The
Labour Party came to power at the
1945 general election, pledging to bring several industries into
state ownership. 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 re-nationalised in 1967 under another
Labour government, becoming British Steel Corporation (BSC). But by then, 20 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with existing equipment, plants operating below full capacity (hence the low efficiency), poor-quality assets, outdated technology, government price controls, higher coal and oil costs, lack of funds for capital improvement, and increasing competition on the world market.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 workforce and underwent a radical reorganisation and massive capital investment to again become competitive in the world marketplace. 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 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 relatively inefficient in the face of world competition.
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. Wilson's was the second attempt at nationalisation; the post-war government of
Clement Attlee had created the
Iron and Steel Corporation of Great Britain in 1951 taking public ownership of 80 companies but this had been largely reversed by the following
Conservative governments of the 1950s with only Britain's largest steel company,
Richard Thomas and Baldwins, remaining in public ownership. Works, formerly South Durham Steel & Iron Company, in 1970 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: •
David Colville & Sons; •
Consett Iron Company Ltd; •
Dorman Long & Company Ltd; •
English Steel Corporation Ltd; •
GKN Steel Company Ltd; •
John Summers & Sons Ltd; •
The Lancashire Steel Corporation Ltd; •
The Park Gate Iron and Steel Company Ltd; •
Richard Thomas and Baldwins Ltd; •
Round Oak Steelworks Ltd; •
South Durham Steel & Iron Company Ltd; •
The Steel Company of Wales Ltd; •
Stewarts & Lloyds, Ltd; and •
The United Steel Companies Ltd. At the time of its formation, BSC comprised around ninety per cent 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. 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 high in the declining industry. This especially impacted BSC since it was a major employer in a number of depressed regions. • In Wales, works at East Moors (Cardiff) closed in 1978. • Shotton closure of the heavy end with the loss of over 6,000 jobs. • In Scotland, Western Europe's largest hot
strip steel mill
Ravenscraig steelworks, near
Motherwell,
North Lanarkshire, was closed by British Steel in 1992, leading to high levels of unemployment in the area. It also led to the closure of several local support and satellite businesses, such as the nearby British Steel
Clydesdale Works in
Mossend,
Clyde Alloy in
Netherton and equipment maker
Anderson Strathclyde. Demolition of the site's landmark blue gasometer in 1996, and the subsequent cleanup operation, has created the largest
brownfield site in
Europe. This huge area between Motherwell and
Wishaw is in line to be transformed into the new town of
Ravenscraig, a project partly funded by
Corus.
Privatisation The
Conservative manifesto for the
1987 general election noted that "British Steel has more than doubled its productivity since 1979 and made a profit last year for the first time in over ten years." Following
Margaret Thatcher's re-election, on 3 December 1987 the
Conservative government formally announced in a statement by
Kenneth Clarke,
Minister of State for Trade and Industry, that it intended to
privatise the British Steel Corporation. On 5 September 1988 the assets, rights and liabilities of British Steel Corporation were transferred to British Steel plc, registered under the Companies Act 1985 as company number 2280000, by the '''''' (c. 35). The government retained a
special share which carried no voting rights but until 31 December 1993, permitted the government to stop any one party controlling more than 15% of the shares. British Steel employees were given a free allocation of shares, and offered two free shares for each they purchased up to £165, discounted shares up to £2,200, and priority on applying for shares up to £10,000.
Post-privatisation The privatised company later merged with the
Dutch steel producer
Koninklijke Hoogovens to form
Corus Group on 6 October 1999. Corus itself was taken over in March 2007 by the Indian steel operator
Tata Steel. == Chairmen ==