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Nasty signalling over Port Talbot

Save our steelThere is currently no small vogue among polemicists of right-wing bent to accuse lefties of something they call ‘virtue signalling‘. So please allow me to introduce a parallel neologism.

Many of the ugly responses from free market ideologues to the crisis now destroying the British steel industry are clear-cut examples of nasty signalling, designed to underline a given writer’s robustly Hayekian lack of sentimentality in economic matters. An exemplar here is surely Allister Heath’s recent Telegraph article, insisting that Port Talbot should be allowed to go to the wall.

It may be heartbreaking’, the publication’s deputy editor insists, as he plays Hearts and Flowers on the world’s smallest violin. But there must be no bail out for Welsh steelworkers, you see. ‘Government intervention tends to fail,’ we are told. ‘Throwing taxpayers’ cash at unviable, obsolete firms to postpone their demise ends up destroying far more jobs that it saves.’

And at first glance, it may even seem that Heath has an unanswerable case. Port Talbot is losing a million quid a day, and given the double whammy of Chinese competition and high energy costs, the plant looks an obvious basket case. What’s more, the UK economy is generating over 1,000 jobs a day. So the 15,000 who look to the facility for their livelihood should be back at work in around two weeks, right?

Well, no. The real world doesn’t conform to such off-the-shelf free market economic models. Unemployment in Britain tends to be structural.

Once companies that entire towns have built themselves around for generations go under, the impact lasts for decades. Check out many former pit villages if you want an illustration of the devastation that can ensue. The idea that a generation of Welsh fiftysomethings can borrow Tebbit’s dad’s bike, decamp to Fulham, and retrain as investment analysts is entirely absurd.

Nor will the job losses be limited to the already high tally Heath blithely cites. The knock-on effects on the area could put 40,000 on the dole, according to research from the IPPR think tank. Short of organising a champagne reception for the local Conservative association outside Port Talbot Jobcentre to celebrate the impending shutdown, it is difficult to imagine how Heath’s proposition could be more insulting.

Is there an alternative? I don’t claim any special expertise on how the steel industry in the UK can pay its way, but estimates from owner Tata suggest that the bill to reconfigure Port Talbot to produce high-end steel for advanced industries is in the order of £2.0bn.

While that is admittedly big money, it’s small beer in comparison to the cost of the bank rescue in 2008. What’s more, the social expenditures resulting from closure and the loss of tax revenue needs to be set against that outlay when running the numbers. Those of us who were around at the time will irresistibly be reminded of the pit closure crisis of 1992.

Recall, if you will, that a Tory government had been elected only months previously, despite opinion polls suggesting that a Labour victory had at least been possible. Labour’s leader quit, and a replacement was elected via a procedure that many considered flawed.

But the Conservatives were soon in serious trouble, with their reputation for economic competence in tatters and deep divisions over Europe coming to the fore. Then, in September of that year, their problems suddenly deepened, after the announcement that one of Britain’s key heavy industries – in this case, coal mining – was effectively to be shut down, with a huge toll on jobs.

Public opinion was outraged. Many middle class middle Englanders who had shown little sympathy for the National Union of Mineworkers throughout the 1984-85 strike now marched the demand to keep the pits open. Labour’s response was, to put it mildly, lacklustre. The movement shouldn’t make the same mistake a second time round.

A demonstration on the scale of the demos against pit closures, which attracted a six-figure turnout, needs to be organised ASAP. Nor should the demand for nationalisation without compensation be off limits. Don’t dismiss these ideas as ‘virtue signalling’, either. A serious and concerted industrial and political response, including extra-parliamentary mobilisations, would work to Labour’s advantage. Now is not the time for the movement to sit on its hands.

4 Comments

  1. Verity says:

    This situation puts into context McDonnell’s work in trying to get the economic debates to the fore within the Labour movement since the current level of understanding within the PLP still leaves them largely in the same school of thought as Conservative the government, i.e. great sympathy, good intentions t’o doing everything possible’, but also thoughts as to what we can do to help the unemployed. Whilst few come out and say, so they have still not been convinced about the need for government to take on the responsibility to ensure balance in the UK economy rather than being responsive to ‘failures’ in the market and selling off the ‘winners’ on the grounds that private investment ‘knows’ best. Perhaps some in Labour Wales lean for a short time in another direction, but not that boldly.

    Let’s by all means expose the Conservatives dilemma but let us not again fail to recognise that the economic positions of the Coopers, Reeves, Leslie’s (and of the many quiet followers) of our organisation may be understanding and sympathetic, but are not fully signed up to alternative views of the positive feature of public investment. David Milliband’s recent ‘speech’ about Labour’s lack of ‘economic credibility’ (as the same time as declaring, he will not be doing his current job for ever), shows that we ail still have much to do to win enough of our own movement to an alternative economic programme that would be sufficient to resist a return to the ‘same old’, same old, i.e. unbalanced economy.

  2. prianikoff says:

    Such a demonstration is already planned:-

    The Peoples Assembly’s March for Homes, Health, Jobs, Education | End Austerity Now
    Saturday 16 April 2016
    Assemble: 1pm, Gower Street / Euston Road, London NW1
    Marching to Trafalgar Square

    be there!

  3. Bazza says:

    Of course the priority is to save the jobs and to avoid a possible knock effect on a further 40,000 other jobs plus to avoid the human costs from the devastation of whole communities.
    Perhaps we need localism arguments getting local industry etc. to procure local steel and why import goods of poorer quality from thousands of miles on environmental grounds but I recognise in a global economy you can’t ban imports but you can try to have a level playing field.
    The poorer quality of for example Chinese steel also raises health safety issues.
    A trade unionist from Redcar recently said in The New Statesman that UK steel is of the highest quality (to which I would add and the safest) so we should risk buying cheap, or is it buy cheap, pay twice?
    Of course the Tories ideologically will only accept private sector solutions (so hundreds of millions in subsidies may possibly to help some take the most valuable assets and possibly save some jobs) but we have to remember capital is international and for example according to the New Left Review something like 60% of exports from China are by foreign owned companies.
    But imagine if we had instead a left wing democratic socialist government there could have been the space for an exciting potential democratic public ownership of steel.
    It could have draw on experts including academics and asked the community for ideas, and to save jobs and communities many of us would be willing to help, for example why can’t they make solar panels for the World which would also address climate change plus help the World’s poor.
    At least we have a refreshing change with a Labour leadership offering support and solidarity and at least asking some fundamental questions.
    Democratic public ownership of strategic industries by country should still have its important place.
    The priority is to save jobs and communities and to support the unions but as John Lennon sang in Watching the Wheels, “I tell them there’s no problems, only solutions.”

  4. John P Reid says:

    http://www.bryangould.com/the-left-case-for-brexit/ Longtime left future contributor

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