Wednesday, 17 April 2013

Margaret Thatcher and the demise of Britain's mining industry

Margaret Thatcher’s funeral today and I can’t remember a time when the nation has been so divided.

Well, yes I can; 1984 the time of the final set piece battle between Arthur Scargill’s mine workers union and the police, ending what was effectively England’s 4th civil war, culminating in the closure of the majority of northern England’s coal mines, and leaving a legacy of bitterness which has lasted to the present day.

Those who vilify Margaret Thatcher for this should try to remember what the 1970s, the pre-Thatcher years were like in the UK.

My late teens and University years were spent in the 1960s, one of the greatest decades to be alive. Barbara and I returned from 4 years in Zambia in 1973 to a Britain that was very much different from the one that we had left in the ‘swinging 60s’. It was a time of austerity; high rates of inflation had forced Edward Heath's Conservative government to impose pay rise capping, which in turn led to unrest amongst the powerful trade unions, as wages could not keep up with prices. The National Union of Mineworkers had ordered its members to work to rule, a result of which was dwindling coal stocks at power stations, associated power cuts, and the 3-day working week, designed to conserve fuel.

And things got worse as the 70s progressed, such that at the end of the decade the dead remained unburied, rats feasted on the refuse rotting in the streets, the Unions held the country to ransom, and politicians had virtually given up. “Crisis, what crisis?” the Prime Minister Jim Callaghan is reported to have said, in 1979 on returning from an overseas visit.

Then along came Margaret Thatcher who, love her or loath her, transformed Britain and put the country back on the international stage.

The coal mines were deep and uneconomic and were bleeding the country to death. Electricity production by North Sea gas was becoming the preferred method. All miners know that the life of a mine is finite, but the Marxist Scargill set out to be the saviour of the pits at all cost, but to no avail, the Iron Lady held out and closures were inevitable, although one can argue that the manner of their closure and the impact on communities was too rapid and severe.

What has been totally overlooked is that at about the same time the few remaining tin mines in Cornwall, which had provided employment for many in the traditional mining areas, shut down virtually overnight, due to a sudden collapse in the tin price. The legacy is similar to that in northern England, with towns such as Camborne, Redruth and St. Just effectively becoming ghost towns and unemployment rife. This is, unfortunately the nature of mining, but these closures brought to an end a long and proud history of metal mining in Cornwall, which had once been the world’s greatest producer of copper and tin.

Despite all her faults Margaret Thatcher was a politician of great conviction, who passionately strived to put England back on its feet and had the courage to stand by her convictions. She certainly polarised opinion then and does so now, although much of the vitriol since her death has been offensive and stems in great part from people who are too young to have lived through the Thatcher years, let alone the decade prior to her office, when Britain was on its knees and needed a very major change in direction and outlook.

2 comments:

  1. Barry, thank you for this informed perspective. I recall that the tin price collapse happened the same week that the East Kemptville tin concentrator started production. While no one ever said the two events were related, I personally feel that the start up of the 9,000 t/d plant in Nova Scotia caused the tin council to fear what would happen next - even though East Kemptville ore had a grade of only 0.18% tin of which only about 0.10 was recovered initially. The council's refusal to subsidize further tin production by purchasing the metal at $8 US per pound caused the price to drop to about $2.90. As a result, East Kemptville struggled for seven years and finally shut down with about two thirds of the original ore remaining in the ground, waiting for a future project.

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    1. That must have been in October 1985 John. Unfortunate timing for East Kemptville.

      From the mid-70s the price of tin was driven artificially higher, as the price of tin was fixed by the Malaysian dollar, while the International Tin Council’s buffer stock manager’s dealings on the LME were financed in sterling. The Malaysian dollar was tied to the American dollar, which strengthened markedly between 1982 and 1984, increasing the price of tin in London simply because of the exchange rate.

      In early 1985 the US$ began to weaken, taking the Malaysian dollar with it, and effectively reducing the LME tin price from its historic peak. In October the buffer stock manager announced that the ITC could no longer finance the purchase of tin to prop up the price, as it had run out of funds. This caused near panic, the tin price collapsed and the LME halted all further dealings. In 1986 many of the world’s tin mines were forced to close down and prices continued to fall in subsequent years.

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