Nationalise British Steel!
The news headlines today are dominated by tales of Conservative careerists knifing each other in the hope of nailing down the job of Prime Minister. The truth is they’re all as bad as each other.
The real continuing story of Tory Britain is shown by what is happening in Scunthorpe. British Steel is the latest firm to go into receivership - to be effectively declared bankrupt. The future of its 5,000 workers is uncertain. Not only the 5,000 jobs in the plant but more than 20,000 others in the supply chain are in jeopardy.
The effect of closure upon the town would be devastating. Scunthorpe was in effect built around the steel plant. A representative for the town declared, “Most of the industries and businesses around there evolved with the steelworks, and other businesses will be affected because the people who work there won’t have any money to spend.”
A former steel worker Charlotte Childs explains, “Unemployment in North Lincolnshire at the moment is nearly 5 per cent. If the steelworks close that would be more like 8.4 per cent, and double the national average.” She asks, “Why is so little being done to help people? If a bailout is good enough for bankers, why isn’t it good enough for steelworkers?”
British Steel supplies Network Rail and other European rail companies with its rails, and Liberty Steel, Caterpillar and other big industrial customers with the steel they need. Closure could be another nail in the coffin of the British steel industry. In 1973 300,000 were employed in the UK industry. Now it’s less than a tenth of that number.
It’s easy to blame foreign competition, especially from China in recent years. There is a global steel crisis. But private ownership has helped drive British steel industry to ruin. Even the Daily Telegraph headlined British Steel’s plight gives capitalism a bad name.
The paper rants: “The collapse of British Steel couldn’t have come at a better time for Jeremy Corbyn’s anti-capitalist crusade. ...despite the threat it poses to prosperity, Corbynomics is gathering momentum.” The Telegraph then gets serious. “The legacy of British Steel’s rotten ownership will linger over Scunthorpe, Teesside, Skinningrove, and the other industrial towns where it was a major employer, like a large plume of acrid factory smoke, choking the inhabitants for years to come.”
The losers from this whole story have been the steelworkers. In 1973 British Steel was a nationalised industry with 300,000 employees. It was privatised in the 1980s and thrown to the wolves. First it was merged with a Dutch steelmaker and renamed Corus in 1999. This was taken over in 2007 by the Indian firm Tata Steel. Tata gave the Scunthorpe plant away for £1 to a buyout firm called Greybull Capital, who renamed the plant British Steel.
Greybull is an example of vulture capitalism. Every firm it has taken over has been driven onto the rocks. Greybull took over the sports bar chain Rileys out of administration in 2012. By 2014, after Greybull ‘restructured it’, the firm was flat on its back. Then in 2015 Greybull took over a chain of convenience stores called Mylocal, which collapsed a year later. They took over Monarch Airlines and flew it into the ground in 2017. The airline shed 1,800 jobs. The government had to shell out the money to bring back home 100,000 stranded holidaymakers.
Greybull appears to have an abject record of appalling failure in running companies. Actually it can be very profitable to run struggling firms into the ground. Greybull bought British Steel for £1. The firm brags that it pumped £20m into the steelworks since it was taken over. Actually they’ve collected £9m in management fees since. (Shouldn’t that be ‘mismanagement fees’?)
On top of that they shackled the works with £154m in high interest loans from which they managed to extract £50 from Scunthorpe. Bloodsuckers! Greybull says it is in the business of ‘risk capital’. That means they grab all the capital while others shoulder the risk.
So the Tory administration nodded through Greybull’s takeover of British Steel. What a bunch of mugs! Now they are saying, “Nationalisation is not the solution here.” But wringing of hands won’t protect the jobs in Scunthorpe.
Labour’s shadow business secretary Rebecca Long Bailey summed up the wretched experience of private ‘enterprise’ and Tory mismanagement. “The Tories’ legacy will once again be industrial decline. The government must act quickly to save this strategically important industry, and the livelihoods and communities of those who work in it, by bringing British Steel into public ownership.’’