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Tata Steel’s job cuts, a tale of 2 press releases

23 November 2012

2:39 PM

23 November 2012

2:39 PM

Today brings bad news that Tata Steel is to cut 900 jobs in the UK (at plants in South Wales, North Yorkshire, Teesside and the West Midlands). This is catastrophic news for a government that has announced its intention to rebalance the economy away from financial and professional services in the south-east (and therefore get an hearing electoral hearing in Britain’s former industrial heartlands); but that is only one aspect of the politics at play here. Tata’s statement says:

‘Today’s proposals are part of a strategy to transform ourselves into an all-weather steel producer, capable of succeeding in difficult economic conditions. These restructuring proposals will help make our business more successful and sustainable.’

In light of that statement, the Global Warming Policy Foundation argues that Tata has been forced to make this decision because the weight of carbon tariffs have made Britain uncompetitive; therefore, skilled manufacturing jobs in a ‘clean’ western economy are exported to ‘dirtier’ developing economies. There is considerable evidence, as I have written before, that the Foundation is not exaggerating the effects of Green policy as currently constituted. That’s not to say that the government should not have a Green policy; but it is to say that the present policy is counter-productive.

The trade unions, when working for the interests of their members, have made precisely this point before, as I have reported here and here. Therefore, it is surprising that Unite, Britain’s largest union, neglects this argument in its statement about the Tata job losses. Instead, we get a partisan spiel from Len McCluskey:

‘Today’s news at Tata rounds off a dark seven days for the UK economy. Tens of thousands of people will be facing a Christmas of uncertainty thanks to the jobs carnage wrought by this government’s bungling handling of the economy.’ 

Unite claims that this latest announcement means that 20,000 jobs have been put at risk in the last week, with employers from Premier Foods (Hovis) to Standard Life announcing job cuts. Many of Unite’s estimated job loss figures fall in the food sector, which is experiencing volatility thanks in part to rising food prices and poor crop harvests. All job losses are deeply regrettable and ought to give government the occasion to review its industrial strategies and tax regimes; but it is odd to blame this government entirely for acts of God. Tata Steel’s decision, however, is not owing to an act of God. Indeed, it is something of which relevant trade unions, which weren’t so keen to pursue antediluvian partisan interests, might make more; because, as the Institute of Directors points out today, the government’s new Energy Bill entrenches many of the mistakes inherent in its existing energy policy. There are likely to be more bad days like this; and if my job was in manufacturing, I’d be utterly livid with Unite’s trivial statement.

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