Should HS2 Be Required to use British Steel?

najaB

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And it's not like we export a lot to make up for that, as we will always be undercut by another county who doesn't have minimum wage rights.
Only if we try to compete in markets where labour costs dominate.
 
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najaB

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It dominates everywhere, because people will always buy cheaper.
But labour costs are only one factor in price. As an example, Germany has higher average labour costs than the UK (source: TradingEconomics.com) yet their automotive industry is one of the world's biggest - simply because they've largely designed labour costs out of their production chain.

And I disagree that people will always buy cheaper - people will always buy the best perceived value that they can afford. That isn't always the lowest cost item.
 

JamesT

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But everything imported is a job going elsewhere, and unemployment is a big problem in the UK. And it's not like we export a lot to make up for that, as we will always be undercut by another county who doesn't have minimum wage rights.
Unemployment isn’t a huge problem in the UK, our rate is around 5% whereas the EU average is more like 8%. Hence all the complaints around Brexit where employers said they were unable to find staff.
According to https://en.wikipedia.org/wiki/List_of_countries_by_exports the UK was the 6th biggest exporter in the world.
Don’t be fooled by the apparent loss of our manufacturing sector, it’s actually larger now than in the past. The difference is our services sector has grown so much faster it dwarfs it, and manufacturing is no longer paying an army of men tuppence an hour to bash metal. The UK now specialises in much more highly skilled work which is much harder to undercut with sub minimum wage workers.
International trade is not a zero-sum game. Those countries that have dragged themselves out of poverty by producing the ‘cheap’ stuff are now in a position to be able to buy the expensive stuff we make. Both sides benefit.
 

MotCO

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It dominates everywhere, because people will always buy cheaper.
I think each country plays to its strengths. We are good at high tech, pharmaceuticals, services, innovation, R&D, etc, so that's what we do. Low value, low tech is for someone else, unless it has a strategic importance, such as energy or arms.
 

JamesT

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I know what you saying, and agree with most of it. However, it comes unstuck when what you think are reliable trading relations turn sour - I'm looking at French electricity, Russian gas etc. Even though contracts or agreements are in place, if the supplying country has a shortage of its own, it will obviously look after themselves first and foremost.
In particular moments these things can come unstuck. The question is whether over the long term more people benefit from the normal low prices than suffer from these blips.
 

Chester1

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I think each country plays to its strengths. We are good at high tech, pharmaceuticals, services, innovation, R&D, etc, so that's what we do. Low value, low tech is for someone else, unless it has a strategic importance, such as energy or arms.

In particular moments these things can come unstuck. The question is whether over the long term more people benefit from the normal low prices than suffer from these blips.

The Oxford Vaccine is a good example of Britain's place in the global economy. British science and research but nearly entirely manufactured abroad. The NHS supply was predominantly made in the UK and since the summer a few million doses have exported but it is dwarfed by the millions of doses produced each week by AstraZenica's Indian partner. Its simply not practical or financially viable to make in massive quantities in the UK. There is a national security argument for doing the minimum to keep some UK steel making capacity but it should be the bare minimum. Anything more is wasting taxpayers money. There are a lot of people of a certain age and background who can't move on from manufacturing being the be all and end all. We need some capacity e.g. like agriculture since the industrial revolution but it shouldn't be a big priority. If a British architecture company gets paid £1 million to design a building abroad it is just as much an export as selling £1 million of steel to construct the building.
 

LNW-GW Joint

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It's often impossible to know where things are "made", even with supposed UK suppy.
The whole supply chain is designed to be flexible, to allow for variable economic pressures.
Rail is an manufacturing outlier with rather inflexible standards and therefore supply chains.
But just as SNCF bought steel for their LGVs locally from Hayange (much of which was resourced from Scunthorpe via the Channel Tunnel), the arrangement might be reversed with HS2 steel from Scunthorpe sourced from Hayange (I'm not saying that will happen, but it's possible).
The issue with the SNCF contract was that Hayange could not expand their normal annual rail production to meet the one-off build of new lines.
Depending on NR's workload, we may find the same issue here for HS2.
The same sort of issue saw the Hitachi class 802 contract largely built in Italy, because Newton Aycliffe was fully occupied on 800/801 production.
 
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