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Now is the perfect time for Cameron and Osborne to show their steel Now is the perfect time for Cameron and Osborne to show their steel
(about 9 hours later)
How much, exactly, has gone into bailing out the banks and the financial sector over the past eight years. £40bn? £100bn? More? According to the National Audit Office, between 2007 and 2010, it was £1,162bn. How much, exactly, has gone into bailing out the banks and the financial sector over the past eight years. £40bn? £100bn? More? According to the National Audit Office, between 2007 and 2010, £1,162bn was made available, including loans and guarantees.
Yet even an amount as unimaginably vast as this has somehow been accepted. The assertion that without a sustainable banking sector, the rest of the economy can’t function is hard to argue with. The bank bailout was a bold move taken by government, not to meet the interests of the incompetent bankers who’d blown up their own businesses, but because Alistair Darling and Gordon Brown knew that the country needed finance.Yet even an amount as unimaginably vast as this has somehow been accepted. The assertion that without a sustainable banking sector, the rest of the economy can’t function is hard to argue with. The bank bailout was a bold move taken by government, not to meet the interests of the incompetent bankers who’d blown up their own businesses, but because Alistair Darling and Gordon Brown knew that the country needed finance.
It is a long, long time since industry fared so well. The people of Port Talbot and Scunthorpe, Rotherham, Corby and Shotton are waking up to the consequences of Indian steel giant Tata pulling out of the UK – and are desperately trying to revive the idea that the country needs a steel industry. But they find themselves trying to pump life into an idea that was abandoned at least a generation ago. They’re doing CPR on a patient already cold.It is a long, long time since industry fared so well. The people of Port Talbot and Scunthorpe, Rotherham, Corby and Shotton are waking up to the consequences of Indian steel giant Tata pulling out of the UK – and are desperately trying to revive the idea that the country needs a steel industry. But they find themselves trying to pump life into an idea that was abandoned at least a generation ago. They’re doing CPR on a patient already cold.
Everyone interested in the recent past has their own date for the extinguishing of government involvement in the old heavy industries. Mine is the moment when Ian MacGregor, the American man who Margaret Thatcher had put in charge of reviving British Steel, asked if he could buy a US steel firm in order to grow the business. She sent him packing. “You do not sell off the public sector by expanding it.” Revival: maybe it depends where you’re standing.Everyone interested in the recent past has their own date for the extinguishing of government involvement in the old heavy industries. Mine is the moment when Ian MacGregor, the American man who Margaret Thatcher had put in charge of reviving British Steel, asked if he could buy a US steel firm in order to grow the business. She sent him packing. “You do not sell off the public sector by expanding it.” Revival: maybe it depends where you’re standing.
Decisions taken more than 40 years ago are back to haunt the children and grandchildren of the people who took themDecisions taken more than 40 years ago are back to haunt the children and grandchildren of the people who took them
Now decisions taken more than 40 years ago are back, with added vigour, to haunt the children and grandchildren of the people who took them. On page after page of Charles Moore’s readably encyclopaedic life of Thatcher, it is clear how consciously she set the tone of industrial politics for her successors. Her mission was to turn the nationalised industries from black holes for public money into saleable assets. Equally, and often in conflict, she was determined to appear to allow unions and management to sort out their differences without her fingerprints showing. That’s been the accepted style of government ever since.Now decisions taken more than 40 years ago are back, with added vigour, to haunt the children and grandchildren of the people who took them. On page after page of Charles Moore’s readably encyclopaedic life of Thatcher, it is clear how consciously she set the tone of industrial politics for her successors. Her mission was to turn the nationalised industries from black holes for public money into saleable assets. Equally, and often in conflict, she was determined to appear to allow unions and management to sort out their differences without her fingerprints showing. That’s been the accepted style of government ever since.
It won’t feel like it to the steelworkers, or to the management with whom they are working so closely, but there are signs that the political mood is beginning to change. Now it faces its first serious test. Some time in the next 24 hours, David Cameron and George Osborne have to show how far they have really reimagined the role of the state. If the years of touring building sites in a hard hat and a hi-vis jacket really amount to anything more than a photo opportunity, and if all those speeches about the Tories being the party of the makers were more than just words, it is not (quite) too late to treat steel like the banks: essential for the national economy. The government should find the cash to hold up the steel industry for a period of, say, a year to allow the search for a buyer to go ahead without it feeling like a fire sale. The actions of the Scottish government may be a useful precedent.It won’t feel like it to the steelworkers, or to the management with whom they are working so closely, but there are signs that the political mood is beginning to change. Now it faces its first serious test. Some time in the next 24 hours, David Cameron and George Osborne have to show how far they have really reimagined the role of the state. If the years of touring building sites in a hard hat and a hi-vis jacket really amount to anything more than a photo opportunity, and if all those speeches about the Tories being the party of the makers were more than just words, it is not (quite) too late to treat steel like the banks: essential for the national economy. The government should find the cash to hold up the steel industry for a period of, say, a year to allow the search for a buyer to go ahead without it feeling like a fire sale. The actions of the Scottish government may be a useful precedent.
In the meantime, more serious thought needs to be given to what an industrial policy that wasn’t called the northern powerhouse might look like. It would consider the best way of growing green energy supplies without making electricity so costly that intensive users are driven out of business. Rather than building bridges next door to steel plants out of material imported from China, such a policy would be creative about drafting contracts so that they enabled state procurement to demand that local suppliers are considered first. It would take into account not just the cost of supporting industry, but the wider costs of failing to support it.In the meantime, more serious thought needs to be given to what an industrial policy that wasn’t called the northern powerhouse might look like. It would consider the best way of growing green energy supplies without making electricity so costly that intensive users are driven out of business. Rather than building bridges next door to steel plants out of material imported from China, such a policy would be creative about drafting contracts so that they enabled state procurement to demand that local suppliers are considered first. It would take into account not just the cost of supporting industry, but the wider costs of failing to support it.
If the northern powerhouse really is more than a vehicle for Osborne’s political ambitions, it could be a tangible expression of the kind of post-Thatcherite thinking that politics desperately needs. The chancellor has a reputation to restore. His party is desperately searching for the big idea that will bind up its divisions; and it could just be that by creating a real industrial policy, the anti-EU paternalists and the pro-EU men of business could find something they can agree on.If the northern powerhouse really is more than a vehicle for Osborne’s political ambitions, it could be a tangible expression of the kind of post-Thatcherite thinking that politics desperately needs. The chancellor has a reputation to restore. His party is desperately searching for the big idea that will bind up its divisions; and it could just be that by creating a real industrial policy, the anti-EU paternalists and the pro-EU men of business could find something they can agree on.
• This article was amended on 30 March 2016 to clarify the figure of £1,162bn for taxpayer support for UK banks.