Steel: the Destruction of Industry and Britain

The growing number of steel plant closures around Britain underlines the continued attack on manufacturing, which is barely 10% of Britain’s GDP. Other production industries like mining, quarrying, gas, electricity, water and sewerage make up another 5%. The service sector is 79% of GDP, with construction making up the final 6%. Government is obsessed by a consumer economy to the exclusion of investment in basic infrastructure industries.

Steel is a strategic industry, as is energy, which is why we should be justifiably concerned that such industries are in foreign hands. Government (and Labour) opposition to real support for Britain’s industry through investment is criminal. Contrast their inactivity in manufacturing with their willingness to bail out banks, nationalising the debt and privatising the profit for the 1%. Government regards the finance sector as far more important than manufacturing, giving the lie to powerhouses in the North or anywhere else for that matter.

Falling demand at home for British steel is indicative of the continuing decline in British manufacturing industry. Osborne has deliberately stopped Government investment in the industry. He went to China last month advertising £11.8 billion worth of contracts for the construction of the HS2 high speed rail link, while Britain’s steel industry is closing down. Thai-owned firm SSI’s plant closure in Redcar means the loss of 2200 jobs. The shutting-down of Europe’s second biggest coke-blast furnace makes future steel production very unlikely. Tata steel is cutting 1200 jobs in Scunthorpe and two plants in Scotland, on top of previous cuts in production and a loss of 1000 jobs at Newport, Port Talbot and Rotherham.

China has been blamed for dumping steel on world markets. Over the last two years China’s steel imports have risen to supply 8% of demand, up from 2% in previous years, but though this is important is it hardly the most important factor in the failure of Britain’s steel industry. Our energy costs are much higher than in other parts of Europe. Britain’s energy is controlled by foreign companies, most of them nationalised for their countries’ industrial and domestic consumption at our expense. Electricity prices in the UK were 82% higher than the EU average in the first half of this year, a gap that has doubled in two years. In the meantime, Cameron’s promise of a fixed price for electricity of £92.50 per megawatt hour to EDF, the builders of the new Hinkley Point power station, is around double the rate for electricity on wholesale markets, so we will be paying for that subsidy to a foreign supplier for decades. Cameron and Osborne can dispense state aid to other European states, but not to us in Britain.

Sustainable steel in Britain is recycled which saves on energy and CO2 emissions, compared to the cost of importing iron ore. Manufacturing steel in Britain saves on transport costs. Most importantly, British steel is of high quality and critically reliable in structures. Some imported steels have not been of the highest quality claimed by their foreign producers. Yet Caparo steelworks, based in Oldbury in the West Midlands, which uses recycled steel has gone into administration with the expected loss of 2000 jobs.

When 6500 jobs go in important production industries like steel (which may be only the beginning) then many other jobs near and far are at risk, as are the communities which are reliant on them. The loss of steel as an infrastructure industry also represents a loss of vital skills which will be hard to regain without a progressive view of industry and education in the future. Workers in all sectors of our economy have a responsibility to all our class. The Government ignores the needs of Britain and its people. Nationalisation of vital industries and services is clearly a first step if we are to stop the destruction of our country. Who stands up for Britain if we do not?

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