Steel production is economically essential, including for renewable infrastructure, but the unions must adopt a fighting strategy to save it, argue Kevin Crane and Richard Allday

The impossibility of separating the ‘political’ from the ‘economic’ struggle is exemplified by the fight for the future of 3,000 jobs at Tata Steel’s Port Talbot plant in South Wales. 

While the mostly rather unedifying general election rages, not much mind is being paid in the mainstream to the conflict taking place in Port Talbot, South Wales, despite the stakes being far, far higher than most people realise. Tata, the Indian corporation that owns Britain’s last blast-furnace steel works, is threatening to close it down, ostensibly to make the plant greener, with the loss of almost three-quarters of the plant’s 4,000 jobs. The effect this would have on the local South Wales economy will be devasting on its own, as the works is a tentpole of employment and commerce. Beyond that, however, it would signal the end of specialist steel production in Britain, which has very serious consequences for the future.

Tata makes two claims to justify its hammer blow against steelmaking in Wales. The first is that it’s unprofitable, the second is that Tata can make steel more ecologically soundly by shifting from blast furnaces to electric arc furnaces, which are lower carbon, and just happen also to be less labour intensive.

On one level, you can demonstrate that the company is acting in bad faith very simply: it is actively building blast furnace steelworks in India. There is, however, more to it than that. Tata has played a deceitful game around the Port Talbot works for years, using the threat of job cuts to extract concessions from both government and the unions, only to press ahead with plans. Disgracefully, the Tory government last September gave £500m to Tata for ‘modernisation’, effectively paying them to throw workers on the dole (cf. News from the Frontline 22/09/2023).

The claims that blast furnaces are simply a polluting thing of the past are also an oversimplification, however.  Specific extreme high grades and specialist steels can only be made with them. Even if Tata makes good on the best version of its plans for the future of the plant, Britain may become permanently dependent on steel imports at a time when global supply chains are entering long-term decline.

Forging the future

Steel is not a substance the economy can run without, and this is even more true as we try to adapt to a more ecologically beneficial infrastructure in other areas. Initiatives like upgrading the electric grid and electrifying railways are vital for bringing down carbon emissions, but they won’t happen without a large supply of steel.

In fact UK Steel (the trade body) claims that, of £4.3 billion already budgeted for in the government’s infrastructure development plans, over a third (£1.5 billion) is going to steel producers overseas, and that is not counting the steel required for the proposed on- and off-shore wind-generation developments. That alone is put at over £3 billion. So, of approximately £7.5 billions budgeted for steel, less than 20% is committed to being produced in the UK.

The grid modernisation, along with rail electrification and wind generation provide the opportunity not only for continued employment for Port Talbot’s 4,000 workers, (and the thousands of other steel workers, in Scunthorpe and specialist producers), but for thousands of jobs required in the infrastructure projects. It could reverse the decline of the British steel industry, which has seen a year-on-year reduction in production, so that it now produces less than half the steel it produced just ten years ago.

At present, Britain lies at the bottom of the G20 league table for its steel sector, relative to the size of its economy. This is important because steel is an essential component of any and every manufacturing economy. It is not so relevant if the only thing you’re interested in is banking and financial services, which explains why the Tories couldn’t give a flying fig about the steel industry.

One of the consistent justifications for the closure of the blast furnaces at Port Talbot and Scunthorpe has been the dramatic surge in energy costs resulting from the global instability caused by the wars in Ukraine and the Middle East. No commentator seems to have pointed out the shortsighted nature of this. ‘Green’ energy production – wind, hydroelectric, solar, tidal etc. – is not subject to supply fluctuations or sanctions. The wind blows across dictatorships and democracies alike; the tide flows in and out, and the sun pours out its energy everywhere. Once the investment is made, the price of this power is way cheaper than fossil fuels and the cost of the investment is a political choice.

The Battle for Port Talbot

Port Talbot’s still-significant workforce is represented by three unions: Community, the GMB and Unite. Community and the GMB, representing fairly specific and more traditional grades in the plant, have generally been less militant than Unite, which represents more general grades that are more in the firing line for job cuts. Unite members had been observing an overtime ban until this week and had been due to go on all-out strike action immanently. This has, however, now been suspended as Tata has made an offer to go into renewed talks about the future of the plant.

It may well be the case that both the unions and employers see the election this week as a significant change in conditions. The Tories are basically certain to lose, and this means that Prime Minister Rishi Sunak and his ‘Who cares?’ attitude towards the productive economy will be gone. This, however, does not secure the future of the works on its own.

The various union leaderships, particularly Unite, argue that they have an agreement from an incoming Labour government to do whatever it takes to keep the furnaces open. Given Keir Starmer’s track record of lying about everything, and the mounting rumours that incoming chancellor Rachel Reeves is going to announce that the economy is ‘far worse’ than we even thought it was, this is the opposite of a safe bet.

Unite’s strategy up to this week pointed the best way forward: relying on members’ own capacity to act, not accepting the deluge of phoney promises and excuses made by Tata. To row back on that strategy now, in favour of relying on the ‘good will’ and ‘principles’ of Starmer and Reeves, runs the very real risk of losing the momentum of the fightback.

The report by the Financial Times that the strike was called off after ‘multiple calls’ by the (current) shadow business secretary Jonathan Reynolds to Unite reps is a shocking warning of Starmer’s Labour Party’s approach to trade unionists. Instead of turning his fire on the employer, who is threatening to put 3,000 workers on the dole and transfer steel production to other Tata plants, he has leant on Unite reps to hold back on the only negotiating weapon they have. 

In this, Starmer has been provided with cover by the other two unions on site, the GMB and Community (formerly the Iron and Steel Trades Confederation) who were spooked by Tata’s threat to bring forward the plant closure if Unite proceeded with its strike. It also threatened to withdraw its enhanced redundancy payment offers. If Tata is simply pulling another fast one, Unite ought to get straight back into action and members of the other two unions should be spoiling to join them.

And this time, they should up the ante, and start arguing for a fight for jobs along the lines of the Clyde shipbuilders’ fightback in the 1970s: occupy the plant and start a ‘work-in’. To raise the stakes like that would undoubtedly lead to Starmer and Tata throwing a hissy fit, but it would equally undoubtedly strike a real chord of solidarity, not just in Port Talbot, not just with the other steelworkers across the economy seeing their own futures being decided in South Wales, but right across the labour movement.

If you remember the support the rail strikes received a year ago, despite the hostile press, and multiply that tenfold, you can see how the economic struggle can affect the political, and vice versa. Sharon Graham was elected  as General Secretary of the Unite union on the promise (among others) of insisting that the union’s politics should be driven from the workplace, rather than from Westminster. There can be few better opportunities for Unite to act on that than now, in Port Talbot. 

If not now, when? If not here, where?