Unlock the digestive of free editor
Roula Khalaf, the FT editor, chooses her favorite stories in this weekly newsletter.
The writer is an old lecturer in economic and social history at the University of Glasgow. His latest book is ‘Coal Place’
The future of the last ovens of the UK explosion at Scunthorpe Steelworks depends on balance. Closing will bring about the production of British virgin steel – making steel from raw materials – to the end. Chinese owners of Scunthorpe, Jingye, say the Lincolnshire plant is heartless. President Donald Trump’s fees – and the world’s response – underline the fragility of global trade. These are harsh winds, to which the remaining elements of the British steel industry have been exposed.
In a sign of gravity of the situation, ministers say they are prepared to nationalize Scunthorpe, which employs 2,700 people. Keir Starmer, remember, overthrew previous work commitments for public ownership and there is little public money to spend.
But steel is the raw material for an industrial economy. If Britain will realize the manufacturing potential offered by today’s push for green energy – both offshore and offshore wind turbines, solar farms, electric vehicles and battery storage depend on steel – then it still has to produce steel.
It can still deduct public ownership – Parliament is remembered to hold an urgent debate this weekend on how to save Scunthorpe. But British governments on both sides of the line have been restrained on the subject for decades. Believing that privatization will give high economic performance is an article of trust and often relying on failure to understand both the purpose and the purpose behind previous public enterprises. This makes the United Kingdom a farthest in Europe, where the state often owns important industries.
It is also worth mentioning a paradoxical result of UK privatization in the 1980s and 1990s: the entry of foreign state -owned enterprise into the British economy. The French, Irish, Danish and Norwegian governments own our wind farms. The Dutch state has run our trains. The Chinese government, through Petrochina, parts of Grangemouth, the oldest oil refinery in the UK.
However, nationalization is still often seen as an outdated, socialist ambition to control the “command heights” of the economy. When in 1995 Toni Blero awarded the “Clause 4” of the Labor Party Constitution, which engaged it in public ownership of the means of production, distribution and exchange, seemed to marked the end of these goals.
History reveals the pragmatic origin of many previous nationalization – governments were thrown to address the challenges that private owners could not or would not meet. Following the work of Clement Attlee’s work nationalized coal, electricity and railway in the late 1940s, investments and modernization followed. The “merry-goo-roast” trains, developed for the purpose, carried coal from new “superpits” to giant energy stations.
Steel itself was the most controversial nationalization of the Attlee government, the one that returned after the conservative victory of the general elections in 1951. At that point, Steel was judged very profitable and very important for the regions to be led by London.
However, by 1967, this changed. Steleliku, then in need of deep restructuring, was taken public by Harold Wilson. The newly formed British Steel was in charge of shrinking the workforce and giving relative success in this difficult exercise. The contracting regions of coal and steel making regions were supported. Investing in new industries such as the production of vehicles varied labor markets.
Critics of public ownership argue that government control of the main national industries was an important impetus for the fall of the British in this period and should not be repeated. Publicly-owned enterprises have been charged as non-flexible, centralized corporations of the mid-20th century. But they include the “golden part” of the Government in the BP as well as the devolved public provision that includes the transport and housing of the Council. Scottish water performance in investment and cost also stands favorably when compared to privatized monopolies in England and Wales.
And the performance of the steel sector since privatization now leaves Britain in the parking lot to make the first large industrial economy without the ability to make steel from scratch.
SCUNTHORPE Owners since 1988 include the British-Hold-Hold-Corus partnership, the Indian Tata Conglomerate, then Greybull Capital, a set of specialized investments that buy businesses with problems, and, finally, Jingye. The harmful effects of being a suburban factory in a global multinational have been in full appearance in recent weeks: Note Jaringe’s lack of government offer 500 million to keep Scunthorpe open.
In an economy marked by new uncertainty in the production and supply of essential raw materials, as well as in trade, it is not bad that nationalization has now returned to the table.
