Tuesday, 29 October 2013

No need for Tata steel to scrap 500 UK jobs

The Tata steel redundancies are not inevitable. The government could forestall the loss of 500 steel industry jobs in Scunthorpe, Teesside and Workington; and it can do so without waving a magic wand, or for that matter throwing 'tax-payers' (or, yours and my) hard earned at the problem.

Tata complains that the markets for its product, steel, is shrinking mainly because not enough houses are being built. There is a massive shortfall in affordable housing in the UK. There are also hundreds of thousands of building workers without work. The economy, despite misreporting by the government, is barely ticking over.

A programme of mass affordable house building would put construction workers back into work, thus pushing up the demand for steel.

But that would only be the start. When people move into new houses they tend to buy carpets, curtains/blinds, furniture, wallpaper, paint; they have new kitchens installed and bedroom cupboards built; back gardens are decked out.

Oh look! A burgeoning economy. Not only do we have hundreds of thousands of workers building the houses we have furniture, white goods, TVs, sound systems, etc being bought. These need to be manufactured and sold; creating and providing jobs for hundreds of thousands more workers.

But even that isn't the end of the upturn. Properly regulated, the extra supply in housing would help to stabilise house prices, especially in London and the SE where it is almost impossible for anyone but Croesus to get onto the property ladder; it would bring down rents; and make a nonsense of the an already universally derided bedroom tax.

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