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British Steel: A Unique Record of Public Regulation
Published online by Cambridge University Press: 07 November 2014
Extract
The iron and steel industry of the United Kingdom is unique in at least three respects which are important in any examination of its present condition and prospects. It is the world's oldest capitalistic iron and steel industry. It is widely dispersed geographically—a factor which distinguishes it particularly from the steel industries of other western European countries with which it is most in competition. Finally it has experienced what must surely be the most extended period of changing economic and political circumstances to which any industry in a predominantly private enterprise nation has been subjected in modern times.
While the intention here is to concentrate upon the political economy of the industry in recent years, it is useful to begin with some review of relevant geographical, structural, and historical factors. The structure of the industry is summarized in Table I.
The geographical dispersion of the industry contrasts rather sharply with the concentration of German steel in the Ruhr and of the French industry in Lorraine. It is, however, not difficult to explain in terms of the original wide-spread occurrence of coal and iron in Great Britain and of the specialized steel-making and steel-using skills which have developed in various parts of the country since 1850, even earlier in the instance of Sheffield. In Scotland and to some extent on the northeast coast and around Sheffield the industry has continued strong mainly because of the market for steel and the supply of specialized labour and knowledge, which has survived the exhaustion of coal or iron ore in these districts. In fact both the northeast coast and Yorkshire retain important reserves of coal, and other more recent considerations have helped to sustain and expand production in these sectors.
- Type
- Articles
- Information
- Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 26 , Issue 2 , May 1960 , pp. 241 - 264
- Copyright
- Copyright © Canadian Political Science Association 1960
References
1 Burn, D. L., The Economic History of Steel-Making, 1867–1939 (Cambridge, 1940), chap. xv.Google Scholar
2 Andrews, P. W. S. and Branner, Elizabeth, Capital Development in Steel (Oxford, 1952), chaps, iv, v.Google Scholar
3 Burn, , Economic History of Steel-Making, 470, esp. n. 1.Google Scholar
4 This alternative had been suggested in the Sankey Report of 1930, which was suppressed. D. L. Burn gives an interesting account of it, pp. 435–9.
5 Andrews, and Brunner, , Capital Development, 92.Google Scholar
6 One wonders whether the industry itself would be as enthusiastic about the decisions of the 1930's if it were to be demonstrated that centralization of the industry ensured subsequent continuous government intervention and political controversy.
7 Perhaps the chief limit to further investment in the early post-war years was the limited capacity of suppliers of capital equipment to the industry. See Hartshorn, J. E., “Capital Goods,” Steel Review, no. 8, Oct., 1957, 20.Google Scholar
8 Roepke, , Movements of the British Iron and Steel Industry, 1720–1951, 179.Google Scholar Of course, the urgency of reconstruction requirements provided a special rationale for a plan favouring existing locations.
9 If imports were arranged by the Board it was provided that any expense involved should be met out of a fund supplied by levy in the same way as the Industry Fund administered by the Federation. However, any sales of imported materials below cost would have to be approved by the responsible minister.
10 All sections hereinafter mentioned are from Iron and Steel Act, 1953. Castings and forgings are specifically excluded, probably because of product heterogeneity and the less concentrated nature of this sector of the industry, but if monopolistic practices arise, the Board may impose price control, subject to parliamentary powers of annulment.
11 The minister might also initiate such action without prior recommendation by the Board, though he is obliged to consult the Board.
12 Annual Report of the Iron and Steel Board for the Year 1957 (London, 1958), 24.Google Scholar
13 Now Sir Robert Shone, executive member of the Iron and Steel Board. See Shone, Robert M., “Steel Price Policy,” Journal of Industrial Economics, I, no. 1, Nov., 1952.Google Scholar
14 Even this does not correspond to the competitive norm as there is no assurance that this would bring forth a sufficient supply.
15 Iron and Steel Corporation of Great Britain, Report and Accounts for 1951–52, 22–3.Google Scholar
16 Lucien Foldes estimated a scrap levy of 52s. 6d. per ton in 1955; “Iron and Steel Prices,” Economica, Nov., 1956, 348.Google Scholar The 1957 report of the Board indicates a levy of about 34s. a ton.
17 Labour has been loaned to break up machinery.
18 Subsequent information indicates that this expectation was not realized, probably because the recession enabled a more rapid rate of elimination of high-cost producers.
19 In the immediate post-Korea era it was easy to argue that world market conditions were affected by short-term factors which should not be allowed to affect domestic conditions, and policy based on this argument was overdone.
20 Another period of rapid expansion in demand will provide a real test.
21 The Federation still considers this a “gross over-estimate.”