SocialismToday           Socialist Party magazine

Issue 198 May 2016

Steeled for a fight-back

"After Labour bailed out the bankers, are the Tories to be remembered as the party that let our steel industry die?" This quote is not from a left-wing paper but an editorial in the rabid right-wing, pro-Tory Daily Mail on 30 March as Tata Steel announced it was putting its remaining UK plants up for sale. The Mail even reminded its readers and David Cameron of the rescue of Rolls Royce in 1971, although it conveniently ‘forgot’ to mention that it was nationalised in 24 hours by a Tory government!

Even for sections of the British capitalist establishment, the prospect of the end of a fundamental industry such as steelmaking feels like losing yet another part of their power and prestige. Lord West, former naval chief, complained that all United Nations Security Council countries had major steel plants to support their defence industries.

But for tens of thousands of workers – 15,000 directly employed by Tata and perhaps three times as many in related jobs – and working-class communities, it is nothing less than a catastrophe. Port Talbot, which has the biggest steelworks, would be devastated and join other formerly industrial South Wales ghost towns like Merthyr Tydfil and Ebbw Vale. Because of the bitter experience associated with that industrial decline, there is the potential to build a campaign to stop any closure.

Just days after the announcement, on 2 April, the National Shop Stewards Network (NSSN) stepped into the void left by the steel unions. It called a protest in Port Talbot to demand the nationalisation of Tata UK’s operations, putting the demand for public ownership at the centre of the debate. Two days later, NSSN supporters and Socialist Party Wales members took part in a lobby of the specially recalled Welsh assembly. This effectively mandated the Labour Welsh first minister, Carwyn Jones, to call on Cameron to nationalise the UK plants. Up until that point, Jones had ruled out nationalisation. Under pressure, he changed his position overnight.

Unfortunately, Labour leader Jeremy Corbyn and shadow chancellor John McDonnell, along with the trade union leaders, have not been forceful enough. Nationalisation has been posed along with other ‘solutions’, and only as a temporary measure. Nonetheless, they have also been forced to strengthen this call.

But the tasks are urgently posed. On 11 April, Tata announced that its second-biggest plant, at Scunthorpe, Lincolnshire, is to be sold to investment firm Greybull Capital. The unions are recommending that the workers agree to this deal. While it is understandable that workers will accept any move that appears to save their jobs, the breakup of Tata Steel UK makes the individual plants vulnerable in the long-term, including Scunthorpe.

A united struggle involving 15,000 steelworkers across the company, on the demand for nationalisation, is the best way to save jobs and defend steel communities. It would raise the confidence of these workers and their families, rather than each workforce being isolated from each other. In addition, the Tories are weak and divided by a whole series of crises: the EU referendum, junior doctors’ strikes, press regulation, and the scandal over the Panama tax evasion papers. If the unions act now and give a lead to their members, it is possible that the Tories could be forced to nationalise the steel plants.

Tory business minister Sajid Javid and Cameron are desperate to secure a buyer but, over the last three decades, British industry has been littered with asset-stripping ‘saviours’ who have been bribed with taxpayers’ money to take over an operation only to disappear over the horizon.

Port Talbot workers are being asked to trust Sanjeev Gupta and his Liberty House company. However, ex-Longbridge car workers in Birmingham ruefully remember the Phoenix Consortium. It ‘bought’ the plant for £10 and was even effectively given £500 million by the then owner, BMW, plus £16 million from the New Labour government. Five years later, the five executives put the company into administration, sacking 6,000 workers on statutory redundancy terms while pocketing £42 million in pay and pensions!

The deal for Scunthorpe is dependent on a 3% pay cut and inferior pensions. Workers, however, will be asking: can the new owners guarantee their jobs, terms and conditions and pensions for the long term? Greybull Capital was a controversial investor in the Comet electrical retail chain before it went into administration in 2011. While another takeover, Monarch Airlines, has survived, the crew and pilots had to accept a 30% pay cut and 700 redundancies. It is also hard to believe that any buyer will be willing to take on a pension scheme of £15 billion with an estimated deficit of £485 million.

Ironically, Tata injected funds to reduce the deficit after the threat of strike action in 2014. The Financial Times is actively calling for the scheme to be put into the pension protection fund but, as ex-Ford Visteon workers know, that casts a shadow of insecurity over retirement, as some of them lost up to half their pension. Only after a hard five-year struggle did they win back £28 million compensation.

Is it not better for Tata Steel workers to fight together to put pressure on the Tories who are creaking under social pressure and their own internal crises? This was seen by Javid’s admission that Port Talbot may have to be part-nationalised as a public/private joint venture. What could a real struggle achieve by the workforce with community support?

The Tories argue that it is too expensive to nationalise, with Tata’s UK businesses losing £1 million a day – according to the company’s management. In reality, it is entirely affordable, amounting to a half of the tax cuts given by chancellor George Osborne to the richest 0.3% in his most recent budget. We call for compensation only on the basis of proven need – yet Tata has ‘sold’ Scunthorpe for £1 to get rid of the business!

Emergency nationalisation on a long-term basis is the only way to ensure steelmaking in the UK. The Labour-led Welsh assembly has limited borrowing powers. Nonetheless, its annual limit of £1 billion would be enough to take over the four Welsh plants, at least. That would also send a beacon of hope to the other UK steelworks. The pooled reserves of Welsh Labour councils would go a long way as well.

The idea of nationalisation, if raised in the context of socialist public ownership and economic planning, could totally transform the situation. Tata’s books should be opened and inspected by the trade unions and workforce. The redundancies that have been announced should be stopped. The steel distribution network should also be nationalised and every publicly-financed construction scheme in the UK, such as Crossrail, HS2 and power station projects, should be supplied with steel from the nationalised steel company.

This would also pose the renationalisation of the railways, which is massively popular and would be another outlet for publicly-owned steel. Taking the energy companies back into public ownership would deal with the issue of energy prices. There is real support among the working class in the steel-working areas and far wider for nationalisation. The public understand the contrast with the urgency shown to nationalise big sections of the banking industry with the reluctance now for steel. The Tories are baulking at £365 million for steel, but anything from £450 billion to £1.1 trillion has been spent bailing out the banks.

This support has to be mobilised, however, and steelworkers and their unions have to up the ante with the government. If the Tories do not move, the steelworks could be occupied with appeals for solidarity to the rest of the union movement – at a time when junior doctors are striking and teachers are balloting for action over the imposition of academies onto state-run schools.

Demands of support should also be put on Labour in the Welsh assembly in Cardiff and its MPs in Westminster. The steel unions and the TUC should call a national demonstration in London or Port Talbot on the demand for the nationalisation of Tata Steel UK. Particularly with the pressure increasing on Cameron and his government, the struggle for steel could be a focal point to defend jobs and communities, but also to force out the Tories.

Rob Williams, chair of the National Shop Stewards Network

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