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Nationalise British Steel? A viable asset, essential to a decarbonised economy

 

Andrew Pendleton (New Economics Foundation) reminds us that since Margaret Thatcher first stood on the steps of Number 10 in 1979, successive UK governments have chosen to withdraw all but the barest bones of support from Britain’s foundational industries, of which steel is one. He questions whether any owner of steel manufacturers in the UK could thrive in the hostile environment UK governments have created.

Failed by the current government’s blind faith in markets, Pendleton writes,  the people of Scunthorpe and many other places have had no voice whatsoever in how the economy was run, until ‘the blunt instrument of the EU referendum’. The loss of this significant company will intensify the sense of loss that contributed to the Brexit vote

There are risks in selling to the Turkish Military Pension Fund or to the Chinese Jingye Group, about which very little is known, industrially, but the interest of foreign buyers suggests that British Steel is seen as a potentially viable asset.

Many tonnes of steel will be needed to build a cleaner economy – for wind turbines, electric vehicles and the rail lines made in Scunthorpe, critical to a decarbonised economy. As Pendleton points out, steel production is ‘problematic’ for climate change – but steel production in Scunthorpe can be ‘greened’ by investing to reduce its carbon emissions, eventually reaching zero as coal-free production (below) becomes the norm.

In Germany, Thyssenkrupp recently demonstrated running a steel blast furnace completely on hydrogen – opening up the prospect of zero-emissions steel production by using renewable hydrogen.

Hydrogen will become cheaper as current methods, which rely on creating hydrogen fuel from purified water, are superseded by less expensive technologies such as one being developed by Stanford researchers, who have been separating hydrogen and oxygen gas from seawater via electricity.

And millions of tonnes of carbon used in shipping will be saved by using steel close to where it is manufactured

Pendleton sees the current economic model, ‘now the default preference of our policy-makers’, as absurd; in Fife, steel fabrication firm BiFab is in mothballs (right) while energy giant EDF imports the casings for the turbines on its new offshore wind farm from Indonesia.

He points out that Indonesia and some of our European neighbours’ governments habitually intervene to ensure that ‘foundational industries’ have guaranteed supply chains and amply-filled order books.

British Steel owners Greybull, a private investment company which owns many other industries, are unlikely to be seriously affected, but the company’s workforce, its suppliers, Scunthorpe and the wider economy will. It will be a disaster, politically and economically. Andrew Pendleton ends:

“Nothing short of immediate nationalisation is needed; anything less will be a betrayal of a whole town and will send shockwaves through the UK’s industrial heartlands . . .

“It is not too late for the government to step in and take the company over, which would have the immediate effect of keeping people in work and the economy of a town afloat. This is absolutely government’s proper role. But it shouldn’t stop there. After nationalisation should come a three-pronged approach:

  • focus on industrial strategy for British Steel in order to secure its supply chains
  • fill up its order book with a proactive procurement policy.
  • and create a worker owned company who could then benefit from an ownership dividend

“Given the UK’s need to invest and build green infrastructure, such as railways, steel is of national strategic importance”. 

 

Read Andrew Pendleton’s article here.

 

 

 

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Keep Trident as a job creation scheme?

“Just get the catchphrases correct and the masses will nod along”; today –

A reader emails: “Today’s Times has several vituperative comments on Jeremy Corbyn – questioning his patriotism, etc., including an editorial on Trident after the Scottish Labour Party vote”.

nuclear buttonAs most will have heard, at a conference in Perth, Scottish Labour Party members and union delegates both voted by 70% to 30% to abandon plans to maintain a “massively expensive” and “militarily useless” submarine-launched ballistic Trident nuclear missile system.

The FT’s Mure Dickie reports (so much more objectively than the paper’s Corbyn-bashing Jim Pickard) that delegate Stephen Low said scrapping nuclear weapons would free money to be spent in more economically productive ways.

FT blog: the problem with UK politics, however, is not that people are too cynical but that they are too gullible

Though union delegates overall voted substantially to abandon Trident, Gary Smith of union GMB Scotland, played the fear card, saying that the idea that Trident jobs could be replaced is “utterly disingenuous” and that scrapping Trident renewal would threaten members far beyond Scotland’s Faslane and Coulport submarine and nuclear missile bases. Elsewhere an estimate of up to 13,000 jobs was given.

Politicians and other vested interests realise that – as FT lawyer/analyst David Allen Green says: “Our politics is beset and bedevilled by the phenomenon of mass nodding along. Just get the catchphrases correct, and you will get all the audience applause you need. The trick is saying the right things at the right time”.

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Twice as many – up to 25,000 worthwhile, constructive jobs in Scunthorpe and North Lincolnshire are at risk as a result of in-plant losses at Tata Steel, it has been claimed – but apart from workers, unions and the current Labour Party, the fear of this far larger loss is not presented to the public as cause for concern by mainstream politicians and supportive media.

After reading my correspondent’s final words: “I suppose several people may well have lost their jobs after Hitler-Germany no longer built the gas-ovens”, two questions occurred to me:

Why have governments preferred to support and promote damaging nuclear and armaments industries?

And why not work to elect a government which will break the mould . . .?

See: Musing on the Trident issue – arms conversion: the transfer of resources from military to civil use.