British Steel, our second largest steelmaker, is to be liquidated following the failure of rescue talks between the government and Greybull, the American private equity firm that manages it. The government would not provide the £30 million loan needed to tide it over (no way of getting round those EU state aid rules, we are told, and since we are to stay in the EU, we must play by the rules) as orders have slumped in the wake of Brexit uncertainty and customer concerns over possible tariffs. 5,000 skilled jobs are at risk, a further 20,000 in the supply chain. Scunthorpe will be decimated. Britain will be left with one blast furnace, Tata Steel at Port Talbot, but for how long?

So much for the ‘industrial strategy’ that May promised when she was elected in 2016. It was never serious, no more than any of May’s other promises. What it really amounted to was that the Conservatives would continue to flog off our national assets, regardless of long-term industrial or strategic or security needs, so long as private equity funds, accountants, corporate lawyers and asset strippers in the City – no personal or party interest there – could make a fast buck. Which explains why, within weeks of May being elected, the world-beating Cambridge semiconductor and software design company ARM Holdings was sold to the Japanese for £23 billion, and has since been busy transferring its technology to a joint venture partner in China (Hammond welcomed the deal because it showed foreign investors ‘had confidence in Britain’); and why, when GKN, our largest engineering company, got into trouble, it was flogged off to Melrose, a corporate raider for asset stripping, netting Melrose’s boss £285 million bonus in the process. Now the future of British Steel is to be decided by a private equity firm, who bought it for £1 back in 2016. My guess is that Greybull will have made a tidy profit on the deal. The scrap metal alone should be worth a small fortune. The human wastage might be more difficult to dispose of.

Of course, it has not helped our steel industry that the government is building Royal Fleet Auxiliary ships abroad, plans to use French steel for our latest submarines, that our new Ajax military vehicles will be built abroad using Swedish steel. Nor that energy costs and business rates are prohibitively high in Britain, or that the Chinese are dumping their state-subsidised steel on world markets. Apparently some buyers have come forward. Serious industrial firms with plans for long-term investment – or private equity ‘asset managers’ looking to make a killing? Sadly, the former could never make a go of it because the prospects for British Steel have been well and truly shafted by a government that could not give a toss about the national interest.

But perhaps we have an industrial strategy after all. It is called ‘China’. The Chinese, our new closest allies, will be on hand to take up the slack by dumping more of their state subsidised steel on us. Perhaps the prospective deal with Huawei to build the new 5G network (‘non-core’ components only) could be sweetened with a majority Chinese stake in British Steel. Perhaps they could build our defence equipment for us too. After all, anything we can do, the Chinese can do more cheaply. And they offer attractive packages to politicians who do their bidding, as former senior civil servants from the Cameron era who now work for Huawei have discovered to their benefit, not to mention Cameron himself, who now works for a Chinese state-backed investment fund.

The Chinese apart, Britain’s industrial future will be left to the whims and short-term interests of City financiers, private equity firms and hedge fund managers. But we can take comfort that it is all in the name of free markets, that global Britain is open for business, the City of London continuing to provide unrivalled services for those who would like to ‘invest’ in our future.

Such is the nature of modern conservatism.


Author: Alistair Miller. 

First published in The Salisbury Review:

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