British Steel collapse: A timeline of turbulence for UK industry

IT had been known that there was ironstone in the Cleveland Hills since the 12th century, but it wasn’t until 1850 that John Vaughan stumbled across a 16ft seam that the iron rush began. Vaughan and his partner, Henry Bolckow, opened their Eston ironworks in 1852.

Henry Bolckow

Joseph Pease, of Darlington, immediately opened up mines near Guisborough and ran his railway across the plain at the foot of the hills to collect the raw material.

• British Steel enters administration putting thousands of jobs at risk

Other ironmasters wanted to invest – Edgar Gilkes, CA Leatham, Isaac Lowthian Bell, Bernhard Samuelson – and within ten years of the discovery, there were 40 blast furnaces at Middlesbrough producing 500,000 tons of pig-iron a year. By the 1870s, supersized furnaces produced a third of all of Britain’s irons – but methods were changing, pioneered by Arthur Dorman and Albert de Lande Long, who converted the ironworks into steelworks. The mines were exhausted by the 1890s, but during the First World War, Dorman Long invested £4.5m in a new Redcar plant and by the end of the 1920s, it had all Teesside production under its control and employed a staggering 33,000 men.

In 1967, 90 per cent of the steel industry, including the Redcar plant, was nationalised by Harold Wilson’s Labour government and British Steel was created out of 14 separate companies. The newly nationalised operation had around 270,000 employees. By 1979, Redcar had the largest blast furnace in Europe.

The 1971 employment census showed 323,000 people were steel workers – 1.5 per cent of all those employed. This had halved by 1981 to 167,000 (0.8 per cent). The biggest drop was between 1978 and 1981, with numbers falling from 271,000 to 167,000.

In 1973, the government came up with a ten-year development strategy which would bring in billions of pounds of investment, but it meant the industry would be concentrated in five main areas: Teesside, South Wales, Sheffield, Scunthorpe, and Scotland.

Falling demand and productivity issues dogged the industry through the late 1970s. The government’s strategy of subsidising loss-making plants and prioritising employment levels came to an end with the election of Margaret Thatcher in 1979. The total nationalised workforce at this time was about 142,000, and a 13-week national pay strike shut the industry down in 1980.

The Tory government under Mrs Thatcher privatised British Steel in 1988. The national workforce had shrunk to 52,000 by this time. By 1990, around 7,300 people were employed in the industry in Scunthorpe.

In 1999 British Steel and the Dutch steel-maker Koninklijke Hoogovens merged, creating the Corus Group. The new firm became the biggest steel-maker in Europe. But Corus soon faced severe problems and announced plans to cut the national workforce, which dropped to around 30,000.

In 2007 Corus was bought by the Indian firm Tata Steel in a £6.8bn takeover. By 2014 about 34,500 people were employed in the steel industry.

A further crisis in the industry in 2015 saw closures including the end of the Redcar works, which was bought from Tata by Thai firm SSI in 2012. The closure was a devastating blow for Teesside, and led to the loss of 2,000 jobs.

SSI bosses pulled the plug on the plant in 2015

In 2016, private equity giant Greybull Capital bought Tata’s Long Products Division for £1. It resurrected the name British Steel, but after weeks of speculation, it was confirmed yesterday that British Steel was in liquidation.

Greybull Capital

British Steel is the latest in a line of UK firms which have become insolvent under the ownership of the fund run by the wealthy Meyohas and Perlhagen families.

Until now, Greybull’s most high-profile failure was the collapse of airline Monarch under its ownership in 2017. The airline left more than 80,000 tourists stranded after it went bust with debts of almost £500m, at an estimated cost of £60m to the taxpayer. It held on to Monarch’s engineering arm, Monarch Aircraft Engineering Ltd, until January when that unit also slid into administration.

Greybull was also a leading backer in OpCapita’s acquisition of electrical retailer Comet in 2012 for £2. A year later, the British retailer, which had 236 stores and employed 7,000 staff, collapsed into administration and closed all of its outlets after a restructuring programme failed to deliver profitability.

Another failure was the M Local convenience store chain, which was bought from Morrisons by a team led by retail entrepreneur Mike Greene, and backed by Greybull, for £25m in 2015. The chain was rebranded as My Local, but dived into administration in June 2016, resulting in the closure of 90 stores with more than 1,200 employees laid off.