Scunthorpe steel: murder by market manipulation

The closure of the Scunthorpe steel-works is likely to spell disaster for the community. In 2016, we published a series of briefings by Brian Parkin analysing the state of the British steel industry (see parts one, two, and three). In the event the cynicism with which British steel has been run into the ground has been even more profound than anticipated. Here Brian draws on his experience as former research officer for the NUM to discuss the social costs of speculation, privatisation and asset-stripping.

This forms the first part of a wider survey of contemporary British industry and the neoliberal mismanagement of the UK economy, to be published over the coming weeks.

When I heard of the imminent closure of the steel-works at Scunthorpe in North Lincolnshire two weeks ago, the news came to me through the crocodile sobs of a BBC radio announcer. As if by an act of god or force of nature, almost the sole employer of an industrial town was to close. After a suitably brief and humbug requiem, a working town, its communities, its families and their hopes were to be consigned to nothing.

If Scunthorpe does actually close, unfortunately I am  – as a former research officer of the National Union of Mineworkers – highly qualified to know what happens next. Redundancy pay, if it hasn’t been squandered by the company, will protect for a while those workers with longer service in the industry, and for a short time a phoney war of normality will hide the undercurrents of the leaching-out of the economic life of the local community.

Ghost town

But then one by one, the local shops will start to close, the bank will move to a higher money turnover elsewhere and the pubs, social welfare clubs will follow when the town visibly and irreversibly, begins to die.

The borough council will call upon central government for advice and relief. A ‘task force’ comprising some well-meaning but not very hopeful advisers will set up a job shop. Local workers, once proud and hard-working and unionised labour, will be acquainted with the brave new world of the gig economy and the benefits of adapting to flexibility, short-term contracts and just maybe, adapting to a less than regular income.

And in the case of Scunthorpe, isolated by a rural vastness on the south side of the Humber estuary, they’d better had. Because in the course of successive privatisations and asset stripping, the steel industry pension scheme, has over the years developed a gaping deficit of over £13 billion.

Sooner rather than later, the outward and irreversible migration will begin. Young people will leave first: except those with neither the qualifications nor money nor other means to go. Whatever the former pride and resilience or comradeship of a former industrial town, the predators will start to move in.

Some 23 years ago, a friend, a former miner when asked about job prospects in South Elmsall, once the biggest pit ‘village’ in Yorkshire, remarked that since the last colliery closure, there had been a boom in employment. For loan-sharks, crack-dealers and pimps.

Collateral damage

Yet I have heard some academics, and even some Marxists among them, describe such social damage as an ‘unfortunate’ but inevitable consequence of de-industrialisation and adaptation to a more service-based and ‘financialised’ modern economy. Such explanations are merely the other side of a market fetishism that forever excludes the social and human costs from the accounts.

Of course in flattering such blighted communities as ‘strong’, ‘independent’ or ‘resilient’, the liberal well-wishers assure themselves that all will be well and that over time the wounds will heal. So the subsequent problems of drink, family break-up, unmanageable debt and mental ill-health will go unnoticed as big boys find that they do actually cry and that the poor do stoically manage their immiseration by hiding from the debt collectors in silence behind the curtains.

In my final years at the NUM my work became increasingly that of defending mining communities from an ever-rolling programme of pit closures. Any strike action would have been rewarded by British Coal disqualifying striking miners from their redundancy pay. So instead we were forced to rely on a less than useless Modified Pit Review Procedure. So we would visit the stricken communities where for maybe a century, the pit had been the source of their pride, their sorrows, their defiance and their enduring sense of solidarity. Time after time we lost. That sense of anger, futility and sorrow has never left me.

Departure lounge

Scunthorpe is now in the departure lounge, unless another liquidity shark turns up to make another fleeting raid. Meanwhile, the crooks and thieves and venture capitalists and their political backers will conjure up the downside of natural market forces as responsible.

Of course there will be no mention of Greybull Capital, the Sloane Street rangers who got Scunthorpe for £1 and then cash-starved it while itemising management fees to the plant at the rate of £250,000 per month: all within view of the most supine union officials imaginable.

So Scunthorpe awaits a coroners’ verdict of death by ‘natural causes’ as Scunthorpe joins the roll-call of Consett, Shotton, Motherwell, Redcar, Corby, Hartlepool, and countless pit villages and industrial communities that couldn’t stand the ‘market test’.

So it goes: death by natural causes has destroyed such communities. Any verdict will do except MURDER!


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