At the end of last week, the Treasury Committee published a damning verdict on Labour’s British Steel adventure, and it makes for grim reading for anyone who assumed ministers had a credible plan for the steel manufacturer. The report found the government is currently burning through taxpayer money at the Scunthorpe site at a rate of around £1.3 million a day, or roughly £475 million a year…
The PAC noted Ministers “could not provide even indicative estimates” of how much more of taxpayers’ money the government expects to sink into British Steel, nor provide any timetable for selling it back to the private sector, with no progress on getting the company back to profitability to top it all off. Labour’s promise to make the firm “productive, profitable and resilient” when it took it over increasingly feels like a distant memory…
Even with the NAO warning that the bill could exceed £1.5 billion in 2028 – before any transformation, compensation, or exit costs are even factored in – the government is still committing to more unnecessary nationalisation in the sector. Co-conspirators will remember Reynolds putting another £350 million of it towards another firm, Speciality Steel…
The Environment Committee also told ministers last week to reject the £10 billion creditor rescue of Thames Water and either put it into Special Administration or legislate to seize control of its finances. Steel serves as a warning: more than a year in, no credible plan, no price tag, no buyer, and no way out. Same old Labour…
Andy Haldane, Burnham’s recent adviser on the economy who has not taken up a No10 job, told Andrew Marr on LBC:
“The market now suspects that this is a traditional tax-and-spend socialist government with better TikTok videos…
imposing windfall taxes on oil & gas or on banks or upping capital gains tax would […] repeat the mistake that Rachel made […] The Achilles heel, the fiscal Achilles heel of this government thus far has been its unwillingness and/or inability to cut public spending.”