Steel yourself for the big Tata!

But as the story unfolded, this feeling was followed by a shiver down my spine – as I realised just how much of what was being said could have been applied to our own industry.

For it looked like we were watching the sacrifice of what had been one of the country’s keystone industries – one which had helped make Britain great – on the altar of free trade, along with many thousands of jobs.

Like our own, steel production was one of the few surviving primary industries and it was sickening to hear the UK government saying that it would do everything in its power to save the industry – while making it plain that this would fall well short of taking any direct intervention. At the time of writing, the powers that be were involved in a desperate attempt at a fire sale before the embers had even stopped glowing – which, even if successful, is not the best way to negotiate an effective deal.

However, I found myself wondering if the UK Government – and society as a whole – would be just as happy to wave ‘Tata’ to the UK’s farming industry as they appear to have been to the last remnants of the steel one.

Judging by the similarities, the signs didn’t look good.

The papers and air waves were full of commentators expressing sympathy for the workers but, at the same time, stating that as long as cheap steel was available on the world market, it made more sense to import the stuff at a lower price than to continue manufacturing it in this country – even if the quality was far lower and the environmental costs of producing it much higher.
I found myself wondering if someone had suddenly put the supermarkets in charge of our trade policy.

Never mind the strategic importance of steel production, nor the fact that once the industry was dead there was no chance of it starting up again – or that once UK production was crippled, countries such as China, which appeared to be dumping steel at below the cost of production, would then have complete control of the market and could charge what they wanted.

Even Adam Smith, the Scot who first promoted the theory of free-trade, conceded that this ideal only worked in a perfect market where the rules of supply and demand were not subjected to political manipulation.

With a bungling government department caught apparently unawares – despite the writing on the wall having been writ large for quite some time – it was pretty obvious that the strategic thinking which should have been at an advanced stage, including the drafting and formulation of a plan B, had simply not even been assembled on the starting blocks. Yet another familiar story.

Higher energy costs and difficult and costly-to-comply-with environmental regulations were also cited as a major contributor to the fact that the production of British and European steel were uncompetitive – and, again, few would argue that these self-same factors are at large and taking their toll in our own industry.

Together with higher labour costs, the energy and environmental handicaps have seen the view that the British industry can’t compete on commodity markets widely expounded – while advice has been to concentrate on processing the product into higher margin products.

And might we in farming have heard that story before?

The huge and apparently unsustainable losses within the industry – put at more than £1m per day – was another part of the story which might also have been applicable directly to our own. The UK Government’s promise that it would encourage the public sector procurement to give preference to using the home-grown (or smelted) product was another one straight out of the tool box used to service our own industry.

But one of the most worrying parallels lay in the attitude and dealings of the UK Government in the years building up to this crisis. Only a few days after the news of the probable closure was announced, the UK authorities were passing the buck in the usual manner and blaming the EU for preventing them from either introducing state aid or applying tariffs on imported steel.

However, only hours after this responsibility-dodging line was issued, it was it was rather inconveniently revealed that the UK had been instrumental in blocking European moves to introduce just such a tariff on the imports of cheap steel – a move which would undoubtedly have gone some way to levelling the playing field for the home produced stuff.

The UK Government might not have been alone in blocking this move – but it had played a leading role in ensuring that cheap imports continued to pour into the country.

And if that doesn’t set alarm bells ringing within our own industry over the promises made to support our farming industry in the future – against the real back-story of the UK government being the leading proponents of doing away with farm support measures – I don’t know what would.

Perhaps it’s time to steel ourselves for what lies ahead.