Apparently Tata are losing £1million every day on their UK steel operations. It is not surprising therefore that they are considering the viability of keeping the plants going. It has been suggested that the Government should take over the UK steel plants. There are problems with this idea though. Firstly, our membership of the European Union would prevent it because of the state aid rules. Secondly, if Tata cannot make steel profitably what is there to suggest the government could. The reality is that too much steel is being produced in the World for present consumption levels. The result is that the price falls. UK manufacturers who use steel are benefitting from the lower steel prices and would not take kindly to being forced to buy higher priced UK produced steel. This might mean they would have to increase the prices on their products and if they then cannot sell them perhaps they too would be looking to the government to bail them out.
Understandably, people recall the fact that two banks were given state aid during the banking crisis but what people do not mention is that since then the banks in question have seen massive changes and huge cuts in the workforce. The bailout was not a cost free option.