Steel Company: British Steel PLC

British Steel PLC

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

Nationalisation
BSC was formed from the assets of former private companies which had been nationalised, largely under the Labour Party government of Harold Wilson, on 28 July 1967. 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 14 major UK-based steel companies then in operation, being:
Colvilles Ltd;
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 Steel Works 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 90 percent of the UK's steelmaking capacity, 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at the time of its formation, including obsolescent plants; plants operating under capacity and thus at low efficiency; outdated technology; price controls that reduced marketing flexibility; soaring coal and oil costs; lack of capital investment funds; and increasing competition on the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 artificially high in the declining industry. This especially impacted BSC since it was a major employer in a number of depressed regions.

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:
At Consett the closure of the British Steel works in 1980 marked the end of steel production in the Derwent Valley and the decline of the area.
At Corby, the closure of the former Stewarts & Lloyds site in the early 1980s saw the loss of 11,000 jobs, leading to an initial unemployment rate of over 30%.[4]
In Wales, works at East Moors (Cardiff), Ebbw Vale and Shotton were closed.
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 huge 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
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.[5] Corus itself was taken over in March 2007 by the Indian steel operator Tata Steel.[6]

Chairmen

Lord Melchett (1967–1973)
Monty Finniston (1973–1976)
Charles Villiers (1976–1980)
Ian MacGregor (1980–1983)
Robert Haslam (1983-1986)
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 - the bulk of the steel had been imported from Germany.