This could indeed be substantial state aid from the SNP to Gupta
A useful little reminder that just because cash doesn’t change hands doesn’t mean that there isn’t something of economic import going on:
Nicola Sturgeon's government may have broken state aid rules in a deal to sell a steelworks to Sanjeev Gupta
We’re not attempting to judge this particular case, we want instead to use it as an example:
The SNP government bought the site for £1 from Tata Steel, then immediately sold it to Mr Gupta's business Liberty Steel as part of a deal they claim was intended to protect jobs. Ministers agreed to protect Tata from any future clean-up costs for environmental damage to the site.
Ah:
….it is considered that the clause providing the indemnity to Tata Steel may represent State aid, even though no money has, or may ever, change hands."
Well, yes, it could be. For the costs of closing down a site after decades - possibly centuries - of heavy industrial use can be extremely high. That’s why it is often so much more expensive to build on brown- rather than green- field sites. An indemnity against any possible clean-up costs is a significant subsidy. Whether that actually breaches state aid rules we’ll leave to the courts.
The larger point here though being we agree, no cash has changed hands. Yet clearly something of economic import has happened. Which is something we need to consider about government involvement overall.
It may be true that the UK government only - “only” - takes 35% of everything in tax to spend as it, not we, wishes. But the government also imposes burdens through regulation, bans, indemnities and even flat out stupidities. These may not lead to cash changing hands but they weigh upon the performance of the economy just as badly. The true cost of government is thus much larger than the mere cash that is sucked from our wallets.
One estimation over in the US, by the Cato Institute, suggests that the true cost of government is about twice that cashflow. That would be 70% of GDP, of everything, for us and that wouldn’t surprise us as an accurate measure.
Which leads to a suggestion. Why don’t we lift some of that burden off our shoulders by limiting, even reducing, the regulation and non-cash interventions into the economy? Actually have that long promised bonfire of the red tape?