The steel industry in the United Kingdom was one of the strongest in the world at one time. However, over the past few decades there has been a gradual decline in steel production. There are many reasons for this, but the fact is that many people in the United Kingdom are losing their jobs due to struggles in this industry. Over the past few weeks, there have been several large layoffs from steel companies. There a couple of major factors at play in the decline of the UK steel industry. Here are several reasons why the UK steel industry is declining and why this is important.
Foreign Production
One of the biggest factors behind the decline in UK steel is the fact that foreign production is at an all-time high. Britain was one of the first nations to go through the industrial revolution, and the country came out of that time period as the biggest steel maker in the world. However, over the past 100 years there have been countless other nations that have gone through this process. One of the biggest steel makers in the world today is China. Chinese steel is much less expensive than steel made in the United Kingdom. Not only does China have cheaper labor, but they have far fewer environmental standards to deal with. Coal is one of the most important products in making steel. However, coal is also generally bad for the local environment. With little land to spare, it is difficult for the United Kingdom to produce a lot of coal without having some of the negative effects. However, in China the government can produce as much coal as they want without having to think about the environmental cost.
Aging Population
Another factor that is at play in the decline of UK steel is the fact that the population in the country is aging. Like many places in Europe, people are getting married and having kids later in life. This has a lot of negative influences on the labor market in a nation. The older a person gets, the less able they will be to perform well in a job that requires a lot of manual labor. The younger people in Europe are also not drawn to manual labor jobs. This creates an economic environment where there are few workers for the steel industry as a whole.
Taxes
The corporate tax rate in the United Kingdom is much higher than that of developing nations as well. There are few nations in the world that have both high tax rates and high growth. Anyone who wants to find low business tax rates must go to Asia or South America. This is a big reason why it is hard to get a lot of business growth going in Europe.
The steel industry in the United Kingdom has been in decline for many years. The influence of cheap foreign steel has played a large role in this decline along with high taxes and an aging population.
