What should be done for the steel industry in Port Talbot?

Original post by Bill_Gates

What should be done for the steel industry in Port Talbot?

I personally think they should close it down.
- We can't afford to nationalize it, the UK government is broke.
- It's a low value added product
- 80% of the UK economy is now in the service sector (i don't agree with it but it is what it is).
- We have close allies who produce steel plus China has been very efficient in the area for years.
- Putting on tariffs for steel might lead to a trade war we might lose out on in other areas of the economy i.e car sales to China for example.

Your views?

I agree.
But even if we could afford nationalisation it's a dead industry for us, loss making and its simple business to know when you can't compete so I don't know why people even thought of that as a possibility.
Why would we put tariffs for steel when China are giving it in huge quantities for a lower price compared to domestic steel? In my eyes I'm surprised it lasted this long.

Reply 22

3121

Original post by Jammy Duel

No matter who is in power the government is always broke as it never has any money

Posted from TSR Mobile

Blair was running surpluses

Reply 23

Bill_Gates

OP

Original post by Dirty Dawah

Don't be absurd, in 20 years time low skilled work will be automated, the rich will be trying to reduce the number of low skilled workers who will be totally obsolete.

I'm hoping that by then we'll have armed security robots with guns to keep order.

erm not really.

Reply 24

chemting

16

Original post by Dirty Dawah

A part of my dislikes the casual racism, another part of me likes the plan and wishes it were true

If only there were a merchant with a magic printer who can create money from nothing, so we can pay off out debts we racked up kicking ass in the middle east.

Twas a joke :smile:

If there was someone who can create money out of nothing, why would he give it away for free...? Something to ponder upon.

We wouldn't be able to live with the inflation, on the other hand I wouldn't mind a £1 billion note... :beard:

Posted from TSR Mobile

Reply 25

Dirty Dawah

Original post by chemting

Twas a joke :smile:

If there was someone who can create money out of nothing, why would he give it away for free...? Something to ponder upon.

We wouldn't be able to live with the inflation, on the other hand I wouldn't mind a £1 billion note... :beard:

Posted from TSR Mobile

I know, I like your posts :smile:

It kinda works for America so long as we have things like the petrodollar. They can literally export dollars like they're goods with intrinsic value and not suffer inflation.

Reply 26

Jammy Duel

Original post by zayn008

Blair was running surpluses

And the government still had no money.

Reply 27

chemting

16

Original post by Dirty Dawah

I know, I like your posts :smile:

It kinda works for America so long as we have things like the petrodollar. They can literally export dollars like they're goods with intrinsic value and not suffer inflation.

Lol thanks :smile:

.

True 'Murica is always an exception :tongue:

The world's reserve currency goes far... the $600bn isn't used for nothing.

Word on the street is that they'll lose their reserve status and the petrodollar may collapse relatively soon - it'll be a Civil War then...

Reply 28

MagicNMedicine

20

Original post by Bill_Gates

- We have close allies who produce steel plus China has been very efficient in the area for years.

China "very efficient"?

Chinese steel is dominated by state-owned groups, its mostly owned either by provincial government or central government.

They have not privatised the industry and allowed market discipline to drive up efficiency, as a result they have overproduced steel at the cost of enormous subsidies from the state.

There is not enough demand even in China for all this steel, so they have tried to reduce their losses by selling this steel at a loss in other markets like Europe.

Now if this is a model of efficiency, why doesn't the UK government nationalise the industry, pump it full of subsidies from the state, and if it overproduces steel then just sell it super cheap (even at a loss) in foreign markets?

Reply 29

Original post by LordMallard

Offer apprenticeships to the workers that lost their jobs and money to the regions affected by the closures, to help them during the transition. Apprenticeships could be offered in construction as we need workers to build houses. It would also mean that we don't have to rely on immigration to fill construction vacancies.

This would be a good idea, if the workers who are losing jobs are paid a fair share. What I mean by this is you can not pay all your household expenses on £3.30 a hour, its far too little. If we stopped issuing work permits we wouldn't need immigration to build houses.

Reply 30

Original post by zayn008

I agree.
But even if we could afford nationalisation it's a dead industry for us, loss making and its simple business to know when you can't compete so I don't know why people even thought of that as a possibility.
Why would we put tariffs for steel when China are giving it in huge quantities for a lower price compared to domestic steel? In my eyes I'm surprised it lasted this long.

To protect UK Jobs maybe?!

Reply 31

BenC1997

9

A government which is already running the risk of not achieving a £10 billion surplus by 2020 should definitely not take on a production site that's losing £1 million every single day.

Reply 32

Original post by Jammy Duel

Are you suggesting that the Chinese and Indians would engage in price fixing rather than trying to take the business for themselves?

Yes thats what I'm suggesting- they will both hammer prices up and there would not be too much difference.

Reply 33

Jammy Duel

Original post by ChildOfTony

To protect UK Jobs maybe?!

At what cost? The steel industry employs less than 20,000 people now. You're looking at a fairly average wage so total tax revenues are going to be in the region of £10,000 each (a not insignificant part of which will remain in unemployment), so you're looking at a tax hit of about £200m if the whole industry goes, if we consider benefits, even if they are all on the benefit cap the total cost doesn't even hit £750m. On the other hand, even if the cost of Chinese steel is only a little over 1% less than British steel that is how much the nation saves, but we can jump over to the tax side of things and still need it only a few percent. On top of that, we would do best not annoying the Chinese given just how much they invest in the UK, again, a loss of just a few percent of this investment is a far greater cost than all the steel jobs in Britain.

Reply 34

Bill_Gates

OP

We should sell Port talbot to India or China - the whole area leased on 5000 years

Reply 35

Original post by Jammy Duel

At what cost? The steel industry employs less than 20,000 people now. You're looking at a fairly average wage so total tax revenues are going to be in the region of £10,000 each (a not insignificant part of which will remain in unemployment), so you're looking at a tax hit of about £200m if the whole industry goes, if we consider benefits, even if they are all on the benefit cap the total cost doesn't even hit £750m. On the other hand, even if the cost of Chinese steel is only a little over 1% less than British steel that is how much the nation saves, but we can jump over to the tax side of things and still need it only a few percent. On top of that, we would do best not annoying the Chinese given just how much they invest in the UK, again, a loss of just a few percent of this investment is a far greater cost than all the steel jobs in Britain.

I'm a believer of self sufficiency. I do not like relying on other countries for resources if something went wrong we would be screwed. I know its an industry losing money and is insolvent for the government to nationalise, but its down to personal preference. Tata employees will lose jobs and never get ones matching the pay there. I have a friend who works for Jaguar land rover- another company Ratan Tata owns- he does something fairly minute in the operation and still gets paid in excess of £25,000. Its to expensive to nationalise but it's sad to see the jobs go. its one of those really where your in a catch 22 situation. China invests a lot of the QE into England- especially Birmingham, If osbornes stunt makes them withdraw from Birmingham and go to Manchester I would be pissed off. But they over produce we need to cut the supply somehow to increase the demand and price of home supplied steel. If you ask how- go and look at Germany who export loads

Reply 36

Original post by Bill_Gates

We should sell Port talbot to India or China - the whole area leased on 5000 years

It would still be unsustainable- it is the energy bill which is excessively over priced , the wages of the employees would be a big big expense and Britian can not compete with china's finest sub-standard steel to be honest.

Reply 37

ChaoticButterfly

20

Original post by Dirty Dawah

Usually I would let failing businesses go under, but steel is important and pretty much every first rate military power produces its own steel so in the event we ever did get blockaded, we could still produce weapons and armaments. Think I am crazy and sabre-rattling? I don't care, go to hell.

When we have nuclear weapons because the future is an uncertain place I think it is entirely reasonable to keep certain industries on home soil.

Reply 38

Dirty Dawah