The Labour government’s devotion to privatisation is under threat as it is forced to take control of the ailing steel industry. Kevin Crane explains the politics behind this turnaround

There are few things more pathetic than the sight of cowards trapped between two things they are afraid of, which is essentially the Starmer government all over. We can give plenty of examples of them disgracing themselves in this way, but their complete paralysis over the question of steel right now is an absolute doozy.

It’s not news that steel manufacturing has been in trouble in Britain for a long time, with the international market being somewhat flooded and the country’s production facilities lagging in investment and technology. As with so much of the rest of the economy, however, Donald Trump’s tariffs and trade wars have poured petrol on the flames.  His global 25% tax on any and all imports of steel into the US have opened up the possibility that all steel works in Britain might shut entirely, and forever.

Readers are probably aware that the historic plant in Port Talbot, Wales, has been the scene of a long and bitter fight for steel jobs, as its private owner – Tata – has closed its blast furnaces and cut the workforce on the grounds of shifting to a ‘more environmentally friendly’ electric arc plant. As workers at Port Talbot have pointed out, these claims would feel more sincere if Tata wasn’t cheerfully running blast furnaces elsewhere in the world.

But it’s now Scunthorpe’s 166-year-old steel plant that is facing closure. This plant is still owned by a company that bears the name ‘British Steel’, a legacy of the previous state-run company, but decades on from privatisation it is owned by a Chinese multinational. With China’s trade strategy now being radically shifted to rise to Trump’s trade war challenge, these owners have essentially abandoned any plans they might ever had to seriously keep the historic workplace open.

In reality, anyone could have foreseen that this was likely to happen, even if the specifics of it being forced by a new American ultranationalism were unpredictable. The problem is that our political, economic and media institutions are not driven by real-world analyses, they are strictly configured to obey the ideological orthodoxy of neoliberalism that Western elites have imposed as the sole legitimate ideas in our society since the 1980s.

Neoliberal governments are, more than anything, convinced that it is wrong on all levels to leave any part of the economy out of the profit-driven private sector. This can be problematic enough even if those economic sectors are making plenty of money for private owners, but it absolutely falls apart if there are no profits to be had. So, what successive British governments have been reduced to for decades now can be described in no honest way that isn’t the word ‘bribery’: chuck public money at the private companies to enable them to pretend a profit has been obtained. Anything but taking the industry back into public ownership.

As I write this, the desperation of the Labour Party to hold fast to this model reeks like a malfunctioning furnace. On Friday morning, junior minister and MP for the Welsh seat of Aberavon Stephen Kinnock visibly trembled in a TV interview as he tried to justify his continued opposition to nationalisation, in a very telling exchange:

‘Well, we are moving towards a competitive viable steel business here in the constituency based on recycled steel and I am hoping that spades will be going into the ground in the summer on that. That is a vital way to protect jobs, because the best way to protect jobs is to build and industry that works and that can stand on its own two feet.’ [emphasis mine]

The interviewer noticed that this wasn’t an unqualified support for the future of core Labour supporters.

‘Sorry – if a company withdraws because it can’t make any money, because there’s a trade war going on and there’s nothing the government has done to protect that business, you’re not building anything. It’s just a simple question… what will the government do?’

After a painful bout of stammering and silence, Kinnock replied:

‘Well, the government’s put £500m into that electric arc furnace, it’s a co-investment with Tata Steel …  Steel is a vitally important part of our economy and its vital for our national security, so this government will do what it takes to ensure that we keep a steel industry in this country, but it should be based on partnership with a steel business that has got a vision for the future and that is what we’re working towards.’ [emphasis mine]

Kinnock’s unwavering commitment to private ownership – ahead of either workers’ jobs or a societal need for a reliable steel supply – is absolutely shared by his colleagues. Earlier this week, sometime Labour leadership hopeful Lisa Nandy also affirmed her belief that a ‘commercial solution’ was both ‘achievable and within sight’ So, we could say that Kinnock is in good company… if it were any way possible to define Nandy as good for anything.

But these absolute dummies’ loyalty to the line is, sadly for them, being betrayed from above. Both Keir Starmer and Rachel Reeves have begun to utter the dreaded words that ‘all options are on the table’, making it clear that they – or perhaps more likely their advisors – have realised the writing is really on the wall here. Starmer has taken the unusual step of calling Parliament to sit on a Saturday, raising seriously the possibility that he might break with his usual pattern and actually do something useful.

If Labour does change position, it will not be because its better nature has prevailed. The left and the trade union movement has called for public ownership for a long time: the party’s dominant right-wing simply do not care. What they do care about is the fact that Labour’s popular support has imploded in less than a year of government, and they are genuinely terrified of threat posed to them by new challenges, particularly the hard right Reform UK.

Reform leader, Nigel Farage, has seized the opportunity to build on already large votes in regions like South Wales and Northeast England by declaring his party’s support for nationalisation and posing for a striking photoshoot with steel workers (or, at least, guys dressed as steel workers). There is a deep irony in this self-professed Thatcherite nailing his colours to public ownership, just as there is in the supposed party of workers being willing to throw workers to the wolves for imaginary private profits. But Reform is committed to winning power, and it knows perfectly well that this is how to get the support to do that. We can expect this party to graft increasingly more and more statist policies onto itself in order to garner more support for its agenda: European countries like Hungary have been dominated by a hard right politics of this sort for some time.

The left in Britain needs to be clear about this situation: we are seeing Labour being forced, potentially, to do the right thing not out of strength, but weakness. People will see this, and neither the party, nor the trade union movement are poised to make the short-term political gains that are available. Doing the right thing for the wrong reasons is still doing the right thing, but it does mean that there are going to be serious problems. Any version of public ownership that Starmer introduces will be intentionally flawed, in the same way the various fragments of the railways that defaulted back under government control this century were botched on purpose. We should be using this moment both to point to the failure of Thatcher’s legacy and to point to the possibilities of pushing further for a socially useful direction for steel making, with a focus on using the resources to make sustainable infrastructure to benefit ordinary people, rather than engaging in the mugs’ game of chasing never-to-be-had profits or winning trade wars.