A history of positive response

During the late 1960s and the early 1970s UK steel demand dropped for the first time since the war. The oil shocks of 1974 and especially 1979 exacerbated the downturn in UK steel consumption, with output dropping in 1980 to less than 12 million tonnes. Britain was not alone in suffering the effects of the economic turbulence. Regulation of the steel industry had transferred to Brussels in 1973, when Britain joined the tariff-free Common Market. In 1980 the European Commission declared the steel industry to be in "manifest crisis," introducing production quotas, delivery ceilings, and state aid in return for capacity cuts.

British Steel entered the 1980s suffering from surplus capacity and chronic overmanning that had caused employment to rise to 38% of total costs. In 1980 the industry suffered a lengthy steel workers’ strike. However, British Steel’s workforce had shrunk to 53,000 by 1988 from 250,000 in 1967.

Furthermore, it had reversed ten years of heavy losses from the mid-1970s. By the late 1980s it was making a healthy profit and was hailed as one of the world’s most efficient steel makers. In 1987 the government decided that it had made an impressive turnaround in performance and had a sufficiently healthy outlook for privatisation to take place. The sale of British Steel was a pioneering transaction that sparked off a mass migration from state to private ownership.