Word: steel
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Dates: during 1960-1969
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Real Reasons. Though old-fashioned in many ways, Britain's steel industry is hardly in dire distress; this year's output is likely to reach a record 26-plus million tons. Moreover, like much of the rest of Britain's highly mixed economy, steel is already a rigidly regulated enterprise, with severe government supervision of prices and investment policy. Steel Federation President E. T. Judge noted: "The White Paper does not make any specific charge of failure against the industry-which it certainly would have done had the evidence existed...
Labor's reply, from Minister of Power Fred Lee, is that British steel consists of too many small units, using too much manpower, to take advantage of the large-scale, computerized economies in steel existing in the U.S. and emerging in Europe's Common Market. Whatever the merit of the economic argument, it comes down to an insistence on merger and modernization-and even Labor partisans have to admit that those can be accomplished without outright government ownership...
...economic rationale, Wilson's real reasons for pressing ahead with nationalization are of course doctrinaire and political. Steel nationalization had become the test of Socialist purpose, and Wilson had a debt to pay to Labor's left wing as well as to his own conviction. Moreover, steel had also become a challenge to Wilson's thin, four-vote Commons majority...
...Much? Picking up the steel gauntlet will turn out to be an expensive proposition. To soften the financial community's opposition, Wilson resolved to pay far more than is really necessary for the private steel shares the government intends to buy up. The White Paper's schedules of compensation for private shareholders of the present firms are nearly 25% above the current market value of the stocks, and will cost the treasury an estimated additional $330 million over the total market price of $1.2 billion. Wilson's unexpected largesse predictably sent steel shares jumping upward...
...also reinforced the conviction of many of the foes of nationalization that the steel takeover is a doctrinal dinosaur in Britain's modern economy. Among them are two Labor dissidents, Desmond Donnelly and Woodrow Wyatt, who have threatened to either vote no or abstain when the White Paper comes up for debate in Parliament this week. Even from the Socialists' own point of view, argue critics with considerable logic, the money spent on nationalization might well be put to better service in the nation's elaborate structure of welfare benefits...