On Tuesday 29th March, the Indian multinational Tata Steel announced its intention to sell Port Talbot and other UK assets, putting at least 15,500 jobs at risk [1]. This follows on from their original plans to cut back and “restructure” the company last year, where 2,200 jobs were lost at Redcar steel works [2].

Profits Crisis

Capitalism is a system where production of commodities is carried out solely for profit, and so capitalists only invest in this production if they can obtain a sufficient return on their investment. Steel is a fundamental ‘building block’ (quite literally) for the manufacturing sector, and so typifies this type of investment good. Worldwide, capitalists are cutting back investment due to the underlying low rates of profit experienced across manufacturing sectors, including in the UK. Chinese capitalism is also experiencing a massive slowdown in capital investment since 2008 due to falling rates of profit. Unable to sell steel locally, increasingly Chinese steel is being exported and even sold below cost-price (“dumped”) abroad, exacerbating the over-supply of steel in the world market. This over-supply has caused prices to plummet, but has its roots in the 2008 crash and subsequent Great Recession.

For the last two years, Tata Steel in the UK has posted consecutive losses in the hundreds of millions of Pounds [3]. From the point of view of capital, this is a crisis – a crisis of profitability. The only way to attempt to restore profitability is to severely cut back on costs. In practice this means that the workforce bear the brunt of the laws of capitalism through wage cuts, job losses, or both. Appeals to the ‘humanity’ of management to spare the workforce, however well intended, are ultimately utopian in the face of the rule of capital.


Most of the Left has responded to the news of Tata Steel with the demand for nationalisation. For example, the Socialist Party declare:

“The demand for immediate nationalisation of the industry is rapidly gaining support. The urgent question is how nationalisation can be achieved.” [4]

“Trade unions across Tata steel should urgently convene a national meeting of shop stewards to organise this campaign for nationalisation with compensation only on the basis of proven need, linking up with the tens of thousands in the communities indirectly affected by these potential job losses. It should also demand the nationalisation of the steel distribution network and for the procurement of steel from a nationalised company for public sector projects like Crossrail, HS2, power projects etc.” [5]

As Marxists we support calls for nationalisation, but not when this amounts to begging a Conservative government to buy and run the company on the workers’ behalf. Instead, we demand the nationalisation of Tata Steel under workers’ control and management. This is because, although we support nationalisation, we don’t want Tata Steel to be run along the same lines as before – i.e. for profit at the workers’ expense.

Unite General Secretary Len McCluskey’s view is truly terrible: “It’s absolutely essential that a foundation industry like steel is protected in order that we can have the much-vaunted march of the makers that the Government talks about”. [6]

A “march of the makers”? We don’t need any more bosses marching all over workers’ rights and jobs. And what does McCluskey mean by “protection”? The only protection available for the livelihoods of steelworkers is nationalisation under workers’ control and management. But this won’t happen simply with appeals to Jeremy Corbyn or Sajid Javid. The only way for this to become a reality is for an immediate occupation of the steel plant. That has to be the start of a campaign for public ownership of steel. This isn’t an extreme demand. In the 1970s at the loss making Upper Clyde Shipbuilders, a famous occupation shook the then Tory Government and electrified the working class.

The Socialist Party fail to raise the issue of occupation concretely and instead put forward a two-stage approach: “ If Corbyn and the union leaders called a national demonstration demanding nationalisation, it would have huge potential to put the Tories under pressure… But if the Tories maintain their refusal to nationalise, workers will have to consider occupying the steel plants to ‘up the ante’.” [7]

This is not a genuine call for action, but a programme of demobilisation and defeat. For a start, why would Corbyn and the Labour Party listen to the demands of a group who oppose the Labour Party and are standing against it in May? And then even if a national demonstration was called, it would unlikely have an effect by itself. Let us recall the Stop the War coalition demo against the war in Iraq back in 2003, where over a million marched against the government, yet it achieved nothing whatsoever. A strategy was completely lacking.

The Socialist Party, by mentioning occupation as a “consideration” at the end of the article, simultaneously attempt to sound radical whilst failing to take up the question of occupation in any serious way. The Trade Union leadership is supporting simply the call for nationalisation (by the Tories) with no demand for occupation, and so the Socialist Party obediently follow, unwilling to break from their reformist approach. This is primarily a reflex action of both the Union officialdom and the Socialist Party to the defeat of the workers at Grangemouth Oil refinery back at the end of 2013.

Lessons of Grangemouth

Back in 2013, the Grangemouth Oil refinery was operating at a loss. The prospect of closure was announced by its owners, Ineos. Due to the flawed approach of McCluskey’s Unite the Union and, in part, the role of the Socialist Party and the slogan “prepare to occupy”, the workers were forced to accept a 3 year no-strike deal and pay freeze (in real terms a pay cut). At the time, we were a factional opposition to the Socialist Party leadership, and commented on events as follows:

“If we had posed the issue of occupation clearly in the first instance, of course, workers may not have agreed with us. But it would have been the right slogan as it represented the reality of the objective situation. Occupation as part of a mass campaign was a necessity. Events would have confirmed the strength of this demand as a concrete guide to action. The issue of closure was always a possibility. This would have “prepared” the workers far more than a call to “prepare”.

The slogan of occupation is clear in the minds of workers, yet the very best interpretation of our slogan was it was posed in a very unclear way. For example: initially the slogan was “prepare for the occupation of Grangemouth”. We don’t think this is adequate as a slogan. Either you call for an occupation or you don’t. That slogan is a half-way house. “Prepare for occupation” is only a useful slogan if it lists the preparations to be made. An example of preparation might be a call for communication with workers in other Unions to engage in immediate secondary action and for physical preparation, such filling up of thermos flasks, packing of sleeping bags and sandwiches and checking on any urgent health and safety issues. The abstract “Prepare to occupy” used in this context was a catch-all phrase that looked 2 ways. It wasn’t sufficiently strong to differentiate us from elements in the leadership of Unite, which appears to have been its intent, but it gave the misleading impression to workers that immediate occupation wasn’t an urgent priority. Also it tried to give the impression that we were serious to our own Party members and those at the forefront of the strike, without calling for any action. It hides our real position. We thought that the workforce wouldn’t go for an occupation.” [8]

Furthermore, we warned:

“The objective reality is that capitalism, as a system of value production, is in big trouble. We are in a period where the system is generating, overall, a low rate of profit. The rate of return in the refining industry is also notoriously low. Certain companies may have above average profits, but overall capitalism is struggling to generate enough profits as a system to prevent it from escaping crisis. This is a permanent feature of the crisis. Industrial struggles will now take a much sharper aspect and we must be prepared to advance bold solutions to the working class. But if we try to stay “in tune” with Union officials and dress this up as being in tune with workers we will be mistaking a transitional approach for another capitulation.”

“This crisis of capitalism is fundamentally brought on by the tendency for the rate of profit to fall. The falling rate of profit has meant public debt has built up enormously, and private companies have to fight to restore their profits. This is a crisis of too little profit, not too much. This crisis will see many more Grangemouths as the capitalist system fights to save itself at the expense of the working class. The savagery of their attacks will intensify as the crisis proceeds. Desperate attempts to appeal to the bosses to see sense, like the Unite demonstration outside the homes of Ineos Executives, fail to highlight the seriousness of the crisis. The room for compromises by the employer class has become massively eroded. It is becoming more difficult to win concessions from a system with little left to give, other than austerity, wage cuts and redundancies.” [ibid]

Having been burnt from calling for occupation in a half-hearted way, even with the blessing of the Trade Union full-time leadership, the Socialist Party have completely retreated from this position. Now they are content to stand behind the Trade Union leaders and fulltime officials, and occupation is no longer urgent at all. But workers need a clear strategy on how to save their jobs and change society for their interests!


The Chinese economy, like many of the advanced capitalist countries, is facing huge overproduction of key commodities due to falling rates of profit. Some sections of the Left are blaming cheap steel imports for the crisis, especially from China. Such an analysis leads to calling for import controls, where the state adds on a tax to the sale of imported steel, making it cheaper for companies to ‘buy British’.

Such demands are dangerous for the working class at home and abroad. It implies that the enemy of British workers is the Chinese companies and Chinese workers, rather than big business here at home. Accepting this nationalistic outlook pits worker against worker and plays into the hands of the right-wing, whether in the main political parties or Trade Union movement, who are more than happy to blame foreigners, migrants and other groups for the problems in this country; Anything to divert attention away from capitalism itself.

If import controls were introduced by our government, other states would react by also raising trade tariffs on steel and various key commodities, initiating a trade war. This would directly impact British workers whose companies rely on exporting their goods, and they could lose their jobs.

Instead, British steel workers should appeal to Chinese steel workers to fight the common enemy- the capitalist steel bosses. International solidarity is not simply a nice gesture but is essential for the success of workers’ struggles due to the globalised nature of capitalism and the crisis. An occupation or strike at Port Talbot could be coupled with calls for international solidarity from Chinese steel workers. British workers could make it clear that their enemy is not the Chinese workers, but the multinationals like Tata Steel and the giant Chinese steel  corporations like Jiangsu Shagang  that roam the planet looking for cheap labour to exploit. Again, it may sound utopian, but ultimately the only way to overcome capitalism is to organise not simply at a local or national level, but international as well. If the crisis of capitalism is not cited within a global framework and blame is placed solely on China, it is implied the problems of British capitalism can be resolved within the context of the nation state by the Tories.

No Solution under Capitalism

Unfortunately, the solutions currently offered by campaigns such as Unite the Union’s “Save Our Steel” disarm workers from fighting for their own interests, which are independent from and opposed to big business. The proposed solutions include calls for restoring corporate profitability by cutting taxes and business rates. [9] However, this means that the logic of capitalism is preserved – production for profit, not for social need, and so the long term viability of the plant, and hence jobs, remains insecure.

We will campaign for “Save Our Steel” to adopt a socialist, internationalist programme. We need a socialist planned economy where production is for the needs of society, not shareholders. As an example, British steel, along with other raw materials, could then be used to build genuinely affordable accommodation which people so desperately need.

The problem is not China or bad government policy. Neither free trade nor protectionist policies offer a way out to the profits crisis. The problem is capitalism itself. An occupation of Port Talbot could be the start of genuine workers’ control and management of steel production in this country. This would begin to challenge the rule of profit and act as a lightning rod for the wider workers’ movement, including in China and other countries. However, such an economic struggle must become a political struggle in order to safeguard the livelihood of the steel workers and in fact all workers. We can’t rely on the Tories or the capitalist state – workers need our own state and a democratically planned socialist economy to provide for all. This could then be the start of an international workers’ movement against the tyranny of capital.



[1] http://www.bbc.co.uk/news/business-34561630

[2] http://www.bbc.co.uk/news/uk-wales-politics-35337896

[3] http://www.telegraph.co.uk/finance/newsbysector/industry/11844952/Cheap-Chinese-imports-hits-profits-at-Britains-biggest-steel-maker.html

[4] http://www.socialistparty.org.uk/articles/22510/31-03-2016/tata-steel-act-now-fight-for-nationalisation

[5] http://www.socialistworld.net/doc/7525

[6] http://labourlist.org/2016/03/mccluskey-calls-on-cameron-to-take-personal-responsibility-over-threat-to-steel-jobs/

[7] http://www.socialistparty.org.uk/articles/22510/31-03-2016/tata-steel-act-now-fight-for-nationalisation

[8] http://marxistworld.net/2014/01/building-a-revolutionary-party-in-the-21st-century/

[9] http://www.unitetheunion.org/campaigning/save-our-steel/



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