Editorial: Reports of the government being urged by Labour MPs to take over Tata Steel UK until a private buyer is found dominated the headlines last week, after the business was put up for sale by its owner.
While Downing Street dismissed suggestions of a possible government takeover, according to the the FT, saying there were no plans to nationalise Tata’s UK steel plants, the business is fighting for its life, certainly not helped by an enormous pensions liability putting off buyers.
The scheme is not the main reason for the company’s woes, but it does seem to add to evidence that pension schemes play an increasingly important role in the fortunes of corporations.
It has been less than a decade since the banks needed taxpayers to save them – and ourselves, or so we were told – a fact still fresh in people’s memories, as are the long, slow years of recession that followed the crash.
While state ownership was criticised back then, only a few years later many might support the idea of the state taking on Tata Steel’s UK plants to save an industry and ordinary workers from hardship, even at significant cost and the feasibility of a turnaround uncertain.
Illustration by Ben Jennings
Tens of thousands of jobs are at stake. But I have a nagging doubt: would similar sympathies extend to workers in high-tech enterprises, research or science parks, arguably the economy of the future and of equal strategic importance? Unlikely.
While saving steel plants is a noble aim and the steel industry has a role to play in today’s economy, any demand for state support should be coupled with a demand for increased investment in application-oriented research – for example setting up non-university research ‘factories’, like Germany’s Max Planck and Fraunhofer Institutes, or the Argonne National Laboratory in the US – to come up with the widgets and processes of tomorrow.
Whether the country can embrace the work of its scientists and engineers as it has its heavy industries and steelworkers might be crucial for the future of Britain’s economy; investors such as pension funds might also have an interest in creating sectors that propel the country forward.
