Iron and Steel Act 1949
The Iron and Steel Act 1949 (12, 13 & 14 Geo. 6. c. 72) was an Act of the Parliament of the United Kingdom which nationalised, or bought into state control, elements of the iron and steel industry in Great Britain. It established an Iron and Steel Corporation which acquired certain iron and steel companies. In a departure from earlier nationalisations the Corporation only acquired the share capital of the companies, not the undertakings themselves. The individual companies continued to operate under management Boards appointed by the corporation. The Iron and Steel Act 1949 was one of a number of Acts promulgated by the post-war Labour government to nationalise elements of the UK's industrial infrastructure; other Acts include the Coal Industry Nationalisation Act 1946; the Electricity Act 1947; Transport Act 1947 (railways and long-distance road haulage); and the Gas Act 1948.
| Act of Parliament | |
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| Citation | 12, 13 & 14 Geo. 6. c. 72 |
|---|---|
| Territorial extent | Great Britain |
| Dates | |
| Royal assent | 24 November 1949 |
| Commencement | October 1950 |
| Repealed | 14 May 1953 |
| Other legislation | |
| Repealed by | Iron and Steel Act 1953 |
Status: Repealed | |
Background
The involvement of the UK government in the iron and steel industry began in the interwar period with the establishment of the British Iron and Steel Federation to represent companies in the industry, and which fixed prices, production quotas, levies, and closed redundant works under Government supervision.[1]
The iron and steel industry came under the control of the Ministry of Supply during the Second World War.
In 1945 the Permanent Secretary of the Ministry, Sir Oliver Franks, published a report on the future of the industry. Franks recommended a radical modernisation with the aim of reducing prices to keep British steel competitive on the world market.[1] In 1946 the Labour government established an Iron and Steel Board, to control the price of raw materials, finished products, and steel imports; and to regulate investment, pooling arrangements, and the development of new plant and equipment. Board members were appointed by the Minister of Supply and represented industry employers, workers and consumers.[1] Full nationalisation of the industry, as opposed to government control, had been pledged by the incoming Labour government in 1945; however, this was a controversial issue and was opposed by the iron and steel companies and by the Conservative opposition.[1]
Provisions of the Bill
The Iron and Steel Bill as first drafted comprised 46 clauses under 8 headings.[2]
- National Iron and Steel Board
- Clauses 1–4: Establishment of the National Iron and Steel Board; its constitution and appointment by the Minister of Supply; its duties; permitted activities; power to establish and liquidate its companies.
- Powers of the Minister in relation to the Board
- Clauses 5–8: General directions; framing of programmes; annual reports and accounts; consultation on the acquisition and disposing of undertakings,
- Registration and Licensing of Iron and Steel Undertakings
- Clauses 9–11: Undertakings to register with the Minister; calling for information; requirement to have a license,
- Acquisition of Undertakings by the Board
- Clauses 12–22: Acquisition notices; securities; representation of shareholders; rights of transferred companies to continue to use assets; efficient operation; limitation of dividends,
- Terms of Purchase
- Clauses 23–25: Compensation for transferred assets,
- Financial Provisions
- Clauses 26–35: Borrowing and raising money; creating and issuing of stock; reserve fund; accounts and annual statement,
- Arbitration Tribunal
- Clauses 36–38: Establishment of tribunal; remuneration; enforcement Orders,
- Miscellaneous and General
- Clauses 39–46: Acquisition of land; terms and conditions of employment; making of Regulations; prohibition of iron ore import; liabilities and penalties; interpretation; application to Northern Ireland.
During the passage of the Bill through Parliament the proposed Iron and Steel Board became the Iron and Steel Corporation.[1]
Enactment and provisions
The Iron and Steel Act 1949 (12, 13 & 14 Geo. 6. c. 72) received royal assent on 24 November 1949.
The Iron and Steel Corporation of Great Britain was established under the provisions of the Act with effect from October 1950. It brought 94 iron and steel companies into public ownership with effect from vesting day, the 15 February 1951.[1]
The 1949 Act also established an Iron and Steel Consumers' Council. This had the duty ‘of making representations to the Minister on such matters affecting the interests of the consumers as the Council think necessary’.[3]
Operation of the Act
The model of nationalisation enacted by the 1949 Act was different to earlier ones, such as Coal Industry Nationalisation Act 1946. Only the share capital of the companies was acquired, not the undertakings themselves. The individual companies therefore continued to operate under management Boards appointed by the corporation.[1] The mode of nationalisation was distinct because many iron and steel companies undertook other integrated activities, that could not easily be segregated into their individual functions. For example, the manufacturers of motor vehicles, which undertook steel processing, were excluded. About 2,000 iron and steel companies operated outside the nationalised sector.[4]
Observations on the Act
The 1949 Act has been seen as both the culmination of the Labour government's nationalisation policy and as a major departure from that policy.[5] It completed the list of major industrial infrastructures to be brought into state control and introduced collective ownership, and a certain amount of competition, into a manufacturing industry. It has also been seen as significant as it 'sheds light on the policy of nationalisation'.[6] It has been described as being doctrinally inspired.[5] And 'a highly exceptional measure... pushed through Parliament with great vigour and determination'.[6] It has been seen as ‘nationalisation for clearly ideological reasons’;[7] since the government 'was so persistent with a measure which can fairly be described as in no way popular'.[6] It was argued that the iron and steel industry was progressive and efficient with good labour relations.[7] And that public ownership was necessary to compel the industry to follow a policy in the national interest.[7] Although different to the nationalisation of the coal, transport, electricity and gas industries the method of nationalisation through the acquisition of shares was similar to that used for the Bank of England (1946) and Cable and Wireless Limited (1947).[8]
Government policy and later enactments
| Act of Parliament | |
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| Long title | An Act to repeal the Iron and Steel Act, 1949, and to dissolve the Iron and Steel Corporation of Great Britain; to establish an Iron and Steel Board for the supervision of the iron and steel industry and to define the functions of that Board, and to make other provision as to the said industry; to provide for the return of iron and steel undertakings to private ownership and for the disposal of the property, rights, liabilities and obligations of the said Corporation; and for purposes connected with the matters aforesaid. |
|---|---|
| Citation | 1 & 2 Eliz. 2. c. 15 |
| Dates | |
| Royal assent | 14 May 1953 |
Nationalisation of iron and steel production had been strongly opposed by the Conservative opposition. The act went into effect in February 1951, meaning that its implementation would occur during the 1951 general election season.[9] On returning to power in October 1951 they planned to denationalise and return the industry to the private sector. This policy was enacted through the Iron and Steel Act 1953.[10]
The Iron and Steel Act 1953 (1 & 2 Eliz. 2. c. 15) received royal assent on 14 May 1953.
Section 1 of the 1953 Act repealed the Iron and Steel Act 1949 and dissolved the Iron and Steel Corporation. It transferred the corporation's properties, rights, liabilities and obligations to a newly established Iron and Steel Holding and Realisation Agency.[10] The Agency gradually sold the nationalised companies back into the private sector with the exception of Richard Thomas and Baldwins which remained in public ownership until it was absorbed into the British Steel Corporation in 1967.[4]
The 1953 act also established a new Iron and Steel Board which began operating on 13 July 1953. The Board had a duty 'to exercise a general supervision over the iron and steel industry... with a view to promoting the efficient, economic and adequate supply, under competitive conditions, of iron and steel products'.[1] The work of the Board and the Agency was thus parallel and complementary.[1]
The 1953 Act remained in force until the Labour government re-nationalised the iron and steel industry in 1967 through the Iron and Steel Act 1967.
References
- "Records of the Iron and Steel Corporation of Great Britain, the Iron and Steel Board, and related bodies". National Archives. Retrieved 19 August 2020.
- "Cabinet papers Catalogue Reference: CAB/129/18 Image Reference:0023 Heads of Iron and Steel Bill" (PDF). The National Archives. Retrieved 19 August 2020.
- Hansard HC Debate 27 April 1949 vol 464 cc237-85
- See Iron and Steel Corporation of Great Britain
- Langley, S. J. (1950). "The Iron and Steel Act, 1949". Economic Journal. 60 (238): 311–322. doi:10.2307/2227057. JSTOR 2227057.
- Kelf-Cohen, Reuben (1973). British Nationalisation 1945–1973. London: Macmillan. ISBN 9781349015436.
- Waschke, Hildegard (1977). "The development and impact of nationalisation in Britain". Intereconomics. 12 (5–6): 153–157. doi:10.1007/BF02928713. hdl:10419/139470. S2CID 54703725 – via Econstore.
- Schmitthoff, Clive M. "The Nationalization of Basic Industries in Great Britain". duke.edu. Retrieved 19 August 2020.
- Thorpe, Andrew (1997). A History of the British Labour Party. London: Macmillan Education UK. p. 133. doi:10.1007/978-1-349-25305-0. ISBN 978-0-333-56081-5.
- "Cabinet papers Iron and Steel Bill 1952" (PDF). The National Archives. Retrieved 19 August 2020.