THE announcement that the UK and Welsh governments are willing to take a stake of up to 25 per cent in Tata UK’s threatened steel plants and offer support worth “hundreds of millions of pounds” has been widely welcomed.
The move comes after the Indian-owned firm revealed last month that it was pulling out of the UK completely, putting up to 40,000 jobs at risk. The company had already mothballed two Scottish plants and one in northern England.
Tata, which owns the remnants of what was British Steel, has blamed cheap imports from China flooding the market, the strong pound and high electricity costs for its decision to end production of steel plate. Its UK operations are said to be losing around £1 million a day.
UK business secretary Sajid Javid has been under increasing pressure to secure a rescue package, with many accusing him of being slow to act. The steel industry has described the financial support plan, which Downing Street insists is a “commercial” endeavour rather than part-nationalisation, as “a positive first step”. Number 10 say the measures would help “keep the operation safe”.
Of course, there are caveats. The deal hinges on finding a suitable buyer, which is likely to involve doing something to remove the hefty pension obligation that has been off-putting for many interested parties. But the decision by ministers to step in is the right one. Government intervention cannot happen in every circumstance, but here we have the future of a manufacturing industry at stake.
It’s not nationalisation, or re-nationalisation. It’s a stop-gap to buy time while a longer-term plan is developed. It is considerably easier and less costly to take on a business when it is still operational, rather than allowing it to die and attempting resuscitation.
In truth, the proposal is not radically different to what happened with the financial crash. Few objected when the government bailed out the banks at a stage when there was a real threat of them going under. Nobody wanted to endure the terrible consequences that particular scenario would have visited on us.
However, when considering the future of the country’s steel industry we should also think about the specific issue of defence. If home-grown manufacturing was to cease entirely and we were left to rely solely on imports, then our defence capabilities would be severely diminished. This would be a dangerous position to put ourselves in.
But on the bigger picture, UK and Welsh ministers have a direct precedent they can look to for guidance. The Scottish Government intervened at the Tata plants north of the border and eventually brokered a deal with Liberty House. Yes, it’s still early days, so we don’t yet have a clear picture of the success of the venture. But in terms of keeping the doors open and offering the chance for a new future, the strategy has worked. This should offer the UK and Welsh governments encouragement that the same came happen elsewhere in the country.
Recruits must be willing volunteers
A pilot project where people who have been out of work for an extended length of time were put through their paces in a military training scheme has thrown up some interesting points for consideration.
The object of the exercise – or, more accurately, exercises – was to build confidence and improve fitness in individuals who have been struggling to find employment. The physical training regime is then backed up with a short college course, presumably to give the mind an equivalent workout.
Anyone who has watched television reality shows about the ordeals facing recruits to the armed forces will surely be thinking that enlisting to such a bootcamp and being forced to perform drills and physical training sounds like a pretty dreadful idea.
However, the outcome of the trial may change your mind. Nearly a third of the Scots who took part in the army training programme found jobs afterwards, while a similar project carried out south of the border showed a success rate of 70 per cent. Participants gave the experience a general thumbs up, insisting they had benefitted from a much-needed boost in their confidence.
Of course, initiatives such as this cannot solve the country’s employment problems on their own, but they are surely worth a closer look if the evidence provided continues to be positive.
In the right circumstances they may be all that’s needed to increase a person’s employability. This kind of approach will work for some who are willing to give it a go if they believe it can help, but it could also have the wrong effect on others. So let’s not start national conscription just yet.