1. Nationalisation & Capitalism With the exception of Labour's attempts to nationalise the steel industry in 1950, the bourgeoisie have never seriously opposed nationalisation measures. The recent nationalisation of Rolls Royce, though in part a rather smart "legal manoeuvre to deprive Lockheed of any company to claim compensation against following the decision to end the RB211, Illustrates very clearly that nationalisation moves are only made against companies or industries that are in severed economic difficulties and which are no longer profitable for the bourgeoisie to run.
But their necessity to the physical structure of capital remains, hence nationalisation is invariably followed by intensive investment programmes financed by the taxpayers' money.
Other benefits to capital then accrue: costly technical developments are undertaken by the State and then handed out to private capital, prices of nationalised products or services are stabilised because they are fixed outside of the free market arena, revitalised parts of state property are thrown onto the market at a later date, and so on. Nationalisation, far from eroding the power of the bourgeoisie, actually consolidates it. The bulk of nationalisation has occurred in either the infrastructure" (railvays road transport, some airline services) or in basic fuels (coal, electricity, gasl. Stebility of price and production in these sectors provide a stable base on which bourgecis production as a whole can rest, and frees the bourgeoisie from the burden of sectors that have developed actue problems of profitability.
When Labour nationalised steel in 1950, however, the bourgeoisie did not wish to give it up and the state held it nominally for only a year. The postwar reconstruction and armaments boom and later the consumer boom of the '50s created profitability in steel, a profitability that concealed the fact that steel was doomed the moment the boom slackened off.
2. The Backwardness of British Steel The output of stael is clearly dependant on the rate of investment in the other sectors of capital i.e., the volume of new machinery required. If the economy as a whole slackens growth, at it did at the beginning of the sixties, investment in new plant becomes superfluous, Steel production therefore plummets and profits plummet even faster because 1. The high cost of overheads remains fixed. 2. Private steel firms hoard a skilled labour force even in times of recession, and 3. Large amounts of capital are standing idle. The alternative is to continue production and "dump" the product abroad. Unfortunately for British Steel, Britain's share of the world market had shrunk so rapidly in the face of U'S*, Japanese, and European competition that this option was not open.
The nationalization that tookplace in 1966/67 was not total nationalization. The British Steel Corporation acquired the bulk of heavy steel production with some share in companies producing more profitable steals eg staniss steer engi processing le.g. certain engineering concernst as well as some outright takeovers in three areas. It was in British capital could best be served by the comthe traditional heavy steel production that the situation was most critical. This was the technical base of the steel industry, which had not been radically overhauled far decades, Unlike the stael plant in Europe or Japan, it had not been physically destroyed during the War. This physical destruction proved advantageous in that fresh capital implemented the most moder industry should produce 35 million tons with a techniques (for example, oxygen plant instead of old high cost open furnaces? and new econo mies of scale. Consistently high rates of capitelisation during the "50s are reflected in the growth of productivity per man hour and in total output of steel, in these countries.
The profitability of the steal industry in the lise in 1951. This was to prove catastrophic for British capitalism over the long-term. A privately. Import of ares, coke, etc.I. Rationalisation. owned stael industry with a backward technical of emall production freemened between a hast to be yemeralised throughout the industry: hori of "small" firms, producing "small" quantities of steel, with no incentive or means to invest in substantial quantities of new plant, all this provided an inadequate pricu besis for British cepitalism facing increasingly stiff competition from other imperialisms. Not only has Britain been unable to axport steel in significant quantities but its exports generally have been undercut by imperialisms whose steel base in particular can produce more steel, more quickly, more efficiently and comparatively more cheaply. In the 1970s for example a steel works has to produce 10 million tons annually to be an economic proposition-that is the equivalent of only 3 major plants for the existing volume of British output.
To sum up then, the resistance to nationalisation of the steel industry by steel magnates enjoying short term superprufits resulted in the perpetuation of a high and inflexible price base for British goods and this contributed to the tailure of British goods to remain competitive in the world market. This in tum produced in the '60s a crisis of capital investment that created recession in the steel industry, who themselves in turn had been unable to influence this eventuality by earning profits abroad because they were totally unable to take advantage of the enormous expansion in world steel demand in the "50s. Nationalisation of steel would have ameliorated, though in no way resolved, the present crisis of British capital. The best that could be done to save the situation in the '80s was to allow British manufacturers access to imports of cheaper foreign metal products. The U.K. tariff on metal imports were dropped from 20.25% in 1957 to 85% today with EFTA and the Commonwealth free.
3. Finally-Nationalisation 1966 In their attempts to cure the ills of British capitalism, the Labour Party nationalised steel in 1966/67. The long term interests of plate rebuiding with taxpayers' money of the steel industry under the BSC so that private capital would find available a cheap, efficient, competitive steel industry at its disposal should it axtricate itself from recession. This required a number of things. The Benson Report of 1965 recommended that by 1975 the British steel labour force of 200,000. In 1965 it produced 26 million tons from 315,000l BSC also intends to close down the old hearth steel works and Build new oxygen plant or extend existing oxygen plant, most of this new investment being concentrated on Teeside and S. Wales. The older steel plants of Yorkshire, the Midlands, the coastal positions (Common Market, growing through redundancy and productivity dealing is zontal integration and economies of scale ard to be cerried out. The steel industry has been nationalised in order to spend in the region of E6.000m between 1965 and 75 making over 100,000 men redundant building a modern steel industry available to capital in the event of its "recovery, Secondary intentions include noid ing down the price of steel through striet control over BSC, to aid British capital through its critical period.
4. The Crunch Comes However, the crisis in British capitalism has become deeper since 1968. The first four months of 1971 saw a massive slump in steel production. The recessions in engineering, machine tools, building, ship building, etc, have resulted in a lack of capital investment in those industries. Steel stockists have cleared their shelves and few orders are coming in to BSC. The expected E130m profit for the 1970/71 financial year has turned into a E20m loss, despite E27m on the credit side arising from price increases at the end of 1970. These were the first big price rises the government has allowed BSC since nationalisation. In March this year BSC put in for a 14% price rise (which would cost private capital E 140ml. This has triggered off a rapid chain of events since the end of March.
Davies, Minister of Technology, has suspended investment grants to BSC, forced BSC to cut its price rise down to 7%, and set up an enquiry to determine the future of BSC's E4,000m. investment plans. BSC have had no choice but to raise their prices by only 7% but as BSC has pointed out, coal and electricity have been allowed rises of 18% and 12% respectively. The Tories are blatantly using steel to subsidize private industry but allowing coal and electricity prcies to rise because these chiefly hit the population as a whole. The response by BSC to these Tory moves has been to read the message loud and clear: — rationalise pronto or the £4,000m will not come your way. Since the beginning of April, BSC has speeded up its redundancy pro gramme obediently. Over 10,000 redundancies have been announced over the last two months. Individual plants are being cut rather than phased out-ug. Irlam is to close, resulting in 4,300 redundancies, saving T million a year. BSC's original plan was to run down old invest ment while making investment in new. The Tories have made the second a condition of the first.
The future of tha 4.000m. is still uncertain. but the Tories have announced that private capital is now froe to enter the special steels, chemical and engineering divisions of BSC. Parts of BSC are to be "hived off", while any new private steel development will bo welcomed whether British or foreign capital is used, Cer. tainly the long-term aim of the Tories is to retum a "healthy" steel industry to private enterprise but this cannot be done yet-British private capital will not investment in new plant ot 1lm tons capacity, in its present condition, What the Tories may well do is to introduce foreign capital under Common Market agree ments (the Dutch and the Germans have had for Foulnessl. With foreign capital being invested, the 4,000ml can be cut considerably.
What is more, the Tories see no future in a national steel industry in the long term. Within the framework of the EEC multi-national cor porations would be a logical development. The pattern of world steel production inoreover is now changing in such a way that cheap trans portation of ores means that it pays to set up production in the markets rather than exporting (Fin. Times, Jan, 4 1971l.
BISAKTA is the biggest union in the steel industry with just over 100,000 members The National Craftsmen's Coordinating Committee, most of whose members are in the AEF, has 22,000 and the National Union of Blastfurnacemen has 19,000, In addition the T&G and GWU have small bases in steel. There has been little coordination between these unions, much less a coherent strategy against BSC. BISAKTA and the steel craftsmen (AEF members) have so far negotiated rises separately. BS's refusals may well drive them together into united action So far BSC has been able to treat its members with contempt. This becomes comprehensible when a little of BISAKTA's history is known.
On the same day in January 1969 as the Corporation announced 40,000 redundancies, BISAKTA met to discuss whether to take its first industrial action for yoars to refuse to take orders from staff and supervisors who would not jain BISAKTA! |Trade Union Regis ter 1969-p. 179). This has been BISAKTA's central concern since 1967-unionising the administrative and clarical buresucracy that has mushroomed since nationalisation. At the some time the NUB has bean fighting a possibile merger with BISAKTA-with some justification!
BISAKTA is distinguished by having no annual delegates conference, by forbidding any unofficial action, and by having its officials appointed from above. This structure is a hang over from the pre nationalisation days when a seniority system developed in an industry where workers are highly skilled, where small firms took a paternalistic approach to industrial rela tions, where payment (before the War) was by "butty" system senior man given a lump sum which he distributes to the men below in wages).
where "promotion" and huge wage differentials still persist. No militancy was able to develop in this atmosphere and today BISAKTA is such that it could agree to the Green Book producti vity deal in 1969. (I am relying heavily for material here on the article on the Steel Industry in Internations/ No. 2. Sept.-Oct. 1970). Despite the Benson Report, BISAKTA, without consulting the rank and file, agreed to a deal that gave the workers a 5% increase (to which BISAKTA has tied itself for three years, despite inflation). an extra week's holiday and a 5-day working week guarantee, in return for method study time and motion study and job evaluation! This is exactly the framework BSC wants for rationalisation and redundancies.
The presant situation is extremely dangerous BISAKTA has put up no fight over the redundancies so far. The present uncertainty carries the danger that the steel workers will become more fragmented than unified, The local buresucracies in BSC have attempted in the past to line up workers in support of their parochial claims to priority in national develop ment programmes At the moment BSC has plans for "greenfield" plant of 12 million tons capacity. The various sactions of BISAKTA are now putting in demands on BSC to site this in their areas. This plays into BSC's hands of course the local sections cool down any mill. tancy to incrosse their credibility with BSC. This atmosphere of mistrust and intrigue in the middle of massive redundancy announcements is hardly conducive to a national strike over pay rates, In addition to this, steel workers have, in some areas, tended to accept redundancies with cocility because of substantial redundancy payIn the present atmosphere of uncertainty and insecurity (Davies" inquiry will report at some indefinite time in the future!, it is vital that rank and file steel workers build national links, that they tight for democratisition of the union and that a strategy to fight redundancy is evolved. The altemative is redundancy, large cuts in earnings following from short time working and massive demoralisation. The Red Mole declares solidarity with all steel workers fighting the Tories and the BSC.