One of the big stories in industry this week is Tata’s proposed sell-off of what remains of the British steel industry. Mike makes the point that while David Cameron is spouting about how the government is doing everything it can, their actions speak much louder than words. And their actions say that they aren’t concerned at all.
Cameron himself is on holiday in Lanzarote. The Business Minister, Sajid Javid, who one of the wags in Private Eye’s ‘Lookalikes’ column suggested looks like the Claw from Thunderbirds, was thousands of miles away Downunder appearing at a business banquet. It was left to Anna Soubry, the Small Business minister, to make a plea for more time. By contrast, Jeremy Corbyn was at one of the steelworks in Port Talbot, and issued a demand to Cameron to recall parliament and take steps to protect the British steel industry.
Mike also points out that other countries have taken steps to protect their iron and steel industries, and that during the financial crisis two banks were nationalised. This raises the question why the government isn’t doing the same for the steel industry.
Cameron did fly back from Lanzarote yesterday. However, while Soubry had made a vague suggestion that the steel industry would be renationalised, Javid ruled this out. Mike, however, makes the point that by ruling out nationalisation, Cameron is most definitely not doing everything he can. See: http://voxpoliticalonline.com/2016/03/31/if-cameron-has-ruled-out-nationalising-tata-steel-hes-not-doing-everything-he-can/
Mike has also posted a further article showing how even the usually solid Torygraph has turned against the Conservatives for this. Osborne’s refusal to rescue the British steel industry seems to be to avoid antagonising the Chinese. He has for years resisted the kind of legislation the Americans have passed to prevent the Chinese dumping cheap steel to the destruction of their own domestic industry. It looks very much Osbo is deliberately sacrificing our steel industry in order to stay in favour with the Chinese, and encourage them to keep investing in Britain.
I’m not surprised by Cameron’s blanket refusal to nationalise the industry. The Tories have been consistently against its nationalisation after it was first done by Clement Atlee’s government. Duncan Sandys, the Minister of Supply, proposed its denationalisation in 1952, claiming that privatisation would restore to the industry ‘independence, initiative and enterprise’ which was not possible under nationalisation. He was opposed by Sir George Strauss in the Labour party, who said that it was ‘indefensible for the control of this industry-on which depends our economy- the fate of townships and the livelihood of hundreds of thousands of employees-to rest in the hands of people with no public responsibility’. It’s a statement that still applies today at Tata’s announcement they want to sell the plant. The iron and steel industry was renationalised by Harold Wilson’s Labour government in 1966. The steel industry itself by that time had recognised the need for reorganisation. Moreover, Labour was in favour of nationalisation because iron and steel was one of the ‘commending heights’ of industry, and so should be occupied by Britain. The Tories started privatising the industry again in the 1980s under Ian MacGregor. Their aim was to cut the cost to the taxpayer, while at the same time they considered that the business of the steel industry should be to make steel, rather than create jobs. Clearly, that attitude has not changed.
The manufacturing industries also suffer from the perception, disseminated by neo-Liberal free-marketeers over the last thirty years, that Britain is now a post-industrial society. Deanne Julius, who was one of the chief wonks in the Bank of England under Blair, took this view, and stated that we should now concentrate on developing the service industries, and leave manufacturing to the rest of the world, and specifically America. This is another idea that Han-Joon Chang shoots down in his book, 23 Things They Don’t Tell You About Capitalism. He makes the point that manufacturing industry is still vitally important. It only looks less important than the service industries, because these have expanded far more and more rapidly than manufacturing. But that certainly does not mean that it’s unimportant.
Except to the Tories. Cameron is not going to renationalise the iron and steel industry, because as a neo-lib he’s devoted to the idea that government should not interfere – market forces and all that gibberish – and that if the industry goes under, well, that’s how it should be. Some how the market will magically correct the situation and another industry will somehow arise to replace it. This seems to me to be the fundamental attitude of the followers of von Hayek and the other Libertarians. He also won’t want to nationalise the industry, because it will mean not only a fundamental contradiction of Neo-Liberal economic doctrine, but also because it’ll mean more state expenditure. Which in turn will mean he won’t be able to give more tax cuts to his big business paymasters.
And lastly, he won’t want to nationalise the industry, because the last thing he wants is a rise in employment, and the revival of an organised and powerful working class, as it was when manufacturing was the dominant industry. Milton Friedman’s wretched Monetarism dictates that there should be a six per cent unemployment rate to keep wages low, and labour affordable.
And finally, there is the issue of class. Whatever Cameron and Ian Duncan Smith spout to the contrary, the Tories are not the policy of ‘working people’. They themselves admit as much. When the issue of the union’s funding of the Labour party came up again a few years ago, Labour made the point that the Tories were being funded by business. The Tories attempted to defend themselves by stating that this was perfectly acceptable, as they were the party of business. And in this case, business does not want state involvement in industry and the creation of nasty, old-style working class jobs that might actually empower the working class.
And also part of it is that the working class simply aren’t considered a concern, in the same way that the Tories are concerned about the upper and middle classes. Cameron’s a toff, as is Osbo and Ian Duncan Smith. The people, who matter to them are the same people as themselves – other toffs and members of the upper middle class. Those are the only people they see personally and interact with, except those they employ. And so ordinary people and their concerns simply don’t register with them in the same way as those of their own class.
And so, while Cameron has come back from Lanzarote, because this is a major issue, it’s not one that he really wants to solve by going back to nationalising the industry. Not when Maggie Thatcher and generations of Tories took so much trouble to privatise it.