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The Weekly paper of the New Communist Party of Britain

Manufacturing blues

by New Worker correspondent

THE STEEL industry in Britain is not what it once was but it nevertheless remains an important part of the economy, particularly if there is to be any hope of a revival in manufacturing industry.

Nationalised by the reformist post-war Labour when it was no longer profitable, it was one of the few privatisations of the Tory governments of the 1950s after it had been restored to health. It was renationalised under Harold Wilson only for Margaret Thatcher to privatise it a second time. Foreign competition and the decline (or destruction) of the companies that were its customers has seen it greatly reduced. It has vanished from Scotland, and now mainly survives in South Wales and Teesside.

The heredity Labour MP for Aberavon, Stephen Kinnock, has taken up the cause of the industry, saying it was the “backbone of our manufacturing sector” and adding correctly that: “Nothing, really, can work in this country in terms of the manufacturing sector without steel. Steel is in the offices we work in, the cars that we drive, the trains that we ride, even the cutlery that we eat our food with.” He could have kept the Green happy by adding that renewable energy needs steel to build wind turbines, but they will be annoyed about steel being used on the HS2 railway they oppose.

He is demanding that the government provide “last-resort” loans to the privatised industry, arguing that the costs of not doing so would be greater than any loans that could (or more likely would) not be repaid. He added: “There are 4,000 relatively well-paid men and women working in the Port Talbot steel works, thousands more relatively well-paid jobs in the steel industry across the country. Imagine the cost of decommissioning a steelwork with blast furnaces and the vast cost that would cause the government.”

Steel industry analyst Dr Kathryn Ringwald-Wildman said the pandemic has only made things worse for the industry but “they would’ve needed government support without the pandemic” and that if: “You take the steel industry out of Port Talbot you have got nothing. You haven’t got anything to take its place.”

She warned that: “It may be that the politicians will decide to defer the decision to end steel manufacturing in the UK – let the companies sink or swim. It would take a very brave government to say we don’t need a steel industry in the UK.”

Tata Steel, which has furloughed about 2,400 in Britain, said: “It is a storm that we are weathering, and we’re looking to come out of the other side. The Government spokesperson said it “already increased the scope and scale of many of our support schemes, including loans to steel companies with a turnover of over £45m”.

Meanwhile at Rotherham, rival producer Liberty Steel has outlined plans to increase production by one-million tonnes per annum. This includes increasing production at its Thrybergh Bar Mill to seek to increase its share of the 1.2 m tonne British rebar market, over half of which is imported at present.

Roy Rickhuss CBE, General Secretary of Community, which is the successor of the old Iron and Steel Trades Confederation, doffed his cap to say: “There is no doubt that steel will be vital to rebuilding and rebooting our economy and steel companies must be ready for the opportunities that will come. It is hugely encouraging that Liberty are investing so they can contribute to essential infrastructure projects like HS2 that will drive the recovery and create jobs. Community firmly believes Liberty’s strategy to displace steel imports is the right one, but we need government to support this by using procurement policy to ensure our domestic infrastructure is built with our own steel.”

Any demand for nationalisation instead of joining with the bosses to demand increased subsidies for private industry are a long way off. Even Harold Wilson did better. Although such calls are unlikely to meet with approval from the Prime Minister, they would meet with a positive response from the working class whom the Labour Party and trade unions are supposed to represent.

One of the potential customers for the steel industry is the motor industry, which on Tuesday issued a dire warning that a third of automotive jobs are risk without government support. In response to the warning from the Society of Motor Manufacturers and Traders (SMMT), the main trade association in the sector, Unite called for a “comprehensive support package to protect the ‘jewel in the crown of UK manufacturing’” to save “tens of thousands of skilled jobs and the creation of a clear path for the transition to electric vehicles”.

But once again it cautioned against an early introduction of an incentive scheme to encourage the purchase of electric vehicles, saying this would be premature because the UK does not currently have the infrastructure to make the widespread use of electric cars viable. Instead it demands an infrastructure investment programme to support this transition.

It wants support for the purchase of low-emission internal combustion engines and hybrid models currently being built in Britain.

Unite’s assistant general secretary for manufacturing Steve Turner warned that the SMMT announcement “demonstrates why the government must urgently introduce a support package for the UK automotive industry. A vehicle replacement scheme should be considered as part of a much wider intervention to assist the industry and any such scheme must promote cars built in the UK or it could unintentionally further damage the UK’s car production”.

The details include a support package for the motor industry similar to those already announced for France, Germany and Spain, rapid expansion of charging infrastructure, any vehicle replacement scheme to prioritise cars built in the UK or containing a high degree of UK components. They also want support for the UK production of electric-powered commercial vehicles (transit sized). Oddly enough, none of that would be tolerated by the European Union (EU), which Unite laments leaving.

In a similar vein, but with regard to a more environmentally form of transport, Unite deplored the lack of action by the SNP Government, beyond pious words, on the question of the bus manufacturing industry. Alexander Dennis of Falkirk and Larbert is one of the biggest companies in Britain. Passenger numbers have collapsed by up to 80 per cent, and the normal pattern of bus and coach services has ground to a halt. The union notes that emergency funding from government does not include support for bus manufacturing and the supply chain, nor does it does not provide any funding for operators to order new vehicles. As a result, the lack of financial support means that there will be no return to normal levels of new vehicle orders in the near future.

Willie Thomson, a Unite Scottish Officer, said: “The commitment from the First Minister is applauded but financial support from the Scottish Government is required to protect the Alexander Dennis workforce at Falkirk and Larbert.” The crisis has occurred “at a time when the case for new vehicles to deliver cleaner, greener and increased capacity in passenger transport is required. Alexander Dennis is a world-class company and we echo the call from Richard Leonard for the Scottish Government to provide support at this time of crisis.”

This call was echoed by Jo Bamford, who said: “The time is now to invest in hydrogen and make the UK a leader in the technology. In order to get there we are going to need a clear policy framework from the Government to allow business to invest – we need a UK-wide hydrogen strategy. If we don’t get that soon, then we are going to get left behind and lose out.” He must know what he is talking about because he owns the Northern Ireland-based bus company Wrightbus, which would make them.