The UK steel industry has been thrown into its biggest crisis for a generation after Tata Steel announced it was pulling out of the country, putting at least 15,000 jobs at risk. Campaigners for Britain to leave the EU say the turmoil supports their argument. But would Brexit really help Britain’s steel industry?

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Why is Britain’s steel industry in crisis?

A collection of powerful forces have put increasing pressure on steelworks. Demand for the metal in the UK has never recovered since the financial crisis, remaining 30% lower than pre-2008 levels, while energy costs, business rates, and environmental taxes have further squeezed the industry. However, Tata and other steelmakers argue that the biggest problem is China dumping steel into Europe. The majority of Chinese steelmakers are state-owned and are estimated to have lost billions of dollars in 2015 as domestic demand slowed. In response, the Chinese steelmakers are trying to increase the amount of steel they export. Steel exports from China to Europe have more than doubled since 2013, helping to send the price of the metal down to roughly half 2011 levels.

Can Europe do anything about this?

Simplistically, yes: it could introduce tariffs. One of the reasons China is dumping so much steel into Europe is that other countries have introduced heavy tariffs on such exports the US, for example, has slapped 236% on Chinese steel. Crucially, India has also introduced tariffs, with steel prices predicted to grow by 15% in the country in the first six months of 2016 as a result. This has led to pressure being put on Tata Steel in India to pull out of the UK and focus on the growing domestic market.

So why hasn’t the EU responded?

The member states of the EU cannot agree what to do. In fact, at a meeting last month, it was Britain which opposed a plan to scrap a regulation known as the “lesser duty rule”, which would have allowed the EU to increase tariffs on Chinese steel beyond the 9% they sit at. Sajid Javid, the business secretary, argued that this would lead to higher prices for businesses that buy steel. He said: “There are many British companies ... that would tell you if duties got out of control ... then it would cost them jobs and growth and it would certainly cut their exports.” Downing Street has subsequently argued that Britain is in favour of higher tariffs, but that scrapping the “lesser duty rule” was not a proportionate response and could lead to protectionism.

So is the EU at fault?

The inability of the member states to introduce higher tariffs appears to be an example of European bureaucracy leading to a slow response to a crisis. However, the ambiguity of the government’s position means that is far from clear whether the Conservative government would have introduced higher tariffs if Britain was outside the EU anyway. Britain is also bound by the rules of the World Trade Organisation (WTO), to which China was admitted in 2001, and any trade agreements it would sign in the event of Brexit.

Do EU rules prevent the government bailing out Tata Steel?

Procurement and state-aid rules mean the government cannot simply hand every state infrastructure project to Tata or hand over cash to prop up Port Talbot. For example, the EU has called for Belgium to take back €211m of state aid used to prop up steelmaker Duferco Group, while an investigation has been launched into Italy’s support for Ilva. The Belgian support was considered illegal because “you could not find a market investor that would give them the kinds of loans they got from the authorities”. But again, it is not clear whether the UK government actually wants to go down this path. There are also ways around the rules, such as offering loans instead of cash. While the EU blocks support for “manufacturers in difficulties”, it allows nurturing the “long-term competitiveness and efficiency” of industry.

But has the EU actually helped the steel industry?

According to Javid, the EU helps to protect the British steel industry from retaliation in the event of higher tariffs being introduced and ithas the power to slow the flow of Chinese imports. Labour agrees, but claims the government is trying to use the EU to hide its inaction over the crisis. Angela Eagle, the Labour business spokeswoman, has questioned why the government supports handing China market economy status within the WTO, which would severely limit the ability to introduce new tariffs. “Granting market economy status to China in the absence of important safeguards would significantly diminish the capacity of the European Union to guard against Chinese dumping and it has the potential to destroy the UK industry,” she told parliament last month. In addition, other problems facing the steel industry, such as energy prices and business rates, are issues specific to the UK.