Should the Govt have "Nationalised" Redcar?

[Dave1987]

John McDonnell has today used Redcar as a reason to why he has changed his mind on supporting the Govt bill to make deficit reduction bound by law.

We all know that McDonnell had he been in power now would have immediately taken over Redcar and nationalised it. I've read up on the plant and it would seem that the current price of steel is very low due to massive over production throughout the world. If it had been nationalised it would have essentially meant the taxpayer subsidising the plant running at a loss unless the price of steel goes back up. Now I for one am loath to see this plant close only for us to import steel from abroad for major construction projects. But if the plant is producing more steel than is needed then there is no way the taxpayer should be propping up a business model that doesn't work.

 

[valenta]

Well before all the economic ramifications are considered it should be noted that 2200 jobs will be lost as a result of the closure, which incidentally will be a far greater loss of money for those people than it would be for the taxpayer to pay for a nationalised company. Should the government have nationalised it - there's certainly an argument for it but I can understand the opposition. Should the government have intervened more - absolutely, just as the French, German and Italian governments did. Certainly I feel that the coke ovens could have been left to run for longer to at least leave a chance for the steelworks to reopen. This closure is merely a symptom of the "profits before people" mentality endemic in this country, particularly since the ascension of Thatcher.

 

[RochdalePioneers]

They can't even argue "it's the free market, sorry. China is dumping steel on the market, the EU is threatening tariffs and the result of the Chinese action is the end of Redcar. We will let the place shut because of Chinese illegal dumping then reward China by buying their steel and touting HS2 contracts.

Anyone would think the Tories would rather heavy industry go away...

 

[cactustwirly]

You guys have to accept that since the 70s jobs have changed, there are now more IT/office/public service jobs than heavy industry, because it is cheaper to import than produce.
Hence you will be subsidizing a failing industry (we are only recovering just recovering from a recession made worse by labour's overspending, we do not want to be wasting money on an unsustainable industry. The money could be used much more productively, eg: the NHS or education, not increasing this country's debt).

We should instead be creating new white collar jobs. Leeds is now a booming financial city. The North-East should be investing in sustainable jobs.

 

[Aldaniti]

We know the price of everything and the value of nothing. What will be the cost of paying benefits to the hundreds who have lost their jobs? What will be the cost of the social issues, monetary or otherwise, that will arise over the coming years? I would have nationalised it and taken action to prevent further imports from having such a devastating effect on our country. What sad times we live in.

 

[valenta]

You guys have to accept that since the 70s jobs have changed, there are now more IT/office/public service jobs than heavy industry, because it is cheaper to import than produce.
Hence you will be subsidizing a failing industry (we are only recovering just recovering from a recession made worse by labour's overspending, we do not want to be wasting money on an unsustainable industry. The money could be used much more productively, eg: the NHS or education, not increasing this country's debt).

We should instead be creating new white collar jobs. Leeds is now a booming financial city. The North-East should be investing in sustainable jobs.

Of course if every country took the view that it would make financial sense to import heavy goods rather than produce them, there would be a bit of a problem. I really do object to this sole focus on profits - consider these 2200 people who have lost their jobs, many of whom simply will not be trained or qualified to take the public service jobs you talk of, nor is there any guarantee of availability. Thus the idea that there can be some sudden transition to other industries is not nearly as simple as you suggest

 

[Aldaniti]

We should instead be creating new white collar jobs. Leeds is now a booming financial city. The North-East should be investing in sustainable jobs.

1. Not everyone has the desire or ability to want a white-collar career. Thankfully. Some people are at their best when they are creative.

2. A balanced economy needs a healthy manufacturing industry.

3. We're still paying a price for an over-emphasis on booming-financial-cities.

 

[Pinza-C55]

John McDonnell has today used Redcar as a reason to why he has changed his mind on supporting the Govt bill to make deficit reduction bound by law.

We all know that McDonnell had he been in power now would have immediately taken over Redcar and nationalised it. I've read up on the plant and it would seem that the current price of steel is very low due to massive over production throughout the world. If it had been nationalised it would have essentially meant the taxpayer subsidising the plant running at a loss unless the price of steel goes back up. Now I for one am loath to see this plant close only for us to import steel from abroad for major construction projects. But if the plant is producing more steel than is needed then there is no way the taxpayer should be propping up a business model that doesn't work.

At the end of the war 1945 British manufacturing was , from memory of the figures, about 48% of GDP. In 1970 it was 30%. Now it is just 10%. This is a complicated way of saying that we don't make stuff any more. If you accept the principle that "if things can be made cheaper abroad then they should be", where you draw the line ?
Would a situation where British manufacturing was down to 1% or 0% be a good way to run a country ?
http://data.worldbank.org/indicator/NV.IND.MANF.ZS
Note that in Puerto Rico the index is 47% - most intel CPU's for instance are made here. How would the UK be doing if we had 4.7 times the manufacturing industry we have now ?

 

[muddythefish]

You guys have to accept that since the 70s jobs have changed, there are now more IT/office/public service jobs than heavy industry, because it is cheaper to import than produce.
Hence you will be subsidizing a failing industry (we are only recovering just recovering from a recession made worse by labour's overspending, we do not want to be wasting money on an unsustainable industry. The money could be used much more productively, eg: the NHS or education, not increasing this country's debt).

We should instead be creating new white collar jobs. Leeds is now a booming financial city. The North-East should be investing in sustainable jobs.

Rubbish.

The economy is over dependent on financial services already. Germany, France and many other EU countries have thriving steel industries.

And Labour didn't overspend.

 

[cactustwirly]

Would nationalization have helped? Look at the miners strikes of the 70s and the failing coal mines.

I will say this again, if we subsidized every failing industry we wouldn't have enough money to pay for public services like health and education, look at the NHS it needs the money more than Redcar.

It isn't up to the government to subsidize failing companies. Other companies go bust and get no government support, why should SSI UK/Redcar be any different?

 

[muddythefish]

Would nationalization have helped? Look at the miners strikes of the 70s and the failing coal mines.

I will say this again, if we subsidized every failing industry we wouldn't have enough money to pay for public services like health and education, look at the NHS it needs the money more than Redcar.

It isn't up to the government to subsidize failing companies. Other companies go bust and get no government support, why should SSI UK/Redcar be any different?

Since the decimation of the coal industry we have had to import most of our energy from abroad - do you think that is acceptable and sustainable ?

Not all "failing" industries should be rescued - but steel making is vitally important to the country's long term manufacturing future. Would you be happy for all the steel required to build HS2 for instance to be imported from China ?

Governments should step up to help struggling companies when required, nurturing them through bad times and possibly returning them to the private sector when the time is right.

Look at R-R in the 1970s so see how it can be immensely successful in the long term.

 

[GrimsbyPacer]

It should never of been privatised in the first place as steel is important for the nation's infrastructure. And considering that banks were nationalised for far less strategic value it does look shortsighted.
Imagine if a new industry wants local steel for a new factory, the UK looks worse now.

 

[cactustwirly]

Since the decimation of the coal industry we have had to import most of our energy from abroad - do you think that is acceptable and sustainable ?

Yes because it is cheaper and keeps costs down, China has way more coal than us!

 

[DarloRich]

Would nationalization have helped? Look at the miners strikes of the 70s and the failing coal mines.

I will say this again, if we subsidized every failing industry we wouldn't have enough money to pay for public services like health and education, look at the NHS it needs the money more than Redcar.

It isn't up to the government to subsidize failing companies. Other companies go bust and get no government support, why should SSI UK/Redcar be any different?

EDIT - not worth a thrombo. People like this don't care for the human impact.

EDIT 2 - perhaps if all the thoroughly decent Tory chaps paid their dues we might have enough to pay for lots of things

 

[Pinza-C55]

Yes because it is cheaper and keeps costs down, China has way more coal than us!

We don't import coal from China. We import 64% of our coal at the last count, most of it from our friends in Russia, the rest from the USA and those lovely Colombians who also make nice tobacco of course. The UK is supposed to sitting on 100 years worth of coal in flooded , concrete capped mines.

http://www.greenpeace.org.uk/newsde...-power-rising-whilst-fossil-fuel-output-falls

 

[muddythefish]

Yes because it is cheaper and keeps costs down, China has way more coal than us!

You obviously know the price of everything and the value of nothing. Look past the end of your own nose.

 

[Bald Rick]

Clearly a difficult time for those affected, not just those that have lost their jobs but also the families, and those who made their living from supporting the steel workers in other ways.

However, why should this particular steel works have been singled out for nationalisation when it failed? Is it simply because it affects so many in one hit?

My sister works for a clothing company that over the past 20 years has systematically moved most production from subcontractors in the UK to Portugal and India. Thousands of manufacturing jobs have gone from this country as a result, more than at Redcar. Should all of the affected clothing manufacturers have been nationalised? Should the Peugeot factory at Coventry have been nationalised when it closed? What about the Goodyear factory in Wolverhampton, announced for closure and the loss of several hundred jobs only last week? What about my mate who is out of work as the (quite bespoke) service he provides is being undercut by a company from India doing it remotely?

Where do you draw the line?

 

[DarloRich]

Clearly a difficult time for those affected, not just those that have lost their jobs but also the families, and those who made their living from supporting the steel workers in other ways.

However, why should this particular steel works have been singled out for nationalisation when it failed? Is it simply because it affects so many in one hit?

simply: Yes.

Plus the lack of realistic prospects for alternative employment in the area.

(there are other arguments about what it means to the north east as a community and cultural touchstone etc)
--- old post above --- --- new post below ---

Would nationalization have helped? Look at the miners strikes of the 70s and the failing coal mines.

I will say this again, if we subsidized every failing industry we wouldn't have enough money to pay for public services like health and education, look at the NHS it needs the money more than Redcar.

It isn't up to the government to subsidize failing companies. Other companies go bust and get no government support, why should SSI UK/Redcar be any different?

oddly it seems ok for the government to bail out the banksters and City spivs. Your comments are:

a) insensitive
b) clueless
c) factually wrong.

I dare not say more.

 

[RichmondCommu]

Yes because it is cheaper and keeps costs down, China has way more coal than us!

However we pay way more for our energy than the rest of Europe which has certainly not done the steel industry any favours!

 

[Phil.]

Steel, like coal is too expensive for this country to produce. The British steel industry was nationalised as late as 1967 by Wilson's government. The steel making was then consolidated into five areas at south Wales, Scotland, Redcar, Sheffield and Scunthorpe. One of the biggest losses was "steeltown" aka Corby and later in 1967 the government started the phasing out of steel making in Corby. Whilst the loss of 2,200 direct jobs at Redcar is a tragedy it pales into insignificance when compared with the 11,000 direct jobs lost in Corby resulting in a 30% unemployment rate there. These losses were mitigated however by the Thatcher government designating Corby an enterprise zone and promoting it thus with it's described skilled workforce. Steel continued to be produced at the other places but the market for British steel shrank and shrank, it's just too darn expensive.
What this suggests is that for a town to be reliant on one major form of employment is a bit of a gamble. It also proves that when it comes to industry the, "Labour is good and Conservative bad" mantra does not necessarily ring true every time.

 

[RichmondCommu]

You guys have to accept that since the 70s jobs have changed, there are now more IT/office/public service jobs than heavy industry, because it is cheaper to import than produce.
Hence you will be subsidizing a failing industry (we are only recovering just recovering from a recession made worse by labour's overspending, we do not want to be wasting money on an unsustainable industry. The money could be used much more productively, eg: the NHS or education, not increasing this country's debt).

We should instead be creating new white collar jobs. Leeds is now a booming financial city. The North-East should be investing in sustainable jobs.

I take it you know very little about Germany and its economic miracle. Germany has built its wealth on industrial output; chemicals, heavy engineering and light engineering, its car industry, ship building, clothing etc. All of this has been carefully nurtured / developed by the Germans and because of it they are one of the worlds biggest exporters.

I've been able to make a very good living through both investment banking and now advertising so the service industry has been very good for me. However you cannot run a country on the service industry alone, you also need to make and export goods if you are to have any hope of keeping the balance of payments at a decent level.

 

[meridian2]

I agree in principle with cactustwirly on the issue of heavy industry being cheaper to import,but what he fails to account for is why the loss of so many jobs,unnecessarily in my opinion, is necessary in order to bring down costs. The government have made the same mistake they did in the 1980s with the mines in their naivety by believing that importing is a long-term economic solution, when all it leads to is an inevitable 'brain drain' to countries where government supports their national industries instead of riding roughshod to get the cheapest deal.

Remember the ancient caveat: cheaper is not always better.

 

[Dave1987]

I can see both sides of the argument on this one. The loss of 2000 odd jobs is very bad especially for that area. And the potential that we may import more steel for the loss of production at Redcar is lamentable. BUT and its a big but, as others have said where do we draw the line on the Govt taking over failing businesses? I remember when CityLink we bust and there was an immediate call for it to be nationalised. Are people saying that every business that fails should be taken over by the Govt? Surely that is marching straight towards the doors of Communism?

 

[NSEFAN]

Communism isn't inherently a problem, it is human greed that corrupts it. The same is true for capitalism. This is why regulation exists. Making steel for the sake of it is not likely to be useful, but the government should still be taking steps to prevent areas from becoming entirely dependent on benefits. Having a coherent plan to encourage new business to the area would certainly help.

 

[muddythefish]

Communism isn't inherently a problem, it is human greed that corrupts it. The same is true for capitalism. This is why regulation exists. Making steel for the sake of it is not likely to be useful, but the government should still be taking steps to prevent the Chinese dumping cheap steel on the world markets.

Corrected it for you.

But with Gideon cuddling up to the Chinese on a daily basis, and Xi due to visit Britain soon, it's not going to happen

 

[Oswyntail]

Lots of strong arguments on either side. But what this illustrates for me is the utter folly these days of putting all of a communities eggs in one basket. There is, or should be, no such thing as a "steel community", a "mining community", a "fishing community" or even a "farming community". It has been known for decades that steel production in the UK was approaching impracticality, so what were the community leaders doing to mitigate the inevitable? It seems their one strategy was asking central government for more subsidy.

 

[Pinza-C55]

Lots of strong arguments on either side. But what this illustrates for me is the utter folly these days of putting all of a communities eggs in one basket. There is, or should be, no such thing as a "steel community", a "mining community", a "fishing community" or even a "farming community". It has been known for decades that steel production in the UK was approaching impracticality, so what were the community leaders doing to mitigate the inevitable? It seems their one strategy was asking central government for more subsidy.

Given that all these industries are privatised the various governments have been able to wash their hands of them.
What exactly are "community leaders" and what can they do to affect the course of a private industry especially, as in this case, one owned by a foreign company ?

 

[RochdalePioneers]

When we're talking about the cost of this and that, probably worth pointing out that EU law requires previous industrial sites to be cleared back to brownfield. Redcar will cost around £1bn and with SSI in liquidation the bill will be paid by the government.

I'd suggest that nowhere near £1bn was needed to rescue the business, restructure it and then refloat it. Spend less money, repel China's illegal price dumping, keep the jobs and skills AND have a Steelworks making things we need? You can understand why the Tories were happy to watch it die...

 

[Xenophon PCDGS]

When we're talking about the cost of this and that, probably worth pointing out that EU law requires previous industrial sites to be cleared back to brownfield. Redcar will cost around £1bn and with SSI in liquidation the bill will be paid by the government.

Noting what you say that it is EU law that requires previous industrial sites back to brownfield, it is therefore not the case that the EU has community funding available in order that their law is fulfilled or is it the case that as you state, the financial responsibility of the particular country to bear the cost in full.

I am thinking of all the former East German very large industrial sites that had to be dealt with after reunification and were then the responsibility of the German government to ensure that the EU law in question was met in terms of the required obligation.

 

[Oswyntail]

...
What exactly are "community leaders" and what can they do to affect the course of a private industry especially, as in this case, one owned by a foreign company ?

Local authorities, elected representatives, whose remit is to make sure their local community is run properly. What I was suggesting was not that they should "affect the course of a private industry" - which was obviously futile, though the line they took - but took steps to mitigate the effect - attracting new and suitable employers to the area before disaster struck. That is their job, that is why they were elected, and their failure is largely what has made this such a tragedy.