Imagination and Determination

No, Boris Johnson did not sell British Steel to the Chinese for one pound. Tata Steel sold the Scunthorpe steel works and other assets for that sum, but it did so in 2016, under David Cameron. Nevertheless, Johnson was Prime Minister when, in November 2019, the British Steel Limited that those had become was sold on to Jingye after having been ordered into compulsory liquidation by the High Court.

So much for levelling up, but that was Johnson. The Prime Minister of Net Zero. A very big spender long before Covid-19, but to little or no obvious effect. He even lifted the requirement that jobs in Britain be advertised first in Britain, making him the most pro-immigration Prime Minister ever, since Liz Truss never got into her stride. Johnson was closer to Stonewall than any Prime Minister before or since. The lockdowns were Johnson’s. The Northern Ireland Protocol was Johnson’s. The war in Ukraine was Johnson’s.

Truss may now say that “Trump has been proven right about pretty much everything”, but if she objected to any of this at the time, then, to say the least, she never resigned. Britain began its singular level of commitment to Ukraine while she was Foreign Secretary. I can hardly contain my excitement at the impending launch of her social media platform, destined for all the success of Louise Mensch’s.

Welcome to the coke war. On one side are those for whom coke is used in smelting. On the other side are those for whom coke is used for snorting. Whether it is the coal to make their turbines and their cars, or whether it is the precious metals for their Green New Deal and their toys, or whether it is their cocaine, the Snorters will cheerfully import the produce of child and slave labour, extracted with no environmental standards whatever and then shipped over vast distances of carbon footprint. But they will never, ever, ever countenance the well-paid, unionised, environmentally safeguarded employment of their compatriots, the Smelters. Has the Labour Party chosen its side? Well, as Aris Roussinos writes:

Like the nursery-rhyme kingdom lost for want of a nail, Britain’s steel crisis is the latest reminder of the country’s nonsensical energy policy. When the Labour Party pitched its iteration of Net Zero to sceptical voters, it made much of the long-term national security benefits of the energy transition. No longer would Britain be beholden to foreign powers for its energy needs; instead, its wind and wave power would guide the world into a fossil fuel-free future. Unfortunately, the breakneck pursuit of Net Zero, begun under Theresa May, has added dangerous new vulnerabilities.

The Government’s panicked intervention to halt the closure Britain’s last surviving primary steelworks was a good and necessary policy, saving for the nation the theoretical ability to produce the tanks and warships its adventurous foreign policy demands. Yet keeping the Scunthorpe mill alive as a producer of virgin steel requires coking coal: there is no alternative technology yet in existence to that pioneered by this country during the Industrial Revolution. The mooted deployment of the Royal Navy to protect the shipments of coking coal necessary to feed the furnaces dramatically underlines the additional onerous burdens Net Zero places on the nation. Securing distant coal supplies strains already overstretched armed forces. It is simply not a serious response to an existential, self-made problem.

The near-extinction of British steelmaking capacity, and of the country’s ability to feed its own furnaces, is the fruit of decades of Government failure, for which both major parties deserve censure. Yet that this desperate last-minute dash to secure coal supplies comes just after abandoning the Whitehaven coking coal mine bid, following Government withdrawal of support for the venture, strikes at a policy incoherence to be laid at Labour’s door alone.

It is simply madness for a country blessed with some of the world’s richest coal deposits to find itself scrabbling abroad for coal it can easily produce at home, to higher environmental standards, without the additional carbon emissions produced by transporting it across distant oceans. The nation has found itself held hostage to an accounting trick, keeping carbon emissions off the national ledger by subsidising its production elsewhere — whatever the cost to the environment, the economy or the country’s security.

In these circumstances, it is possible to grudgingly sympathise with Jingye, Scunthorpe’s newly-maligned Chinese owner. Having offloaded responsibility to a foreign company for which the mill was a minor venture, the Government now appears to want China to take the blame for closing it when, rightly, the mine’s former bosses can complain that it is British energy policy which made the mill economically unviable in the first place.

Keeping British steelmaking on fragile life support, fed by hastily-sourced injections of fuel, is not a tenable policy. If the Government wishes to prove itself serious on national security, it needs to keep the ability to produce virgin steelmaking alive, with room to drastically scale up production in the event of an emergency. If it wishes to keep steelmaking alive, then it requires coal. If it requires a secure supply of coal, the only answer is native production.

The remorseless logic of Labour’s last-minute intervention thus leads inexorably towards either the abandonment of Net Zero, or a major carve-out for national security — a state of exception that also encompasses keeping the National Grid more stable and secure than Ed Miliband’s hasty energy transition has yet managed.

For all that Westminster intended to lead the world in the allegedly forthcoming shift to renewable energy, the only thing that has been managed so far is a unilateral Great Leap Backward, granting Britain the highest energy costs and the weakest industrial capacity of any major developed nation. Despite the rage of the last surviving neoliberals, Labour is right to congratulate itself for moving to nationalise Scunthorpe. Yet the logic of its decision leads the Government towards breaking a newer but somehow more powerful Whitehall taboo: finally jettisoning the self-imposed energy stranglehold inhibiting the nation’s economic survival.

And Owen Jones writes:

British Steel is heading for nationalisation – against the will of the government. This is an important point, because it speaks to dogma colliding with practical reality. Here is a private company defeated by the “sink or swim” laws of the free market ideology that produced it, demanding instead that taxpayers come to its rescue – by threatening to make shortsighted business decisions with damaging consequences for the country’s future. What happened in Scunthorpe is not an outlier in the failed experiment of privatisation, and the government’s emergency takeover tells us that public ownership is a realistic solution if there is a political will.

Here’s another example: water. Even the City editor of the Financial Times – hardly a bastion of radical socialism – concluded that its privatisation looked like “little more than an organised rip-off”. Since privatisation in 1989, water companies have piled up more than £60bn in debt, while our water bills have continued to rise. Yet despite rivers and seas being blighted with raw sewage, and the loss of 1tn litres of water from leaky pipes in 2021 alone, shareholders raked in more than £85bn since this most basic of human necessities was flogged off.

On both British Steel and water, Nigel Farage outflanked Labour – from the left. That this Thatcherite former City trader demanded British Steel’s nationalisation as he posed with steelworkers, and called for Thames Water to go bust, is testament to how unpopular privatisation is. A poll last year found that 82% of Britons thought water should be publicly run – compared with 8% who believed in privatisation, which is half as many as those who think the moon landings were staged. Three-quarters believe rail and mail should be publicly run, with more than seven in 10 backing nationalised energy.

But as with the banks in 2008, nationalisation is treated as a reluctant emergency measure. Starmer backed nationalisation of the natural monopolies during his leadership campaign. Indeed, he told the BBC’s Andrew Neil in 2020 that nationalisation of those industries was a pledge that would appear in Labour’s next manifesto. But the following year, he told the BBC’s Laura Kuenssberg that he “never made a commitment to nationalisation”, itself testament to his pathological dishonesty. It’s true that Labour has committed to nationalising rail, but after the resignation of transport secretary, Louise Haigh – who genuinely believed in public ownership – what that will mean in practice is highly questionable, especially if an increasingly austerity-driven government starves it of investment.

Public ownership shouldn’t be a last resort. From the banks to the myriad private contractors feeding off state largesse – such as Serco, which was fined more than £19m after billing taxpayers for tagging prisoners who were dead – private ownership has repeatedly failed. What’s now missing is a positive vision of what public ownership could look like in the 21st century. A lot of the blame needs to be directed at Peter Mandelson’s grandfather – a chap named Herbert Morrison, who developed Labour’s form of nationalisation after the second world war. That model was top-down and undemocratic. Most of the board members of the newly nationalised industries were just brought over from their privately run predecessors. The first chair of the National Coal Board, for example, was a former coal baron named the 1st Viscount Hyndley. These industries were kept at arm’s length and run on a commercial basis.

In 1946, one Liberal politician had a point when he said that a miner who went to work in this newly nationalised industry “will see the same manager, the same deputy, the old roadway, the same coalface and, on Friday, he will probably be paid by the same man”. There was never any genuine public enthusiasm for privatisation, but this undemocratic system meant that Margaret Thatcher won passive acquiescence by arguing: “What earthly sense is it that families should have a millionth share in some nationalised industry which is indifferent to their needs and wishes?”

A democratic alternative is surely possible, where representatives of workers and consumers play a key role in running industries. In French cities such as Paris, for example, the water supply was privatised from the mid-1980s onwards, and prices soared. When it was taken back under public ownership, a board of directors was installed that included elected city councillors, trade union representatives and members of environmental non-government organisations. The Observatoire parisien de l’eau is an assembly representing civil society that oversees the board’s decisions. Not only have water bills fallen by 8% and leakage levels halved, but the city offers taps with sparkling water.

Rather than handing power to unaccountable bureaucrats, public ownership could be part of a new vision of democratising society – taking back control, if you will. The disillusionment with democracy, after all, has so much to do with governments hiving off their functions to markets, and then claiming impotence in the face of change. Privatisation never forged the popular capitalism promised by the “Tell Sid” British Gas advertising campaigns of the 1980s: by 2022, just 10.8% of UK shares were owned by individuals, down from 28.2% in 1981. Rather than handing wealth and power to the people, privatisation helped forge a model defined by low growth whose diminished proceeds disproportionately swell the bank accounts of a tiny few.

Handing power to the people away from the elites is a message that will resonate in an age of mass disillusionment. Alas, Labour has vacated so much space that even Farage can posture as an economic radical by comparison. That is a travesty. But as British Steel and flailing water profiteers underline, the old order is dying; its morbid symptoms are everywhere. What is needed now are politicians with the imagination and determination to build something else.

Begin by electing the Workers Party, first at Runcorn and Helsby, and then also at Hampstead and Highgate.