Policy Proposal: Nationalise the Steel Industry

In recent weeks the depleted British manufacturing sector became even more diminished as steelworkers found themselves out of work after years of company service. The contraction of the British steel industry was blamed on Chinese price dumping and the availability of cheap steel from abroad thus making the output in Britain too expensive to manufacture. The government has said that it would “support” the steel industry, but being neo-liberals they are doing everything but intervene in the market lest the ghost of Murray Rothbard comes back to haunt the Tories in the House of Commons. The British Steel Corporation needs to be brought back into existence, the industry should once again be nationalised.

In mid October 2015 the Thailand-based company Sahaviriya Steel Industries (SSI) announced that it had gone into liquidation and would be closing its steelworks in Redcar, putting 2,200 people out of work. The closure was incredibly significant as it was the Teeside Steelworks second-largest of its kind in Europe, and because the town’s local economy was so heavily based on steel, economic deprivation will surely be a long-term consequence of the plant’s closure.
Redcar High Street looking miserable. You could say it looks positively...blue.
Redcar High Street looking decidedly miserable. You could say it looks rather…blue. (BBC)
Within days of this announcement by SSI, industry giant Tata Steel announced that 900 jobs would be cut from their Scunthorpe plant with another 300 cuts across sites in Scotland. An official from the steelworkers’ trade union Community said: “the workforce has done everything we can in recent years to make a success of the business and give us the chance of a future. but we can’t do it alone. We need the government to step up and take action”. He is absolutely right, but there is no way that the government will do anything other than offer ‘support’ to those people looking for new jobs. What is needed is a long-term strategy to maintain Britain’s steel manufacturing industry and nationalisation is the answer.
As I suggested with a state-run vehicle company, the structure would be as decentralised as possible and administered by devolved administrations for each of the constituent nations. Furthermore each would be run by the workers as a federation of co-operatives rather than a centralised bureaucracy from Westminster. There could again be checks on the ability of the Westminster government to privatise the company such as mandating that the company always be operated by the workers, thus preventing it being subsumed into a larger transnational corporation.
In terms of its impact upon British society it would be two-fold. Firstly it would secure jobs in Britain thus preventing unemployment and the well-documented social impacts of economic deprivation such as rising crime and racial tension. In addition to this important aspect is the fact that it would encourage the government, both devolved and Westminster, to invest in infrastructure projects that would require steel as failure to do so would almost certainly result in the closure of the company, and no government is stupid enough to put an entire industry out of business. The investment in infrastructure projects would stimulate the construction sector and, in the case of transport projects, spur growth in the private sector.
On a more abstract note, the nationalisation would give Britain more geopolitical influence as it would no longer be beholden upon other nations for a steady supply of steel for infrastructure and other such projects. This would enable Britain to be more assertive in its dealings with other nations, especially regarding human rights, as the government wouldn’t be dependent on that nation’s favour.
The main problem that people would point out is that current EU rules are incredibly restrictive when it comes to governmental aid to struggling aid, after all the EU was originally formed as the European Coal and Steel Community. This would be where a left-wing government would be able to galvanise support from the populace to demand an end to the ideological heart of the European Union. The EU must be reformed to give member states more freedom to nationalise industries of their choosing, especially nations who are not in the Eurozone, and thus transformed into more of an international political organisation rather than a vessel to impose neo-liberalism upon a continent.
This would part of a more substantive EU reform package however, as with many EU rulings, there are ways around them; for example there may be rules against government aid being delivered to help struggling companies, but I do not believe there are rules against the government starting its own company. Furthermore, as the trade body UK Steel has pointed out, the German government is not nearly as adversarial with German industry and as a result the implementation of a similar set of practices couldn’t be blocked by these countries.
Merkel can't bemoan the British government from implementing the same policy as her government. After all, imitation is the sincerest form of flattery.
Merkel can’t bemoan Britain implementing the same policy as her government. After all, imitation is the sincerest form of flattery. (BBC)
David Cameron is constantly whining about how the “long-term economic plan” is centred around rebuilding Britain’s manufacturing base, but this is impossible as long as he is content with the government being a market observer. The government must intervene in the market and secure the future of the steel industry, else the economy and by extent government policy, will be dependent upon the output of other nations whilst the manufacturing heartlands of Scotland and Northern England suffer. A full-scale nationalisation will give the government much more flexibility when it comes to international negotiations as well as maintaining the industrial tradition of Britain that Tories often fetishise. The government must act now.
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