We must steel ourselves for the truth…
Tata have announced their intention to abandon steel making in the UK, which is apparently costing them almost £1m a day. Not so surprising then. Especially as this decision can hardly be the shock some are claiming, and comes after the recent Budget failed to offer any special measures designed to assist.
Why then do people expect the government to care now? The decision to lose 17,000 jobs has already been taken (hence the lack of support in the Budget), and despite many statements to the contrary, there were and remain options available that will work within EU “state sponsorship” rules (see below). Reading between the lines it’s clear that Tata’s Board expected some concessions or other assistance and convened swiftly once the Budget had let them down, taking the only logical business decision left on the table. The union backed rescue plan required far more finance than the government had just declined. So who on earth thought that had legs?
Now people are claiming to be surprised? “Tata won’t tell us how long we’ve got to find a buyer” bleet multiple government spokespersons. Well hardly surprising that they’re not uber co-operative when they feel they’ve just been stitched up by the Camborne-ites. How naive. So if Tata intend to simply close down the plants and walk away, incidentally killing off a potential future competitor then frankly who can blame them? Wake up Ministers – you blew it. Maybe they’ll collectively “damn and blast” while the furnaces cool down?
Germany is Europe’s primary steel producer. In 2015 the Germans were somehow able to apply tariffs to better protect themselves from “dumped” cheap Chinese steel. But the UK apparently can’t do this because of the EU? Aside from being a strong argument for Brexit this is clearly nonsense since Germany has already done it.
Overshadowed by the steel story, the press and other media nearly buried news that the UK current account deficit (£33bn for 2015) is the largest it’s ever been and has been growing steadily since 1983. Finally it’s coming out! Yes, “UK plc” actually went bust over 30yrs ago but no-one’s got around to admitting this, and even now it’s only tacit – no-one has the cojones to actually say exactly this on camera. So what have our politicians been doing since 1983? Rearranging the deck chairs on the Titanic! This probably explains why the calibre of many of today’s politicos is sadly not what it used to be. Deck chair attendant is rarely a permanent job – its lifespan depends on a sunny outlook, and these days our climate is (mostly) set in Strasbourg!
Meanwhile Tata’s impressive turnaround of Jaguar Land Rover (JLR) has resulted in a range of vehicles that are increasingly made from clever alloys, aluminium – anything but steel in fact. In 2015 when Scunthorpe was closed down, JLR employees wrote to Tata boss Cyrus Mistry asking for assurances that UK steel would continue to be used to make vehicles in the UK. TheStickler wonders what, if any, reply they received!
And then there’s EDF and the new Hinckley Point nuclear reactor. EDF is primarily owned by the French government. But its more independent execs are either voting with their feet or stating opposition in public. Embarrassing! There’s a Chinese angle here too and The Times front page today joins some of the dots, suggesting that brown-nosing Beijing to get our nuke(s) sorted was prioritised over losing 17,000 jobs – and our entire steel industry.
TheStickler remembers, as an undergraduate, being introduced to the work of The Club of Rome and their publication “The Limits to Growth”. It’s all there. And that was from the 70s, about ten years before we went bust. The only sane comment so far seems to be from those who remind us that propping up or (re)nationalising the uneconomic or unviable is daft, and has rarely worked (cf shipyards, trains, coal etc.). But allowing the Germans to protect their industrial heartland at the expense of our’s is arguably criminal. And these same inept muppets still insist the EU is a good thing. For Germany it clearly is, but for us here in the disunited kingdom?
TheStickler suggests we steel away…
…or get out of the EU, design world-beating reactors and military hardware made of specialist steel, and renationalise JLR while we’re at it. Ta-ra Tata. Now that’s “putting a bit of stick about”, as the sadly fictional FU was prone to remark in the original House of Cards.
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