If a simple soul like me can see the need for contingency plans, then surely the govt has economic experts who can point out potential risks and come up with similar contingency plans for strategic industries – otherwise what’s the point of them?

Businesses barely understand the obvious risks that face their own business, let alone the hard to predict ones. It’s completely unrealistic that government should understand the businesses of others in a variety of sectors well enough to prepare contingency plans is unrealistic.

teamhurtmore – Member
…As you indicate if Javed was that impressive, he wouldn’t be wasting his time being business secretary – he would be in Monaco already

Well he can’t have my lovelies or grapes, but he can have the bankers and the used champagne. And he must sit downwind from me because onions and bean tacoes have consequences.. 🙂

As you indicate if Javed was that impressive, he wouldn’t be wasting his time being business secretary – he would be in Monaco already

THM much as I admire and agree with your low opinion of politicians, your unfailing faith in economics and business is hardly borne out by facts is it? Economists and business people, and businesses and the private sector as a whole get things spectacularly wrong so often it’s difficult to lend any credence to anything they say over what politicians do. I don’t want to start another banking debate, but if what you say is true then surely the banking crisis and all the catastrophic results from it would never have happened?

unfailing faith in economics

Ask 4 economics a question get 5 answers

banking crisis and all the catastrophic results

The banking crises of 2008 was small beans compared to the 1929 crash and imo history will show 2008 was nothing compared to the Greek default of 2017/18 (?). Its all relative and economic cycles are normal

Aye boom and bust is normal within the fantastic market system of capitalism

Predictions of Greek/EU/Euro decimation are your ask 4 economists question with the added flavour of their own political views drastically altering the opinion.

Good post Daz

Few if us have any respect for politicians but the argument that the market is perfect/will sort it – dark satanic mills anyone?Sweat shops? CHild labour? – is seriously flawed. Regulation is a reaction to what it delivers which is , often and certainly if left unfettered, morally repugnant- at its extreme to all- at its margins we are back to ones own personal politics.

When I was in business I had contingency plans for all sorts of eventualities – including a bank crash

What was you contingency for that? You built pens so you could barter for livestock?

your unfailing faith in economics and business is hardly borne out by facts is it?

My what? What on earth does that mean? You might as well say you have unerring faith in fish or dogs or any other very broad “catch all”. Economics is simply a discipline that “helps” people in their every day task of allocating scarce resources. We are all economists by definition and that makes it a very broad church. Ditto business.

Economists and business people, and businesses and the private sector as a whole get things spectacularly wrong

You mean they are fallible? True…

so often it’s difficult to lend any credence to anything they say over what politicians do.

May be, may be not. As above tends to be advisable to use some discretion. But successful people tend to learn as much, if not more, from mistakes than from failures.

I don’t want to start another banking debate

Phew

but

There’s always a but isn’t there?

Jamba – the coming Greek defaul? Where do the exposures lie now? Compare that wth the utter devastation of the Greek economic and social life that they (especially the young) have experienced – all caused and exacerbated by a flawed political concept that flew in the face of economic reality. Occasionally you…edit, must not feed…

Anyway, Marrs on in a moment and there’s bound to be a nice politician on with all the answers. All will become clear no doubt.

Guardian now reporting losses are actually £2.5 million a day, pension, last year £129 million was pumped in the pension scheme, which has a current liability of 14.5bn.

Oh, and earlier this year, industrial action was threatened when Tata tried to close the pension scheme. Oops.

Cliche but

a pensions expert, said Tata Steel’s UK operations are a “pension fund with a business tagged on”.

Oh Mason v Flanders on Marr……how will chippy fair again his erstwhile predecessor?

Papers this morning reporting government new “rules” re buying British. New procurement rules. I wonder how they define British – some are very unhappy if that includes foreign ownership 😉

14.5 billion? How many ex steelworkers are there? Or is the heat in possession of some restorative quality that extends your life by 200 years?

14.5 billion? How many ex steelworkers are there? Or is the heat in possession of some restorative quality that extends your life by 200 years?

Flanders wins by a KO in first minute. Sense above vitriole. No wonder she is paid £400k (apparently) and he is stuck in batter.

Marr to John McD….”and specifically….” 😉

14.5 billion? How many ex steelworkers are there? Or is the heat in possession of some restorative quality that extends your life by 200 years?

Lets see.

There’s around 130 000 workers in the fund. 14.5 billion pounds, so a bit over £100 000 in the pot per person.
£100 000 on the open market will buy you an annual pension of around 4-5k I guess.
Of course, those workers will be retiring on annual pensions of a lot more than 5k.

outofbreath – Member
“When I was in business I had contingency plans for all sorts of eventualities – including a bank crash”
What was you contingency for that? You built pens so you could barter for livestock?

I was in North Queensland, no need to barter for livestock when feral game is so readily available and fish are thick in the water. 🙂

For a bank crash I expected a return to normality after 2-3 months for the banks that survived, but a longterm recession. And the strategy for that was:

Businesswise – I owned all stock and property and ran no accounts that could not be paid out of ready cash. I worked on the principle a bank crash would be temporary, but the following downturn probably longterm.

Personally – I adopted the practice of some Mormon friends had of having a few months supply of food and essentials in the home.

And for when everything totally crashes, a bicycle. 🙂

Vinneyh are there really that many active members?

Also the liability is only one side of the equation, the pension scheme will have offsetting assets.

Quite surprised there would be a massive deficit on a British steel scheme given (I assume) high mortality rates, but like British coal.

Being a child of the good lady Thatcher I’m suitably critical of loss making businesses, however you live and learn and should that approach be applied to UK plc we would be shutting up shop completely and moving to India.

So whilst we may be able to shuffle debt around long enough to retire with comfort our kids are probably going to need this steelworks to make stuff when the pound is devalued sufficiently to make imports impossible, the ponzi sheme of selling that stuff to each other collapses and our oil investment are worth jack.

If ever there was a bubble waiting to burst its here….

https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments

Getting lectures from a boy who’s never had to balance a houshold budget just adds to the farce. 😉

So both politicians said essentially the same thing on Marr

Steel is an important industry – strategic if you want a better sound bite
Gov has a role to play in terms of facilitating the sale to a new buyer
We support measures to prevent illegal dumping of steel

Phew, no more need have petty party politics getting in the way.

Time for the tough negotiations to start.

Humour me here please people, I’ve skimmed this thread and it seems there’s no easy option.

What would happen if the government bought out PT (and possibly the rest of the steel making industry) as a supplier for capital projects such as road/rail/defence etc? They could supply steel for government contracts with the necessary adjustments in the contract price to reflect the fact that they’d be getting the steel free.

If Tata are losing a million a day, has anyone worked out how much would we be spending on supporting people by paying them benefits and supporting them with the problems that long term deprivation results in? If it comes out at around 365 million a year then it would be worth propping up PT.

Living in a part of the prosperous south in my luxury mansion sipping champagne with gold flakes in it and eating unicorn steaks (I **** wish!) I’ve seen what closing a big plant can do to the area surrounding it as Ford’s Dagenham plant, and the surrounding satellite plants, are now a shadow of what they formerly were, even in my lifetime. At least here though people have some other options to move into, what it will do to a place like PT where the whole area depends on the plant for its economic existence doesn’t bear thinking about. Some of the inlaws live in Scunny as well so they could be next.

Of course, those workers will be retiring on annual pensions of a lot more than 5k.

The pensions issue is an entirely separate one. For decades the entire country, both public and private sector alike doled out pensions which were way beyond what they could afford, in effect borrowing from future generations on the ridiculous assumption that the good times would continue forever. It’s hardly fair to now punish pensioners of individual businesses or sectors when the problem was a systemic one, and grossly unfair to use that as a stick with which to beat steelworkers with.

edit: I’ve just read that the govt could shoulder the pension liability to enable a sale. That would seem like the proper approach.

Vinneyh are there really that many active members?

Active means alive. There will be many ex employees who are now working elsehwere who are entitled to a pension

Re losses per day £1m vs £2.5m shows how quickly losses can change, how hard they are to quantify.

@dazh govt has a scheme now to protect pensions so they (we) are on the hook whichever way if the company goes bust

@spurs from what I understand the losses are about £90k pa per worker although this only includes steel workers not the supply chain

@tmh will catch Marr later sounds another interesting show

Since there is a lot of talk re money and economics – it’s worth remembering that economics is a social science and therefore very much related to politics i.e. the politcial stance of an economist will influence their economic work.

What would happen if the government bought out PT (and possibly the rest of the steel making industry) as a supplier for capital projects such as road/rail/defence etc? They could supply steel for government contracts with the necessary adjustments in the contract price to reflect the fact that they’d be getting the steel free.

Governments are rubbish at business; they’re not even that great at government.

How much steel do you think the government buys in a year?

How dare you – some of us hold fond memories of when the civil service etc. worked under similar procurement rules

Montego vans with rusty doors hinges from new, creak. Long afternoons spent sleeping in the sun when the pickup had broken down. Passenger window dropping three inches when you hit a bump.

Halcyon days I tell you! 😀

Dazh, for a separate issue (?) pensions seem to playing a remarkably central role!!

It would be good to have some help with some of this logic. When foreigners own so-called strategic industries in the UK or are awarded (unprofitable contracts), that is taxpayers subsidising Jonny Foreigner and a scandal. But when we use tax payers’ money to take on a foreign company’s liabilities, to minimise their losses and to facilitate a sale to (most
Ikely) another foreign company that is perfect logic.

Confused? Me too…..

After the original hubris from Tata which has seen them over-extend themselves, the new managers know how to grab governments by the short and curlies and squeeze hard. With the T-K merger in the offering, Tata would be happy for PT to close so they can play hard ball knowing that they have the politicians in the do-do!! And our politicians squabble and stare at the headlights.

Governments are rubbish at business

The Chinese government seems to be considerably better than anyone we have private or otherwise.

Selling things below cost is rarely good business

The Chinese government seems to be considerably better than anyone we have private or otherwise.

@wilburt – economy originally built on ultra low cost labour, zero welfare inc pensions, rampant corruption, massive real estate bubble, huge financial excess inc excessive lending bank and non-bank 😳

Not so great at deomcracy either

Its actually a very good way of gaining market share and putting your competitors out of business.

@wilburt – economy originally built on ultra low cost labour, zero welfare inc pensions, rampant corruption, massive real estate bubble, huge financial excess inc excessive lending bank and non-bank
Not so great at deomcracy either

Is that China or the UK? 😉

I’m not advocating their methods btw just suggesting goverments are no worse than private groups at turning a profit, operations is operations they can be well or poorly run by both.

Selling things below cost is rarely good business

As a short(ish) term measure to put your competitors out of business, before becoming a monopoly supplier, then hiking your prices, it’s incredibly good business.

Just ask Starbucks. Or any of the many many independent coffee shops they put out of business by doing precisely this.

Government is going to offer financial support to any new buyer.

Why is Tata buying a German steelmaker?

Binners you at a hoot. It’s hard to tell if you are being serious especially since your constantly attack Jamba for making things up or just have a laugh/taking the piss.

The coffee industry has been one of the mos remarkable growth stories of the past 20 years. Assumed to be mature in 1999, it has been transformed with sales of almost £8bn with 40% from specialists outside the big chains. It’s also forecast to double again in size in next 10 years.

The crap UK cup of brown liquid has gone, replaced with almost too much choice and a greater quality. Pubs and restaurants have also had to raise their game.

Most railway stations I use have competition between entrepreneurial specialist and the big chains.

So while some lament the passing of the crap corner Caff, the rest of the world has moved on. Still we could have protected the market and stifled completion and stuck with brown sludge.

That’s not the specific aspect of the Starbucks model that binners is referring to…although on a net basis I don’t think Starbucks put any coffee shops out of business…in fact quite the opposite

Understood @wilburt

Don’t get me started on Starbucks – one giant tax dodge and a horrible product to boot

Tata has a good Ditch business apparently and a poor UK one. A merger of the Dutch business with ThyssenKrupps is believed to be a great match (again apparently) and will also yield econs of scale.

They screw PT in the meantime despite the UK gov bending over backwards to be rogered help. Take UK capacity out and bob’s your uncle the Dutch and German businesses look even stronger.

It’s not a mystery to Mr Mistry – they have a cunning plan and by some accounts a 6 week timetable. Rattan Tata over stretched the company, Mistry comes to the rescue (for them at least)

They kick started a coffee revolution rather that killing the market and many entrepreneurs enjoyed the ride. The sad old caff was exposed for what it was – pretty crap.

http://www.worldcoffeeportal.com/ThoughtLeadership/LatestNews/Booming-UK-coffee-shop-market-outperforms-UK-retai

The UK coffee shop market is dynamic and rapidly growing. The report shows that the UK is becoming a nation of coffee connoisseurs and coffee shop visitors drink an estimated 2.2 billion cups of coffee per year in coffee shops. Costa is the number one seller of speciality coffee with an estimated 169 million cups sold annually and has also, for the sixth year in a row, been voted the nation’s favourite chain by Allegra’s independent panel of consumers.

Coffee shops are playing an increasingly important role in the UK, enhancing the social vibrancy of a community and contributing significantly to employment and the economy. The third wave/artisan coffee has raised consumer expectations about coffee quality and store design and the most successful brands are responding to this trend.

The artisan independent segment is becoming far more regionalised than ever and strong artisan independents are expanding into small chains with the support of consumer funding and traditional investment, following the success of leading small chains such as Taylor St. Baristas and Grind & Co.

What an awful example to us all – bloody capitalists

THM just a shame the two big players in coffee you name shirk paying UK taxes in any meaningful manner

True, but while they don’t sell below costs as Binns was implying (GP margins are @50%) their OP margins are diddly squat. So increase the tax bill – fair enough, we all feel rosy about that – and where does it come from? Lower wages, higher prices or lower dividends? You decide….but it doesn’t take too much imagination does it?

But fair enough to knock Stabucks but look at the impact on the industry in the UK…in addition to the rapid growth we are also world leaders in supporting Fairtrade coffee. So all-in-all a positive impact with coffee massively outperforming the rest of retail – an almost mirror image of steel.

BTW – you may want to check Costa’s tax record, it’s claimed to be a reason for gaining mkt share off S’bucks

jambalaya – Member

Don’t get me started on Starbucks – one giant tax dodge and a horrible product to boot

I want to agree, then every so often I have a starbucks caramel macchiato and all is forgiven. Embezzle all you like folks.