For Reform’s supporters drawn from the right of the Conservative party, Nigel Farage’s call to nationalise British Steel never made much sense. Why return Britain to the days of pre-Thatcherite Britain, when loss-making industries were propped up by the taxpayer as they gradually became less and less competitive globally?
Yet the political value of Farage’s policy has now become plain. With the government recalling parliament to pass emergency legislation to take control of the ailing British Steel – said by its Chinese owners, Jingye, to be losing £700,000 a day – Farage can now be seen to be leading Labour party policy. He has given a huge kick to a project that Reform will need in order to win an election: to start drawing large numbers of supporters from the left as well as the right. Reform is never going to form a government if all it is doing is splitting the right-wing vote; appeal to the working-class voters who feel betrayed by Labour, on the other hand, and the party has a genuine chance of government.
Farage’s leadership on British Steel isn’t going to disappear after today’s emergency parliamentary session, either. What the government is proposing at the moment doesn’t make much sense – at least not without the government adopting another Reform policy: to drop net zero targets. How utterly bizarre that the government is now desperately trying to save a blast furnace, when it has spent the past year telling us that it is dirty, obsolete technology which needs to go in order for Britain to reach its net zero targets. The last government was no different on this issue. When the Port Talbot steelworks got into trouble, Rishi Sunak’s government stuffed it with £500 million to tear down the blast furnaces and replace them with an electric arc furnace. Those who protested that the new furnace would only be able to recycle steel, not manufacture it from scratch, were brushed aside. All that mattered was the net zero target.
It was the same with the raw materials. Part of today’s rescue package involves the government importing coking coal from Japan to keep the blast furnaces at Scunthorpe running. That is a material which should by now have been available from Cumbria, yet the previous government gave lukewarm support to a company wanting to develop a coking coal mine there – and then Ed Miliband delivered the coup de grâce to the project. Again, the net zero target was allowed to trample over all other concerns. Were it consistent, the government would be celebrating the demise of the Scunthorpe blast furnaces as another great step towards net zero. But it seems finally that the threat of mass job losses and the demise of Britain’s industrial base is beginning to cut through. Global trade war, and before that the pandemic, seem to have awoken ministers to the hazards of trying to rely on stretched supply chains.
The future of the UK steel industry is not going to be resolved today. Even with a government bailout, British Steel faces high producer costs. When the electric arc furnace in Port Talbot opens, it will find itself having to live with the highest electricity prices in the world – paying around four times as much for its power as US competitors, and significantly more than European rivals. Nor is today’s financial support – which the government says will stop short of nationalisation – likely to be enough to persuade Jingye to keep the works open. Full nationalisation will very likely be required at a later date. By then, Farage will well and truly be in control of Labour policy – and Labour’s blue-collar voters are not going to forget it.
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