By David Milsom

The British Steel plant in Scunthorpe, North Lincolnshire employs around 2,700 people. It is the last plant in the UK capable of producing virgin steel (high quality steel not recycled from scrap). This is the kind used in major construction projects like new buildings and railways.

In May 2019, British Steel was placed into compulsory liquidation, with control of the company passing into the hands of the appointed Official Receiver while a buyer was found.

In March 2020 the Jingye Group, a Chinese private company, took over ownership of British Steel. The company reportedly paid £50 million for the purchase, promising to make £1.2 billion in investments over ten years. However, recently, Jingye publicly claimed that the plant was losing £700,000 per month. While the company claimed this was due to tariffs and high energy costs, this is a smokescreen for the real cause.

The fundamental reason why British Steel is in crisis is the running of industry for profit. Private owners seeking to ‘cut corners’ on costs routinely fail to provide the investment needed for a functioning industry.

Jingye pressed the government for a rescue package, but in the meantime had delayed orders for vital materials such as coal. Any further delay in this could have led to a catastrophic unmanaged shutdown of the plant, which could then never be re-opened – hence the government’s last minute decision to recall parliament to give the state powers to manage the company, even though it remains in private hands.

Nationalisation urgent

Labour has been reluctant to use the word nationalisation. Before emergency measures were introduced, Industry Minister Sarah Jones said “the best way forward is for British Steel to continue as a commercial run business, with private investment and government support”, rather than as a nationalised asset. Yet the fruitless search for a new buyer while the present owners blackmail the government and sabotage the plant has actually put the 2,500 jobs at risk.

Shockingly, Labour’s current refusal to bring the steelworks into public ownership has created space for Farage and Reform UK to pose as the champions of nationalisation, verbally going against Farage’s long standing Thatcherism. Reform – a party led by multi-millionaires and bankers – cannot be relied on at all as allies in the fight to save the steel industry.

Nationalisation may yet be the solution the government reaches for. Even then, it will only be seen as a temporary stage pending a future sell-off when the situation has ‘stabilised.’ This is what the Tories did in 1971 when they nationalised Rolls Royce, and what Labour did with the banks in the 2007-09 financial crisis.

Socialist Alternative instead fights for a different sort of nationalisation, with workers’ control and management of the industry as part of a socialist plan, including a green transition to new technology with no loss of jobs.

We say:

• Open British Steel’s books. No hiding behind ‘commercial secrets.’ The trade unions need to see where the subsidies went and what the true costs are.
• Immediately nationalise, with no compensation to this international steel conglomerate who have run the plant down.