British Steel (historic)
 |
|
| 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.
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 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with existing equipment, plants operating below full capacity (hence the low efficiency), poor-quality assets, outdated technology, government price controls, higher coal and oil costs, lack of funds for capital improvement, and increasing competition in the world market.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.
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