Monday, 22 February 2010

Corus, Teeside Steel, and Why Safety Nets Are Cheaper Than Benefit Cheques..

The banners fluttered in the icy Teeside breeze, the workers gathered at the gates of the massive Corus steel plant, the journalists mingled with union leaders and activists, and the whole scene transported me back to the newsreel coverage of the 70’s and 80s, where time and again workers of just about every industrial persuasion downed tools and walked out in protest, alot of the time for quite justifiable reasons, and sometimes for reasons that were not so.

This week we have seen the workers at Corus steel in Teeside walk out in protest at the decision to mothball the huge complex that not only dominates the local countryside, but also the local economy. In many ways, the steel industry in Teeside is, if not the actual heart of the local jobs market, it is certainly one of the great arteries of it, and the prospect of the plant closing, leaving such a massive hole in the local economy is a frightening one, not just for the residents and businesses of Teeside, but also for everybody who lives in a similar area.

Coming from Hull, I recognise just how devastating it can be to see the industrial heart of a place ripped out. Ever since the fishing industry essentially died out in Hull, the city has lurched from crisis to decline. The recent economic downturn has resulted in the loss of thousands of jobs in Hull, the caravan industry being essentially closed down in the city, despite 3 of Europe’s largest caravan companies being based there. In the last 12 months there have been in excess of 5000 more people claiming job seekers allowance in Hull, with yet another generation sinking into the despair and hopelessness that comes with a future blighted by poor health, limited prospects, high unemployment, weakening social cohesion, and an overriding sensation of being disenfranchised from the mainstream political process, and of being somehow regarded by the establishment as second class in comparison to other, more prosperous regions of the UK.

The really frustrating thing about the situation in Teeside concerning Corus, is that this is just another example of multi-national companies capitalising on the British outlook that seems to actively encourage failure.

Don’t get me wrong, I am not saying that Corus on Teeside is unprofitable. According to the trade unions that represent the workers, it is quite the opposite.

What we have though is a situation whereby a multi-national company, Tata who are the parent company of Corus, has chosen to mothball a perfectly profitable site (chosen seemingly being the operative word in this instance) despite the fact that it’s other operations around the world require the use of the very product that they claim there is no demand for!

In essence, Tata are making a selective decision to close this plant, and end over a century of steel making, to punch a massive hole in the local economy, to sound the death knell for suppliers, customers, and indeed many other businesses that survive on the wages spent by Corus employees.

Why is it that this company is so willing to slit the throat of one of its own companies?

The only reason that I can come up with is that they have identified other locations and companies where the steel production is completed without due regard to a viable living wage, robust and accountable Health & Safety, and environmental laws which are enforced.

Obviously, cutting oneself free of such limiting restraints must give a healthy boost to the dividend paid to the shareholders, despite the fact that steel making on Teeside has a reputation of being amongst the highest grade in the world.

So it seems that Tata are essentially ignoring their own demand for steel, and are allowing one of their subsidiaries to wilt and die so that they can purchase steel at a much lower price, in all probability manufactured to a much lower standard, in order to feather the nests of the shareholders.

“But surely that is the cut and thrust of business?” I hear you ask.
Of course, businesses will take decisions that will benefit them industrially and financially, and I agree with those who claim that in many ways, this situation is no different. I have made my observations concerning the possible reasons behind Tata’s decision to justify the mothballing of the Teeside plant, and any suggestion of disingenuous actions on the part of Tata aside, this incidence does stand apart from the examples of many others, simply because of the scale of impact that will be suffered by everyone living in the local area.

As I briefly mentioned above, the Teeside plant is at the very heart of the regional economy. The loss of these jobs will cripple Teeside, and indeed parts of Cleveland and North Yorkshire. In the same way that I have described the effects of economic gloom on Hull, the same will happen in Middlesbrough and the wider region. Another generation of working age men and women reliant on state benefits, stripped of hope, ambition and self worth. Another generation of children who will never experience what it is like to have a parent to look up to who is holding down a job, paying taxes, contributing to society, thereby repeating the circle of hopelessness.

I cannot help but think that the government have abandoned the people of Teeside in their hour of need. I truly believe that it would be just as expensive to the public purse to subsidise or nationalise Corus, as it would to prop up the legions of workers, and their future generations with all of the associated benefits required, to provide a basic standard of living.

The government however will recoil in horror at the prospect of such a suggestion I am sure. They are far too busy propping up the greedy banks that plunged us into the situation that we are in to worry about some hard up provincial workers who will, in their political thinking, return a Labour candidate anyway.

But this abject abandonment of the Teeside workers and their communities acts as an indicator of two main themes that seemingly underpin our whole political system; A cynical and calculating approach to the very regions which have historically provided Labour with their core support, and a culture, whereby the stock answer to any major problem is to find reasons s to why it is that we cannot do something, rather than looking for ways in which our politicians can make things better
for the people they supposedly serve.

The simple fact of the matter is that Labour are now too occupied with playing to the ‘Daily Mail’ gallery in the run up to the imminent General Election to worry about the regions and heartlands of what was Britain’s industrial base. They have focussed their efforts on bailing out the banking and financial sectors, which I believe was the right thing to do, however, the strategy of the government seems to be to support the white collar industries that have crippled the country’s finances at the expense of almost every other sector, the net result being that once again, the south east and London, are the main beneficiaries of government investment, whilst the regions are left to rot in hopelessness.

This policy has been adopted by the incumbent government because of the failings of the current first past the post system of elections, whereby political parties know only too well that there is no real prospect of them being held to account for their failing of voters out in the regions, and away from the London chattering classes, which is where New Labour is fixated in its ideology and policy.

The situation as it stands is made worse by the fact that we in Britain are cursed with the affliction of our political leaders taking refuge from decisive governance by hiding behind excuses instead of taking the action that is needed in order to make our lives better, and our infrastructure work better.

What the government should be doing is taking a pragmatic view with regard to Corus, and recognising that the time has come for them to take serious and decisive action. I have stated above, that it would in all probability be just as expensive for the government to step in with regard to steelmaking in Teeside, than it would be to simply allow the industry to die, and then spend countless millions on benefits, extra costs to the NHS, all of the associated problems that accompany the abandonment of a generation.

We are entering an age whereby we should be looking towards ambition, innovation, and creativity to guide us out of the difficulties that we currently face. We should be forging ahead with the expansion of high speed rail, and the electrification of the railway network. All of this work requires steel. Steel that can be made at Teeside, and that can keep the aspirations of a region alive, and provide otherwise desolate and aimless workers with hopes and dreams for the future.

There are so many projects and initiatives that can and should be lifting this great
nation from the pits of recession. Our government should be presenting a unified and co-ordinated policy whereby the demand created from these essential projects should be matched with the characteristics of our regional manufacturing centres in order to ensure that the policies of the national government do not again ignore the needs of, not only the manufacturing ability of our nation, but also the need of
the workers within these regions to be given the chance to safeguard, and build upon the basic standard of living that they, and their families have the right to enjoy in a civilised nation.

The cost of turning our backs on the people of Teeside, and indeed workers in other areas is going to be huge. We have no other true option than to stretch out the safety net beneath the workers of Teeside, as it will save money, heartache, and another generation from the scrapheap in the long term.

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