THE DECLINE OF STEEL

As the British steel industry comes face to face with Common Market entry, it also reaches the end of a long, historical road which spells doom for it in any independent form.

The British Steel Corporation's annual report just published shows that in the year ending March 1972 they made a gigantic loss of £68m.

Home sales only reached 12.6 million tons, and total turnover at £1,292m was substantially below the levels anticipated.

The drop in home sales represented a massive fall of 24 per cent compared to the 1970-1971 levels. This reflected the most severe decline in UK steel demand since the war and a verification of the going crisis throughout capitalism.

In an industry where almost 100,000 jobs have disappeared in ten years-and 40,000 since nationalization in 1967 — the Tory government is planning for well over another 100,000 sackings.

The vast majority of British steel plants will be closed and production concentrated in a few modernized units.

Output over the next decade will be virtually the same as it is now. The Tories have decided, in conjunction with Common Market governments, that any future developments will probably take place on the Continent itself.

Already burdened with over capacity - yet on the whole with far more modern equipment — the EEC is firmly opposed to the expansion of BSC to a position where might dominate, the rest Europe.

At the same time, of course, British capitalism does not have the financial resources to enable prolonged expansion of steel-making capacity in this country.

The end of such an industry is of tremendous historical significance for British capitalism. It means that the 'workshop of the world' of the 19th century has now been reduced to the graveyard of world industry.

A century ago it was Britain which dominated the world in the production of iron and steel. It provided the basic raw material for manufactured goods. With no great rivals and a vast empire, Britain controlled the world market.

Today that position

reversed. British capitalism arguably the weakest link of the advanced economies that make up western imperialism. And the fact that most basic of all industries-steel—is on the verge of collapse indicates the depth of that crisis.

Even massive state aid through investment loans and two bouts of 'nationalization' have been unable to stop the rot.

Now the British steel industry finds itself in the midst of rapid technical changes which are transforming production.

The decline in British steel is long-term. Until the 1870s the industry still led the world in production. But by 1914 it had slipped into third place behind the United States and Germany. The main reason for this was the rapid switch from iron to steel production over that period.

Iron production dependent on manual labour, with highly-skilled craftsmen and a relatively large labour Steel production became a viable proposition on the introduction of the Bessemer method in the 1850s. This involved the conversion of molten pig iron into steel without the use of additional fuel. Carbon and silicon were burned out of the metal by a blast of air blown through a converter. The result was a steel much stronger than the wrought iron which had been produced previously. Britain, employing expensive capital-equipment and highlytrained chemists and metallurgists.

In 1913 Britain's share of world steel production was about 10 per cent. It was, however, a declining share, the process continuing throughout the 1930s. By 1955 the share was 7.5 per cent and by The first such mill in Britain was opened by Dorman Long in 1958.

A comparison with the Japanese steel industry will illustrate vividly the backward nature of its British counterpart and the hopeless position it now finds itself in.

In the 1950s the most important breakthrough in ably better quality control. At Port Talbot, BSC has already replaced 14 old-style converters with two LDs. They are capable of producing 250,000 tons extra of steel each year. Yet the labour torce has been cut from 2,500 to 500. India. The Japanese have been able to drop the price of steel they produce by about 3 per cent a year.

This has given them formidable competitiveness in world markets, not least of all in Europe. Japanese steel imports by Britain have risen 500 per cent to £20m over the last two years. The first replaced the Bessemer method. Right: Port_ Talbot steel works capacity. There are only three British plants with an output greater than 2 million. Over 30 units have an average output of 850,000 tons. CONTINUED TOMORROW Redundancies in British steel industry since January, 1971