The Courier & Advertiser (Perth and Perthshire Edition)
The lesson of Welsh steel
Last week the Tory Government was caught like a rabbit in the headlights of public opinion when faced with the prospect of thousands of steel job losses. The Business Secretary was in Australia on a trade promotion that turned out to also be an extended holiday. The Prime Minister was in Lanzarote. The junior minister, left minding the shop, said that “nothing had been ruled out”, foolishly raising false hopes of real Government intervention.
These were soon dashed by Sajid Javid ruling out public ownership, even for an interim period. Unfortunately he had next to no idea what to rule in.
And this weekend he screeched into a double U-turn and said temporary public ownership was possible if not likely. All this Tory confusion points to some deep lessons.
Firstly, presiding over the end of the Welsh steel industry will be a mark of Cain for the Tories just as it was for them in Scotland when Ravenscraig was closed in the early 1990s. It will haunt them not just with steelworkers but with all those deeply uncomfortable with the idea that you can run the economy without actually making anything tangible and that industrial communities are therefore expendable.
That is a view not just confined to left wingers. It was Winston Churchill who once warned of the dangers of “making finance too proud and industry too poor”. We are now in that position in a deflationary spiral with just about every resource-led industry, whether it be farming, oil or steel, in deep trouble.
George Osborne has been accused kowtowing to the Chinese but the real criticism should be not his pursuit of the relationship but rather what the Chancellor’s key objectives have been.
Osborne’s aim has not been a productive industrial partnership but rather Chinese financial institutions parked in the city of London and Chinese gold for nuclear power.
That is the explanation for the bizarre wrecking role that the UK has played in European initiatives. Instead of joining in the emergency measures to counter the dumping of steel the UK Government led the opposition and now the UK steel industry is being hoist on the Osborne petard.
Secondly, those who suggest that “there is no alternative” or “nothing can be done” are just examples of politicians born without imagination. In international terms the British steel industry is tiny. China has produced more steel in the last two years then the UK in the last century.
However, much of the domestic output is of high quality and specialist steels. There are still markets to be won with the right product mix but the disadvantage of sky high energy prices – relative not just to the Chinese but compared to just about every competitor – has to be addressed as does the steel pension fund black hole.
This could be achieved by having a supported program of on site renewable energy plants for heavy energy users and by parking the steel pension liability with a Government guarantee, as was done for the Royal Mail a few years back.
All of that would cost money but it would be a more sensible use of public funds than pouring £170 billion of lifetime costs down the Hinkley Point nuclear black hole or paying for a lifetime’s unemployment for redundant steel workers.
That brings us to the third point which is the contrast between the won’t do inaction of the Westminster Government and the can do approach of the Scottish Government.
When faced with closures in Clydebridge and Dalzell, the Scottish Government convened a taskforce, bought the assets from Tata and then sold them on to the international metals group Liberty House, which is at the forefront of the “green” steel initiative whereby recycled materials are used as the key raw material.
The initiative may or may not be wholly successful, although the early indications are very positive. However, at least it is an example of doing something and not sitting back.
At the end of the day it boils down to what kind of country we want to be. There is one future for Scotland which sees us as a regional outpost of the UK rentier state with its vast disparities of wealth and power both socially and regionally.
This is a deeply imbalanced system which is heading for the social and economic sands.
Alternatively we can marshall the natural and human resources of this country, mobilise its intellectual capital and international reputation to build an outgoing European democracy.
That is a future worth having and is the real lesson that the crisis of Welsh steel has for Scotland.
Secondly, those who suggest that ‘there is no alternative’ or ‘nothing can be done’ are just examples of politicians born without imagination