On 24 November 1949, the Iron and Steel Act 1949 received royal assent, placing the nationalisation of the British steel industry on the statute book. It followed the nationalisation of coal (1947), electricity (1947), gas (1948) and the railways (1948).

While the legislation reflected the Attlee government’s determination to bring the “commanding heights” of the economy into public ownership, the measure was highly contentious. It would not feature in the “Butskellite” post-war consensus that followed. In this regard, the act has been described as “the most contentious of all measures enacted from Labour’s 1945 manifesto.”

It authorised the creation of the Iron and Steel Corporation of Great Britain, a public holding company which acquired the shares of 80 major steel companies “engaged in the working, getting and smelting of iron ore, the production of steel, and the shaping of steel by rolling, and of certain property”.

***

Labour’s 1945 general election manifesto included a commitment to legislate for the “public ownership of iron and steel”. It said the existing “private monopoly” had maintained “high prices and kept inefficient high-cost plants in existence.”

The manifesto added: “Only if public ownership replaces private monopoly can the industry become efficient.”

On 28 May 1946, the commons passed a resolution endorsing the government’s decision to bring forward proposals for nationalising “appropriate sections of the iron and steel industry” by 338 votes to 184. Speaking during the 1946 debate, Conservative MP Robert Hudson referred to “rumours” that the commons leader, Herbert Morrison, entertained “some qualms about the rightness of this decision”.

On 17 April, the cabinet heard that steel nationalisation was “undoubtedly the most difficult nationalisation project which the government had yet entertained”. It was said that “doubts” had begun to emerge from within the Labour Party over whether the industry should be nationalised. Nevertheless, in July, 143 Labour MPs signed a petition demanding the immediate introduction of a bill for full nationalisation, explicitly rejecting any compromise.

Alfred Edwards, the Labour MP for Middlesbrough East, a steel-producing constituency, was the party’s leading and most vehement opponent of steel nationalisation. Edwards’ extensive criticisms precipitated his expulsion from Labour in May 1948.

Cabinet divisions over steel nationalisation received significant contemporary treatment in the press. These divisions implicated questions over political priorities, the nature of a ‘mixed economy’, and the economic sense of the measure. One tendency, identified with Morrison, was reported to be sceptical on the grounds that it could hamper production. In cabinet meeting on 7 June 1948, Morrison called for an approach “which would be generally acceptable” to the British Iron and Steel Federation (BISF).

A rival cabinet faction, identified with Aneurin “Nye” Bevan, was reported to be calling on the government to push ahead with its plans.

Cabinet minutes from this period reflect a political anxiety and ambiguity regarding the rationale for steel nationalisation. In the meeting on 7 June, Attlee warned of issues with a memorandum produced by the minister of supply, George Strauss. It stated that there was “no question of inefficiency, or of disinclination or inability to carry through essential modernisation” in the iron and steel industry. Attlee demanded a new memorandum setting out a “good case” for proceeding with nationalisation.

This memorandum was produced on 10 June by Strauss. It argued at the outset (“in order to prevent our propaganda starting off on the wrong foot”) that the government’s case for nationalisation rested “on the need for taking this important basic industry out of the realm of private profit-making into public ownership rather than on grounds of any present inefficiency in the industry’s management.”

Days later, on 14 June, Attlee expressed his “grave concern” at the “continuing disclosure of confidential discussions between ministers”.

***

Division and political anxieties engineered a delay, therefore, in finalising a collective government position on steel nationalisation. This delay meant the measure – demanded by Labour’s Bevanite elements – risked running afoul of the effective veto peers held over legislation in the final two years of a parliament.

Cabinet discussions suggest ministers expected that the Conservative majority in the upper chamber would – if given the opportunity – use their two-year suspensory veto under the Parliament Act 1911 to block the nationalisation of steel until after the general election due in 1950.

The Parliament Act 1911 reduced the power of the Lords from absolute veto to two-year delay. In the final phase of a parliament therefore, the Lords delay amounted to an effective veto – compelling ministers to drop bills, amend proposed legislation or call an election. The last two years of a parliament’s life, when there was a non-Tory majority in the commons, would become moribund.

To circumvent this, the government introduced the Parliament Bill (later the Parliament Act 1949) to reduce the Lords’ delaying power from two years to one. This would allow steel nationalisation legislation to be introduced into the 1948-1949 parliamentary session; Labour could procrastinate and postpone nationalisation, therefore, without risking its defeat at the hands of the effective Lords veto. Steel would still be nationalised before a general election in 1950.

The Conservative opposition condemned the new Parliament Bill as a device designed solely to secure the passage of the steel nationalisation and assuage Labour divisions.

The proposal to amend the Parliament Act was included in the October 1947 king’s speech, therefore, as a pre-emptive measure. As of yet, there was no bill providing for the nationalisation of the steel industry. But in his speech to MPs on 21 October, Attlee reiterated the government’s intention “in the present parliament to nationalise the relevant portions of the iron and steel industry.”

Winston Churchill, the Conservative leader of the opposition, noted the widespread reports recounting Labour’s divisions on steel nationalisation. In these terms, he referred to the decision to amend the Parliament Act as the “purchase price of this year’s delay in doing a wrong and foolish thing [steel nationalisation]”.

He added: “On this petty and unworthy ground, the prime minister thought it right to reopen the constitutional settlement which was reached in the Parliament Act of 1911, and which has formed the basis of our constitution for the last 36 years…

“All this disturbance is to be raised for the sake of some political deal inside the cabinet to enable them to carry on from month to month.”

This proposed reform, he said, was “flung out, not as a result of grave historic and prolonged constitutional controversies, but as a cheap, paltry, disreputable deal between jarring nonentities in a divided administration.”

Churchill, a minister during the fraught passage of the Parliament Act 1911, added: “In order to placate those who complain of the delay he throws this serious constitutional issue of the House of Lords as a sop into the political stewpan.”

Morrison, the lord president of the council, rejected Churchill’s well-founded accusation that the Parliament Bill was merely a tactical device for locating a cabinet consensus on steel nationalisation.

He told MPs: “[Churchill] has picked up a lot of newspaper stories. He says that the proposal to amend the Parliament Act 1911 is a nasty, horrible, unclean deed within the cabinet over the Iron and Steel Bill. He is wrong.”

Rather, Morrison argued that without the proposed reforms, a Labour government would face a “Conservative veto in the last two or three sessions of parliament.”

He also dismissed Churchill’s speech as “a plea for laissez faire, a plea for the Manchester school of the 19th century; a plea for economic anarchy”.

Harold Macmillan, the future Conservative prime minister, joked that the cabinet had “vetoed [steel nationalisation] a year themselves”.

Supermac, on energetic form, declared: “Suppose the government do finally introduce a steel bill. Why, what then? Why then, it is argued, the most terrible tragedy may happen, because the House of Lords… may so delay the bill that it may not be passed before a general election.

“But would this be very bad? ‘Oh yes, very bad’, it is said. But why? ‘Why? Because the socialists might lose the election, and then steel would not be nationalised.’ But would not that be the will of the people? ‘Oh no’, reply the socialists.

“‘You do not understand how the thing works. When the people vote socialist, that is the will of the people prevailing and triumphing; but when they vote Conservative, it is the triumph of the forces of reaction.’

“What hypocrisy! What absurdity!”

References to the government’s nationalisation plans persisted throughout the passage of the Parliament Bill. Morrison, introducing the proposed legislation at second reading, referred to a hypothetical “Bill A”, which, if introduced in the present section, could be vetoed by the Lords as the law then stood. Conservative MP Kenneth Pickthorn observed that what the “Treasury Bench coyly calls ‘Bill A’… [Labour] backbenchers call the Steel Bill.”

David Maxwell Fyfe, speaking for the Conservative frontbench, quoted directly from a report in the New Statesman. The report, citing the decision to curb the power of the House of Lords, said that Attlee had “averted the danger of a split in his own ranks on the issue of iron and steel.”

The report added: “The lord president of the council [Morrison] has won his point that nationalisation should be postponed until 1949, and the minister of health [Bevan] has agreed on the understanding that the House of Lords shall not be permitted to kill the bill, by the use of the two-year veto.”

***

In September 1948, a short parliamentary session began – solely organised to satisfy the Parliament Act 1911, which stated that a bill needed to be passed by MPs in three “successive sessions” over a period of not less than two years. The historically succinct speech from the throne said MPs had been summoned “in order that you may give further consideration to the bill to amend the Parliament Act 1911”.

It added: “It is not proposed to bring any other business before you in the present session.”

Responding to the king’s speech, Alfred Edwards – the former Labour MP – expressed his understanding that the political situation had come to this because “the minister of health [Bevan] threatened to resign his position unless the government agreed to nationalise the steel industry.”

He added: “In order to keep that pledge to the minister of health we are sitting here today, the whole country has been upset, and the whole of parliament has been dragged here to listen to a 74-word speech.”

(In August 1949, Edwards defected to the Conservative Party; he later labelled Bevan as a “near-communist extremist”).

The government’s strategy was set out in a memorandum considered by the cabinet on 14 June 1948. The document, authored by Morrison, recommended that three further sessions should be held before the parliament elected in 1945 was dissolved.

It stated: “In the first of these, a short session running from 14 September to about 27 October, 1948, the Parliament Bill would be passed by the commons and sent to the Lords for a second time, but no other legislative business would be transacted. This would be followed by a long session, running from late in October or early in November, 1948, until December, 1949, in which the Parliament Bill would be passed into law and the Iron and Steel Bill would be passed by the commons for the first time.

“In the third session, which would open in January, 1950, and would be relatively, short, the Iron and Steel Bill could, if it had been rejected by the Lords in the preceding session, be passed into law under the amended provisions of the Parliament Act.”

The October 1948 king’s speech – the second speech from the throne in as many months – contained the much-expected measure on the nationalisation of the steel industry. King George VI said a bill would be laid before parliament “to bring under public ownership those companies extensively engaged in the production of iron ore, or of pig iron or steel, or in the shaping of steel by a rolling process.”

The address from the throne also implored parliamentarians to “consider further the bill to amend the Parliament Act 1911 on which during the last two sessions your Houses have disagreed”. A third passage through the House of Commons would fulfil the terms of the 1911 act and see the bill safely through to royal assent.

Anthony Eden, speaking for the Conservative frontbench, said the party was “unalterably opposed” to the “ill-judged and ill-timed” proposal to nationalise steel. He maintained the Tory line that the proposal was introduced by “considerations of party strategy and party cohesion”.

Attlee justified the bill on the grounds that steel was “basic to the planning of the economy of this country”.

The bill received its first reading the following day, on 27 October, and returned for consideration at second reading less than three weeks later.

Addressing the House on 15 November, Strauss, the minister of supply, described the British Iron and Steel Federation as “a vast monopoly, or cartel, possessing great powers without responsibility over the well-being of our people.”

He declared: “This great reform removes from the private sector of our economy to the public the industry which is the citadel of British capitalism. It transfers to parliament and the community that power to dominate the economic life of this country which now resides with the steelmasters in steel house.”

Oliver Lyttelton, speaking for the Conservative Party, quoted Labour backbencher, Seymour Cocks, in a bid to expose the government’s true motive. Cocks is purported to have said: “Once we have nationalised steel, we shall have broken the back of capitalist control of industry in this country and its domination forever…

“After that happens whatever party is in power, we shall be a socialist state.”

Churchill said the bill showed ministers were the “handmaids and heralds of communism”. He posited that steel nationalisation was “not a plan to help our patient struggling people, but a burglar’s jemmy to crack the capitalist crib.”

Under the terms of the bill, the vesting date – the date on which the new corporation would formally take ownership of the companies – was set for 1 May 1950. This would likely see the corporation established before the general election, which had to be held by July 1950.

Churchill suggested that the “fixing of this remote date seems to have been the means by which the differences in the cabinet were adjusted between the extreme nationalisers and the more sober and responsible ministers.”

Sir Andrew Duncan, Conservative MP and BISF chairman, also spoke in opposition.

Iron and Steel Bill secured its second reading by 373 votes to 211. This reflected the largest anti-government vote in the commons in the years 1945-1950.

The bill completed its passage through the commons with the help of a guillotine motion tabled by the government. Jack Jones, joint parliamentary secretary to the Ministry of Supply, claimed the bill’s committee stage would have lasted seven and a half years without this measure. Lyttelton objected, declaring that “198 out of 480 amendments were undiscussed in committee”.

The bill passed its third reading by 333 votes to 203.

***

As had been expected, parliamentary opposition to the Iron and Steel Bill was at its most critical in the Lords.

To this point, Attlee and the Labour government had forged a mostly constructive relationship with the Tory-dominated upper chamber. Conservative peers, led by the Marquess of Salisbury, had not sought to thwart legislation they regarded as falling within Labour’s mandate. Responding to the 1945 king’s speech – the Attlee government’s first – Salisbury said that it would be “constitutionally wrong” for the Lords “to oppose proposals which have been definitely put before the electorate.”

This principle has since been referred to as the Salisbury convention, or Salisbury-Addison convention (after Viscount Addison, the leader of the House of Lords at the time).

Conflict between the two Houses erupted over the Iron and Steel Bill, however – on the question of the vesting date specifically. Salisbury said he would give the bill a second reading, but vowed to delay its operation until “after the latest date of the next general election”. He argued that if Labour won the 1950 election, then nothing would prevent the bill from coming into law “however pernicious we ourselves may think it.”

But he added: “If, on the other hand, the government are not returned to power at the election, then it is evident that the people will have rejected nationalisation of iron and steel.”

Speaking during the second reading debate on the Iron and Steel Bill in May 1949, Salisbury said it was “rather odd that a government which prides itself on being democratic should choose the date for the final transfer of shares at just about one month before they must appeal to the people.”

He also elected to remind the government that “they have left this bill until the very last months of a dying parliament, when their mandate is already clearly fading.”

Viscount Swinton, a senior Conservative peer, similarly denied that the government had a mandate for the bill – thereby justifying opposition in the Lords. He argued the bill bore no “resemblance to anything in the election programme, or even to the government’s intentions as expressed in the motion submitted in another place in 1946”.

The bill received a second reading without a division by the House of Lords on 25 May. But, as Salisbury indicated, peers reserved the right to shape the bill at committee stage.

On 29 June, Salisbury set out the Conservative Party’s “simple device… to postpone the coming into operation of this bill until 1 October 1950, and the vesting date until 1 July 1951”. He said the amendment would give the government time to “produce convincing economic arguments in favour of this measure… and the British people time to consider those arguments, if they exist, and to declare their view”.

In total, 89 peers backed Salisbury’s scheme; 22 sought to reject it.

On 25 July, the commons resolved to reject the Lords amendments.

The vesting date amendment, which Strauss identified as the “amendment to which… the opposition attach the very greatest importance”, was rejected by 285 votes to 137. The government stated, as its given reason, that it was in “the national interest that the securities of the iron and steel companies should be transferred as soon as practicable.”

On 28 July, the upper chamber voted by 103 to 29 to insist on its amendment.

***

Some months later, on 31 October 1949, the commons considered the Parliament Bill at second reading for the third time in two years.

Fyfe, speaking for the Conservative frontbencher, outlined his party’s threefold opposition to the bill.

He stated: “In the first place, we say it is unnecessary and undesired; secondly, that it weakens the formation, expression and influence of public opinion between elections; and, thirdly, introduced and continued in two periods of unequalled economic difficulty, its deliberate purpose is to dislocate and disturb production… by facilitating the nationalisation of iron and steel.”

Fyfe criticised Morrison’s suggestion at the Parliament Bill’s first second reading in October 1947 that the decision to amend the 1911 act was not connected to steel nationalisation.

Morrison, in his contribution, responded: “It is perfectly true that we have the Iron and Steel Bill in this session.

“As it happens, [the Parliament Bill] will take care of that measure should it be necessary. But at the time this bill was brought in there might, for all we knew, be other bills in need of care.”

The Parliament Bill secured its third reading in the commons, for the third time, on 14 November 1949. It passed by 340 votes to 187.

***

The cabinet met on 10 November to agree a collective position in the face of the opposition from the Lords. Secret negotiations, conducted between ministers and Salisbury and Swinton, were discussed. It had been agreed that the “earliest date for the vesting of the companies in the corporation would be 1 January 1951”.

Ministers considered these terms to be “favourable”, noting that any other course of action would be now “impracticable”.

But crucially, this concession pushed the vesting date past the deadline for the next general election.

On 16 November, Strauss informed the House of Commons that the government’s position had changed. He condemned the conduct of the Lords as “contrary to all principles of democratic government”, but said ministers had been “forced to face realistically the effects of that action”.

The new Parliament Act, Strauss suggested, would not come into force quickly enough.

He said: “Our alternative proposal is 1 January 1951 or such date within the following 12 months as the minister may determine.”

Churchill said he was “satisfied” that Salisbury’s amendment and the government’s amendment were broadly aligned. The former prime minister reiterated that should the Conservative be returned to power “one of our first steps will be to expunge from the statute book this wanton, wasteful and partisan measure, in which many of those associated with it do not, in their hearts, believe, and which strikes this country a bitter blow at a bad time.”

Morrison supposed that if the Lords agreed to the amendments “then the bill will be on the statute book this session, and the Parliament Bill will have nothing to do with the passing of this bill whatever.”

He cited this as a vindication of the longstanding position that the origin of both bills were entirely unrelated. “That will prove conclusively that the Parliament Bill was not brought in purely for the Iron and Steel Bill”, he told MPs.

“The Parliament Bill was solely a measure of general legislative insurance. That was all.”

Salisbury, as per his agreement with the government, accepted the amendment as “entirely satisfactory to us”. The Conservative leader in the Lords also defended his approach to the bill during its journey through parliament.

Salisbury stated: “Much though we dislike this bill… we have not throughout these discussions, as noble Lords opposite know, regarded it as our function to reject the bill.

“If we had wished to do that, we should have voted against the second reading. And that we did not do. On the contrary, we went to considerable pains to amend and improve the bill as best we could.”

He added: “But we did regard it as vital, and we have said so from the start, that the British people should be given another opportunity of looking at this measure – which, I would remind the government, is, in fact, quite different and far wider than that envisaged at the last general election – and of expressing a considered opinion upon this new proposal.”

Iron and Steel Act, on these terms, received royal assent on 24 November 1949.

The House of Lords considered the Parliament Bill again on 29 November, no longer in the shadow of the steel nationalisation. Viscount Swinton, however, was still bitter. Speaking for the Conservative frontbench, he referred specifically to the bill’s “retrospective clause” – which would have applied to the Iron and Steel Bill had no agreement been reached.

He declared: “Like a kangaroo, the Parliament Bill carried the steel bill in its pouch. My Lords, we have heard of kangaroo closures, but this is the first and, I hope, the last time any of us will meet a kangaroo bill.

“And the kangaroo was abortive, for the government have accepted the whole substance of your Lordships’ contentions regarding the Steel Bill. How foolish that sinister, retrospective clause looks now.

“It will remain for the time being on the statute book, a shoddy monument of political ineptitude.”

Peers rejected the bill for the final time by 110 votes to 37. But this last stand was ultimately futile. Under the terms of the Parliament Act 1911, the Parliament Act 1949 received royal assent on 16 December.

The Parliament Act 1949 was not, in the end, activated by any bill introduced by the Attlee government.

***

The Iron and Steel Act, as expected, featured prominently as an issue in the 1950 general election.

Crucially, as had influenced Salisbury’s stance in the Lords, the measure was not believed to be popular. A Gallup poll in August 1949 found 53% were against the bill, versus 25% who were in favour.

The 1950 Conservative manifesto made significant concessions to Labour’s programme of nationalisation, setting the terms of the post-war economic consensus. But the manifesto retained the right to “repeal the Iron and Steel Act before it can come into force”.

Labour won the 1950 election, but with a significantly reduced majority. The party secured a majority of just five seats – some distance short of the 146-seat majority it enjoyed after the 1945 election. In the wake of the election, Churchill argued that proceeding at pace with the plans would see the government commit “political hari-kari [harakiri] on the steps of St Stephen’s.”

But such counsel was brushed aside by Attlee, whose government proceeded to implement the act.

On 14 September 1950, Strauss announced the appointment of a seven-person board; a boycott by industry leaders had complicated the government’s selection. Churchill, meanwhile, regretted that the government was plunging the country into “the fiercest party controversy” during the international crisis provoked by the Korean War. He responded with a motion of censure, which was rejected by a narrow majority of six votes.

The Iron and Steel Corporation was nonetheless constituted; the vesting date eventually arrived on 15 February 1951.

Churchill responded with a second motion of censure, which was defeated by a majority of 10.

The new nationalised steel regime was always likely to be unstable, however, due to the lack of political consensus. And following the Conservative victory in the general election of October 1951, Churchill’s new government moved quickly to repeal the legislation.

The 1951 Conservative manifesto again included a pledge to “stop all further nationalisation.”

It added: “The Iron and Steel Act will be repealed and the steel industry allowed to resume its achievements of the war and post-war years. To supervise prices and development we shall revive, if necessary with added powers, the former Iron and Steel Board representing the state, the management, labour, and consumers.”

The November 1951 king’s speech featured the promise of a bill “to annul the Iron and Steel Act with a view to the reorganisation of the industry under free enterprise but with an adequate measure of public supervision.”

The industry was de-nationalised under the Iron and Steel Act 1953. The Conservative government established a new Iron and Steel Board to supervise the industry under private ownership.

The 1953 act remained on the statute book until the next Labour government, led by Harold Wilson as prime minister, re-nationalised the iron and steel industry under the Iron and Steel Act 1967. This legislation created the British Steel Corporation (BSC). The 1964 Labour manifesto pledged that the “private monopoly in steel will be replaced by public ownership and control.”

Labour’s 1966 manifesto repeated this commitment “to transfer the private steel monopoly into public ownership and to rationalise its structure.”

In the 1980s, Margaret Thatcher re-privatised BSC as British Steel.

In a statement to the commons on 3 December 1987, Kenneth Clarke, the minister of state for trade and industry, said the government was “committed to returning successful state industries such as steel to the private sector as soon as practicable.”

***

In his memoir, As It Happened, Attlee recounted his relationship with the Lords as prime minister. He said Labour experienced “no trouble” across its first three years in power after the 1945 election. Rather, the House of Lords “fulfilled a useful role as a debating forum and a revising chamber.”

But he said it was clear that the “Iron and Steel Bill would not get through the Lords without the use of the Parliament Bill”.

He added: “In my view, the period of delay imposed by this measure before the will of the elected chamber could prevail was too long. Accordingly it was decided to introduce a measure shortening the period by which measures passed in the commons could be held up…

“The Conservatives naturally put up strong opposition, but were somewhat embarrassed by the fact that the best shots in our oratorical locker were provided by extracts from the speeches of their own leader when he was a Liberal [Churchill during the debates over the 1911 Parliament Act].”

On his nationalisation plans, Attlee said that only “iron and steel roused much feeling, perhaps because hopes of profit were greater here than elsewhere.”

In 1964, Marquess of Salisbury reflected on his relationship with the Attlee government. He said that due to the large Labour majority in the commons, Conservative peers adopted the “broad guiding rule that what had been on the Labour Party programme at the preceding general election should be regarded as having been approved by the British people.”

Salisbury added: “Therefore… we passed all the nationalisation bills, although we cordially disliked them, on the second reading and did our best to improve them and make them more workable at committee stage.

“Where, however, measures were introduced which had not been in the Labour Party manifesto at the preceding election, we reserved full liberty of action.”