Nationalise steel as part of an industrial plan

17 April 2016

By Jeremy Dewar

At a board meeting in Mumbai, India, Tata executives voted through a plan to sell off all its UK plants or, failing that, to shut them down. Some 15,000 workers and their families face the prospect of devastating job losses, with another 25,000 workers in the supply chain at severe risk.

The Port Talbot plant in South Wales employs 4,100 highly skilled workers and dominates the town. It is estimated that four local jobs could disappear for each steelworker made redundant. This would kill off an entire community, just as pit closures obliterated mining villages a generation ago. Steelmaking in Scunthorpe, Rotherham, Corby, Llanwern and Shotton would also be severely affected by steel plant closures.

Tata claims to be losing over £1 million a day, and a steady stream of job losses and closures over the last nine months testify to a crisis affecting the global steel industry, including in the USA, South Africa, Brazil and even (for all of the finger-jabbing) in China.

Liberty House is the only company so far to show an interest in Tata’s plants. While Liberty House boss Sanjeev Gupta says his objective is not to make job cuts, his company has just completed a separate takeover of Tata’s Scottish mills and made 270 redundant. Gupta has also been evasive over Tata’s pension obligations.

Tata’s workforce, the unions and Labour should demand a veto over any proposed sale. Workers’ jobs, pensions and conditions should not be up for grabs. They are theirs by right.

The Tories were caught on the hop not by Tata’s decision, but by the public outrage. David Cameron lamely warned that there was “no guarantee of success” in finding a buyer, adding, “I don’t believe nationalisation is the right answer”.

And when Business Secretary Sajid Javid finally came to Port Talbot, he merely proposed government handouts to any new owners, offering cut-price electricity, tax breaks, underwriting of pensions and grants to modernise the plant.

This kind of bribery has been tried and failed before. It extracts no guarantees from the new owner, who can asset-strip the company a few years down the line, leaving the workers and the community in a worse situation than before.

Labour’s alternative

The Labour Party has, in contrast, proposed nationalisation, the obvious solution to save jobs and the industry. Jeremy Corbyn demanded the recall of parliament (refused by Cameron), while John McDonnell published a four-point plan in the Sunday Mirror on 3 April under the slogan, “Nationalise to stabilise”.

Much of McDonnell’s plan is welcome: nationalising the plants; bringing forward public works to strengthen demand; investing for the future. Unfortunately, however, it poses far more questions than it answers. Let’s take it step by step.

Temporary nationalisation is better than allowing “the market” to destroy livelihoods and communities. But this also means that the state absorbs the debts and pays for investment only to sell the company on for new bosses to make a clean profit.

It is one thing to berate the government for bailing out the banks, while letting steel collapse; it is quite another to copy the very same bailout formula. This pro-capitalist solution can be summed up neatly as “socialising losses and privatising profits”; or as some commentators put it in 2008: “Socialism for the rich”.

The second problem is McDonnell’s protectionist call on the European Union to slap steep tariffs on Chinese steel imports. The immediate impact of this would be to export job losses to China, where 400,000 steel jobs are already under the axe. This is not international solidarity but nationalism: “British jobs first”.

In the medium term, this means a trade war, with retaliatory measures flying back and forth. British and EU exports would be hit, as trade and eventually production are scaled back to fit a smaller market. More jobs would be lost. The range and ultimately the quality of products would also suffer. Workers in poorer countries with less economic clout would suffer most, as richer nations “dump” their surplus output on the Global South, putting their workers and farmers out to pasture.

And in the longer term, trade wars ultimately lead to real wars. The economies of the USA, China and the EU have all outgrown their national borders. This forces their ruling classes each to try to conquer a greater share of the world market, something that can only be achieved at the expense of other big powers.

The labour movement should resist the propaganda that paints workers in other countries as their enemies, undercutting them and stealing their jobs. Capitalism is the problem, not foreign workers.

Finally, McDonnell suggests that the UK steel industry can be saved by “workers, management and major customers” coming round a table and sorting it out.

Class interests

Unfortunately, workers and bosses, whether steel bosses or their customers’ bosses, do not share a common interest. All capitalist managements will demand that workers make sacrifices to become “competitive”: lower wages, longer hours, faster production, cutting back on health and safety, job cuts and no-strike agreements.

The incorporation of workers and unions into “quality circles” or onto company boards is not the beginning of “workers’ control” but its opposite. In Germany “workers’ participation” has never stopped short time, job cuts or closures in troubled times.

So what can be done? The affected unions (Community, Unite and the GMB) have not gone any further than Labour has. Nor have they called any action.

We need a national demonstration, backed up with strike action across Tata and, where possible, solidarity action from car and factory workers. As soon as there is any move to close down any part of the plant, workers should be ready to move into occupation to secure its assets and machinery against removal.

Bold action can thwart the bosses’ plans and put a socialist solution on the agenda.

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