A very good point, well made. Surely people must be happy with green taxes ensuring the country is attempting to meet climate goals? Although going by the towel thread not many people actually care?
Should the government do more to help the steel industry or....
- Thread starter Danthus
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A very good point, well made. Surely people must be happy with green taxes ensuring the country is attempting to meet climate goals? Although going by the towel thread not many people actually care?
Soldato
lol, good luck with that. The bank would have you repossessed and out on your arse within 3 months of you not keeping up payments.
Cameron needs to grow some balls and go rogue and just slap a tarriff of 200% on Chinese steel imports into the UK. He has got Jean Claude Junckers junk too far down his throat to do this though
Lots of good points but blaming "green policy" is simply wrong.
The ex-boss of nPower was on Radio 4 this morning talking about this. Energy prices here are something like 35 £/MW compared to 25 euros/MW on the continent. Germany for example invested in renewables in a big way and now has incredibly cheap wholesale electricity prices (occasionally reaching NEGATIVE prices).
Go to about 01.20.00 for the interview: http://www.bbc.co.uk/programmes/b074yzwh#play
Wind and solar have already reached grid parity in loads of places (including Germany, France, and even Sweden) despite renewable subsidies being 40 times LESS than those given to fossil fuels.
Map of solar PV grid parity (click for legend)
There's now about twice as much investment in new renewable capacity as fossil fuels, and the gap is increasing. Almost three quarters of new capacity last year (in the USA) was wind and solar, compared to about one quarter natural gas.
Investors wouldn't be pouring money into renewables if they were more expensive than fossil fuels and hurting industry. The idea that "green levies" are bad value is idiotic, especially when they're a small fraction of current fossil fuel subsidies.
The ex-boss of nPower was on Radio 4 this morning talking about this. Energy prices here are something like 35 £/MW compared to 25 euros/MW on the continent. Germany for example invested in renewables in a big way and now has incredibly cheap wholesale electricity prices (occasionally reaching NEGATIVE prices).
Go to about 01.20.00 for the interview: http://www.bbc.co.uk/programmes/b074yzwh#play
Wind and solar have already reached grid parity in loads of places (including Germany, France, and even Sweden) despite renewable subsidies being 40 times LESS than those given to fossil fuels.
Map of solar PV grid parity (click for legend)
There's now about twice as much investment in new renewable capacity as fossil fuels, and the gap is increasing. Almost three quarters of new capacity last year (in the USA) was wind and solar, compared to about one quarter natural gas.
Investors wouldn't be pouring money into renewables if they were more expensive than fossil fuels and hurting industry. The idea that "green levies" are bad value is idiotic, especially when they're a small fraction of current fossil fuel subsidies.
Soldato
which is a fair point, but then the IK government goes and buys cheap chinese stell which you know has not been produced in a "green fashion" for all its major infrastructure projects at the smae time that they are crippling their own national manufacturing industry through green levy. It's horse crap.
The energy usage would be null and void, in fact we'd be exporting electricity to the grid if money had been invested into the coke ovens.
The coke ovens "cooks" coal between 800 and 1250 degrees in a low oxygen atmosphere this outputs a gas, which contains high levels of carbon monoxide and ch4 and has a similar calorific value to natural gas. This should be used in a perfect world throughout the plant on boilers, flares and power turbines instead of natural gas.
But at the moment the byproducts plant is barely functional (when I was there its efficiency was at 10%...) so all the additions that should be removed and sold (tar,ammonia,benzine, nathpalene) are carried in the pipe work which blocks the pipes up and makes it hard to burn. Resulting in plants using natural gas in plant critical operations costing the company money.
Just an idea of the money that's being lost, a single lorry of benzene retails at £25k we were producing one a week, a fully working system will produce one a day, that covers the wages. We were burning of the ammonia instead of selling it.
There are bits and bobs like this all over the plant, like the hotmill. It's the biggest choke point in the steel works, it hasn't been upgraded since e 80s. Siemens came in 2012 to fit there kit at a cost of 80mil. This would have tripled out tonnage output as well as increased the amount of products we could roll successfully such as high silicone steel which goes for £120 per tonne. And the plant could run for a week before needing a roll cage instead of Dailey roll changes (2hours out everyday). But that was ignored because the blast furnace went over budget because we got a stupid engineering firm in who did things arse about face, Siemens ( control and instrumentation experts) were doing valves and abb ( very good valves were doing lagging and control systems).
The problem with the steel works is we promote brown noses and idiots out of the way whilst those that are good at there job are kept in the same positions. So there is no knowledge or brains Up top.
1. The cost of all British goods made from steel go up, reducing exports. Some goods become unprofitable, companies fail, jobs lost.
2. Tax revenues fall, pollution increases
3. UK publicly funded infrastructure projects increase in cost
When somebody else can produce something that satisfies demand at a lower cost than you, you have lost. You need to reduce prices or offer something better, or accept defeat. Long-term, structural, artificial support for industries is rarely economically viable.
Soldato
Spot on
Not only has our steel industry not changed to stay competative and not seen the modernisation and investment needed to keep energy costs down but our energy costs more due to poor investment in the power industry.
Laying blame on those imposing costs and talking about ways to not pay these costs while continuing to operate as we have done but with more government funding is stupid and backward. It is essentially catering to backdated industries and taking away any incentive to modernise, while paying out of our own pocket while we bail out the industry every time
But ofc standard anti - EU peeps with absolutely no clue on energy have their agenda to push.
Man of Honour
I actually agree and can give a first hand experience.
In 2007 Indesit announced that the Creda/Hotpoint factory in Stoke was no longer sustainable and would have to shut down but we'd go through lengthy talks before the final nail.
I said to somebody "What if we took a pay cut" and my work mates were horrified. My statement spread around the factory and one bloke came down from another department to have a right go at me "Hey it was only an idea".
I said things at the time about what was waiting for them outside but only a few would listen and agree.
Over the next few months the Job Centre set up a department with at least 20 staff and it was at that point it was leaked that at least 80% of the workforce were illiterate. Their were colleagues I'd seen for over 20 years with a daily paper but all they could manage to work out was the Horse Racing or look at pictures.
Staff were then coming back to the factory floor realising any job they got was going to be minimum wage and we were on a great wage at the time.
A factory ballot was taken with 95% of the work force voting for a pay cut but the Italians came back and said we would have to work for around £2/hour to make it work and obviously that wasn't going to happen.
Short version:
1000 staff realised the jobs outside would pay minimum wage so decided to vote for a pay cut.
Mortgage companies can and do come to temporary arrangements with customers in financial difficulty. It's not in their interest to repossess the property when other options are available. It will of course depend on the individuals circumstances and previous credit. But it was not uncommon during the 90's housing crash to do so.
Option 1: A person is made redundant. They can't pay the mortgage and have no long term prospect of doing so. The mortgage company would have course start reposession.
Option 2: A person has a significant wage cut. They will look for another job longer term but would like to come to a temporary agreement with the mortgage company. This may include paying only interest on the loan for a few months and then extending the term of the mortgage so the bank gets paid in full by the end of it. If the mortgage company agrees to the temporary arrangement then they get paid in full by the end of the term. If the company won't consider the agreement then they will have to reposess the house. Then what? Who else will buy thew house in an area of sudden mass unemployment and redundancies? The propoerty will be worth a lot less because of the local circumstances. The mortgage company would have to sell the reposessed house at a significant loss due to lower market value. They lose out compared to coming to a temporary arrangement.
I wouldn't want to be in either position but I'd prefer option 2 to option 1. Good luck isn't required. The mortgage company doens't really care about the customer but faced with a financial loss they may consider alternative arrangements to prevent their loss.
1. How do you work that one out?
2. Tax revenues from energy falls, but being more competitive means more jobs, which means more Income tax and Corporation tax income.
3. It's well known that correct investment in infrastructure returns more for the economy which sources it than the cost of creating it. By using EU sources you are getting better quality products, generating jobs and ensuring the profits stay local.
China can't price at below cost forever. The UK needs to weather the storm.
Associate
I agree except UK should only buy UK steel.
Totally agree on that one.
Man of Honour
Can you comment (sorry if you already did, haven't read every reply) on the quality of steel we're (capable of) producing here in the UK vs whatever China's flooded the market with?
Like in real, factual terms, rather than "Theirs is crap, lol"
Soldato
People will complain one way or another (green taxes vs industry feasibility), you can't really win.
Soldato
1. This would work if the cost of steel was lowered directly or indirectly. Until then, you are just shifting the cost to someone else rather than reducing it.
2. Stupid idea. The idea behind the tax is to encourage energy efficient investments and modernisation to industries which are outdated and contribute significantly to environmental issues. Take away the cost and you take away the incentive to develop and invest in the industry to cut the cost. Subsidising energy tax is an on going cost which is HUGE and the cost gap between UK steel and other steel will only get larger as they develop their industry and we pay out of our pocket to keep an outdated neglected industry afloat.
3.Good idea but a workaround that could lead to projects being neglected due to increase costs. Requires the cost of teh steel industry to be tackled before implementing to avoid this
4. A fair move, though not a solution
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1. If the price of a raw material goes up, the price of goods made from it go up too.
2. That argument is illogical, as we generate income tax and corporation tax income from industries that do not benefit from considerable state intervention. Having a steel industry that subsists on state intervention is less tax advantageous than having a non-steel industry that is not heavily dependent.
3. If the better quality of EU steel was worth it's price for the application, it would be bought instead of Chinese steel. Stimulating job creation can be good, long-term structural and artificial support for jobs is not. It creates a bubble of self-delusion that eventually bursts when the rest of the economy cannot sustain it anymore. Taxing everybody else's profits to keep some profits local is nonsensical in the long-term.
China can price below cost for as long as they like, and we benefit from cheap steel as a result. If Chinese companies and workers no longer want to work long hours in poor conditions and generate small/no profits, then prices will rise, and the viability of UK steel will change. If this was a two or three year long situation then 'smoothing out' that economic reality (with state intervention) to match the reality of the investment required to build factories, train workers etc. would be reasonable. However, China has been out-producing at lower-cost for decades, and will continue to do so for the foreseeable decades.
Ultimately, there is a limit to where we can invest, and rather than trying to produce steel in competition with China, we could invest further where we can and do successfully out-compete them, in order to ensure we retain that edge.
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Soldato
I really can't see the Tories supporting the Steel industry and will be too late to wait for the next Labour government. Maybe we need to turn to Europe for help.
Andi.
Andi.
Are you happy with then paying a significant increase in prices on goods which use expensive UK steel?
Soldato
Are we capable of supplying that steel?
I can imagine we import a lot while we don't have the capabilities to produce what we use even if we forget about cost.
Anyone have any idea? I genuinely don't know, for all i know we produce more than we use but i think its likely the other way round by a fair margin
I can imagine we import a lot while we don't have the capabilities to produce what we use even if we forget about cost.
Anyone have any idea? I genuinely don't know, for all i know we produce more than we use but i think its likely the other way round by a fair margin
Soldato
It'll probably cost less to the tax payer to pay those workers to sit at home that prop up that loss making business
On a more realistic note that should shrink the plants and specialise the production there and support that. China can do all this easy stuff cheaper and if we try to take them on they will just lower their prices again and again to maintain their production and growth rates
As to resurrecting a Coal sector again - I for one and glad we have stopped digging that stuff out the ground to burn. Nuclear is probably the way to go - I imagine the same mount of pollution just concentrated into a smaller area
On a more realistic note that should shrink the plants and specialise the production there and support that. China can do all this easy stuff cheaper and if we try to take them on they will just lower their prices again and again to maintain their production and growth rates
As to resurrecting a Coal sector again - I for one and glad we have stopped digging that stuff out the ground to burn. Nuclear is probably the way to go - I imagine the same mount of pollution just concentrated into a smaller area