Sheena Ní Thuaidh

3 November 2007

Within a day of the announcement that the North of Ireland was to lose almost 1000 jobs in Seagate industries the bad news was being discounted. Stormont Employment Minister Reg Empey was promising packages of support, while his counterpart, Economy Minister Nigel Dodds, welcomed the announcement from veterinary pharmaceutical company Norbrook Laboratories of an £83m investment which ‘could’ create almost 300 jobs in an indefinite time frame. 

The story of Seagate cannot be so easily discounted. The massive job loss represents the failure of the development policy of the previous British administration, the failure, even before its introduction, of the far-right economic policy of the local DUP/Sinn Fein administration and their British sponsors, the failure even of a wish-list of further extreme right measures that the Stormont parties believed would bring the economic good times.  As it is we face an all-out attack on the working class and on public service that is unlikely to produce a sort of ‘Orange cub’ version of the Celtic tiger and will instead leave a desolate, undeveloped and weaker version of the current low wage economy.

The policy of the previous British administration, the policy that brought Seagate to the North, can be summed up quite simply – bribery.  Massive subvention of startup and running costs were meant to bribe transnational capital to come North. Seagate has received £12m from Invest Northern Ireland and its predecessor IDB, since 2001. It’s a policy that has been in place for years and the poor pickings are demonstrated by the fact that Seagate is one of a small group of high-tech manufacturing firms based in the six counties.  When the policy failed in the past the instability of the troubles was blamed.  Then we awaited a ‘stable’ DUP/Sinn Fein administration.  By then a new explanation was in place.  Workers in the North were featherbedded.  Too many were in public service.  Their wages and conditions were too high.  They paid too little for basic services.  The solution was a Stormont budget that aimed to cut the tripe out of public service, privatise anything that moved in a gigantic giveaway, and drive wages and conditions down, deregulate industrial law and draw in a flood of transnational capital á la the Celtic tiger. 

It is only a few weeks since Peter Robinson announced the new far-right budget for the North, proclaiming ‘a dynamic, innovative economy’.  The budget was supported by Sinn Fein, with Marin McGuinness arguing that the North was ‘truly under new management’.  In fact the total spend has been set for the next decade by Gordon Brown, with local politicians given the job of re-arranging the deckchairs. Robinson has taken money from public service and increased the budget of  Invest NI to feed further bribes to the multinationals. He set a target of 6000 new high-tech jobs for 2011by investment in four areas: skills, enterprise, innovation and infrastructure.

The Seagate management knew all this.  It decided to close its Limavady plant anyway. The reasons were quite simple.  Last year the company made £16 million profit.  The new plant in Malaysia, paying local wage rates, is projected to generate a further £15 million profit.  Absolutely none of the grandiose plans of local capitalist politicians come within miles of matching this. 

It is worth noting that plan B, a new prosperous economy based mainly on floating on a property boom, was also a casualty.  It turned out that the demand for trained staff had exceeded local supply and a number of the workers in the factory and the supporting local economy are from Eastern Europe.  Almost as much media time was given to tears for the ‘buy to rent’ sector of the local middle class as to the workers facing the dole. In any case the local property market has already begun to decline – hardly surprising when we consider that house prices have risen to some of the highest in these islands, that wages in the private sector are 80% of UK average while personal debt equals or exceeds that average. 

There was one magic bullet not deployed that was the constant source of lobbying of Gordon Brown by both Sinn Fein and the DUP.  Both were convinced that lowering the rate of corporation tax to match the rate of 12% in the South would be enough to tip the balance and create an influx of transnational capital.  It does not seem to have bothered either that the increased tax burden would have meant that workers would have had to meet the deficit in tax or that public services would have been cut to foot the bill.  In any case the figures provided by Seagate show that a 12% tax rate would have been a drop in the ocean and made no substantial difference.  In fact Seagate is a cross-border junkie, having quit Clonmel in 1997 and ripping out 1400 jobs, leaving the 12% tax rate for a better deal across the border. Clonmel recovered with the expansion of a US medical device manufacturer.  But that was then and this is now.  The US is looking East for new investment opportunities and the Orange Cub, brat of the Celtic Tiger, will be stillborn.

Following the closure announcement a number of old chestnuts from the budget have been dragged out of the fire.

Skills - More training will be provided, despite the fact that companies like Seagate will not employ their already trained employees at the local wage rate. It should be remembered also that the combination of sectarianism and class prejudice means that the training is being tagged on top of a local education service that is a sprawling monstrosity with a long tail of failed children, that the Sinn Fein education minister has been unable to come to any conclusion on the replacement of the 11+ and that the major party, the DUP, actively supports selection, despite its injustice and inefficiency.

Enterprise - Local firms are to be urged yet again to develop entrepreneurial skills. The truth is that more than 95% of the North’s private sector is made of small businesses. 90% of companies employ fewer than ten people and only 0.5% have a workforce of more than 200. There are fewer than ten PLCs in the North. The largest is the privatised electricity board. Capitalism has a tendency towards monopoly. Local firms exist in niche markets, made more inefficient by the tendency of sectarianism to lead to a duplication of local businesses. The majority have neither the capital nor the research base to fight for a share of the global market.

Innovation – In fact a state-sponsored ‘centre of excellence’ has been developed at Limavady.  The information that this technical support was not sufficient to hold Seagate shows how limited this tool can be.  Public funds can only develop as limited capacity to host transnational parasites.  An even more worrying aspect of the innovation mantra was the explanation by Seagate for the retention of the 1400 jobs in its Derry plant.  It saw these as high skill jobs and the Derry workers as performing at the very top of the global skills market and, crucially, receiving wages at the minimum rate that could be paid in this high-skill end of the market. So we can make this work if we train ourselves to be the best in the world and then work for bottom dollar pay!

Infrastructure - This is the statelet that built its first motorway to nowhere to avoid going to Derry or Dublin, where the powers of the old councils and the new administration have been constrained to prevent open sectarian discrimination.  These are the people to build a rational infrastructure!  In any case the roads budget has been set for 10 years, is insufficient, and will develop mainly the East coast at the expense of the West.

The fact is that the North is a basket case.  It has existed as the low-wage fag end of the British and imperial market and these traditional industries have gone.  It has little connection with the Southern market, which in any case has not developed as an independent capitalist entity. Its internal infrastructure is distorted by sectarianism, with as yet no direct motorway connection to Dublin and less than that to Derry. It is too unstable to attract transnational capital and in any case that bubble is beginning to burst in the South (see:http://www.socialistdemocracy.org/RecentArticles/RecentThe
SignificanceOfTtheIntelJobLosses.html). The housing and credit boom can not be sustained and are already beginning to falter.

Following the collapse of republicanism there has been a limited low-wage boom in the North, but the ‘peace dividend’ of a mass inflow of transnational capital never occurred.  The boom has been is housing and construction, in tourism and in retail.  The whole thing has been lubricated by peace and community funding but, despite millions being poured in, not one penny has gone to the state directly developing any form of capitalist production. In fact the articles of these schemes preclude this happening as exemplifies by the first fund, the U.S. Fund for Ireland.  Bribes for transnationals – yes.  Handouts to local firms – yes. Theft of public resources and their transfer to private hands – yes. Training for non-existent jobs – yes. An economic plan to develop Ireland in the interests of its people – no.  Paisley and McGuinness tell the workers they are with them, but no-one suggests that capital be thrown to one side and the factory seized by the state, even though there is a world-wide shortage of hard-drive disc blanks and the resources are sitting there to continue production

The settlement in Ireland is a capitalist and imperialist settlement. The new North is being developed to meet the needs of capital, not of the working people who live there.  A race to the bottom that leaves the workers as an impoverished reserve army of labour, waiting to meet the needs of capital on any conditions that the bosses care to set, would be a perfectly acceptable outcome for our rulers.

In response socialists have the banner of the socialist republic – of a society organised around the needs of the workers and democratically planned to link local sustainable development of our natural environment to our human needs and to develop links of solidarity   across the globe.

That alternative, long dismissed and decried, is gaining fresh credence in the face of the Seagate closure and of the capitalist economic strategy that underpinned it.