|Volume 53 Number 31, November 18, 2023
Steel workers demonstrating at Port Talbot in June 2022
The decision to close down blast furnaces at British Steel has met with much derision by the workers who are faced with destruction of raw, "virgin" steel production and loss of jobs as a consequence. It is estimated that at least 2,000 jobs will be lost. Blast furnaces will be replaced with electric arc furnaces at Scunthorpe and Teesside. Parts of the site in Scunthorpe will become vacant.
Despite the serious consequences of this decision, there is no reference to it in the King's speech, and virtually nothing either from the government or any of the Westminster cartel parties. The Department for Business and Trade only claimed the proposals were greener, putting the British steel industry on an allegedly more sustainable footing. The so-called "Opposition" in Westminster has failed to offer anything concerning such a decision affecting this important foundation industry, fundamental to the economy. The Labour Party failed to mention it in response to the King's speech in Parliament, showing their complicity and a lack of any alternative. Meanwhile, the government has offered a pay-the-rich subsidy of £300m to the company.
The £1.25bn proposal for electric arc furnaces is mainly for recycling purposes. By melting down scrap, they produce steel of a lower grade to that produced by blast furnaces. Such recycled steel is inappropriate for some uses, such as building or vehicle manufacture. Production of raw steel still requires blast furnaces. Raw materials include iron ore, which, though in abundance in Britain, is largely untapped as a homegrown resource. The shutting-down of blast furnaces is an indication of the decline of the British economy within the interconnected economy of the imperialist system of states and in the world as a whole, and is related in turn to the general decline of Britain as an imperial power.
In this case, China's Jingye Group own British Steel. The monopoly purchased Britain's second-largest steel producer following its insolvency in 2019, pledging to invest over £1 billion over a ten-year period. In February this year, the company announced plans to close its coking oven, citing high "labour costs" in British steelmaking, indicating its desire to cut staff.
The company said that investment in the arc furnaces is "subject to appropriate support" from the British government. In many other Chinese investments, in the conditions of trade disputes between China, Britain and the United States, investment has been either limited or blocked, nominally for "security" reasons. At the same time, the economy's foundation industries have already been offered to oligopolies like Tata, who have taken over the lion's share of steel and the formerly British-controlled car industry, so that now Tata Jaguar and Tata Steel call the shots. Earlier in the year, Tata said it would close its two blast furnaces in Port Talbot and replace them with electric arc furnaces, destroying 3,000 jobs. Yet on top of this, a subsidy of £500m was offered by the government.
Masking its real intentions, head of British Steel Xijun Cao said the company could not continue to maintain its blast furnaces and meet its environmental obligations.
"We have engaged extensively with the public and private sector to understand the feasibility of producing net zero steel with our current blast furnace operations. However, thorough analysis shows this is not viable," he said. "We need the UK to adopt the correct policies and frameworks now to back our decarbonisation drive." Of course, no mention is made of the export of carbon emissions elsewhere if virgin steel production is moved abroad.
The closure plans will bring Britain's capability to produce virgin steel to an end, seriously undermining the economy. The government even acknowledges this fact, and yet acts recklessly, claiming that output from new electric arc furnaces will cover most of the country's needs. But they present no scientific analysis of what these "needs" are to a modern socialised economy aimed at meeting the needs of the people. Neither are there any new plans to invest in hydrogen to create high quality steel. Instead, the government adds to the deception by pretending to care about environmental concerns, pointing to the fact that, by using coke, blast furnaces produce carbon dioxide. But where is the government when it comes to the overall question of cutting carbon emissions? It is already moving the goalposts on this question. Its policy decisions, which will affect the long term, are based on the short-term and narrow interests of capital, the profit-making of the global oligopolies.
Concerns over the proposed timeline of the closures and replacement have led unions to consider strike action. They have already threatened such action over Tata's earlier plans.
Roy Rickhuss, general secretary of steelworkers' union Community, condemned the plans as "dangerous and foolhardy". They "would leave the UK unable to make steel from raw materials and dangerously exposed to international markets," he said.
The closure would be "a hammer blow" for steel production in Britain, said GMB national office Charlotte Brumpton-Childs, and "devastating" for Scunthorpe.
Yet workers will not "stand back" as the steel industry was "dismantled in real time," warned TUC general secretary Paul Nowak, noting that "other countries have shown that it is possible to transition to zero-carbon steelmaking and protect good steelmaking jobs for the future. We can do the same here."
There is a need for investment in the key foundation stones of the socialised economy such as steel production. Planning a new direction for the economy entails increasing the manufacturing base. Steel manufacturing is a vital part of the economy, which should be all-sided. The working class with its independent programme has the project of becoming the decision-making power and building such an economy, aimed at serving the needs of the people and harmonising these needs with those of the natural environment.
Destruction of foundation industries is akin to the destruction of the means of production. A degree of self-reliance is needed in foundation industries to protect an economy from the vagaries of markets under the sway of the global oligarchs, which act at will without a moment's thought for the local economies where they operate, and which shift production around the world as suits them. It is the workers who have an interest in the future of society and they will not see the steel industry being wiped out altogether by the chaos that dominates human relations at present.
A new direction is needed for the economy, and the argument can be made for a thriving steel industry at its centre. Public control is needed over the steel industry, control by the actual producers. The working class draws the conclusion that the socialised economy must be brought under the control of those who live, work and produce for it if it is going to be capable of uninterrupted extended reproduction while safeguarding the future of the natural and social environment.