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Mythbust

Brussels isn’t to blame for British steel’s woes

by Sam Ashworth-Hayes | 12.04.2016

Myth: EU is to blame for British steel’s woes

InFacts: The UK bears brunt of the blame, for example by resisting tougher EU anti-dumping duties against Chinese steel. Quitting would make things worse. The idea that we could easily get away with subsidising our steel industry is also misleading.

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British steel is struggling, and Brexiteers think the EU is to blame. That’s not accurate.

Brexiteers argue that the EU hasn’t done enough to stop China ‘dumping’ cheap steel into Europe. It is true that the EU could have acted faster to impose a tax on Chinese steel sold at unfair prices, and that these tariffs are far lower than those imposed by the United States. But the EU’s limited response reflects lobbying by the UK government, which believes that higher tariffs would raise prices to consumers and damage the wider economy.

Brexiteers say EU rules stop us from using short-term state aid to save steelworks. The UK is an enthusiastic proponent of exactly these rules, and has supported recent EU investigations into Italian and Belgian government support for steelworks. Britain might not be much freer to deploy state aid if it were out of the single market. Assuming that the UK was still a member of the World Trade Organisation, other countries could argue that our subsidies were contrary to World Trade Organisation rules. The EU, which is responsible over 50% of UK steel exports, would probably retaliate by imposing duties on unfairly subsidised British steel. The US certainly would. Indeed, it already has.

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The EU’s renewable energy policies have also come under fire, with Brexiteers criticising their effect on energy prices.

The UK chose of its own free will to vote in favour of EU renewable energy targets. While its pursuit of that target has increased energy prices, that’s the result of UK choices about the way we have sought to hit the targets–for example, we have funded renewables subsidies through levies on energy suppliers. The government has now acted to reduce the burden of these levies on energy intensive industries, with EU state aid approval.

This article is an adaptation of a piece that previously appeared on InFacts

Edited by Hugo Dixon

One Response to “Brussels isn’t to blame for British steel’s woes”

  • Is the UK government kowtowing to China (on steel dumping and on various other issues) because they need the Chinese government to help them fight attempts by German and Austrian anti-nuclear-power fanatics to kill Hinkley Point C in the European courts?