Closing the Coal Mines in the UK

In this post, I looked at whether the Government should intervene and subsidies declining firms and industries. One good example of this is the coal mining industry. The coal mining industry used to employ nearly half a million people and was vital to the local economies in which the coal mines were located.

Naturally, the local coal mining communities vigorously tried to protect the industry from closure. It is an emotive issue – unemployment is devastating for the people affected. The closure of the coal mines was even more painful because the whole area would suffer from the rise in unemployment.

However, although it is a great social cost does this justify government intervention? Should the government just allow industries to go bust whatever the social cost. Does it work when Governments start subsidising firms.

Whether the Government should intervene and subsidies declining firms and industries

Note AQA unit 1 often ask questions like this.