British steel- I'm being abit thick here. Please explain.

lets not forget they aren’t in power so can’t actually implement anything,

If they have a way to make PT steel profitable in the foreseeable future all Labour have to do is explain it.

Then management can simply borrow the required investment against future profits.

Or, more likely Cameron would step in and take the credit.

Power is not needed to solve this problem – merely the idea.

Power is not needed to solve this problem – merely the idea.

And I thought I was an idealist 🙂

Seriously though, if that were true, why isn’t the request from labour to recall parliament to debate the issue being entertained? If ideas are all that is required, isn’t that the place to thrash them out?

And as for the bonkers comment..

I have no idea. I hope that they are

Negotiating hard with Tata
….with EU
….with potential buyers, if any

Reviewing the “restructuring plan” and considering what can be done to make it work
Estimating various scenarios for ultimate liability to UK tax payer

Re-examine the history of past interventions which is mixed a best – see today’s FT Lex column – and learn from past (and many) mistakes

That’s for starters as I have been at works drinks and a bit worse for wear!

Seriously though, if that were true, why isn’t the request from labour to recall parliament to debate the issue being entertained? If ideas are all that is required, isn’t that the place to thrash them out?

Someone wise enough to have the solution to a problem everyone else finds intractable is probably bright enough to pop an e-mail to the management/tata/steel union.

I suspect Civil servants come up with all the ideas anyway.

The Labour plan is perfect as they are in opposition and there is no chance they will have to put it into action and be judged on it. Temporary nationalisation – really that’s quite fabulous – so who takes it private again and when ? In the meantime it sucks billions. Also as I said whatever we do the Chinese can do to and more so, its a race to the bottom.

@outodbeeath – “borrow against future profits” – any lender will not lend against fantasy future profits particularly in an industry with over capacity in a shrinking market.

Labour want Parliament to be recalled so they can showboat. Parliament can do diddly-squat about the situation.

The labour party and unions have proposed a plan of temporary nationalisation, followed by restructuring and appropriate tax breaks and other financial support leading to eventual re-privatisation.

Sorry but with respect Labour’s proposal is complete bollocks.

You can’t “restructure” a business back into profit when the single biggest Opex cost (energy – which is more than half of total production cost) is 50% higher than competitors.

Unless the energy price is dealt with there cannot be transformation or anything else that would ever lead to a “re-privitisation”, and Labour have absolutely no proposals for how the differential in Energy Opex can be dealt with – pretty much every aspect of their proposal has already been tried by the Belgian government to save a steelworks there and was subsequently ruled to be illegal state aid by the EU.

Of all those in the news tonight – Kinnock speaks the most sense in general – Chippy Mason getting slightly hysterical on N’njght in contrast. Kirsty deciding not to listen too…

mason currently showing his doesn’t understand commodity prices….muppett.

Among the long term plans, no one yet talking about how you reduce economic and social dependency on a narrow industrial base (leaving aside it’s competive position) – the ultimate folly at the heart of all this.

Chippy Mason getting slightly hysterical on N’njght in contrast.

You won’t like this then 🙂

I do find it hilarious that all the ‘serious’ types on here who go on about ‘bonkers’ plans to nationalise or who dismiss us ‘chippy’ northerners jump through all manner of logical hoops and contortions to argue against a pretty common sense view in the name of ideology. The same arguments which were completely abandoned (with good reason) when it was the banks in the firing line. Why not just admit that, as Mason says, you do not give a shit?

@dazh why don’t the government just announce they are putting up income tax by 1% across the board to pay for the rescue or how aboit a gofundme page for the £1m a day it costs to keep it open. Lets see how many citizens go for that ?

You are right perhaps some of us me included are being too “flippant” about what is a potentially devastating development. So if that is the case I apologise. However we need to see this situation in the correct global context andnunderstand there is very little we can do about it.

BTW the Mason piece about defense made me laugh – just how much steel do you think there is in a modern piece of military hardware like a jet, helicopter or drone ? Tanks perhaps but we don’t need a whole steel industry to make a handful of them, ditto ships

jambalaya – Member

@binners you are right in one regard, we could have a buy British policy for steel for construction … except that’s not allowed….

I’m sure the Brexiters will love to point that out…

The same arguments which were completely abandoned (with good reason) when it was the banks in the firing line.

Banking is a special case for all the obvious reasons, but even if it wasn’t banking is probably sustainable in the UK for the time being. Tragically, Steel production isn’t.

Its a bit rich of you to complain about others not seeing a way out, when you can’t think of one yourself.

A buy British policy will just saddle British businesses with having to buy Steel at uncompetitive prices, and so you get a knock on effect that will hamper other British businesses – or foreign business operating in Britain.

The real problem here, and it is the fault of every government we’ve had for the last 50 years probably, is that we’ve allowed large areas to become totally reliant on one industry and one facility/company. Ideally you want each area to have access to a broad and diverse industrial base.

I’ve got no problems with the UK government chucking loads of money at this problem – but not to save a business or industry that can never be competitive, i’m not sure that is the case with Steel or not if you were to take away the dumping issue, but I’d much rather see the government chuck that money at the people losing their jobs and the local communities that will be affected in retraining people and doing what they can to invest in the future and attract new businesses and industries into the area. It was good news to hear that Aston Martin and TVR will be building new facilities in Wales. It is things like this that are the future for these areas that have become reliant on one industry, and not artificially propping up a hopeless existing industry or business that will never be able to stand on their own two feet and don’t have a viable future. That is just wasting taxpayers money and that is a reckless and unacceptable thing to do for any government. They should treat every penny of taxpayers money like a bar of Gold Bullion.

The whole Northern Powerhouse thing was not about propping up and attracting the old heavy industries of the past – it is about new high technology, high value industries – the things that the UK is genuinely world leading and world class at. More Silicone Valley than Steel City. We can’t hope to compete with the Developing world in labour intensive old heavy industries – the average British worker earns about ten times more than their Chinese counterpart. There just is not a business case. And it’s a vision that will be a number of generations in the making rather than an overnight thing. You can’t re-balance a nations economy intantaniously – it trickles down to how we educate our kids as we bring up the next generations with the necessary skills and knowledge etc.

If there was carbon tax (which is also good for the environment) surely British Steel would be cheaper than Chinese steel. Chinese steel is cheaper, but the price gives free/cheaper shipping.

Carbon tax wouod be good for environment and local business…and one cannot ignore the long term environment issues over business making cash in the short term (because I’m sure the argument to this point will be our export economy)

Why not just admit that, as Mason says, you do not give a shit?

Ah, so there is now a monopoly on giving a shit? Marvellous. Equally “hilarious” will be the criteria used to define it….

Almost as good as Mason lambasting the (admittedly lightweight) business secretary for not being able to delivery long term stability to the owners of business that is subject to volatile commodity prices. Lazy rhetorical nonsense.

The real problem here, and it is the fault of every government we’ve had for the last 50 years probably, is that we’ve allowed large areas to become totally reliant on one industry and one facility/company. Ideally you want each area to have access to a broad and diverse industrial base.

Ssh, I mentioned that earlier but think I got away with it.

We’ve allowed areas to become dependant on one industry. True but the flip side is we’ve allowed London to suck up everything else.

Why not move parliament out of London? Say Middlesbrough? Have HS2 starting there?

With energy costs why not build a **** tidal lagoon in PT? Free energy.

I’m very surprised the brexiters are not making more of this. IIRC USA has 233% import duties on Chinese steel.

And how is the US steel industry faring behind those tariff barriers?

The whole “area reliant on one industry” rhetoric is completely misplaced. If one looks at the history of industry, like businesses tended to group themselves together round the sources of raw materials, other geographically significant features (for example, rivers) or an abundance of labour. Blaming successive governments in the second half of the 20th century for the economies of production employed at the start of the industrial revolution and even many centuries before is ridiculous.

😯

If one looks at the history of industry, one also sees what happens to those who fail to recognise when the original rationale for location disappears. Boiling frogs anyone?

Of your three factors – RM supply no longer relevant, other geog features not sure, and supply of labour – well smell the coffee, steel has long since gone from being a labour intensive industry.

So it is massive folly to ignore this and allow any region to become economically and socially dependent on an industry in which there is so little, if any, long term competitive advantage.

Northern textiles???

@thm it doesn’t matter. The US can do something and our hands are tied is the narrative that brexiters could be using.

Boris visit to PT?

John Redwood singing national anthem outside blast furnace?

The whole “area reliant on one industry” rhetoric is completely misplaced. If one looks at the history of industry, like businesses tended to group themselves together round the sources of raw materials, other geographically significant features (for example, rivers) or an abundance of labour. Blaming successive governments in the second half of the 20th century for the economies of production employed at the start of the industrial revolution and even many centuries before is ridiculous.

Yes, and have you seen the size of a steel works? They’re the size of a town. It’s not like you can have lots of small steel works, one on every corner in every town.

CFK, so the US have steel tariffs and it has FA impact on their domestic industry. So you are correct, easy answers and empty rhetoric are indeed perfect for the Brexit camp

So it is massive folly to ignore this and allow any region to become economically and socially dependent on an industry in which there is so little, if any, long term competitive advantage

Northern textiles???.

Do you have the remotest idea how these industries get established in the first place? Their are very valid reasons. Access to power, to raw materials, to labour, transport links.

These may make little sense in an economy now based on sitting in coffee shops, on the internet, remotely selling your skill set to someone the other side of the planet, but they made a hell of a lot of sense at the time.

My problem is that as with northern textiles, mining, steel etc, over the decades these industries have contributed billions upon billions to this countries wealth. In some cases they can genuinely be what made this country what it is. Yet now they’ve served their purpose, and outlived their usefulness, they are treated as petty inconvenience. A nuisance.

And all those people who contributed to the economy all there working lives are now just a PITA that will appear on the unemployment statistics and be a drain on resources. . They will receive not a shred of acknowledgement or sympathy from government, and will be abandoned to the grim fate that awaits them as they are stripped of their dignity and their community implodes.

As a society, is this really the best we can do?

Do you have the remotest idea…

No, I prefer to rely 100% on your insight instead (hence the checks on accuracy). And thanks, I will re-write all the geog GCSE case studies on the industry that I have used over the past few years. All bllx, but fortunately the examiners are as thick as me.

at the time

Hmmm,

The whole “area reliant on one industry” rhetoric is completely misplaced. If one looks at the history of industry, like businesses tended to group themselves together round the sources of raw materials, other geographically significant features (for example, rivers) or an abundance of labour. Blaming successive governments in the second half of the 20th century for the economies of production employed at the start of the industrial revolution and even many centuries before is ridiculous.

+1

What is different now though, and for the past 1/2 century is that movement of labour has been restricted due to costs and welfare – I’m not saying that it is a bad thing to support folk where they live, but in the past workers (and bosses etc) had to move to where work was (whatever the cost).

We need to understand that and this is why you have to persuade (through cash) industry to move to areas of high unemployment.

Obviously companies can easily ‘do the merry-go-round’ though…

I would imagine many Brexiters like me don’t think the plant should be nationalised even if it where possible. I have already commented on protectionist import tarrifs, that’s not a solution either imo. As such as a Brexiter there isn’t a lot of poitical milage in the situation. The only political point I would make references Corbyn, he published on his now deleted blog that he was against the EU as it prevented nationalisation.

@binners is there not a natural cycle, a town grows from a rural village or port on an industry (mining, coal, textiles) it reaches a level sustainable on that industry. If that industry changes the town must change too or irs natural for it to shrink back towards its origins. Perhaps you can tell me what the owners of the Northen businesses did with their money (Castle Howard, Nidd Hall etc) ? The North of England receives a massive subsidy from the South East in terms of tax revenues etc, but its never enough is it ?

Perhaps you can tell me what the owners of the Northen businesses did with their money (Castle Howard, Nidd Hall etc) ?

They spent it all on whippets, pigeons, flat caps and pies? Come on Jammers…. keep up…. this is common knowledge.

The North of England receives a massive subsidy from the South East in terms of tax revenues etc, but its never enough is it ?

And we’re eternally grateful for the crumbs that fall from your table sir

*doffs cap*

THM – raw material supply is still relevant, because in PT’s instance a deepwater port was built in order to ship it in – I guess that’s a sign that the place was moving with the times. Continuing to use Port Talbot as the example, the site grew to keep up with demand from the use of local materials over 200 years ago, development of the dock, building of blast furnaces, introducing steelmaking and then the amalgamation that took place 100 years ago (to counter foreign competition as it happens). These were all business decisions which drove the place to the size and scale it is now. I think “allowing a region to become socially and economically dependent on one industry” misses the point: this government, and any of the past few decades didn’t “allow” it. It’s how most traditional industry has developed. What we’re seeing now is the failure of modern legislation to keep up in a global market. As many have already said, a free market only works for everyone if it’s a level playing field, which it isn’t.

My point about those 2 factors was that they’re the reason that regions traditionally saw clusters of similar businesses and industries. Sure, it’s less relevant now, but it can’t simply be ignored as no longer relevant since that’s how these places have developed over decades and in some cases centuries.

You’re right, steelmaking and rolling is no longer labour intensive – very few industries are these days – but there’s two parts to the labour side of it and you’re forgetting the skills and experience built up over (in some cases) a lifetime.

What’s your point with Northern textiles? Same influencing factors as I mentioned previously, then undercut by foreign imports?

I’m very surprised the brexiters are not making more of this. IIRC USA has 233% import duties on Chinese steel.

It would make no difference, we port far more from Europe than we do from China.

My point about those 2 factors was that they’re the reason that regions traditionally saw clusters of similar businesses and industries.

Agreed

Sure, it’s less relevant now

Ditto

but it can’t simply be ignored as no longer relevant since that’s how these places have developed over decades and in some cases centuries.

Not ignored no, but not the determining factor going forward either. Industries evolve as you describe and locations become more or less relevant with them. As we know large parts of the S Wales industry became locationally less relevance and locations changes as a result. That will never change.

Is Dundee still reliant on Jute, Jam and Journalism?

I think “allowing a region to become socially and economically dependent on one industry” misses the point

Well we will agree to disagree on that one, but I think for the people of Ebbw Vale in the past and PT now I fear that this is very much the point.

Those furnaces at port talbot use products that we manufacture in our company. the product that we manufacture is used in many and varied industries in the world. These products are made from the material that is made at port talbot (and other steelworks). On many high spec projects (oil/marine, Power gen, Nuclear) the projects specifically state no Chinese or Indian steel to be used due to poor quality. Just thought I’d mention it speaking as an actual manufacturer in the UK.

MT – there was an automotive production guy on the radio saying exactly this. He said that the car plants in the UK would never use cheap Chinese steel due to quality issues, so they’d now have to import that instead of getting it from Port Talbot, which would increase their costs

A question for Jambawibble and THM, do you think steel making is a strategic industry?

what is a “strategic” industry – uncle Vince tried to explain and he didn’t include steel, but he wasn’t clear.

Steel isn’t strategic or important. Credit default swaps are where its at!

what is a “strategic” industry

Estate Agents?

On many high spec projects (oil/marine, Power gen, Nuclear) the projects specifically state no Chinese or Indian steel to be used due to poor quality. Just thought I’d mention it speaking as an actual manufacturer in the UK

You don’t expect some shiney arsed money juggler to understand this do you ?

God help them if they ever need to replace steels in any structures around the city eh

And real answers?

As humourous as the glib responses are they don’t really address the question do they? It’s very easy to hide behind glib sound bites, especially as a politician, but actually hard to come up with proper answers.

Ducking the question?

Ok is steel making a vital industry to keep going come what may? THM You seem one of the more hawkish among the STW brethren, what are you going to make your tanks, ships, guns out of? Papier Mache ?

You don’t expect some shiney arsed money juggler to understand this do you ?

God help them if they ever need to replace steels in any structures around the city eh

Have you heard of Building Control Officers? Classification Societies? Warranty Surveyors?

If a “shiney arsed money juggler” though they could make significant savings by using cheap inferior steel, they would be doing it now.

I already said No earlier in the thread @Pigface