THE extraordinary session of parliament last Saturday was necessary in order to rescue British Steel. There is little reason to be cheerful, though, as this is a largely half-baked measure and the future of both the company and all the associated jobs remains in the balance.

Most other countries, irrespective of their political ideology, would not dream of letting themselves be put in such a position, and neither should we.

Steel is a vital industry. It is important in itself and is a vital input into other key sectors, including rail, other transport, certain infrastructure, construction, machinery and cars.

Many of these have become rather unfashionable industries in a number of Western economies, including Britain. But they have only become “unfashionable” because Western firms have stopped investing in them or severely reduced their investment. Yet many of these same industries are booming in the rest of the world.

Instead, we were told that services and especially financial services were the way forward. Bizarrely, despite the utter banking collapse in 2007 to 2008 and its costly consequences, there are many who still seem to believe this, including in the Labour government.

Yet industry is vital to the prosperity of any advanced economy. This is precisely for the reasons outlined above. Steel is a crucial input to a whole variety of sectors. If an economy has no domestic production at all, it must always source key components like steel from overseas markets, which poses risks in terms of security of supply, costs, and the volatility of global conditions.

Often, overseas sourcing makes sense if production is more efficient or cheaper. No-one should imagine that pulling up the drawbridge on the rest of the world economy is a recipe for success, as Donald Trump is now discovering.

There were many examples of this type of approach in the 1930s and 1940s. They ended in disaster. Autarky lasted longest in Spain under Franco, which was a basket case economy until it reintegrated into the world economy from the 1980s onwards.

Yet it is vital to have a base domestic industry in vital areas, in order to ensure some continuity of supply and a cushion against global market volatility. Taking control of British Steel was a necessary step, absolutely necessary. But how it has been done is completely misconceived.

In effect, government policy is to seize control of the company without taking ownership of it. Ownership matters. Clearly, British Steel is a company in a (very) long-term crisis. Its viability is dependent on increased investment. In these circumstances, this investment can only come from the government. But, while British Steel remains in private hands, the commercial benefits of any investment (if they materialise) will accrue to the private owners.

If the government persists in this approach, either it will fail or it will amount to yet another bail-out for the private sector. These have been tried repeatedly and failed. This is because chronic underinvestment in sectors such as steel has reduced British production to a niche player, with only a small part of global output. The private sector has been unwilling to invest on a sufficient scale to remedy that.

That includes the current owners, which has led to a staged outpouring of Sinophobia from commentators and others. Staged, because the current owners were barely mentioned in the debates last Saturday, which I attended and spoke at.

It almost feels as if a memo was issued subsequently, to turn this into an anti-China scandal affecting national security. I have no doubt at all that the company behaved very badly. But as one thoughtful commentator pointed out, the same company operating at home in China is obliged to meet all sorts of economic, employment and environmental goals for the benefit of society. The difference is that the British government imposes no such conditions, as the crises at Tata, the scandal at P&O, or the regulatory capture by the water companies show.

If the government wants to ensure that British Steel has a future, it will require a level of investment to secure commercial viability. This reinforces the point that public ownership is a prerequisite for any future plan, as the private sector has not produced an investor on sufficient scale over decades. Public investment is crucial.

Steel is also emblematic of wider problems of the British economy, which Trump’s tariffs have only exacerbated. There is widespread malaise across a variety of industries. Several sectors of the economy have been plagued by both under-investment and poor regulation, a laissez-faire approach which has not even precluded asset-stripping.

Even in the recent past, this has applied to rail, water, and energy, among others. Cars and pharma may be next because of the tariffs. In many cases, quasi-nationalisation has been forced on the government despite its own wishes.

This forced nationalisation reflects the wider economic crisis of the British economy. With economic stagnation, parts of the private sector are failing, and the government can either let them fail or be forced to step in. At the very least, increased economic uncertainty and tariffs will continue to create a challenging environment in the period ahead.

Therefore, the pressure for nationalisation is not going away, and instead it seems set to increase.

Obviously, this is not a government which will enthusiastically go down that road. On the economy, it stands much more in the Blairite tradition of assuming that the private sector is innately superior, despite all the evidence that has accumulated from the banking crisis and the failed privatisations. It is also a government which continues to piecemeal privatise the NHS, the latest example being the sell-off of GPs.

Even so, objective conditions are pushing the government down a certain path, however unwillingly. Therefore, it is time for the economic arguments of the left to come to the fore. We have an answer to the failure of crucial sectors of the economy, which is nationalisation and sufficiently large public investment to ensure viability.

Unlike Liz Truss, Trump and the parties of stagnation who want unfunded tax cuts for the rich, we have no concerns about the bond market reaction. If we take over failing firms at close to their real value of close to zero, and invest in them to generate viability, they will lend as much as is required.

It should also be remembered that nationalisation has overwhelming public support across supporters of all political parties. Nationalisation is a policy whose time has come, once more.

Diane Abbott is a Labour member of Parliament for Hackney North and Stoke Newington.