Economics / Politics

Beg, steel or borrow?

At last I was interviewing the official supposed to be engaged in rebuilding the steel industry of Britain both for present and future needs. The conversation was illuminating. He was an extremely able man. What he could do he did very efficiently. But he had to work within the limits of the policy laid down for him… Apparently we had reached the maximum steel production for which there seemed any prospect of profitable consumption.
Aneurin Bevan, In Place of Fear (1952)

In 1980 Derek Robinson came to Cardiff to support the striking steelworkers. I was there at the time and remember ‘Red Robbo’ of British Leyland fame urging one and all to help save the steel industry, save jobs, save, in essence, industrial Britain.

The South Wales Constabulary patrolled the Welsh capital in larger numbers than usual during that time but in truth there was little trouble: the Iron and Steel Trades Confederation (ISTC) was not among the labour movement’s shock troops. Its members were dubbed ‘virgin strikers’ by their fellow trade unionists, and up to that point the strongest demand made by their moderate leader Bill Sirs was for a ban on smoking at meetings of the Trades Union Congress – an eccentric stance in working-class circles at the time. The strikers just wanted some more money and were not about to start any aggravation (as no one says any more).

In trouble-making terms, the strike was almost overshadowed by the controversy over the Granada Television programme World in Action’s refusal to name its sources for confidential documents exposing the alleged uselessness of the management of British Steel Corporation under its then chairman Sir Charles Villiers. (For the uninitiated, BSC had a run of splendidly-monikered chairmen, Villiers’ predecessor being Monty Finniston who had in turn succeeded Julian, the 3rd Baron Melchett.)

The workers won, for a while at least. The first Thatcher government forked over the money and then set about ‘modernising’ BSC, i.e. closing a lot of it down prior to privatisation.

Labour, then in opposition, was somewhat muted during all this: it had presided over the ‘rationalisation’ of BSC in the 1970s, including the gutting of the Ebbw Vale works in the constituency of the then deputy prime minister Michael Foot. Moreover, this was a time of strong currents and cross-currents in the world of what were still huge nationalised industries, and BSC had never quite made it to the front rank in the public consciousness. BL made cars that were household names. British Rail carried millions of passengers a year. The National Coal Board (NCB) had a workforce believed to be the most powerful in the country. Then there were the superior nationalised industries, such as Rolls-Royce, British Airways and British Aerospace.

BSC never really fitted in any of these categories, sitting somewhere ‘out there’ with the British Transport Docks Board and the white-coated power station-workers of the energy industry. Yet this was an organisation that had intersected, more than most, with various way stations in the story of British post-war industrial policy.

That it was nationalised by the Attlee regime of 1945-51 seems no big deal, nor that it was privatised during Margaret Thatcher’s third ministry. But in between it was that oddity, a privatisation during the Butskellite Tory 1950s and, equally unusually, a renationalisation in the Wilsonian 1960s.

In the next decade, and the early 1980s, its performance was to become a deeply contentious political issue, with claims of poor productivity countered by proof that output per man-shift was equal to that of its German or American competitors, and this proof, in turn, brought into question by suggestions that improved productivity had been bought with a taxpayer-funded investment in new equipment that would never have been sanctioned by a private-sector company.

Then there was the bright future that, post the 1980 strike, was held to beckon for a new, slimmed-down BSC. Yes, plants at Corby, Consett and elsewhere would have to go, but this would leave a business resting securely on the pillars of the new monster-mills of tomorrow: Llanwern, Ravenscraig, Scunthorpe, Redcar, Port Talbot and the rest. How many of those are still with us – and for how long?

After that, of course, came privatisation (or rather, re-privatisation) in 1988, which followed BSC’s one brush with real – pace Sirs – industrial militancy: the ‘battle of Orgreave’ in 1984, when striking miners (not steelworkers) mounted a mass picket of a BSC coking plant near Sheffield.


Ah yes, the miners. Another point of contact with that especially pointy fork in the road of UK industrial history is that the chairman of BSC until 1983, when he moved to the coal board, was none other than Sir Ian MacGregor, who chaired the NCB throughout the 1984-85 miners’ strike. For the record, he served also on the board of British Leyland alongside chairman Sir Michael Edwardes, who sacked Derek Robinson, whom we met earlier.

Oddly, the BL experience can teach us something about why the remnants of the remains of BSC – the Tata plants in the UK – appear to be on the brink of closure.

Rewind to the early 1980s, when two high-profile nationalised industry chairmen are about to step down. One is the abovementioned BL strongman Edwardes, the other is someone whose term of office covered roughly the same period, the chairman of the British Railways Board, Sir Peter Parker.

In, let us say, 1985, the fairest-minded person would probably have conceded that while they would have preferred to share a couple of pints or a bottle of wine with the cultured Sir Peter rather than the flinty Sir Michael, there was no doubt that the latter had the better record. Had he not saved BL? Sir Peter, by contrast, had left it somewhat late in the day to stage a confrontation with the rail unions, albeit one from which he had emerged victorious.

Three decades on, their legacies look rather different. Bar the Mini, none of BL’s volume car business survives, and only Jaguar remains out of the up-market division Jaguar Rover Triumph. British trains, on the other hand, are operating at peak capacity, a development that can be traced back without a doubt to Sir Peter’s chairmanship.

The lesson? Don’t privatise until the future is secure and even then keep a firm grip on the reins.

History is replete with turning points that failed to live up to their billing. But given the inability of Her Majesty’s Government to give any convincing reason as to why south-eastern bankers ought to have been bailed out in 2008 and 2009 while Welsh and north-country steelworkers ought to be left to twist in the wind in 2015 and 2016, maybe this one is for real.


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