British Steel

This article is about the company. For the Judas Priest album, see British Steel (album).
British Steel plc
Industry Steel
Fate Merger
Successor Corus
Founded 1967
Defunct 6 October 1999

British Steel plc was a major British steel producer. It originated from the nationalised British Steel Corporation (BSC), formed in 1967 which was privatised as a public limited company, British Steel plc in 1988. It was once a constituent of the FTSE 100 Index. The company merged with Koninklijke Hoogovens to form Corus Group in 1999.

History

Alasdair M. Blair (1997), Professor of International Relations and Head of the Department of Politics and Public Policy at De Montfort University, has explored the history of the British Steel since the Second World War to evaluate the impact of government intervention in a market economy. He suggests that entrepreneurship was lacking in the 1940s; the government could not persuade the industry to upgrade its plants. For generations the industry had followed a piecemeal growth pattern that proved inefficient in the face of world competition. The Labour Party came to power in 1945 committed to socialism. In 1946 it put the first steel development plan into practice with the aim of increasing capacity. It passed the Iron and Steel Act 1949 which meant nationalisation of the industry as the government bought out the shareholders, and created the Iron and Steel Corporation of Great Britain. American Marshall Plan aid in 1948–50 reinforced modernisation efforts and provided funding for them. However the nationalisation was reversed by the Conservative government after 1952.

The industry was again nationalised in 1967 under another Labour government, becoming British Steel Corporation (BSC). But by then twenty years of political manipulation had left companies such as British Steel with serious problems: a complacency with existing equipment, plants operating below full capacity (hence with low efficiency), poor-quality assets, outdated technology, government price controls, higher coal and oil costs, lack of funds for capital improvement, and increasing competition in the world market.

By the 1970s the Labour government's main goal for the declining industry was to keep employment high. Since British Steel was a major employer in depressed regions, it was decided to keep many mills and facilities operating at a loss. In the 1980s Conservative Prime Minister Margaret Thatcher re-privatised BSC as British Steel. Under private control the company dramatically cut its work force and underwent a radical reorganisation and massive capital investment to again become competitive in the world marketplace.[1]

Nationalisation

BSC was formed from the assets of former private companies which had been nationalised, largely under the Labour government of Harold Wilson, on 28 July 1967.[2] Wilson's was the second attempt at nationalisation, Clement Attlee's Iron and Steel Corporation of Great Britain having been largely privatised by the Conservative governments of the 1950s. Only one steel company, Richard Thomas and Baldwins, remained in public ownership throughout.

BSC was established under the Iron and Steel Act 1967, which vested in the Corporation the shares of the fourteen major UK-based steel companies then in operation, being:

At the time of its formation, BSC comprised around ninety percent of the UK's steelmaking capacity; it had around 268,500 employees and around 200 wholly or partly owned subsidiaries based in the United Kingdom, Australia, New Zealand, Canada, Africa, South Asia, and South America.[3]

Dorman Long, South Durham and Stewarts and Lloyds had merged as British Steel and Tube Ltd before vesting took place. BSC later arranged an exchange deal with Guest, Keen and Nettlefolds Ltd (GKN), the parent company of GKN Steel, under which BSC acquired Dowlais Ironworks at Merthyr Tydfil and GKN took over BSC's Brymbo Steelworks near Wrexham.

Restructuring

According to Blair (1997) British Steel faced serious problems at the time of its formation, including obsolescent plants; plants operating under capacity and thus at low efficiency; outdated technology; price controls that reduced marketing flexibility; soaring coal and oil costs; lack of capital investment funds; and increasing competition on the world market. By the 1970s the government adopted a policy of keeping employment artificially high in the declining industry. This especially impacted BSC since it was a major employer in a number of depressed regions.[4]

One of the arguments aired in favour of nationalisation was that it would enable steel production to be rationalised. This involved concentrating investment on major integrated plants, placed near the coast for ease of access by sea, and closing older, smaller plants, especially those that had been located inland for proximity to coal supplies.

From the mid-1970s the (now loss-making) British Steel pursued a strategy of concentrating steelmaking in five areas: South Wales, South Yorkshire, Scunthorpe, Teesside and Scotland. This policy continued following the Conservative victory in the 1979 general election. Other traditional steelmaking areas faced cutbacks. Under the Labour government of James Callaghan, a review by Lord Beswick had led to the reprieve of the so-called 'Beswick plants', for social reasons, but subsequent governments were obliged under EU rules to withdraw subsidies. Major changes resulted across Europe, including in the UK:

Privatisation

British Steel was privatised in 1988 by the Conservative government of Margaret Thatcher. It merged with the Dutch steel producer Koninklijke Hoogovens to form Corus Group on 6 October 1999.[6] Corus itself was taken over in March 2007 by the Indian steel operator Tata Steel.[7]

British Steel is the planned future rebrand of steelworks in Scunthorpe, Lincolnshire by investment firm Greybull Capital which has acquired the site from current owners Tata.[8][9]

Chairmen

Ian MacGregor later became famous for his role as Chairman of the National Coal Board during the UK miners' strike (1984–1985). During the strike the "Battle of Orgreave" took place at British Steel's coking plant.

Sponsorships

In 1971 British Steel sponsored Sir Chay Blyth in his record-making non-stop circumnavigation against the winds and currents, known as 'The Impossible Voyage'. In 1992 they sponsored the British Steel Challenge, the first of a series of 'wrong way' races for amateur crews.

British Steel had agreed a sponsorship deal with Middlesbrough Football Club during the 1994–95 season, with a view to British Steel-sponsored Middlesbrough shirts making their appearance the following season. But the sponsorship deal was terminated before it commenced after it was revealed that British steel only made up a tiny fraction of steel used in construction of the stadium, and that the bulk of the steel had been imported from Germany.

See also

References

  1. ↑ Alasdair M. Blair, "The British iron and steel industry since 1945," Journal of European Economic History (1997) 26#3 pp 571-81
  2. ↑ Mény, Y.; Wright, V.; Rhodes, M. (1987). The Politics of Steel: Western Europe and the Steel Industry in the Crisis Years (1974–1984). Walter de Gruyter. p. 315. ISBN 9783110105179. Retrieved 5 October 2014.
  3. ↑ UK Steel:Key dates
  4. ↑ Alasdair M. Blair, "The British iron and steel industry since 1945," Journal of European Economic History Winter 1997, Vol. 26 Issue 3, pp 571-81
  5. ↑ Select Committee on Transport, Local Government and the Regions, HMSO
  6. ↑ British Steel merges with Dutch rival BBC, 7 June 1999
  7. ↑ "India's Tata wins race for Corus". BBC. 31 January 2007. Retrieved 26 November 2007.
  8. ↑ James Quinn,. "British Steel name returns as Tata sells Scunthorpe plant to Greybull for £1". The Telegraph. Retrieved 11 April 2016.
  9. ↑ "Business Live: Sale revives British Steel name". BBC News. Retrieved 11 April 2016.

Further reading

External links

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