The Tata Steel plant at Port Talbot in Wales recently announced plans to lay off 750 of its 4,000 workers. These are only the latest casualties in the crisis of the British steel industry. Some 4,500 people in total have recently lost their jobs following the closure of Tata Steel works across the country – and those are just the workers effected directly; indirectly, thousands more involved in the supply chain to Tata will also suffer.
The job losses at Port Talbot are another nail in the coffin of domestic British industry, coming on top of the closure of the Redcar steel plant in Teesside last year, which saw the loss of another 1700 jobs. The days of the 1970s when the nationalised steel industry provided work for over 280,000 are a very distant memory now.
These closures only serve to strengthen the legacy of Thatcherism and of the post-Thatcherite consensus that has dominated British politics in the last 30 years. We are witnessing the results of privatisation and the rat-race philosophy of capitalist competition: ever-growing dislocation and destruction of working class communities.
The decline of British capitalism
All of this comes in the context of an international crisis of capitalism and, in particular, of the crumbling apart of British capitalism. With the long term economic decline of capitalism in Britain, the move to a parasitic ‘rentier’ economy of finance and speculation, and the lack of investment into genuine production, industry in the UK has been unable to maintain competiveness on a global scale.
Many urged the government to intervene and rescue the steel industry, or at the very least provide some sort of plan or financial aid for the families affected. But these pleas fell on deaf ears. The Tory government have stated categorically that they will not ban cheap imports from China – imports which have pushed prices to levels that make British-produced steel unviable.
In order to artificially maintain growth and employment levels in China following the onset of the 2008 global crisis, the Beijing government led a massive programme of Keynesian spending on infrastructure, including the provision of generous subsidies to Chinese steel makers. With the economy now slowing down in China, domestic demand dropped; nevertheless, China still continues to produce steel at huge levels, resulting in massive excess capacity in the steel industry, and leaving the Chinese government to pursue foreign markets. The result is that global steel prices have fallen 40% in the last two years. Chinese steel exports, meanwhile, doubled in 2015. But China alone is not the problem; US, European, and Indian steel companies are also flooding an already saturated market, resulting in a massive overproduction of steel on a world scale. After decades of underinvestment, there is no way the industry in the UK can compete.
The British government are well aware of these limitations, and in the corridors of Whitehall they realise their lack of influence and power to control or even effect the price of steel globally. As Tory business secretary Sajid Javid was forced to admit, “No government can change the price of steel in the global market”. Meanwhile, whilst cheap Chinese steel is dumped on British shores, the Tories are busy courting Chinese leaders with red carpets, suspect trade deals, and golden handshakes. The slowing economy in China is yet another reflection of the contradictions in the global capitalist system, and the impact of China’s subsidised steel exports illuminates the cracks in this system.
We must also acknowledge that Chinese steel workers – and all workers worldwide – can only ever temporarily benefit from their government’s protectionist policies. The working class everywhere will continue to be attacked and regularly deconstructed, only to then be rebuilt in a different location, as the capitalists seek to break the power of organised workers, push down wages in all countries, and maximise their profits.
Social fabric torn apart
With all the crocodile tears and political posturing of the Tories and their big business friends, it is easy to forget about the people that matter: the workers and their families. The wider social context of the steel plant closures is a sorry affair; nothing short of a disaster and a tragedy for the communities in Port Talbot, Teesside, and elsewhere.
Working class communities will go to wreck and ruin. Middleborough is a town that didn’t exist until iron ore was found in the hills of Cleveland. Now the very fabric of these communities is being ripped apart. Stress piles up on families, and the lack of a steady income will cause extreme social problems; domestic abuse, crime, drugs, violence, depression and prostitution will rear their ugly heads. The deconstruction of the welfare state and the NHS through Tory austerity and privatisation will accelerate the flourishing of these conditions; thousands will be thrown onto the scrapheap of society. As can be seen from the aftermath of the miners’ strike, formerly strong working class communities and trade union organisations will be gutted and broken, weakening the ability of workers to resist and fight back.
The Tories will argue blindly that this process is the responsibility of the individual alone – as Thatcher said, that “there is no such thing as society”. In reality, these social scars are the fault of the conditions caused by a loss of decent jobs; the loss of a general purpose and a steady income. This highlights the inability of capitalism to provide basic demands such as full employment, and is combined with an attack in this period on all the reforms and gains won by previous generations, such as the welfare state and the NHS.
The closure of the steel industries in Port Talbot and Teesside will see the tearing apart of our communities, all for the benefit of the elites of this world. These attacks on the working class are a continuation of the process that Thatcher started. The result, however, is that people are also growing increasingly angry, leading to a political radicalisation – and polarisation – taking place, as workers and youth seek a way out from this crisis. We must do our upmost to fight for the only alternative to this decrepit and rotten system – the socialist transformation of society.