How the government left an old steel town for dead.
Late last year, I received a call from my friend Yair. He informed me of two developments in his life. Firstly, he had moved from Middlesbrough to the neighbouring Teesside town of Redcar. Secondly, he was now unemployed. My first thought was, “He’ll fit right in, then.”
In September 2015, the Thai-owned steel company Sahaviriya Steel Industries (SSI) announced that it was closing its 100-year-old Redcar plant at a cost of 1,700 jobs, with around 500 workers retained to keep the coke oven and power station operational. The following month SSI went into liquidation, jeopardising the remaining jobs. Ultimately, at least 3000 workers from the wider supply chain were laid off. It has wreaked devastation on a community built on steel.
Today the Redcar steelworks stands eerily still on the south bank of the River Tees, an empty but spectacular shell, devoid of life or purpose. Shrouded in its spectral shadow is, perversely, a big golf course. Fun. Across the fields, the chimneys of chemical manufacturers Wilton International billow as their plant bustles with life, just to rub it in.
Since we both graduated with a BA in Creative Writing and Film Studies last June, Yair, 23, has enjoyed intermittent breaks from unemployment. At one point he went door to door for a charity, but he wasn’t making the numbers so they let him go. Then he moved to Redcar, where they made him take part in a Workfare scheme at Poundland in return for the same benefits he’d be getting if he did nothing. He found it demeaning and draining on the soul.
Yair’s housemate Jeri, 24, is the only paid employee at the Redcar community bank. He has lived in Redcar all his life. Jeri helps his clients put together CVs, look for jobs, and get hold of low-cost loans. He says that, as they struggle to adapt to an unfamiliar job market, older, skilled workers are being dragged through the system just like a fresh-faced whippersnapper like Yair. And they’re not just coming from the old steelworks, either. Robust enough welfare provisions haven’t emerged to soothe the many woes of Redcar’s swelling unemployed ranks. It now has the 10th highest unemployment rate in the country.
Jeri tells me about one victim of cuts to public services who passed through the community bank, for many years a carer for a loved one. “I had to edit a CV on Thursday for a 62-year-old woman.” The relative she cared for “had just died six weeks ago. And she didn’t know how to…she’s literally still grieving, she’s 62 anyway and I’m making her a CV and she goes, ‘what chance do I have getting a job?’ And I was like, ‘Aw, no, you’ve got a chance.’ She was like, ‘Yeah, yeah.’ She’s a 62-year-old, and I’m sitting there going through her CV with her, trying to find her a sales job.”
“That’s not just here,” he caveats, “that’s everywhere. That’s just, y’know, Tory government.”
But Jeri has first-hand experience of Redcar’s former steelworkers and their struggle to reassimilate into its economy. “I can understand (their frustrations.) They come in, and they do get tret’…” he pauses, “…pretty shit, to be honest. Some of them, y’know…you are a skilled worker, but they’re getting a bit ‘you’ve gotta do this, you’ve gotta do that.'”
Their transition, he says, involves a huge change of mindset. Jeri tells me about an ex-steelworker who came to see him a few weeks ago. There is a measure included in Business Secretary Sajid Javid’s £80 million “rescue package,” designed to provide “important support to workers and the local economy,” whereby, if a company takes on a former SSI worker, the government will pay £11,000 of their wages for two years. When Jeri told him about this, the man’s response was, “Yeah, but who’s gonna pay the other 20K?”
I suggest that this demotion in the workforce is a blow to workers’ senses of pride and dignity. Jeri agrees.
“I wouldn’t want to go from doing that…y’know, it’s a very prestigious job round here. It’s a very prestigious manual job. It’s like, you’re not a skilled worker anymore. You’re not gonna be earning 30K. You’re gonna be working in a shop. You’re gonna be earning half of that. There’s some that were on 30k plus a year, because they’re skilled tradesmen, and they can’t use a computer. So we’re sat there, writing out their CVs for them. I mean, there’s a lot of that.”
Jeri says “people come in wanting loans, and needing them.” He’s given fourteen to SSI workers since he started working at the community bank, and only two or three of the recipients have paid them back. Is there hope, I ask, that he might see the rest of the loans again? “No hope. I don’t blame them, to be honest. It should’ve been a grant, not a loan.” He says the bank handed out up to £500 to each SSI worker. “God knows how many.”
Whilst I was up in Redcar, another steely storm was brewing. Tata Steel had announced the closure of their Welsh Port Talbot plant, putting 40,000 jobs at risk. After much hand-wringing talk of how nationalisation “is not the answer,” on April 21st Sajid Javid announced that the government was willing to nationalise a stake of 25% if a credible buyer materialised.
Labour’s Stephen Kinnock (in whose Aberavon constituency Port Talbot resides) has a point that 25% of the necessary £1.5bn is “helpful but quite a way short of what is required.” But it is hard not to savour the delicious irony that British steel is to be brought partially back into public ownership by Sajid “there’s no place for state ownership in today’s economy” Javid, a man so steadfastly devoted to the small-state ideals of the free market right that he wooed his wife by reading her extracts from Ayn Rand’s ultra-individualistic libertarian shagfest The Fountainhead.
In The Daily Mail the iconoclastic Tory columnist Peter Oborne, describing Javid as an “ideological Thatcherite,” recommended Cameron sack him, saying he had been “left with zero credibility and is being forced to implement a policy he opposed. An honourable minister would have resigned.”
The left-wing economist and writer Paul Mason, who had told Newsnight in March that “I think he’s going to have to nationalise some or all of those plants,” boasted to his Twitter followers that, “As I predicted, to Blairite and neoliberal incredulity – Tata Steel 25% nationalised.”
But Javid had been happy to let Redcar fail. Had he been trying to make an example of that failure of the market, with the smaller, belated Port Talbot investment as his awkward concession to basic political and economic necessity?
Defending Javid’s industrial policy in the i, Emran Miam provided some insight into why he may only now have chosen the path of state intervention. “If the private sector,” he wrote, “decides that steel production in the UK is uneconomic, then the Government has little room for manoeuvre,” because the Department for Business “relies on business to take (the) view” of what technologies or services are economically viable “and then it responds.”
An editorial in The Northern Echo welcomed “the latest move that could protect jobs” but asked why state intervention “was deemed a step too far when Redcar asked for help.” They argued that the biggest criticism that could be levelled at the bailing out of Redcar with public funds could also be levelled at Port Talbot – that it would be throwing money at a loss-making enterprise.
The economist Richard Murphy, however, refutes the idea that the British taxpayer will lose money in the bailout, arguing that “the UK government is running a deficit. Any extra spending will be bond funded and will not be paid for by taxpayers.” He says, “taxpayers will never repay those bonds: the national debt has net increased for more than 320 years and despite George Osborne’s claim that he will run a surplus, and so repay bonds, by 2020 there is not a hope of that happening.”
But it seemed to The Northern Echo like preferential treatment, designed to maintain support for David Cameron at a difficult time, and hidden behind the bejewelled smokescreen (picture it) of the Queen’s 90th Birthday.
Whilst Cameron has certainly had his fair share of troubles of late, and a “senior Government source” told The Daily Mirror he “has specifically told us he does not want to go down in history as another Thatcher,” (famed for her own deindustrialisation project) I was reminded of what Jeri had said to me when I asked him if he thought the Port Talbot plant should be nationalised.
“They are going to get involved,” he seemed certain, “yeah, they’re gonna help out in Port Talbot. They’re just making all the noise now, but, yeah. And just the fact of the idea that they’re going to is already enough to start people going a bit mental.”
What about, I asked? “I can understand with the whole Port Talbot thing, people’s anger…it’s just…looking into different avenues at Port Talbot is what annoys a lot of people up here. When the government gets involved and stuff like that, which they’re kind of doing in Port Talbot…that’s just something they wouldn’t do up here. That bit, I can understand why people do get annoyed.”
Jeri thought residents of the areas around Redcar would resent it if the government decided to help out the Welsh steelworkers. “Definitely, 100%. There’d be a lot of outrage.” The government’s unwillingness to act in the first place, he said, “widens the North-South divide, very much so. Local opinion becomes very hostile to the South when this kind of stuff happens.”
I was duly apologetic for my reprehensible Southern background, and pleaded that my socialism runs so deep that, if you cut me, I bleed red (although I think this is true of a few people.) But the hostility doesn’t seem to extend to all of my wretched Southern kin. “A lot of people round here are hoping that the Labour Party can beat out the Tories and turn things around up here,” Yair tells me. He joined Labour last September, on the day Jeremy Corbyn was elected leader. “Corbyn is the best chance we have of that. Both Jeri and I are supporters, although he’s not as vocal as I am.”
Corbyn’s right-hand man, Shadow Chancellor John McDonnell, has outlined a “four-point plan to rescue the steel industry,” Firstly, by “stabilising” it by temporarily nationalising plants threatened with closure until a buyer is found. Secondly, Labour would “fast-track” infrastructure projects requiring steel and build with British product. They would think of sustainable ways to “restructure the industry” and, finally, seek to “create a level playing field” by looking at business rates, energy prices, and initiatives to stop the market being drowned in cheap foreign steel, primarily from China.
Much of the present steel crisis can be attributed to the malign influence of the far left, and a British political leader’s sycophantic capitulation to his extremist allies. Now that China have mostly dispensed with the whole wishy-washy loony left side of communism (ie. the economics, ie. the entire thing) and retained only the bits appropriate for the modern age (the brutal, dissent-crushing authoritarianism) Cameron would ride a tank through Tiananmen Square if he thought it would impress Xi Jinping.
China is responsible for almost half of global steel output. Its government heavily subsidises the industry, and imposes a 46% tariff on EU imports, including steel from Tata. Some free market.
No sooner had I headed back southwards and begun transcribing my interview with Jeri, than it emerged – amidst revelations drawn from the biggest leak of confidential documents in history – that Cameron had chosen to benefit for thirteen years from a secretive offshore trust set up by his father, situated in Panama for tax purposes.
He sold the shares on the eve of becoming PM, as if there was maybe something wrong with having them in the first place. But the fun didn’t stop with the secret trust. When Cameron partially bowed to public pressure by partially publishing his tax returns, they indicated that his family had wrangled what’s politely known as a very “preferable” rate of inheritance tax, although I still call him Dodgy Dave.
From the flagrant dishonesty of his five different explanations of his tax affairs, to these further questions of transparency, there’s a whole other article to be written on Cameron’s role at the centre of the Panama Papers scandal. In fact, I already wrote it. It’s called “It’s time for David Cameron to resign” and you can find it on my blog, ThinkCeaseBlog.wordpress.com. But I digress.
What really stung was when The Financial Times revealed that Cameron – who likes to talk a tough talk on tax avoidance – “personally intervened in 2013 to weaken an EU drive to reveal the beneficiaries of trusts, creating a possible loophole that other European nations warned could be exploited by tax evaders.”
The government’s limp defence of stunting these steps towards accountability was that trusts “are sometimes used to protect vulnerable people.” The FT added, however, that they “can be a tool for financial secrecy and for shifting assets offshore.” Cameron’s contention that secret trusts of the kind he profited from are not a significant factor in the vast global network of tax avoidance is laughable in light of the Panama Papers.
While Business Minister Anna Soubry has blamed the government’s hesitance to bail out the steel industry on EU restrictions on state aid, countries like Germany have found ways past this, taking advantage of incentives to invest in renewable energy. What’s more, at a time in which our place in Europe is being hotly contested, an article published in the FT a week prior to the tax revelations lends further credence to the notion that the British government can exert a considerable influence on the European Union.
The Mirror attributed the steel crisis to “a ‘perfect storm’ caused by high energy costs and the dumping of cheap Chinese steel on world markets.” It seems extraordinary, then, that the FT would report that “according to senior European officials … Britain blocked attempts to strengthen EU trade defences against imports of cheap Chinese steel that have devastated Tata Steel’s operations in the UK.”
Axel Eggert, head of the European Steel Association, called the UK “the ringleader in a blocking minority of member states that is preventing … modernisation of Europe’s trade defence instruments.” Politicians supportive of the EU Out campaign have attributed the malaise of British steel – as they do with so many of life’s shortcomings – to EU policy. But it seems that the specific part of the EU enforcing the policies in question is the UK.
As a consortium of Welsh businessmen headed up by telecoms giant Terry Matthews, the third richest man in Wales, attempts to get its act together in time to purchase Port Talbot steelworks alongside the government, I start to think we’re living in strange times.
Down the road that links Redcar to the Teesside steelworks, smaller businesses snake up the hill towards the desolate plant. Some of them are still showing signs of life, like a mobile home service, or Redcar Shellfish Ltd, run in association with Yorkshire Crab.
The Teesside Beam Mill is still operational, and was recently sold to Greybull Capital for £400m, saving 700 jobs. How odd that, whilst, in Port Talbot, Sajid Javid of all people resurrects the state-owned asset that was once known as British Steel, Greybull are using that name to rechristen what remains of the Redcar plant.
Is common ownership back in vogue? Probably not, given that the fate of British industry rests in the hands of a man who, if born of the millennial generation, would most likely have found that his hyper-individualistic, Social Darwinistic political path led straight to a life of Men’s Rights Activism. Javid, stroking his eggy head, portentously murmuring “who is John Galt?” to nobody but himself as he sits under his unironically framed Gordon Gecko “Greed is Good” poster, is a perfect ideological disciple of George Osborne’s mission to reduce the size of the state.
Unfortunately for them, the sacred market sometimes says otherwise. It sometimes says, “Help! Help me! I know I said I didn’t want governments meddling with me but, seriously, I’m drowning here!” In the words of Paul Mason, “It’s all very well dissing nationalisation until your banking system collapses.”
It’s wonderful that Javid thinks market forces have legitimised state intervention in Port Talbot. But when a government takes office they enter into a social contract, and that includes protecting communities like Redcar. When a town depends on an industry, deindustrialisation wreaks havoc on the local economy. As Jeri told me, “They’ve taken a part of what makes Redcar Redcar.”
This piece was originally published in the May 2016 edition of Le Nurb.
Header image by by Jezz Richings.
Other, less good, pictures by Jack Frayne-Reid.