Estimates for the annual running cost of Tata Steel have been put as high as £1.5bn a year – a fraction of what we spent bailing out the banks. But what else could you get for the money? We looked at how much the government has spent in other areas, and compared the costs.
You could renew one-fifth of a Trident submarine
The cost of replacing our Trident submarines has, by the Ministry of Defence’s admission, risen from a projected £20bn to £31bn. The programme involves building four new submarines, so the £1.5bn needed for Tata Steel would get you one-fifth of one new submarine.
It’s not a dreadful deal. You get the missiles thrown in for free – they have an operational life expected to last into the 2040s.
You could build 1/36th of HS2
In the last autumn statement it was announced that the cost of HS2 was expected to rise above £55bn. Phase 1 of the scheme involves a route distance of 120 miles. We estimate that £1.5bn would buy you 3.2 miles of the route.
The money would travel a little further by investing in Crossrail instead. At an estimated cost of about £15bn, you could have got about a tenth of the way across London.
You could buy about 8% of Hinkley Point C
The Hinkley Point nuclear power station project is in trouble, with engineers suggesting the proposed opening date for EDF Energy’s new reactor is too ambitious to deliver. There’s £18bn on the table to build it, so about 8% of that budget would keep Port Talbot in action.
You could also use the £1.5bn to clean up a tiny bit of the mess of decomissioning Sellafield – an operation expected to cost £53bn.
You could build half of a massive aircraft carrier
We’re spending about £6.2bn on the Royal Navy’s two new Queen Elizabeth-class aircraft carriers. HMS Queen Elizabeth was launched in 2014, and HMS Prince of Wales is due for launch in 2017. You could get just about half an aircraft carrier for the money needed to prop up Tata’s UK steel business. The money wouldn’t stretch to buying any planes, however. But then neither does the £6.2bn we’ve spent on building them.
It puts parliamentary expenses into perspective
Since the MPs’ expenses scandal, our politicians’ claims have been held up as a benchmark for public extravagance. But at their current bill – a modest £106m a year for offices and expenses - it would take MPs 15 years to pool enough cash to bailout Tata for a year. That’s a lot of duck house cleaning bills and weedkiller.
The Royal Mail share sales
You would have nearly been able to nationalise Tata for a year by privatising bits of the Royal Mail. The government twice sold chunks of shares in the Royal Mail last year, raising £1.341bn. They’d be worth fractionally more at the current share price, but not enough to quite cover the full £1.5bn
It’s not such a sweet deal with the sugar tax
You couldn’t bail out Tata on the proceeds of George Osborne’s new sugar tax. One of the problems with a state-run steel entity is that it might look like illegal “sweeteners” if the government doesn’t keep the right side of EU regulations. The sugar tax would need to raise three times as much money as Osborne estimated for it to save our steel.
We pay twice as much each year to fund the BBC
The corporation might be worried about top-slicing of the licence fee to fund free TV and radio for pensioners, but the annual £3bn that the BBC gets from taxpayers would be enough to bail out Tata twice over
And with one eye on the EU referendum …
You’ll hear a lot of people estimating various amounts of money that the UK funnels into Brussels in EU payments. You can cut the figures several ways, depending on whether you use: the gross contribution; the contribution less our automatic rebate; or whether you try to calculate how much EU money is ploughed back and spent within the UK.
Full Fact estimate that the UK’s “net contribution” to the EU budget in 2015 was £8.5bn. That’s £23.28m a day. So bailing out Tata steel would take 64 days’ worth of our annual contributions to the EU budget.
