The government’s lack of an industrial strategy is seriously jeopardising Britain’s economy. Our future prosperity depends on a revival in production, says Antony Tucker. Steel yourself.
The growing crisis in Britain’s steel industry has been caused by the economic incompetence of David Cameron and his government. Rather than protecting this valuable exporter from illegal Chinese “dumping” like our European neighbours, the Conservatives have chosen to let it rust away: symptomatic of an administration which is keen on debt and speculation but has utterly failed to develop a winning industrial policy.
Tata’s decision to end its British steelmaking activities threatens the livelihoods of 15,000 workers directly, with another 25,000 possible job losses in the supply chain. Coming on top of similar news from Teesside late last year, this represents the end of the British steel industry. Whilst Cameron claims he has “deep concerns”, in concrete terms his government has done diddly-squat to support the continued employment of so many skilled manufacturing workers. Remember George Osborne’s promise of a “march of the makers”? This craven indifference to the death of an industry is further proof of the hollowness of that pledge five years ago.
But surely, you might say, this is just the law of the market? After all, Tata are losing £1 million each day from their British operations, an entirely unsustainable sum. But this is not because of being outcompeted, but illegal practices. “Dumping” – selling steel at a loss to drive other nations out of business and seize their market share – is the current Chinese tactic which has wrought such havoc in Europe. With their domestic economy stagnating, China’s ruling cliques have elected to expand abroad via an illegal technique of economic conquest. In the USA, duties have been imposed to protect fair business practices, but in Europe, the Conservatives have wielded Britain’s veto to prevent the EU using its considerable powers to save our steel. Rather than implementing an “anti-dumping duty”, the trade organs of the EU have been hamstrung by Cameron and Osborne’s pro-China stance.
For a party that was once a bastion of free-market economics, this capitulation by the leaders of the Conservative Party is as hypocritical as it is devastating to the communities to whom steel production is their lifeblood. What then can be done? Nationalisation is inevitably Jeremy Corbyn and John McDonnell’s kneejerk reaction, unsurprisingly considering their proposal to revive the original Clause IV of the Labour constitution which committed the party to state ownership of key sectors. This must only be temporary, hence McDonnell’s “nationalise to stabilise” plan (although he would keep the business in state hands given the chance), but must be part of a broader industrial strategy. Permanent state ownership is a failed solution to the problems of the past, worthless for the issues of today; the state cannot become a repository of lost causes.
Under the Conservatives’ rudderless direction of the economy, manufacturing in Britain has continued to fail. Our economy is driven by unsustainably high borrowing, the unreliable housing market and speculation which caused the 2008 crash and will cause another one if left unchecked. With historically low interest rates and subsidised mortgages, the government has only encouraged this trend. Meanwhile, the manufacturing sector has shrunk for 26 of the last 57 months; instead of investing in our exporters for a sustainable future, we are expected to borrow prosperity on our credit cards and our mortgages.
The left’s answer to this cannot be to hark back to an imagined halcyon past, but to promote an alternative vision of Britain’s economic future, one which values investment and sustainable growth and abandons the endless spirals of debt-fuelled consumption. Better training is vital, with high skilled apprenticeships – not the farce of qualifications in street cleaning and retail work provided to meet the Conservatives’ targets, which simply represent a child’s wage for an adult’s work. Job losses in our steel industry should be avoided, as the sector provides valuable skills which can be transferred into newer industries, such as wind turbine production and construction.
Equally, improved research and development can drive the high-tech industries of the future, growth which risks being undermined by a government whose answer to our below average spending in this area may be to replace grants with loans. Above all, we need a government brave enough to act to ensure that the market continues to be fair, to prevent other sectors falling foul of illegal practices as has befallen the steel industry and reward true entrepreneurialism rather than speculation and unscrupulous behaviour.
This is the true tragedy of the death of our steel industry: the Conservatives are throwing thousands of skilled workers and their families onto the scrapheap so as to please their dear friends in the Chinese Communist Party. That we should be so friendly to a ruling elite which continues to torture, oppress and execute its people (including killing political prisoners to harvest their organs) is detestable, however beyond our control these terrible actions are. But Britain’s industrial workers should feel betrayed today: betrayed by a government which has chosen to help a clique of dictators rather than the people it claims to represent.
Tata means goodbye for many who hoped for a government brave enough to develop the promised industrial strategy, one that could protect the skills of the steel producers and revitalise Britain’s flagging investment in innovation to drive the growth of the future. Instead, it looks like what little economic success the country can muster will be on the back of debt and speculation, a cycle which will benefit a few and come back round to cost the majority of us dearly. The death of steel production is a tragedy as of itself, but it represents another failure by the government to run the economy properly, for long term prosperity rather than short term gain.