Should the government do more to help the steel industry or....
- Thread starter Danthus
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Soldato
Do you have a source for this £200 billion? Or are you talking about quantitative easing? That's a bigger number.
Soldato
A few points:
It is not the government's fault that the world commodity market is through the floor. Yes there could be state support but this would potentially push global prices down. The lack of ability to compete is also at a period of low energy costs. China also has the ability to out compete the UK in this front so price differentials will likely get higher should oil prices increase in future.
Labour began the bank bailout so you may want to share your anger among both parties.
Contributors to society are not viewed as dole scum and the most if not all here would agree that your situation is one that merits its use. Long term claimants who do nothing to try and change their situation are those that often attract disdain.
I have no idea of your age but you are an electrical engineer in manufacturing. If you are in any way mobile you will surely be able to find some new opportunities. I appreciate that not everyone in the industry can do this but electrical engineering is pretty transferable.
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Whilst I actually have a huge sympathy for the miners of the 80's,
(Scargill did them an utter disservice, and continues to do so to this day!)
The idea that "Thatcher killed Mining" is however a total nonsense! *
Consider...
Pick out the precise point on that graph at which "Thatcher destroyed Mining"!
*
I do agree that Thatchers policy on deep coal mining was wrong, but that is a subject for a different debate
Probably because it wasn't the entire banking sector that was being propped up. Barclay's got capital from the middle east, HSBC just moved capital from elsewhere in the group, Standard Chartered didn't get involved and I think Santander may have gotten support from Spain but I don't remember. That's 3 of the largest UK banks and the other major UK retail bank
You could argue the support through the BoE was propping up the sector, but that was for the wider economy and mostly guarantees to encourage lending.
In any case, in the nicest possible way, even if the UK steel industry collapses and never revives, the overall impact on the UK economy is nothing to compare to the FS sector collapsing. People may not like it, especially in the traditional manufacturing areas, but unfortunately that's the truth.
Soldato
I'm an engineer but all I see is market forces causing this. Steel is very cheap at the moment and if the UK business was viable it would have not have closed. There is a little bit of an opportunity with the Chinese investment as they will be looking for somewhere to put money in European steel to avoid the impending European tariffs that are going to be added to Chinese steel. The UK can live without a steel industry but unfortunately not without banks and people's money that are in them. Don't like it then put your money elsewhere.
I wasn't arguing for against bailing out the banks, I was querying Javid and his assertion that state aid may not be allowed.
I can't see why it would be allowed. State aid is generally prohibited by EU rules, banking issues weren't unique to the UK, steel industry issues are.
Cheaper steel prices will help construction companies. They will employ more people and/or make more money. It's the Chinese companies selling at a loss that are being hurt most.
The UK has a relatively large oil industry, I didn't see many people complain that something needs to be done to protect them from the "overproduction" of Saudi Arabia, USA and Russia in oil.
I doubt it is a uniquely British problem, although I haven't heard of other EU countries hoping to contravene state aid rules.
Unexpectedly low Chinese demand for steel combined with Chinese production levels which failed to forecast this has caused world steel prices to go down.
Everyone as a consequence will see their margins get hit.
http://www.independent.co.uk/news/b...dustry-is-in-crisis-and-why-the-a6701111.html
Germany, Italy, France and Spain all produce more steel than the UK.
The UK has a relatively large oil industry, I didn't see many people complain that something needs to be done to protect them from the "overproduction" of Saudi Arabia, USA and Russia in oil.
I doubt it is a uniquely British problem, although I haven't heard of other EU countries hoping to contravene state aid rules.
Unexpectedly low Chinese demand for steel combined with Chinese production levels which failed to forecast this has caused world steel prices to go down.
Everyone as a consequence will see their margins get hit.
http://www.independent.co.uk/news/b...dustry-is-in-crisis-and-why-the-a6701111.html
Germany, Italy, France and Spain all produce more steel than the UK.
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Erm but more pits were closed under labour governments. Please don't let facts get in the way of a rant about Tories.
since Anglesey aluminium and Lynemouth shut down are there even any aluminium smelters in the uk?
Soldato
The Tories closed the pits (Labour closed more, far more)
They closed the British car industry (No they produced crap cars and the rest were sold to foreign business and these car companies are doing very well now (except Lotus))
They sold of the trains to their mates (Cant comment on this as I dont know)
They sold of the energy and water companies (We pay less than most of Europe)
And now they are destroying the steel industry. (No Cheap china steal is)
Anything else you wish to add?
Top Tip for the left wing commies, Labour are far more worse than the Tories
Permabanned
I do think there is an argument to be made for not being dependent on imports. From a national economic perspective and once industries like steel closed down completely it is a lot harder for them to start up again from nothing. They (the banks and gov) should definitely do some investigation in to how they can tick it over until oil price goes up again pushing up import costs. I think it is BS that the banks get bailed out and they spend trillions on farcicle projects like rail projects and windmills.
Soldato
Banks make the UK far more money than the Steel industry.
We need to spend on rail, but windmills are pointless
Permabanned
the banks make more money for the banks not "the uk".
The other half of my comment didn't make it because of ocuk under attack.
Soldato
Yes they do - they also put billions into the UK coffers through tax
From what Ive heard on the news the owners have lost 600M in the last few years alone - real life people aside - throwing more money at it is just flogging a dead horse isn't it?
The UK needs to skill up and supply some value add as the east can supply basic raw materials at a fraction of the cost - really don't see the point competing with them
Permabanned
Everyone gets taxed by the government, including the banks, well except amazon and starbucks and facebook. That doesn't meant that the banks are making money for "the uk", they make money for themselves and pay as little tax as they can get away with. Its not realy the argument of the thread though so don't want to derail. Just saying this idea that the banks make money "for the uk" and that is why they were worth bailing out is just wrong.
I am not saying that they should just throw money at the existing business. They should look at how they can make any steel business viable even with a lower output. They need to look at it long term 10-30-50 year. Not just 5 year until next election. There must be substantial assets worth saving up there in the steel business than can be put to use. The government should get together with the banks and look at how they can buy out the foreign investors and incentive local people to take over the business by reducing all the regulations that lead to higher costs.
At some point oil price will go up again and foreign imports will become less viable, it won't be a good idea to wait until then and try and create a steel industry.
If the banks are making money for the uk, why do we have to rely on so much foreign investment? While the UK banks are investing all over the world, china build our nuclear power stations, spain and france and holland own our train lines and so on. British banks (are the big four even British anymore) are about the least nationalist bankers on the planet and the uk government bends over backwards to help them whatever way they can.
I am not saying that they should just throw money at the existing business. They should look at how they can make any steel business viable even with a lower output. They need to look at it long term 10-30-50 year. Not just 5 year until next election. There must be substantial assets worth saving up there in the steel business than can be put to use. The government should get together with the banks and look at how they can buy out the foreign investors and incentive local people to take over the business by reducing all the regulations that lead to higher costs.
At some point oil price will go up again and foreign imports will become less viable, it won't be a good idea to wait until then and try and create a steel industry.
If the banks are making money for the uk, why do we have to rely on so much foreign investment? While the UK banks are investing all over the world, china build our nuclear power stations, spain and france and holland own our train lines and so on. British banks (are the big four even British anymore) are about the least nationalist bankers on the planet and the uk government bends over backwards to help them whatever way they can.
Where has that info come from? in 2013-14 it lost £16m and in 2014-15 it made £109.8m whereas the worldwide company lost £424m