the world that doesn’t have government support.
“If you have a government golden share, where essentially the government controls the entity, why would the private sector want to co-invest in that?
“In this instance it’s very likely that it’ll be foreign capital and that’s a different thing.
“[We sold British Steel] because the other alternative was that we would just run it ourselves. There were no other buyers at that price, no.
“It’s a binary choice. You can either run it in the private sector, and sometimes that will mean foreign capital and large amounts of industry, like the steel industry, that does mean foreign capital. Or you can have a bunch of bureaucrats run it. That was the choice.
“In the real world, the government had to decide very quickly. We couldn’t get a bunch of bankers or clever bureaucrats to design the perfect structure because we had to act in the moment. I wasn’t a government minister at the time, but I do remember that these decisions had to be done very quickly.”
