Should the Govt have "Nationalised" Redcar?

[ExRes]

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...

Sorry, I know it's early in the day but how can the Tories be 'happy to watch it die' if they are going to, according to you, pay a larger bill for liquidation than by restructuring the business ?

 

[RochdalePioneers]

Because heavy industry is "bad". What else could it be? Spend less, keep the strategically critical industry, don't completely knacker Teesside. Or have the Northern Powerhouse minister say "not my responsibility" then pledge to spend "not a single pound"

 

[Tetchytyke]

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.

Let's hope we're never in a situation where we need to produce our own steel rather than importing it from China or Russia then.

It's more than about economics, sometimes. It's about national security. I can't imagine any other serious world country being happy relying on other countries for everything.

It's interesting how the banks get "support during a difficult time" but heavy industry is "failing and not worth saving".

--- old post above --- --- new post below ---

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.

Which they have done, repeatedly. There has been significant investment in Middlesbrough and Stockton-on-Tees attracting businesses into the area around Thornaby. Some of it has been successful, e.g. Durham University's Teesside campus, but some of it hasn't; as we've repeatedly seen in the north east, many "service industry" jobs are shipped out to India just as soon as the subsidy "investment" ends.

You cannot build a local economy on call centres.

You've still not answered my question on the other thread: what should the councils have done differently, and which employers would be queuing up to move to Middlesbrough without subsidy "investment"? And if we're subsidising "investing in" call centres to move to Teesside, why is subsidising "investing in" a steelworks any different?

 

[Oswyntail]

Let's hope we're never in a situation where we need to produce our own steel rather than importing it from China or Russia then.

Agreed - but is the answer to keep producing steel (and, presumably, everything else,on the assumption we will potentially fall out with everyone, or work for a world order where we can live together? I know which approach I prefer.

It's more than about economics, sometimes. It's about national security. I can't imagine any other serious world country being happy relying on other countries for everything.

OK, so we produce steel. Are we not even then reliant on other countries for the raw materials, eg iron ore?

It's interesting how the banks get "support during a difficult time" but heavy industry is "failing and not worth saving".

Yes. The two sectors are not at all comparable, though. Shut down steelworks and the rest of the country generally carries on. Shut down banks and the rest of the country stops.

Which they have done, repeatedly. There has been significant investment in Middlesbrough and Stockton-on-Tees attracting businesses into the area around Thornaby. Some of it has been successful, e.g. Durham University's Teesside campus, but some of it hasn't; as we've repeatedly seen in the north east, many "service industry" jobs are shipped out to India just as soon as the subsidy ends.

You cannot build a local economy on call centres.

No, but is that all they have attracted? Have they been repeating what has worked? It doesn't have to be "service industries". The bottom line is that this long predicted closure seems to have caught them by surprise.

 

[Tetchytyke]

OK, so we produce steel. Are we not even then reliant on other countries for the raw materials, eg iron ore?

All the raw materials needed for steel are found in the UK; we invented the stuff.

The fact our last Tory government shut down all the mines for political rather than economic reasons is a bit of an issue, admittedly, but still.

Relying on other countries- as opposed to collaborating with them- never ends well.

Yes. The two sectors are not at all comparable, though. Shut down steelworks and the rest of the country generally carries on. Shut down banks and the rest of the country stops.

Or so the bankers claim.

I'm sure we'd somehow survive without Barclays Capital, UBS and Goldman Sachs. It'd be tough (not tough) but we'd manage.

No, but is that all they have attracted? Have they been repeating what has worked? It doesn't have to be "service industries". The bottom line is that this long predicted closure seems to have caught them by surprise.

The employers which have settled have generally been service industry employers- call centres, predominantly, but also the university, law and insurance admin.

I also don't believe the closure has "caught them by surprise". They were powerless to stop it or mitigate the effects, but that's different.

I'll ask again: what should they have done differently? And if we're "subsidising" new businesses, why shouldn't we "subsidise" existing ones?

 

[Oswyntail]

All the raw materials needed for steel are found in the UK; we invented the stuff.

But have not been extracted in sufficient quantities for many decades, if at all.

I'm sure we'd somehow survive without Barclays Capital, UBS and Goldman Sachs. It'd be tough (not tough) but we'd manage.

Nice selective list! Of course we'd manage - cultures have been using barter for millennia - long before steelworks were thought of. You try not using anything created or enabled by banks for, let's see, a day. Then tell me how you'd cope.:roll:

The employers which have settled have generally been service industry employers- call centres, predominantly, but also the university, law and insurance admin.

So why haven't other sectors settled? Have the attractions and incentives been wrong? Plan B?

I also don't believe the closure has "caught them by surprise". They were powerless to stop it or mitigate the effects, but that's different.

They knew it was coming, probably for ten years or more. Yes, they were powerless to stop it, but also to "mitigate the effects"? Other areas of the country have coped much better with the long-predicted collapse of the dominant industry, by long-term diversification plans.

... And if we're "subsidising" new businesses, why shouldn't we "subsidise" existing ones?

Because some old ones are not creating products economically that customers want

 

[RichmondCommu]

Let's hope we're never in a situation where we need to produce our own steel rather than importing it from China or Russia then.

It's more than about economics, sometimes. It's about national security. I can't imagine any other serious world country being happy relying on other countries for everything.

We can't even build our own power stations now!

 

[Tetchytyke]

You try not using anything created or enabled by banks for, let's see, a day. Then tell me how you'd cope.:roll:

Retail banking might be tough because of the way everyone's moved away from cash, but it wasn't retail banking that was bailed out by the last Government and it isn't retail banking who are benefiting from hyperinflation quantitative easing.

Other areas of the country have coped much better with the long-predicted collapse of the dominant industry, by long-term diversification plans.

The evidence is very much to the contrary. A look at employment rates shows that much.

The areas with the highest unemployment rates- Hull, Nottingham, Glasgow, Liverpool, the Rhondda, Birmingham, Wolverhampton- are all areas which had heavy industry and lost it. You've previously referred to Manchester as a success story, yet the employment rate there is 61% (it is actually 62% in Middlesbrough by comparison).

It's very easy to talk about "long term diversification plans", as though it is as simple as saying "financial services are booming, we want financial services jobs here, lets persuade Merrill Lynch to move to Blaenau Ffestiniog".

Almost 80% of GDP is from the service industry, primarily financial and legal services. With the best will in the world, they're not going to move out of London and relocate to Hartlepool are they?

You are also repeatedly failing to explain why giving "incentives" to the steel industry is wrong but giving "incentives" to other industries is OK. "Making what people want" is not an answer.

 

[Trog]

How about this for a thought subsidise Redcar steelworks which gives them an advantage, and in a year or so they will have driven the other UK steelworks out of business. As it seems there is just not enough demand for steel to keep them all busy.

As for stopping China dumping steel on the world market, how do you suggest we tell the various African and Asian countries that they have to buy our expensive steel instead of cheaper steel from China, sending a gunboat is so nineteenth century.

 

[najaB]

The fact our last Tory government shut down all the mines for political rather than economic reasons is a bit of an issue, admittedly, but still.

The rate of mine closure and job losses were higher under the Labour government than under Thatcher, but hey why let facts get in the way. And don't forget they were losing over £3 per tonne, so it wasn't really sustainable.

 

[DarloRich]

The rate of mine closure and job losses were higher under the Labour government than under Thatcher, but hey why let facts get in the way. And don't forget they were losing over £3 per tonne, so it wasn't really sustainable.

don't let the facts get in the way of a goof story part 2:

The Labour plan was to preserve a profitable and sustainable industry by removing those pits that were un proftiable and investing in and developing those that remained to increase profitability.

The Tory plan was to punish miners for winning their strike in 1974, to ensure they could not win again by destroying their industry, their communities and the way of life that supported them.

They took put the profitable pit and the unprofitable pit without distinction. Hell the Tories even took out he Nottinghamshire miners who supported them!

 

[muddythefish]

The rate of mine closure and job losses were higher under the Labour government than under Thatcher, but hey why let facts get in the way. And don't forget they were losing over £3 per tonne, so it wasn't really sustainable.

Straight from the Enid Blyton book of history.

 

[radamfi]

The areas with the highest unemployment rates- Hull, Nottingham, Glasgow, Liverpool, the Rhondda, Birmingham, Wolverhampton- are all areas which had heavy industry and lost it. You've previously referred to Manchester as a success story, yet the employment rate there is 61% (it is actually 62% in Middlesbrough by comparison).

Wow, that is a remarkable statistic. If Middlesbrough is better than even Manchester, then maybe all is not lost. Being brought up in a working class, northern environment, I was always led to believe that work would get more and more scarce as time went on. I believed it so that is one of the reasons I have saved aggressively since I started work in case I couldn't find a job ever again. I'm now financially independent at a young age, which sounds good, but you could argue that I shouldn't have believed the sceptics and perhaps had more or a life in my 20s and 30s. Despite everything, so many people are still working, even in the north where there is supposed to be no work whatsoever. So I no longer listen to doommongers any more. No matter how good things are, people will always find something to worry about.

Just because each region of each country doesn't have the full set of industries, doesn't mean the world is over. If that was true, then small countries would not be viable. I'm sure Luxembourg doesn't have the variety of industries that Germany or even the UK has. But they are doing OK. I just visited Bulgaria, supposedly a desperately poor country. But people are happy. They have freedom of movement to go anywhere in the EU. The UK has a GDP per capita about 6 times that of Bulgaria, yet not all Bulgarians are in the UK or in other rich EU countries. They have a happy life there. So if they can live a happy life, then surely so can people in the north of England.

 

[ainsworth74]

The rate of mine closure and job losses were higher under the Labour government than under Thatcher, but hey why let facts get in the way. And don't forget they were losing over £3 per tonne, so it wasn't really sustainable.

don't let the facts get in the way of a goof story part 2:

The Labour plan was to preserve a profitable and sustainable industry by removing those pits that were un proftiable and investing in and developing those that remained to increase profitability.

The Tory plan was to punish miners for winning their strike in 1974, to ensure they could not win again by destroying their industry, their communities and the way of life that supported them.

They took put the profitable pit and the unprofitable pit without distinction. Hell the Tories even took out he Nottinghamshire miners who supported them!

I think I'm going to have to ask both of you to submit some sources to back up the facts you're claiming

 

[najaB]

I think I'm going to have to ask both of you to submit some sources to back up the facts you're claiming

What years were Labour again?

 

[DarloRich]

What years were Labour again?

that is your source is it? A graph from wiki? Righto! Any context or just a simple line graph?
--- old post above --- --- new post below ---

Wow, that is a remarkable statistic. If Middlesbrough is better than even Manchester, then maybe all is not lost. Being brought up in a working class, northern environment, I was always led to believe that work would get more and more scarce as time went on. I believed it so that is one of the reasons I have saved aggressively since I started work in case I couldn't find a job ever again. I'm now financially independent at a young age, which sounds good, but you could argue that I shouldn't have believed the sceptics and perhaps had more or a life in my 20s and 30s. Despite everything, so many people are still working, even in the north where there is supposed to be no work whatsoever. So I no longer listen to doommongers any more. No matter how good things are, people will always find something to worry about.

Just because each region of each country doesn't have the full set of industries, doesn't mean the world is over. If that was true, then small countries would not be viable. I'm sure Luxembourg doesn't have the variety of industries that Germany or even the UK has. But they are doing OK. I just visited Bulgaria, supposedly a desperately poor country. But people are happy. They have freedom of movement to go anywhere in the EU. The UK has a GDP per capita about 6 times that of Bulgaria, yet not all Bulgarians are in the UK or in other rich EU countries. They have a happy life there. So if they can live a happy life, then surely so can people in the north of England.

Yeah! Northerners should live like Bulgarians! Yeah. Vote Tory :roll: Utterly clueless.

BTW you reckon things are good do you? Good inst decent well paying jobs replaced by zero hours contracts in Sports Direct or a low wage job in a call centre treated like dirt.

Good isn't generations of people with no prospect of a job. Good isn't having insufficient money to cloth your children properly. Good isn't making a choice between heat or light

Good inst comparing life in a rich country with that of a poorer country and saying we would behave like Bulgarians. Good is making sure people aren't left behind, that everyone has the same standard of life and the same chances to make a better life. Good is trying to make life better for us all, not our rich chums.

But hey, im all right jack eh?
--- old post above --- --- new post below ---
Edt2: I also wonder how many of the experts on this board have ever found themselves out of work, signing on and without enough money to survive. I have. I bet most of you haven't.

 

[ainsworth74]

that is your source is it? A graph from wiki? Righto!

To be fair the data set that that graph is derived from uses information from the Department of Energy & Climate Change (which can be found here) so I'm not sure you can dismiss it just for being from Wikipedia.

Do you have any sources for what you said?

 

[DarloRich]

To be fair the data set that that graph is derived from uses information from the Department of Energy & Climate Change (which can be found here) so I'm not sure you can dismiss it just for being from Wikipedia.

Do you have any sources for what you said?

yes my eyes.

there is no context to any of that. It simply shows a reduction in pits. Not why or how or what the overall objective was. I read some economic studies of the labour v conservative closures at university which basically boiled down to Labour closing the uneconomic/basket case pits, those with little or no supply left, those requiring the most investment to modernise, those with the lowest productivity etc

The Conservatives closed pits. The closure of pits under the Thatcher govrnment wasn't as a result of pits becoming exhausted, or lack of profitability at all pits, or a fall in demand for coal (although the energy generators privatization saw to that indirectly) or because of any natural decline in coal working or for want of skilled labourers. It was a political decision. The pit my uncle worked in had, by the NCB's own figures, over 100 years of easily mineable coal left. Its still there. They closed it despite good productivity and good if unspectacular finances.

I will see if i can find the papers on the net

 

[ainsworth74]

I will see if i can find the papers on the net

I would be most grateful if you could or similar ones as I'd be interested in reading them

 

[DarloRich]

I would be most grateful if you could or similar ones as I'd be interested in reading them

I should have "borrowed" them permanently from the university!

 

[Domh245]

What years were Labour again?

Apologies for the lack of understanding here (never really cared much about history!) but I can't see how this supports the idea of labour costing the most mining jobs!

I've roughly overlaid the party in power onto your linked graph, and it would seem that all the big drops happened under conservative leaders, bar the late 60s, but that would appear to have been a trend that carried straight through that administration!

the graph

 

[asylumxl]

While everyone is talking about the price of steel, I've noticed nobody has talked about the environmental impact. Surely in the long run it'd be more sustainable to keep heavy industry in the UK wherever possible?

For example, having rails for HS2 produced locally would reduce the distance they'd need to be transported and thus reducing the whole-life emissions of the project.

I'm no economist, so forgive me if I'm wrong, but I'd also imagine it'd be beneficial economically too. We would be keeping money within the UK economy rather than sending it abroad. Various car companies and even Hitachi Rail seem to think the UK has a future in manufacturing and export. Yes, perhaps products will cost more but as the old adage goes you get what you pay for.

 

[Aldaniti]

Very sadly, it looks as if it will be Scunthorpe's turn to be hit next week:

http://www.bbc.co.uk/news/business-34552523

Over the past 30 odd years our politicians have taken decisions and created a situation whereby they are now so paralysed by inability, blinded by ideology and suffering from lack of backbone, that they are now only able to manage the process of orderly decline.

 

[Chester1]

If the government bought the site (not the company) and employed some of the unemployed workers at a lower rate of pay then would it be viable?

My rule of thumb when people tell others that they are niave and dont understand why the Tories are wrong about everything is simply, if it works for you then great, if it doesn't then unfortunately nothing is going to change for a long time. I work in an office, using skills that are transferable into a range of jobs, for a wide range of organisations. I chose that path because its the direction of travel for both the UK and Western economies. Service industrys aren't difficult to get into if you have basic skills that every adult should have e.g. Being able to use a computer, being polite to customers/clients, being able to follow guidlines and pay attention during work based training. I have very little sympathy for people without those skills if they become unemployed, they are extremely basic skills for the modern world. Don't get me wrong, I am sure the transition will be painful, especially with intially lower pay but unless people have stuck their heads in the sand for 4 years then they wont be unprepared.

I know that sounds heartless, but its the way the wind is blowing and will do until at least May 2020, probably until May 2025 or 2030. People can adapt or be left behind. Its not fair but its the reality of whats happening. Id rather adapt. I don't support the Tories but I dont see the point doing a Canute.

 

[DarloRich]

I would be most grateful if you could or similar ones as I'd be interested in reading them

this is one of them but not the one i was after: http://www.seec.surrey.ac.uk/research/SEEDS/SEEDS67.pdf

and this is part of another: http://www.jstor.org/stable/4399210?seq=1#page_scan_tab_contents

 

[ainsworth74]

Ah interesting I shall have a read later!

I wish I still had full access to jstor Whilst at University it was a very good way of wasting time reading very interesting academic journals on all sorts of things.

 

[DarloRich]

Ah interesting I shall have a read later!

I wish I still had full access to jstor Whilst at University it was a very good way of wasting time reading very interesting academic journals on all sorts of things.

tell me about it! I read all kinds of stuff, in between the drinking I will keep looking. There were two or three more papers but I feel one or more may have been doctoral theses