Tata Steel has announced a plan to close the blast furnaces at its Port Talbot plant in South Wales and instead concentrate production based on electric arc furnaces. The company plan will end the production of new steel at the plant and in the UK, and, with the loss of nearly 2,000 relatively well-paid jobs, will devastate the local economy and communities. In most of the South Wales region, these were built around coal and steel production. As British industry has declined those communities have been abandoned to their fate, condemned to high poverty and social decline.
The partial closure of the Port Talbot steelworks would feel like the final few nails in the coffin of Welsh industrial employment. The local community is united in fighting for the plant because it can see its possible future in the Rhondda and valley towns in the coalfields where jobs were wiped out by the Thatcher government, creating all the social problems associated with that.
The company claims that this plan is part of the process of moving to ‘green steel’ production. The UK government would pay the company half a billion pounds to achieve this, and the media faithfully repeat this propaganda. But, in reality, Tata is concerned solely with increasing profit and its plan has very little to do with green steel.
Big corporations have adapted to the demands of preventing climate change by appearing to be part of the movement to reduce the emission of carbon and other greenhouse gases, even when they have not. This capitalist window dressing has been dubbed ‘greenwashing’. Companies have also used the demand to reduce carbon emissions as a lever to introduce new manufacturing process or set-ups as a way to drive down wages and conditions for workers. Tata has used the drive to reduce emissions by moving production to cheaper plants in order to increase profits at the expense of Port Talbot and its workers; they have been ‘greenlashed’.
The first thing to say is that Port Talbot’s blast furnaces are definitely major producers of carbon emissions. The plant, the biggest steel plant in the UK, is also the biggest carbon emitter in the UK. The furnaces burn coking coal, one of the worst sources of carbon emissions. Fully 7% of carbon emissions are produced by the global steel industry.
By closing the furnaces and relying on an electric arc furnace (EAF) the company is arguing that it is cutting carbon emissions from Port Talbot. However, it is not quite that simple. The electric arc furnaces that Tata want to build will recycle old steel, something existing plants already do. They will not produce new steel. This will have to be imported from plants in other countries, which will produce the steel using almost exclusively coal-fired blast furnaces.
So, most steel currently produced in Port Talbot will continue to be produced using high-carbon methods abroad, and then be transported long distances to UK markets. It will not significantly reduce global carbon emissions. It matters not one jot whether the carbon dioxide is emitted in Wales, the Netherlands, China, Brazil, India or the United States, it will still contribute just as much to climate change.
In fact, this illustrates another important point. The Tory UK government likes to boast that Britain has reduced greenhouse gas emissions more than most other countries since the 1990s. And it’s true that compared to other industrial nations Britain’s carbon production has not increased so fast. But this is almost entirely because the Tories and their ‘captains’ of industry have presided over the destruction of most of British industry, including the steel industry. Factories, mines and mills have been closed and manufactured goods increasingly imported from cheap labour economies in Asia and Latin America.
The relatively low level of carbon emissions has been a by-product of the deindustrialisation of the British economy, not the result of any green policies of Tory or Labour governments. And the products that used to be produced in these polluting British plants are instead imported from polluting factories overseas. British capitalism has outsourced its carbon emissions abroad, but it has not reduced global greenhouse gas emissions one iota. In fact, at the same time as announcing the closure of the blast furnaces at Port Talbot Tata has announced plans to open new blast furnaces at one of its plants in India.
Union response
Unions at Port Talbot have put forward two main strategies to save jobs. Community and GMB commissioned the Syndex report, which proposes a longer phase-in of Tata’s plan, saving some jobs short term while a blast furnace is retained but accepting more job losses in the long term. The report accepts many of the assumptions in Tata’s plan, including Tata’s claims of financial losses at Port Talbot.
Unite has produced a much more ambitious plan, The Workers’ Plan for Port Talbot, which draws on the latest technological advancements. It calls in the short term for the retention of one of the blast furnaces (No.4) and the replacement of the other which is reaching the end of its life with a 3Mt Electric Arc Furnace instead of the 1.5Mt EAF envisioned by Tata. Importantly, as well as calling for more EAFs at Port Talbot, the plan calls for the immediate construction of a green hydrogen-powered Direct Reduced Iron (DRI) facility that can make new steel from iron ore using hydrogen to reduce carbon emissions by 95%.
DRIs emit water vapour not carbon. Such a process would require the building of a green hydrogen plant powered by sustainable electricity near the steelworks, and would be expensive. But it is not untested technology. Two DRI towers have been built at a plant in northern Sweden, following investment by the Swedish government. Unite the Union estimates that its plan would require investment of £12 billion over ten years. But the UK government is giving Tata £500 million to cut jobs.
The development of green steel at Port Talbot would be ground-breaking, protect jobs, and make a major contribution to reducing carbon emissions. Other scientists have pointed out that the green hydrogen plant could be powered by a tidal lagoon electric plant in Swansea Bay. However, it’s clear that neither Tata nor any other capitalist steel company are prepared to make that kind of investment at Port Talbot. Tata is determined to close steelmaking there to boost profits.
The only way to protect jobs and the environment is to nationalise Tata steel, with compensation only paid to those in need. Chris McDonald, chief executive of the Materials Processing Institute, has pointed out that in the 1960s, the last time the British steel industry needed large-scale investment to keep up with the technological advances of its competitors, the government had to step in: “The steel industry was uncompetitive and brand-new technology came along, and the whole of the world’s steel industry upgraded to the latest technology. We resolved that in the UK by nationalising the industry and investing in it”. McDonald added “Now, I’m not calling for the nationalisation of the industry…” (Wales Online, 24 March, 2021)
But why not call for nationalisation? It is obvious that no capitalist firms are prepared to invest the sums necessary to transition to low-carbon or zero-carbon production at Port Talbot, because it is simply not profitable in the short term, and profitability is the raison d’etre of all capitalist companies. And, clearly, they have no sense of social responsibility to their workforces or the communities that rely on their employment.
The weak point of Unite’s plan is that it doesn’t call for nationalisation. It has seized on a vague commitment from the Labour front bench to argue that £250 million of the necessary investment can come from an incoming Labour government, in addition to the £500 million already committed by Sunak, plus £250 million from Tata. But even though the company would only have to pay 25% of the investment in its own plant, it has turned down the plan and is attempting to rush through the partial closure of the plant before the election.
But Unite’s plan still only accounts for just £1 billion of investment to keep the plant running in the short term. What about the other £11 billion needed in the next ten years? Only nationalising the plant and investing in a transition to hydrogen-powered green steel can retain the plant and “revive British steelmaking”.
Socialist nationalisation
However, nationalisation should not mean a repeat of the failure of the nationalised British Steel Corporation (BSC) of the 1960s, 70s and 80s. BSC was run as a capitalist corporation by the old steel bosses who had run down the industry when it was privately owned. And the company was laden with the debt of its nationalisation and the huge cost of investment to make up for decades of neglect of the old private owners. That is why we call for compensation only where there is proven need – none to the fat cats at Tata who took over a plant built from public investment and now want to throw it on the scrap heap – literally.
As well as nationalisation, we demand democratic workers’ control and management of state-owned industries. The Workers’ Plan for Port Talbot gives us a little glimpse of how workers on the shop floor, working with technologists and scientists, can bring forward the best ideas for organising production. In 1976, workers at Lucas Aerospace put forward a detailed plan of how their company could transition from arms production to socially useful production. The knowledge, talents and creativity of workers in manufacturing, mining and energy production could be harnessed to develop a transition to green production that also protects jobs and livelihoods. But first industry must be taken out of the hands of the polluting capitalist class through nationalisation and production planned for the benefit of society and the planet.
The belated solution to the threat of climate change from pro-capitalist governments and parties across the world, including Green parties who have participated in capitalist governments, is to provide financial inducements to the companies to introduce green measures or to subsidise capitalist green industries. Like Biden’s Inflation Reduction and Chips and Science Acts which are pouring $2 trillion in subsidies into US tech companies, and similar measures in the EU and China, as a subsidy-based trade war takes place. But as the recent COP28 summit has shown, the progress away from greenhouse gas emission is painfully slow, so slow that it will not prevent temperatures rising 3% above pre-industrial levels.
And, as well as being ineffective and harmful to the planet, capitalist transition from carbon puts workers livelihoods at risk. We are expected to pay the cost through job losses in the old industries and low wages in the new. Over the last few decades, wages share of global GDP has declined and profits share has risen as a result of a capitalist offensive on living standards. Every crisis is used as a way to extract more profit at workers’ expense. As long as the capitalist class retains stewardship of the world’s resources and the means of production, then workers will be expected to pay the price of preventing climate change.
Instead, the working class can fight for a workers’ green transition that guarantees jobs and living standards at the same time as transitioning production away from emissions.
The neo-liberal offensive against the working class of the last 40 years, coupled with the retreat of the trade union leaders, did lower the confidence of workers in their ability to control their workplace and industry in general. The Lucas plan was developed at a time when workers in British industry had succeeded in beating off the capitalists first large-scale post-war counter-offensive against the working class by the Tory Ted Heath government, when there were large degrees of workers control in many workplaces. However, the strike waves in Britain in the last two years indicate the possibility for workers to regain the initiative again. But this will need to be allied to a socialist programme that can achieve a socialist green transition.
Dave Reid