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| Industry | Steel |
|---|---|
| Founded | 1967 |
| Defunct | 6 October 1999 |
| Fate | Merger |
| Successor | Corus |
British Steel 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.
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.
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with existing equipment, plants operating below full capacity (hence the low efficiency), poor-quality assets, outdated technology, government price controls, higher coal and oil costs, lack of funds for capital improvement, and increasing competition on the world market.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. [1]
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, 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.
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 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. [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.
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. [1]
One of the arguments made 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, 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 at 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:
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." [5]
We will continue the successful programme of privatisation.
— Conservative Manifesto, 1987
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. [6]
… the Government are committed to returning successful state industries such as steel to the private sector as soon as practicable. It is quite apparent that the British Steel Corporation has now reached the stage where it would benefit from a return to a fully commercial environment. I am therefore pleased to announce that I am setting in hand the work necessary to privatise the corporation as soon as possible, subject to market conditions.
[…]
I believe that early privatisation and full commercial freedom will enable the company and its work force to be best placed to go on to further achievements and to secure a firmly based competitive industry with a long-term future.
— Kenneth Clarke, Minister of State for Trade and Industry
| British Steel Act 1988 | |
|---|---|
| Act of Parliament | |
 | |
| Long title | An Act to provide for the vesting of the property, rights and liabilities of the British Steel Corporation in a company nominated by the Secretary of State and for the subsequent dissolution of the Corporation; and for connected purposes. |
| Citation | 1988 c. 35 |
| Dates | |
| Royal assent | 29 July 1988 |
| Text of the British Steel Act 1988 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk. | |
On 5 September 1988 [7] the assets, rights and liabilities of British Steel Corporation were transferred to British Steel plc, [8] registered under the Companies Act as company number 2280000, by the British Steel Act 1988. [9]
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. [10]
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. [10]
Dealing in shares opened on the London Stock Exchange on 5 December 1988. [11]
The privatised company later merged with the Dutch steel producer Koninklijke Hoogovens to form Corus Group on 6 October 1999. [12] Corus itself was taken over in March 2007 by the Indian steel operator Tata Steel. [13]
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.
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.
The English rock band XTC mentioned British Steel in their 1979 song Making Plans for Nigel.
The heavy metal band Judas Priest named their 1980 album British Steel after the British Steel Corporation. Lead singer Rob Halford explained in an interview that the 'sounds of heavy metal' have been with him since childhood, due to the close proximity of the BSC plant where he grew up.
GKN Ltd is a British multinational automotive and aerospace components business headquartered in Redditch, England. It is a long-running business known for many decades as Guest, Keen and Nettlefolds. It can trace its origins back to 1759 and the birth of the Industrial Revolution.
Tata Steel Europe Ltd. was a steelmaking company headquartered in London, England, with its main operations in the United Kingdom and the Netherlands. The company was created in 2007, when Tata Group took over the British-Dutch Corus Group.
Dorman Long & Co was a UK steel producer, later diversifying into bridge building. The company was once listed on the London Stock Exchange.
Port Talbot Steelworks is an integrated steel production plant in Port Talbot, Wales, capable of producing nearly 5 million tonnes of steel slab per annum. This makes it the larger of the two major steel plants in the United Kingdom and one of the largest in Europe. Over 4,000 people work at the plant.
Richard Thomas and Baldwins Ltd (RTB) was a major iron, steel and tinplate producer, primarily based in Wales and formed in 1948 by the merger of Richard Thomas & Co Ltd with Baldwins Ltd. It was absorbed into British Steel Corporation in 1967. The business now forms part of Corus, a subsidiary of Tata Steel.
The Steel Company of Wales Ltd was a Welsh steel and tinplate producer. It was formed in 1947 and absorbed into British Steel Corporation in 1967, British Steel then merged with Hoogovens and became Corus UK Limited. The business now forms part of Tata Steel Europe.
The Consett Iron Company Ltd was an industrial business based in the Consett area of County Durham in the United Kingdom. The company owned coal mines and limestone quarries, and manufactured iron and steel. It was registered on 4 April 1864 as successor to the Derwent & Consett Iron Company Ltd. This in turn was the successor to the Derwent Iron Company, founded in 1840.
The Ravenscraig steelworks, operated by Colvilles and from 1967 by British Steel Corporation, consisted of an integrated iron and steel works and a hot strip steel mill. They were located in Motherwell, North Lanarkshire, Scotland.
The Teesside Steelworks was a large steelworks that formed a continuous stretch along the south bank of the River Tees from the towns of Middlesbrough to Redcar in North Yorkshire, England. At its height there were 91 blast furnaces within a 10-mile radius of the area. By the end of the 1970s there was only one left on Teesside. Opened in 1979 and located near the mouth of the River Tees, the Redcar blast furnace was the second largest in Europe.
The steel crisis was a recession in the global steel market during the 1973–75 recession and early 1980s recession following the post–World War II economic expansion and the 1973 oil crisis, further compounded by the 1979 oil crisis, and lasted well into the 1980s.
Llanwern steelworks is located in Llanwern, east of the City of Newport, South Wales.
David Colville & Sons, a Scottish iron and steel company, was founded in 1871 and it opened its Dalzell Steel and Iron Works at Motherwell in 1872. By the first World War, it was the largest steel works in Scotland and it continued to expanded afterwards taking over a number of other steel works in Cambuslang and Glengarnock.
Ebbw Vale Steelworks was an integrated steel mill located in Ebbw Vale, South Wales. Developed from 1790, by the late 1930s it had become the largest steel mill in Europe. It was nationalised after World War II. As the steel industry changed to bulk handling, iron and steel making was ceased in the 1970s, and the site was redeveloped as a specialised tinplate works. It was closed by Corus in 2002, but is being redeveloped in a joint partnership between Blaenau Gwent Council and the Welsh Government.
The Iron and Steel Industry in Scunthorpe was established in the mid 19th century, following the discovery and exploitation of middle Lias ironstone east of Scunthorpe, Lincolnshire, England.
The Iron and Steel Act 1967 was an act of Parliament of the United Kingdom, which regulated corporate governance in the iron and steel industries. It required that employees had voting rights for the board of directors.
Skinningrove steelworks is a steel mill in Skinningrove, North Yorkshire, England. The business was formed in 1874 as the Loftus Iron Company, after a liquidation of the company reformed in 1880 as the Skinningrove Iron Company. The works expanded from producing only pig iron to include steel production in the early 20th century, with mills specialising in long products including railway rail. As part of the business the company constructed a jetty at Skinningrove, and owned an ironstone mine in Loftus.
British Steel may refer to :
Redcar Bulk Terminal (RBT), also known as Redcar Ore Terminal, is a privately run dock at the mouth of the Tees Estuary in North Yorkshire, England. The port is used for the transhipment of coal and coke and for many years was the import dock for iron ore destined for Redcar Steelworks under British Steel Corporation, British Steel plc, Corus, Tata Steel Europe and Sahaviriya Steel Industries.
The Iron and Steel Act 1949 was an Act of the Parliament of the United Kingdom which nationalised, or bought into state control, elements of the iron and steel industry in Great Britain. It established an Iron and Steel Corporation which acquired certain iron and steel companies. In a departure from earlier nationalisations the Corporation only acquired the share capital of the companies, not the undertakings themselves. The individual companies continued to operate under management Boards appointed by the corporation. The Iron and Steel Act 1949 was one of a number of Acts promulgated by the post-war Labour government to nationalise elements of the UK's industrial infrastructure; other Acts include the Coal Industry Nationalisation Act 1946; the Electricity Act 1947; Transport Act 1947 ; and the Gas Act 1948.
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