Friday, 21 May 2010

The Stealth of Steel

British Steel was privatised by Margaret Thatcher's government in 1988. In the mid-70s, under the previous Labour government of Jim Callaghan, British Steel (now loss-making), faced cutbacks. Subsequent governments were obliged, under EU rules, to withdraw subsidies. Major changes resulted across Europe including in the UK.

A file on Ravenscraig, released by the Scottish Government and the National Archives of Scotland some 15 years before the normal 30-year limit, shows the desperate efforts of Scottish ministers in the early 1990s, to limit the fallout from the closure of the steelworks. For those interested in the history of steel making in Scotland these documents will provide invaluable information.

British Steel told officials the north Lanarkshire site was at risk weeks before the official announcement in January 1992, prompting a warning to John Major that at least 1200 jobs were at risk. Ian Lang, the then Scottish secretary, was advised by officials to tell British Steel executives the closure would be seen as a betrayal of Scottish workers and the company was pressured by ministers to honour it's privatisation agreement by trying to sell the site rather than shutting it down.

Mr Lang was also advised to press British Steel to release full details of the commercial case for closure. It was suggested he seek alternatives such as leaving the site ticking over until the market improved. Concerns were also raised by officials at that time about the cost of decommissioning the site - something which has blighted the area for many years now.

British Steel had been expected to operate at the site until 1994, but pre-tax profits had fallen from £307m to £19m leading to the decision to axe the plant.

The file shows that the then Tory government did try to save the total closure of the plant yet Labour perpetuate the myth that the Tories destroyed the last of Scotland's heavy industry.

British Steel was bought by Corus, (now part of the Tata Group), which closed their Teeside plant, with a loss of 1600 jobs, earlier this year and moved production to India. Gordon Brown's government could not save it.


William said...

Maybe they did all they could, maybe they did nothing.

I have a documentary on the East End of Glasgow filmed in the early 1980's. One episode concentrates on Beardmore's, now the site of the Parkhead Forge shopping centre. At its height, they employed over 40,000 people. By 1982, they were employing just over 500. In one scene, the shop steward laments - "They tried it in Belgium, the Common Market, and what did the Belgians do? They went out and rioted. The French went and marched. The Germans put on import controls because they were ready for an uprising as well. The British? We accept it.”

What did we gain by playing 'fair' and following 'the market' and 'refusing to intervene'? Huge parts of British industry are now destroyed and will never recover. Even countries like Sweden now have enormous R&D funding that dwarves ours. What do we have?

subrosa said...

I was in and out of the UK in the 80s William but if I recall, the shambles was that government and unions fought each other instead of both combining forces against the EU.

What does annoy me now is that steel is produced in India by Tata. Who do we give money to through DFID?

You've guessed it.

Apogee said...

Was there not a scandal about passports for the owner of Tata, who then buys the steel works, closes them down and makes a very large profit from carbon trading rights that via Tata, very apt name, now belong to the Indian company, which the then labour government couldnt convince to keep open for the benefit of British workers.Meanwhile, aid to India from UK pays for the largest part of their space research.That is the fact of the matter, our "free" money means that they cay indulge in prestige projects that we cannot afford because we are feeding their poor.
We need Common Sense, CS, not political correctness PC.
Or before very long we will be going to India with the begging bowl. and guess what the answer will be.................sorry cant help!Please go away!

subrosa said...

Richard at EU Referendum has had a lot to say about Tata and the chairman Apogee. Maybe that's where the bell is ringing?

The Oncoming Storm said...

William's comment just shows what's wrong with Britain's approach to Europe, countries like the French just ignore the bits of the EU they don't like while we slavishly adopt and gold-plate everything that comes out of Brussels just to try and prove that we're good Europeans!

The loss of much of our heavy industry was probably inevitable due to governments from the 1950's to the late 70's failing to deal with Britain's uncompetitiveness for fear of the electoral consequences and just took the soft options which just stored up trouble for later. Had earlier action been taken then many of those industries might have survived.

It's interesting to read that Lang and co. tried to save Ravenscraig but I think they should have made more of a song and dance about it. When Corus announced it was shutting the Llanwern works near Newport a decade ago, it produced an angry response from Blair. This made no difference to the outcome but I'm sure that Blair's intervention chimed with Welsh people angry at the closure "See! Tony's on our side!..." they might have said! So perhaps Lang should have been more vocal about Ravenscraig's demise, if he had then it could well have denied Labour a stick to beat the Tories with. It wouldn't have made any difference in 1997 but it might have in subsequent years.

subrosa said...

That's my view too Oncoming Storm. The problem is all politicians do is look to the short term (the next election) and never consider future consequences.

We now have exactly the same situation in Afghanistan. No long term plan.

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