Redcar doesn’t want to lose jobs - but neither does China

Blog for The TaxPayers' Alliance! I've copied the first part here but you can find the full blog here and it was also published in the Yorkshire post here!

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First Redcar and then Tata Steel announced further job cuts in the steel industry. Exactly what is going on and is there a case for the government to intervene using taxpayer cash to prop up the current price of steel or bail out the suffering plants to protect British jobs?

The Steel Industry in the UK

A large motivating factor in the outcry is that the jobs under threat are of national historic importance to the country. During the industrial revolution producing steel was of national importance in order to grow the railways, build machinery and expand.

By 1870 Britain produced 60 times more steel than it had in 1800 and in 1875 Britain produced 40 per cent of the world’s steel. But by 1896, only 20 years later, Britain’s share in the world steel market dropped to 20 per cent. The industrial expansion slowed and so did production of steel.

Then in the post war period the steel industry went through a lot of uncertainty as successive governments nationalised, privatised and re-nationalised the industry. Conflicted objectives and a lack of innovation meant the industry wasn’t free to develop and grow as it liked due to the uncertain climate.

Steel production volume continued to fall and so did exports. Currently Germany ranks 7th in the world for total output, making it the biggest producer in the EU, with Britain ranking as 18th.