Nationalise Port Talbot?

[Bold Seagull]

If a buyer cannot be found, is it time to take back a crucial industry? Is this just left wing idealism, or is it actually economic realism?

If it goes under, we not only lose 20,000 jobs, but our dependency on importing only increases.

Imports are currently cheaper, but will that always be the case. Isn't something as fundamental as the production of steel be protected and potentially owned by us, even if it does run at a loss to start with?

Nationalising is undoubtedly considered the preserve of the left, but isn't it a capitalist thing to do? Didn't we nationalise the banks to save them, and effectively us - that has turned out to be a prudent thing to have done, so why not for such a fundamental industry in this country?

Discuss.

 

[Paul Reids Sock]

As you say - we did it with the banks so why not here?

I doubt they will though

 

[Brian Fantana]

A temporary nationalisation, which provides a bit more time for a buyer to be found and safeguards jobs, is the way forward IMHO.

 

[BensGrandad]

Why should the tax payers of this country buy a loss making or non profitable industry?

 

[ForestRowSeagull]

Suspect my answer would be different if I were working in steel or living in an area that relies on its production; but the fact that the plant is losing ~£1m a day is quite staggering. With China continuing their tactics of dumping into our economy it doesnt really look like a situation that will improve in the ST anyway. There's also the argument that banks are more systematically important to our economy than Steel plants too, but 20,000 is a hell of a lot of jobs as you say.

 

[Bold Seagull]

Why should the tax payers of this country buy a loss or non profitable industry?

20,000 people out of work isn't profitable either.

You make an essential point though about profitability - is that the only measure of the importance of an industry or service?

 

[Westdene Seagull]

Nationalising is undoubtedly considered the preserve of the left, but isn't it a capitalist thing to do? Didn't we nationalise the banks to save them, and effectively us - that has turned out to be a prudent thing to have done, so why not for such a fundamental industry in this country?

Discuss.

The banks were PARTLY nationalised in order to save the financial system collapsing and people losing all their savings. There always was and still is a plan to sell those shares back and make the banks non-nationalised again. That's hardly going to happen if we nationalise the steel industry. The biggest hurdle is that our wages are much higher so our steel will always be more expensive. Why should the taxpayer have to pick up the losses ? If the taxpayer subsidises steel why not coal ? Or indeed any loss making industry ?

 

[Pavilionaire]

I thought that EU laws effectively prevent governments from propping up their domestic industries and providing subsidies to ailing industries? This could prevent Cameron from providing the assistance Port Talbot needs, even if he was inclined to renationalise it.

I agree with the premise that there is a social cost to losing the steelworks jobs. There is also an intangible cost to the UK of losing a domestic steelmaking capability - what price is the UK prepared to pay to preserve the ability to make steel in this country?

 

[beorhthelm]

i think there should be a serious consideration of maintaining a strategic capacity to manufacture steel, with any plan focusing on that rather than "save n jobs", which doesn't address any problems. not that the jobs don't matter, just that it creates a false impression of the problem, cost and benefits. its already been exaggerated from the 4k that Port Talbot steel works actually employs.

 

[Eeyore]

Why should the tax payers of this country buy a loss making or non profitable industry?

Like the banks.....

Then sold back at considerable loss.

 

[Bold Seagull]

The banks were PARTLY nationalised in order to save the financial system collapsing and people losing all their savings. There always was and still is a plan to sell those shares back and make the banks non-nationalised again. That's hardly going to happen if we nationalise the steel industry. The biggest hurdle is that our wages are much higher so our steel will always be more expensive. Why should the taxpayer have to pick up the losses ? If the taxpayer subsidises steel why not coal ? Or indeed any loss making industry ?

Well indeed. Perhaps that is a question. 40% of our energy production still (rightly or wrongly) relies on coal, and yet we import a huge swathe of that from Russia - hardly a stable bedfellow for your energy security.

Steel is essential to construction and manufacture. If we were unable to import steel competitively, or China stopped being the world's Builders Merchants, then how do we construct our buildings, our weapons and defence, our car manufacturing industry?

Keep taking away our own ability to be a self sustaining economy (perhaps that is already long gone), then we are forever reliant on importing. If our energy security and construction materials are going to be completely in the hands of other markets, we are ever dependent on others. As I asked BG, is profitability in a worldwide market the only measure?

 

[beorhthelm]

Like the banks.....

two profitable banks (and a building society) where propped up because their balance sheets made them technically insolvent, and other banks extended additional loan guarantees (not funds), at cost, as their collapse would have a direct, material affect on others. so stop using this as an example, because its not the same.

 

[Bold Seagull]

I thought that EU laws effectively prevent governments from propping up their domestic industries and providing subsidies to ailing industries? This could prevent Cameron from providing the assistance Port Talbot needs, even if he was inclined to renationalise it.

I agree with the premise that there is a social cost to losing the steelworks jobs. There is also an intangible cost to the UK of losing a domestic steelmaking capability - what price is the UK prepared to pay to preserve the ability to make steel in this country?

I think there are rules about propping up a private business, but that is different from taking that business into state ownership. I might be wrong...

Your final question I agree with you and [MENTION=599]beorhthelm[/MENTION], is probably the most pertinent one for me too.

 

[Brian Fantana]

I thought that EU laws effectively prevent governments from propping up their domestic industries and providing subsidies to ailing industries? This could prevent Cameron from providing the assistance Port Talbot needs, even if he was inclined to renationalise it.

I agree with the premise that there is a social cost to losing the steelworks jobs. There is also an intangible cost to the UK of losing a domestic steelmaking capability - what price is the UK prepared to pay to preserve the ability to make steel in this country?

This is strictly true, but other EU governments have found ways around it.

For instance, last year the Italian government took control of a steel plant at risk of losing 16,000 jobs. Shortly afterwards, the plant was given £75million for 'environmental improvements'. Similarly the German government have been making handouts to steel firms on the basis that domestically-produced steel is used for building projects.

 

[Westdene Seagull]

Like the banks.....

Then sold back at considerable loss.

Really ? I know the figures can be subjective but this is what Rothchilds think :

 

[BensGrandad]

20,000 people out of work isn't profitable either.

You make an essential point though about profitability - is that the only measure of the importance of an industry or service?

Isnt profitability a core essential of a businees? Or are we going back to the days of British Rail and having 6 men doing the job of 2 just to keep them in employment.

 

[Pavilionaire]

This is strictly true, but other EU governments have found ways around it.

For instance, last year the Italian government took control of a steel plant at risk of losing 16,000 jobs. Shortly afterwards, the plant was given £75million for 'environmental improvements'. Similarly the German government have been making handouts to steel firms on the basis that domestically-produced steel is used for building projects.

If the UK government can legally take these steps then I think they should.

 

[Bold Seagull]

Isnt profitability a core essential of a businees? Or are we going back to the days of British Rail and having 6 men doing the job of 2 just to keep them in employment.

I think that is a poor analogy. No one is saying that the Port Talbot plant isn't an efficient, hard working, high quality manufacturer of steel. The only measure on Port Talbot is that currently steel from China is cheaper. That might not always be the case, and as others have said, the production of your own construction and manufacturing materials is an essential part of a sustainable economy.

 

[beorhthelm]

I think that is a poor analogy. No one is saying that the Port Talbot plant isn't an efficient, hard working, high quality manufacturer of steel. The only measure on Port Talbot is that currently steel from China is cheaper.

not just the Chinese (and other nations) dumping at below their cost is depressing prices, the artificial costs for energy and other issues imposed on the industry make the economics complicated.

 

[worthingseagull123]

Why should the tax payers of this country buy a loss making or non profitable industry?

Like the banks?