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Why Is The Government Giving £45M To Roman Abramovich While Letting A British Steelworks Go To The Wall?

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AAlthough regulations around steel make it hard to intervene, a way could be found to preserve jobs at the Teesside plant.

ay: Sahaviriya Steel Industries (SSI) announces it will mothball the steelworks in Redcar, resulting in the direct loss of 1,700 jobs. As a result of the low price of steel, SSI will cease producing steel on Teesside, although Andy McDonald, the MP for Middlesbrough, estimates that job losses could be as high as 9,000 once the impact is felt along the steelworks' supply chain, with contractors and suppliers on course to be hit hard.

Wednesday: The government announces a loan of £45m – to Evraz, a steel-making and mining company owned by Roman Abramovich, the Russian oligarch. It has operations in the Ukraine, Canada, the United States, and Russia.

Why isn't the government stepping in to rescue jobs in Redcar? Government subsidy of the steel industry is tightly regulated by the European Union because overproduction of steel by heavily-subsidised national champions, resulting in crashes in the price – has been a persistent problem within the European economy. (That's also why closing down Trident manufacturing in Barrow and replacing it with alternative, well-paying work, is not as easy as it often sounds – the government has more leeway to subsidise jobs for defence than it does industries that compete on the global market, which is why the three unions who represent its workers remain opposed to scrapping the submarine.)

However, other European governments have persistently found ways round these regulations, with the Italian government heavily subsidising its steel industry under the guise of funding "environmental protection". And as David Cameron's choice to use the international aid budget to rehouse refugees here in Britain shows, the British government isn't opposed to fiddling the rules when it suits. It comes back to the central problem of the government's industrial policy: they have a plan to mortgage increasingly large chunks of Britain to China. They don't have a plan toretain the top academics or to maintain British industrial capacity.

http://www.newstatesman.com/politics/economy/2015/10/why-government-giving-45m-roman-abramovich-while-letting-british-steelworks

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Hmm, you'd need to see the detail.

It looks like an export credit for work being done in the UK.

I've not seen the detail but this is an export loan based on some high-end work/contract being done in Sheffield.

Why this and not Redcar? There's no demand for what Redcar is doing. Gross oversupply and no customer.

Redcar would be about pouring money into a site and hoping the steel prices turns.

The Redcar plants swallows £5m/month in wages alone.

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So to labour MPs, when steel jobs are at risk, its a lack of subsidies. When farming job's are at risk, well thats just market economics. Tough.

Labour scum just appealing to their obsolete luddite base.

http://www.express.co.uk/news/politics/607678/Kerry-McCarthy-Labour-shadow-environment-minister-vegan-MP-meat-smokers

Miss McCarthy also dismissed the concerns of British dairy farmers, who are currently protesting against the low price of milk in supermarkets as they face rising debts and a struggle to pay bills.

She added: “It’s a supply and demand thing. Too much milk is being produced and if you live by the market you have to risk dying by the market.”

Edited by Executive Sadman

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State handouts to business in the UK are reserved for banks. I thought everyone knew that by now. The world can not be allowed have too much steel but it can never have too much debt.

Edited by stormymonday_2011

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Very true.

Agricultural subsidies in the EU and tariffs to prevent processing of the stuff that can't be grown here being processed before being imported are keeping developing nations poor

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Frankly I think we should open up our markets to Africa and the world fully and let prices fall. I would turn all the newly emptied farms and fallow fields into areas of leisure for our people and possibly to actually build homes on. Our industrial farming landscape does us no favours - they are there merely to acquire subsidies and they always want more.

It was a seminal moment in British history when the Liberals removed the Corn Laws that the Tory landowners put in to keep corn prices high. Protectionism merely means you end up paying too much for something that could be better spent elsewhere.

I can't believe that people don't realise what happened when the Tories put us into Europe - they resurrected the Corn Laws across all foodstuffs.

And if we gave access to our markets, perhaps Africa on our doorstep wouldn't have their agriculture destroyed by lack of markets and dumping of surpluses and needing our 'charity'.

Split minds about that. Free trade should be accompanied by free markets in general. I'm not sure holding our farmers to high environmental standards whilst allowing beef rearers in central america basically defile rainforests with impunity serves any purposes. Businesses should compete on efficiency, not on the fact africa and the developing world have no regulations and minimum wages to worry about.

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I agree with that and also believe it should be applied to all goods and services. That way, only true innovation and distinctive competencies win out.

My point is really that what is good for one industry should surely have equal argument for being applied to all. At the moment we again have socialism for rich landowners whose markets are protected and even subsidised. Let them go to the wall like everyone else. You never saw a farmer marching in solidarity with workers in industry losing their jobs.

True- there is however, the small matter of food security to consider. Especially with J.I.T logistics being in place in every supermarket in the UK.

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So succesive governments have stood by whilst foreign companies buy up and mothball/scrap our industrial base/capability? Sorry they don't stand by idly, they actually award contracts and give public money to them to do so.

Incredible. If these companies (and landlord farmers) mothball these sites, then the site should be free for someone to attempt to return them to productive use. That may make them think. We do we continue to tolerate this shafting???

Edited by PopGun

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So succesive governments have stood by whilst foreign companies buy up and mothball/scrap our industrial base/capability? Sorry they don't stand by idly, they actually award contracts and give public money to them to do so.

Didn't they pay many of these companies to shut down by giving them 'carbon credits' for doing so?

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