The Death of British Steel and the Myth of the Good Brexit

On May 22nd, British Steel, which is the United Kingdom’s second-largest steelmaker, went into liquidation. It hasn’t been easy to manufacture steel in the U.K. for a number of years. The country’s high energy costs and property taxes make it an inhospitable place for heavy industry, even compared with other European countries. But it was Brexit—specifically, the unresolved, purgatorial, shapeless Brexit that Britain finds itself in, three years after deciding to leave the European Union—that carried British Steel over the edge. Last year, with uncertainty stalking the economy, orders began to dry up. In April, because the Brexit negotiations were not complete, the company was hit with a hundred-and-twenty-million-pound bill, as part of the E.U.’s emissions-trading plan. At a court hearing the following month, British Steel, which had revenues of 1.2 billion pounds last year, revealed that it would run out of cash within a week. Since then, the company, whose origins go back to the industrial revolution, and whose evolution maps the story of British manufacturing, has been kept alive by the government. The current Prime Minister, Theresa May, has not yet left, and her successor, probably Boris Johnson, has not yet arrived. Desperate to avoid a spectacular bankruptcy in the interlude, the state has been paying British Steel’s bills and the salaries of its workers, while looking for a buyer to take four blast furnaces, named after English queens, and a two-thousand-acre steelworks off its hands.

The government set a deadline for the end of June to receive bids for British Steel. On June 28th, I travelled to Scunthorpe, in North Lincolnshire, where the company is based. A Moravian chemist named Maximilian Mannaberg poured Scunthorpe’s first steel, on March 21, 1890. The town sits on a broad, fertile plain not far from the North Sea. The roads are wide. The air smells slightly of coke ovens. Until 1936, Scunthorpe was a village, part of a collection of hamlets, fields, iron mines, and workers’ cottages strung around a giant amalgam of three competing steelworks—Appleby-Frodingham, Redbourn, and Normanby Park—that together built a century of British railways, steel rods, warships, and bridges. (Scunthorpe’s town crest includes the heraldic emblem of a “Blast-Furnace issuant therefrom Flames all proper.”) By 1967, Britain was the second-largest steel producer in Europe, after Germany, and more than twenty-five thousand people worked in Scunthorpe’s furnaces and mills. The place was known as a “boom town Eldorado,” according to the local paper. These days, mainly as a result of Margaret Thatcher’s free-market reforms, the U.K. makes less steel than Belgium. Scunthorpe’s three steelworks have shrunk to one, and the town has a lung-cancer problem. In 2016, what had become British Steel was sold to a group of private-equity investors, named Greybull Capital, for one pound. The same year, in the E.U. referendum, people in Scunthorpe voted for Brexit by a margin of two to one.

Des Comerford, who runs a menswear store in the town, picked me up from the station. In the seventies, soon after he left school, Comerford broke his pelvis. When he came out of the hospital, his job at a shop had gone. “Who came to my aid and savior? British Steel, in Scunthorpe,” he said. Comerford, who is sixty-two, worked for a year and a half as a shunter, tipping molten slag out of huge ladles from the furnaces. (Scunthorpe’s motto, “May the Heavens Reflect Our Labours,” comes from the way that the slag used to light up the night sky: it was visible to trawlers fishing at sea.) There was a “Save Our Steel” poster in the window of Comerford’s store, which is called Fallen Hero. He explained that the results of the Brexit vote in Scunthorpe had been a culmination of decades of neglect by London and a sense of being outmaneuvered by rival E.U. countries, which better protected their steel industries. “That was a defiance. That was ‘Enough,’ ” Comerford told me. “That was like saying to the government, ‘You’ve left us stranded.’ ”

Nobody in Scunthorpe has much time for Greybull Capital, the previous owners of British Steel. (In 2017, one of Greybull’s other investments, Monarch Airlines, went bust overnight, leading to the repatriation by the government of a hundred thousand holidaymakers—the largest airlift of British citizens in peacetime.) But the company has had lacklustre owners before. The priority now was to sort out Brexit. Scunthorpe’s M.P., Nic Dakin, a member of the Labour Party, voted to stay in the E.U. and now wants a second referendum. “There is a mood of anger towards our local M.P.,” Comerford said, describing Dakin’s positions as a betrayal. (Dakin, a former teacher in Scunthorpe, is a member of a cross-party group of officials and politicians trying to find a buyer for British Steel. “Nobody voted Leave to lose their job,” he told me.) Recently, Comerford went to a meeting, at Scunthorpe’s soccer stadium, of Nigel Farage’s insurgent Brexit Party, which has proposed that “a national strategic corporation” take ownership of British Steel. “They were the first political party that showed a genuine interest and desire and ideas of how to save the steel plant,” Comerford said. “It was fantastic. And do you know? Most of it was common sense.”

Since the spring, when Theresa May’s Brexit deal suffered its third defeat in Parliament and Britain’s departure from the E.U. was delayed for a second time, a kind of disassociation has set in. Even though the Brexit conundrum remains almost entirely intact—the country is divided, the E.U. is its largest trading partner, and the Irish border is still the Irish border—an idea has taken hold, particularly among Brexiteers, that a parallel, straightforward departure has been possible all along. There is a clear path, which, either out of incompetence or for some darker reason, Britain’s politicians have refused to take. The myth of a good Brexit contends that it is not leaving the E.U. that is damaging the U.K.’s standing in the world, or vulnerable businesses like British Steel; it is merely the way that the enterprise has been conducted so far. “It’s the indecision that is doing us,” Paul McBean, a representative for Community, Britain’s largest steelworkers union, who has worked at the Scunthorpe plant for forty years, told me. “I do negotiations for a living. The negotiation side of it has just been absolutely useless.”

In recent weeks, the contest to replace May, which is between Johnson and Jeremy Hunt, an ostensibly moderate former Health Secretary (and the incumbent Foreign Secretary), has become a competition to say the most macho things possible about the resumption of talks with Brussels. In late June, Johnson promised to take Britain out of the E.U. by October 31st—the current Brexit deadline—“do or die.” Hunt followed that by promising to stop negotiations a month early if no agreement is in sight, to prepare the country for a No Deal exit. “We won’t blink as a country,” he said.

Quite how any of this will play out in reality is another matter. Brexit was supposed to have happened by now, which means that the summer of 2019 is a badly timed moment of transition for the process. The U.K.’s chief Brexit negotiator, Oliver Robbins, is about to step down. The civil servant in charge of the country’s No Deal preparations, a thirty-three-year-old official named Tom Shinner, has also left the government. Neither Johnson, a Brexiteer who has alternately cheer-led and heckled from the sidelines, nor Hunt, who voted Remain, have had any hands-on experience of the negotiations. Recently, when Hunt promised six billion pounds to Britain’s farmers and fishermen, to cover any losses that might result from a No Deal departure, the Chancellor of the Exchequer, Philip Hammond, who is likely to lose his job soon, pointed out that the Treasury wouldn’t have that kind of money to spare. (According to Hammond, a No Deal exit would cost the British government ninety billion pounds.) In the case of steel, if Britain fails to agree with the E.U. on a quota for exports, then the bloc could immediately impose tariffs of twenty-five per cent. “No Deal means no steel,” Dakin told me.

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At an industrial park on the edge of town, I stopped by the Bradbury Group, which uses steel to make security doors. Tim Strawson, who founded the company in 1991, voted for Brexit but was having some doubts. “I wanted Britain to have control over its own destiny,” Strawson said. “I’m not sure that I made the right choice.” Strawson was dismayed by the performance of May’s government, but he also acknowledged the daunting complexity of attempting to redraw Britain’s trading relations with the E.U. Although his factory is only three miles from British Steel, Strawson did not know how much, if any, of the processed steel that he buys comes from the plant. The nature of E.U. supply chains means that steel might leave Scunthorpe and cross several borders before returning to his factory to be turned into a door. If the steelworks closed, the damage would fall most obviously on Strawson’s staff, many of whose families work for the plant or in its direct supply chain. “It would be a disaster for the town if British Steel went, a big disaster,” Strawson said. I asked him if he had changed his mind about Brexit. “If I was sticking with my head,” he replied, “the logical answer should be to remain.”

In the afternoon, there was an emergency meeting of the North Lincolnshire Council, to support the steelworks. The council chamber, which overlooks the town square, was opened this year and painted white. Steel girders, stamped “British Steel SRSM”—from Scunthorpe’s rail-and-section mill—sloped from ceiling to floor. There was no real purpose to the meeting, except to express the town’s fear and its desperation to be spared the closure of the works. (When the June deadline arrived, there were about ten bids for British Steel, although it is not known how many came with the intention to break it up.) “We all know what effect it would have, the loss of twenty thousand-plus jobs across North Lincolnshire—you don’t have to wax lyrical about that,” Len Foster, a Labour councillor who has worked for British Steel for forty-four years, told the chamber. Margaret Armiger, a Conservative councillor, described her father, in the early days of the Second World War, cycling more than a hundred miles to find a job at the steelworks. Another Labour councillor, Tony Gosling, who worked in a plate mill until 2015, read out the names of British steelworks that have closed since the eighties, like a list of the dead. “Consett, Corby, Ebbw Vale, Hartlepool, Llanwern, Ravenscraig, Redcar, Rotherham, Sheffield, Shelton, Shotton, Stanton and Staveley, Worthington,” he said. “Don’t let the light go out on another community.” Brexit was barely mentioned, because it was something that most politicians in Scunthorpe, Labour and Conservative, agree on. It was something that most of the people in town had wished for, because things could not carry on as they were. Now they were praying to be saved.