Thatcher dies.

UndercoverElephant

Stevo 666 wrote:

jedster wrote:

I grew up on Tyneside in the 80s. I thought she was wrong about most things for the reasons described above. My Dad worked in industry and we had to move away from a place we were very happy in order for him to find work.

As I've grown older and seen more of the world and of business I've realised that she didnt "shut down the major industries" she just refused to prop up businesses where we were not competitive. Some businesses that had the potential to be successful were lost. But many were not going to be successful and I don't think governments are any good at working out which are which. It's the job of govenrment to provide the environment in which businesses and capital markets can do that well.

Today I genuinely believe that someone needed to confront the unions and privitise the bloated, poorly managed state-owned industries and she had the guts to do it.

I still disagree with lots of the detail of what happened but on the central thrust of what she set out to do, she was right and despite everything, Britain is better off for her time as PM.

+1

I grew up near Middlesbrough in the 70's and 80's - same take on it as you. We need someone else like like her in charge just now.

I would agree that in some cases the industries that were demolished were uncompetitive in the modern era, and that in some cases the unions were blinkered in their pursuit of what they felt was fair for their workers. In some cases the unions should have accepted that some cuts were necessary in places where the factories were unprofitable, as this would probably have given a slower transition towards different, and more competitive industry.

But it wasn't like that. Was every coal mine unprofitable? Far from it. Some were more than profitable, but they were still closed. Was every ship-builder a drain on national resources? Certainly not. Some of our industries were more than sustainable, but the baby was thrown out.

Whoever said that it wasn't government's job to provide jobs and helping to transition the workers into new employment is blinkered beyond belief. Do you think that jobs weren't created and businesses encouraged within the Conservative heartlands during this era? The South-East in particular did very well over the time, but regions which were very-much against the Conservative government were left to rot. Why was that?

If they'd had the foresight to offer tax breaks for new businesses in the area at a time when the old ones were being shut down, we may not have had the decades of endemic and perpetual unemployment in the old industrial areas. But that wouldn't have had the desired effect.

jedster

Railways, power stations* and water companies should belong to the state

I don't agree. They all require regulation (implying a degree of central planning) but they dont need state ownership.
Contrary to what you suggest, the efficiency of the water and electricity industries has been improved in the private sector. Rail is more debateable but arguably that has been because the structure of the privatised industry was misconceived (seperation of track and train operations into different companies).

*hardly any developed countries where power stations are largely state owned now. Personally, I could make a case that nuclear plants are better owned by the state but not other technologies

The Rookie

jedster wrote:

I have some sympathy with the view that if the government had propped up more ailing businesses to "tide them over" then the pressure for labour reform and the (essential in my view) clipping of union power would have been weakened - some of this pain was necessary to get reforms through.

Spot on....all the time you keep tiding them over they never change.

Thatcher didn't kill ship building, or mining, or Rover group, the unions did that by making them so uncompetative they could only survive through massive subsidy from other working people, how was that right? Removing the subsidies was the only way to force the change through.

I do feel sorry for many miners, they were pawns in a power play between the unions and the govt, one the govt had to win eventually (before the whole country went down the pan), the miners strike was doomed from the start, it was spring, demand for coal was dropping, we had large stock piles (planned by the govt) made even larger by a milder winter than normal, but Scargill convinced himself he could win (For himself, did he really care for the miners? I doubt it very much). I knew many miners from the east kent mines, very very few supported the action, and felt that the majority country wide didn't either, yet they were bullied and cajoled into striking (An aquaitance lived one street down from a 'scab' miner and owned an identical car, one night scab was written on every panel in paint stripper, nice to see if you can't win an argument in a democratic way you resort to such treatment, isn't that what right wing thugs are often accused of?)

rolf_f

jedster wrote:

Railways, power stations* and water companies should belong to the state

I don't agree. They all require regulation (implying a degree of central planning) but they dont need state ownership.
Contrary to what you suggest, the efficiency of the water and electricity industries has been improved in the private sector. Rail is more debateable but arguably that has been because the structure of the privatised industry was misconceived (seperation of track and train operations into different companies).

*hardly any developed countries where power stations are largely state owned now. Personally, I could make a case that nuclear plants are better owned by the state but not other technologies

I work in the non privatised part of the water industry and I think there are aspects of the current setup that do work well - environmental self regulation isn't ideal but that's how it was before privatisation.

As for power, interestingly I think at one point, pre privatisation, Ferrybridge power station might have been closed leaving Eggborough and Drax only in that area. Post privatisation they end up in the hands of different companies and all are still going strong. So, superficially, privatisation appears to be keeping more locations and people in work than the supposedly less efficient state model.

And of course this is the point. Whilst change had to come, we'd have been far better off had it been handled by someone who wasn't so shamefully cack handed about it. If we can applaud Thatcher for ending the recession in the 80s, we can equally damn her legacy for the one we are now in.

jedster

Hi UE,

Think you are factually wrong on a number of points here:

But it wasn't like that. Was every coal mine unprofitable? Far from it. Some were more than profitable, but they were still closed. Was every ship-builder a drain on national resources? Certainly not. Some of our industries were more than sustainable, but the baby was thrown out.

Neither ship buiding or coal mining was closed down completely - we still have some operating today. Can you point out which truly profitable collieries were forced to close? Shipbuilding was not state-owned. The Government didn't order shipyards to close, it's just that the companies running them couldnt make money. We retrenched into very hi-tech naval shipbuilding where we had a strategic interest (obviously funded by defence spending). Do you actually think the Gvernment should have ordered container ships and oil tankers to create work for civil ship builders? If you look round Europe today there are hardly any major civil shipyards operating - we aren't competitive with Korea and China. The US has less than Europe. We would have been p1ssing in the wind.

Whoever said that it wasn't government's job to provide jobs and helping to transition the workers into new employment is blinkered beyond belief.

I'm not sure anyone said that Government shouldn't help with transition - i.e., investment incentives, retraining, unemployment benefit. I just said Government should not prop up uncompetitive industry. That's different. I don't think government should generally create jobs for their own sake. But I do see a case for, say, increasing infrastructure investment IF IT HAS A GOOD ECONOMIC CASE when demand in the economy is weak. Frankly, more of that could and should have been done in the 80s. Roads, schools and hospitals had been badly run down by the time Blair came in to power.

Do you think that jobs weren't created and businesses encouraged within the Conservative heartlands during this era? The South-East in particular did very well over the time, but regions which were very-much against the Conservative government were left to rot.

I don't think the Government created many jobs in the SE - the private sector did. Classic case of Government getting out of the way. What job creation efforts would you point too? The SE did well because it was globally competitive in the finance, media, business services industries that saw new opportunities coming out of deregulation and European market integration.

If they'd had the foresight to offer tax breaks for new businesses in the area at a time when the old ones were being shut down, we may not have had the decades of endemic and perpetual unemployment in the old industrial areas.

Actually they did do exactly that - that's what Enterprise Zones were. In the North East it had SOME impact - helped attract Nissan, Komatsu (excavators), Siemens (semiconductors). Unfortunately not enough to offset all the job losses. But remember the context, it wasn't just the UK that was suffering in those recessions - appetite to invest was rather limited across the developed world so attracting new businesses was difficult.

Cheers,

J

jedster

As for power, interestingly I think at one point, pre privatisation, Ferrybridge power station might have been closed leaving Eggborough and Drax only in that area. Post privatisation they end up in the hands of different companies and all are still going strong. So, superficially, privatisation appears to be keeping more locations and people in work than the supposedly less efficient state model.

That is pretty superficial though - those power stations are running very hard because (imported!) coal is very cheap compared to gas at the moment and so those plants are very cost effective. Of course, they are getting old and eventually CO2 costs will kill them but we should be very gald to have them now.

UndercoverElephant

jedster wrote:

Can you point out which truly profitable collieries were forced to close?

Quick example, from 1992:

http://www.independent.co.uk/news/uk/in ... 57492.html

I can dig further back.

cyclingprop

UndercoverElephant wrote:

jedster wrote:

Can you point out which truly profitable collieries were forced to close?

Quick example, from 1992:

http://www.independent.co.uk/news/uk/in ... 57492.html

I can dig further back.

What is the comparative economic cost of coal versus gas power? (Don't know the answer to this, genuinely not trolling, for once).

UndercoverElephant

cyclingprop wrote:

UndercoverElephant wrote:

jedster wrote:

Can you point out which truly profitable collieries were forced to close?

Quick example, from 1992:

http://www.independent.co.uk/news/uk/in ... 57492.html

I can dig further back.

What is the comparative economic cost of coal versus gas power? (Don't know the answer to this, genuinely not trolling, for once).

It's a bit of a strange one, this. My Power Engineering professor at University always said that coal-fired stations hadn't had much done to them for years, as the market was calling for the cleaner gas-fired stations, and he genuinely believed that they could really have increased the efficiency of a coal-fired station (roughly 42%) up to that of a gas-fired one (about 60%) without too much trouble, but there wasn't the money there for research. The Danish have a plant that's up to about 50% now, so I assume he is correct.

The main problem being that coal has to be transported and that costs money, but like he said, the whole country is built on the stuff, so there must be more we can do.

The UK cost estimates here probably don't tell the whole story, as our coal is always imported now, so we have even higher transport costs.

https://en.wikipedia.org/wiki/Relative_ ... _estimates

rjsterry

Watching the wall-to-wall coverage last night, I was struck by two things: how determination to see something through - something very much needed to push through reforms - can spill over into blind obstinacy and a belief that because everybody disagrees with you, you must be doing something right. The other thing was that I had somehow forgotten just how pro-apartheid she was.

jedster

What is the comparative economic cost of coal versus gas power? (Don't know the answer to this, genuinely not trolling, for once).

The short answer is that it is very sensitive to the relative prices of gas and coal.
But there are two other considerations:
a) coal produces much more CO2 - we now tax/charge for emmissions of CO2 so this alters economics
b) coal plants are much more expensive to build for a given capacity than gas plants (double) and so a coal plant needs to make a fatter margin to justify the investment in a new plant

Currently gas is expensive relative to coal and CO2 charges are quite low. If you are running an old coal plant (i.e., not having to justify a new investment) then coal plants are much cheaper than gas (variable cost say £30/MWHr vs £60/MWHr). If you go back to the early 90s (which UE's article dates from) gas was very cheap (linked to the oil price which was more like $20 than today $110) and so gas plants were very competitive hence lots of gas investments, declining demand for coal, hence pit closures. That article was backwards looking on profits - did not reflect the coming reality of new gas plant reducing demand for coal.

So given coal generation is competitive now, why arent we building more? The short answer is CO2. We are signed up to European treaties that require us to slash the amount of CO2 produced in electricity generation. Over time this means that we have to close coal plants unless we can capture the CO2 and store it somewhere (i.e. the cost charged for CO2 emissions will keep rising). Research is ongoing but at the moment capture and storage looks very expensive. Given that, it is a bold investor who wants to sink £2 billion in a new coal plant with a life of 40 years. Even so, E.ON did try to build a new one in Kent but was refused planning after campaigns by environmental groups.

On the narrow point of efficiency:
a) the CO2 intensity is not just a result of thermal efficiency differences it also reflects the chemistry of coal vs gas
b) UE is right that there is potential to get coal efficiency up quite a lot although I think 50% is a bit high - high 40s vs about 60 for gas is current state of the art in practical operation. This is much better than older plants - 70s/80s UK plants typically 35%-38% efficient
c) My understanding is that there are fundamental physical limits that mean coal cannot be as efficient as gas (contrary to your UE's engineering professor's statement). A gas CCGT power plant uses two stages - a gas turbine (like a big aero engine) with the waste heat producing steam driving a steam turbine (like a coal plant). It is these two stages that increase efficiency. Now you can gassify coal and put it through a similar two stage plant but the gassification process consumes energy which means that the total efficiency has to be lower than for gas. And UE is correct that the transport cost is higher for coal (although if the gas has been liquified in say Qatar, shipped, regassed then that may well break down).

Sorry for the detail - professional interest

Ciar

All i remember when growing up in the 70's/80's and i am 42 this year, was sitting at home with the family eating dinner by candlelight, which when your 7-8 years old was exciting, my mum and dad never thought that, it's why I have never voted for labour, and my grandfather a staunch labour supporter never did again.

she did good and bad, but she did actually do, in all honesty i reckon she had more Cajones than any other leader since or member of parliament for that matter.

jedster

how determination to see something through - something very much needed to push through reforms - can spill over into blind obstinacy and a belief that because everybody disagrees with you, you must be doing something right

Yep. But that's true of most people - biggest strengths tend also to be our weaknesses too.

Silly analogy but you know how in test match cricket, a common tactic is to feed a batsman's favourite attacking shot when they have just got it, with catchers in place...

Better example would be Blair - the great communicator and pursuader - I think one of the reasons he could be very pursuasive was because he was good at pursuading himself. I think you can see that around the decision to go to war in Iraq and his post rationalisation. I think he genuinely believes he was right ... because he sold himself the idea very skillfully

Ben6899

CiB wrote:

Rick Chasey wrote:

Us young people can read you know ;-).

Shame you can't write, or use the correct title. Thatcher Dies. Neat, concise, rude, ignorant. I'll let you off crass as at least you didn't title it 'Thatch dies'.

She was a married woman with a title. It wouldn't have taken much to include either in the thread title. Furkin ignorant leftie next Tuesdays.

I've nothing to add. Nobody cares what anyone else thinks on an internet forum, but it gives a few people an opportunity to wave their right-on credentials around. Carry on everyone.

How about Thatcher Dead?

warreng

I'm 42 as well and the damage she did to my family was horrific

People talk about the tasks that needed to be done - I always got the sense that she destroyed the coal industry to get back at the NUM for their strikes in the 70s - for her it wasn't economic reasons - it was idealogical and personal. The fact she wrote off whole communities for political purposes should be seen for what it is. Evil and vindictive

Her support of Apartheid and Pinochet - if a mainstream party leader held those opinions now they'd be drummed from office

Her approach towards the EU was backwards (harking back to WWII attitudes) and did this country real damage

Her treatment of the NHS - where do you start with this??!!!

The poll tax

Selling council homes without replacing the stock - lining the pockets of tory-voting private landlords while creating sink estates - but it's ok - they don't vote Tory

But if there's one thing that upsets me is that she polarised the country so massively. How can she be seen as a great leader of a country when a large portion of this country absolutely despises her? She called miners the enemy within - that's her own country men she was talking about. She's hated with good reason. Her own party forced her out - the same people that are now on TV telling me how great she was

And to people who tell me not to be glad that another human being has dies then stop telling me she was a great PM.

Vile woman

UndercoverElephant

Just to take things even further off-topic: The Danish plant which I was talking about (Avedøre unit 2) is about 49% efficient when generating electricity, which is state of the art for coal power. However, the Danish have decided that the waste heat shouldn't just be pumped into the sea, so they sell the heat to the local community and industry in the form of heat. This takes the total energy conversion rate of the plant into the 95% range.

I live just down the road from a (recently defunct) coal-powered station, which pumped waste heat into the sea - as they weren't allowed to sell it to the rest of us, as that would be anti-competitive. Meaning that numerous people would take that 30-40% efficient electricity, run it through the national grid, then through a inefficient heating system, wasting more energy, and then heat their homes with it.

Coal power could still be a great way to generate combined heat and power, and could actually lower the CO2 output of the country, if we actually utilised the power produced.

stu-bim

Sorry for the detail - professional interest

No apology required, I had been wondering if coal would now be a viable alternative in the current world

walkingbootweather

The problem with these detailed debates about the relative efficiencies of different energy sources is that Government can and does affect this through policy e.g. setting or tax, or relief. There are occasions when a less efficient solution is preferable, perhaps if the alternative is massive regional blight or risks in relying on overseas sources over which you have little control. My conclusion was that the Thatcher Government dismantled the mining industry for ideological reasons more than economic ones.

Imagine a scenario where European Government policy encouraged financial markets to relocate from London to Frankfurt or Paris, or for agriculture and manufacturing to be supported over financial services. This might result in unemployment through no fault of their own of many hard-working people from the SE. I think we can appreciate why these people might be bitter at having to move to a different area of the country or continent away from friends and family, see the value of their property collapse, to have to retrain and start again.

This is effectively the position many people found themselves in through the 80s, and since northern economies are less diverse than those in the south, the effect was especially marked.

A more compassionate Government would have withdrawn support from inefficient businesses more gradually, and helped encourage alternative businesses develop to fill the void.

rick_chasey

http://bilbo.economicoutlook.net/blog/?p=23353

An interesting blog from a macroeconomic perspective.

Found it via an FT recommendation.

jedster

Imagine a scenario where European Government policy encouraged financial markets to relocate from London to Frankfurt or Paris, or for agriculture and manufacturing to be supported over financial services. This might result in unemployment through no fault of their own of many hard-working people from the SE. I think we can appreciate why these people might be bitter at having to move to a different area of the country or continent away from friends and family, see the value of their property collapse, to have to retrain and start again.

This is effectively the position many people found themselves in through the 80s, and since northern economies are less diverse than those in the south, the effect was especially marked.

A more compassionate Government would have withdrawn support from inefficient businesses more gradually, and helped encourage alternative businesses develop to fill the void.

I think all this is very true - it is certainly how I felt as a teenager in the NE in the 80s seeing industry closing and being forced to move away from the region. I guess now I see a bigger picture and feel that much of that was necessary. Harsh though it was. You may be right that there was a more gradual path of adjustment that could have achieved the same end with less pain. We will never know if that would have worked. I certainly think that at times her determination and forcefulness came across as simply not caring. I dont think that was completely true but it felt like it and IMO that contributed a lot to people hating her.

jedster

She called miners the enemy within - that's her own country men she was talking about.

I know - pretty rough stuff.

On the other hand, you have to remember that in 1974, in the teeth of the first oil crisis, the NUM went on strike resulting in the three-day week, rolling black-outs, etc. I can understand why some people might see that strike as a form of treason. Certainly it demonstrated that the miners were willing to inflict huge damage on the country in pursuit of their own narrow self-interest at a time of crisis. I don't think you can claim that the NUM were innocent...

roger_merriman

It was a time of polarised politics and she was very much of her time.

I come from SE Wales with the loss of steel and coal the towns have suffered entire streets have gone etc.

warreng

I wasn't claiming that - I'm no fan of Scargill or his approach to the conflict either

I was more referring to the human casualties - families, communities, people's prospects

UndercoverElephant

jedster wrote:

I don't think you can claim that the NUM were innocent...

I don't think anyone would ever claim that; same still goes for Bob Crow and the like - some of their tactics are reprehensible. I'm by far not a union man, and the times I've been threatened with redundancy, or even when I was made redundant, I could see that there was a reason for it. I'm lucky enough to be in demand, though. If all I knew was what I did, and the only employer in town was the one which was laying me off, my viewpoint may well be very different.

vermin

Nothing much has changed in the UK since 1978 has it? We are still a narrow minded, egotistical and bigoted lot.

RIP Maggie. Shame about the whole Apartheid thing.

DonDaddyD

I was born in 1982, I'm not going to pretend that I know the history of that generation or what it was like during that time.

I find the BBC coverage interesting and I'm not arrogant enough to dismiss a celebration of Britain's most significant female persona of the modern age as tedious. What she achieved was amazing. And let's face it, Thatcher came up during the 70s and 80s where she faced a level of sexism from all sides (including liberals) and to an extent that it was comparable to racial predujice, and yes I am saying that: domestic violence, no such thing as marital rape, the professional glass ceiling were rife, visible and ignored during that era. She may not have faced all the perils of being a woman in England at that time, but dont think it was easy - borderline impossible, actually.

She shaped the Country we live in today and her first Government was the juncture between post-war Britain and our Modern day one.

I may not agree with all her policies but I can admire her strength of character and what she achieved especially weighed against the adversity she had to face.

RIP.

Sewinman

One good thing about her death is that its brought a tiny flourish of proper politics back to the surface where people f'ing HATE the other camp. None of this chumy coalition bollox - but proper old school class warfare, red v blue, donkey jacket v met police with no body armour, beer and sandwiches, loud speakers on vegetable boxes, doves and hawks. I remember it well as a kid, the good old days! :twisted:

We have had our own boring little version of Fukuyama's 'End of History' since she left politics, the Tory ****.

TheStone

Sewinman wrote:

One good thing about her death is that its brought a tiny flourish of proper politics back to the surface where people f'ing HATE the other camp. None of this chumy coalition bollox - but proper old school class warfare, red v blue, donkey jacket v met police with no body armour, beer and sandwiches, loud speakers on vegetable boxes, doves and hawks. I remember it well as a kid, the good old days! :twisted:

We have had our own boring little version of Fukuyama's 'End of History' since she left politics, the Tory ****.

Back then they were actually different. Thatcher shrunk the government by a significant amount. She changed many peoples lives (for good or bad).

Now they've both moved to the middle. It's just some chums arguing over minor difference to give the illusion of choice.

walkingbootweather

TheStone wrote:

Now they've both moved to the middle. It's just some chums arguing over minor difference to give the illusion of choice.

Its the ice-cream seller model (otherwise known as The Hoteling-Downs Model of Spatial/Political Competition) innit

Headhuunter

jedster wrote:

Imagine a scenario where European Government policy encouraged financial markets to relocate from London to Frankfurt or Paris, or for agriculture and manufacturing to be supported over financial services. This might result in unemployment through no fault of their own of many hard-working people from the SE. I think we can appreciate why these people might be bitter at having to move to a different area of the country or continent away from friends and family, see the value of their property collapse, to have to retrain and start again.

This is effectively the position many people found themselves in through the 80s, and since northern economies are less diverse than those in the south, the effect was especially marked.

A more compassionate Government would have withdrawn support from inefficient businesses more gradually, and helped encourage alternative businesses develop to fill the void.

I think all this is very true - it is certainly how I felt as a teenager in the NE in the 80s seeing industry closing and being forced to move away from the region. I guess now I see a bigger picture and feel that much of that was necessary. Harsh though it was. You may be right that there was a more gradual path of adjustment that could have achieved the same end with less pain. We will never know if that would have worked. I certainly think that at times her determination and forcefulness came across as simply not caring. I dont think that was completely true but it felt like it and IMO that contributed a lot to people hating her.

Exactly, it's easy to say with hindsight that she should have reduced support more slowly etc, however during the 70s, Britain was most definitely at the mercy of union led workforces like the miners, and the steel industry and to many, the unions were seen as the aggressors and the reason Britain was failing. The unions wielded a great deal on undemocratic power over the entire country in the 1970s.

By the time Thatcher came to power, the argument was that something needed to be done and fast. At the end of the 70s, Britain was forced to go to the IMF for a bail out things were so bad! There basically wasn't the time or money to go on supporting failing industry any longer. The cupboard was bare and just as the Greeks are facing tough times now, the UK had to bite the bullet in the early 80s or face total bankruptcy.

In any case the outgoing Labour government had already tried to rationalise and reduce inefficiencies in these massive industries through the 1970s, for example they spent a lot of time and money consolidating the Glasgow/Clydeside ship building industry, which was basically nationalised at huge taxpayer expense simply to try to hold the business together. This policy had been pursued over the previous 10 years and simply wasn't working...