What Evidence could be used to show that Manufacturing Decline has Taken Place in the Area?
Evidence for de-industrialisation of the steel industry in the South Wales region can be found by looking around the old industrial towns in the surrounding area where the iron and steel industry were once pervasive. Large numbers of old factories, once used by the steel industry in the area are now empty and unused, providing evidence that these industries are no longer profitable and have declined in South Wales. There is also a large amount of dereliction due to a loss of income to the area from the iron and steel industries that once brought employment and money to the towns. Old industrial buildings located in these industrial areas may have been converted into shops, art galleries, museums or offices. This is known as urban renewal, and is further evidence that the iron and steel industries, which once inhabited these buildings has previously declined. Finally, the decline of the iron and steel industries from the industrial towns in South Wales could also be proven by the out-migration of people from these areas. The de-industrialisation caused numerous job losses and a reduction in employment opportunities, resulting in many people moving out of the area in search for jobs. This movement creates a noticeably smaller population and this is therefore further evidence for the decline of the steel industry in South Wales.
Reasons why the Region is Suffering from De-Industrialisation in the Iron and Steel Industry
There are many reasons why the iron and steel industry in South Wales has suffered industrial decline or de-industrialisation during the 20th century. These reasons are mostly due to changes in politics and economics, which have altered the amount of money that the industry is receiving. Also, due to the development of new technologies right the way through the 20th century.
Throughout the 20th century a huge amount of technological development occurred, meaning less steel was required to manufacture the same number of products as were produced previously. This meant less steel was produced and therefore the industry began to lose money. Also, improvements in the quality and durability of the steel produced, meant it lasted longer and therefore less manufactured steel was required, as it did not necessitate replacement as quickly as previously. This also assisted with the decline of the iron and steel industry in South Wales. Other materials, such as aluminium and plastic were also developed throughout the 20th century meaning they were increasingly replacing steel in the manufacture of certain products. These materials are much more versatile and often more cost effective, thus reducing the demand for the steel produced in South Wales and aiding the decline of this industry. Finally, the UK economic recession of the 1930’s resulted in cuts in the steel consuming business to prevent the loss of profits, causing a reduction in the need for steel. This directly influenced the de-industrialisation of South Wales due to the decline of the iron and steel industries located there.
An increase in competition has also been a major cause for the decline of these manufacturing industries in South Wales. Several countries within the EU, such as Italy and Spain receive subsidies from the European Union, which are put towards the expansion and improvement of industries such as the steel industry in these countries. This means they are more able to produce higher quality, cheaper steel than manufacturers in the UK as they are receiving extra money. For example, money from the European Investment Bank has been provided towards the building of the Taranto steel works in Southern Italy. This better quality, inexpensive steel is therefore preferable to the UK produced steel, and has aided the decline of the steel industry in South Wales. There have also been new producers, such as those in South-East Asia that are able to produce cost-effective, good quality steel because of the low labour costs available in countries such as these. The modern manufacturing plants have also helped to reduce costs, and improve quality. This has been an influence on the decline of iron and steel manufacturing in South Wales because steel consuming industries are much more likely to purchase the higher quality, cheaper steel than that produced in South Wales, causing a reduction in the production of steel in the region and therefore the decline of the industry.
Privatisation has also been a cause for the de-industrialisation of the iron and steel industry in South Wales. This is the process of transferring property from public ownership to private ownership, or transferring the management of a service or activity from the government to the private sector; in this case it is the transfer of control of the steel industry in the UK (British Steel), from the government to the private sector. In the past the steel industry has been supported by state subsidies from the government, which have helped towards keeping the steel manufacturing plants open. However, as British Steel is now a privately owned company, these iron and steel producers, such as those in South Wales, no longer receive this benefit. This has meant that the iron and steel industry in the region is no longer receiving enough money to make enough of a profit, and has therefore declined.
The UK became a member of the European Union in 1973, and since 1993 the UK has been a member of the EU Single Market, meaning companies can sell their products anywhere in the member states and consumers can buy where they want with no penalty. This means that cheaper steel manufactured in subsidised countries can now be bought by any member country without additional charges. Therefore, less steel is being obtained from the South Wales iron and steel industry, and more from countries such as Italy and Spain, which produce steel of a higher quality and better price. This has helped in the decline of these industries in South Wales. There has also been an overcapacity of steel produced within the EU, meaning that decisions have been taken to force member states to cut down on the production of steel within their country. This has had a direct effect on these industries in South Wales, causing a decline in the steel industry, as reductions in the amount of steel produced have had to occur.
Finally, in the last few years, one of the major factors that has hindered the competitiveness of the South Wales steel industry worldwide, has been the strength of sterling against the euro. This has caused overseas consumers to purchase European steel instead of that produced in the United Kingdom, aiding the decline of this industry in areas, such as South Wales.
How the Region is Trying to Adapt to the Decline in Iron and Steel Production
There are many ways in which the South Wales region is attempting to adapt to the decline of the iron and steel industry during the 20th century. These generally include the movement of new, modern industries into the area or the improvements of the remaining steel works located in South Wales. One example of the latter is the expansion and redevelopment of the Port Talbot steel works over the past few years; one of only two remaining in the south of Wales. Over £187,000,000 has been spent on modernising the factory, by installing modern, up-to-date equipment to manufacture the steel completely by computer-controlled machinery. This has resulted in Port Talbot becoming the most-efficient steel works in Britain and it has given a new lease of life to the steel industry in this area.
Development in these declining areas of South Wales has been encouraged by a policy brought in by the government to decentralise government departments from London to other areas of the UK. This has seen the movement of the vehicle licensing department to Swansea and the Royal Mint to Llantrisant, bringing new jobs in to the area and helping in the regeneration of the region.
There have been many improvements in the infrastructure of South Wales brought about by EU funds, including the M4 motorway linking London with Cardiff, the Heads of Valleys Road, the InnerCity rail link and Cardiff international airport. All of these improvements have helped to create easier access into this region, increasing the likelihood of new industries locating there and redeveloping the area.
The Welsh Development Agency was set up by the UK government in 1976 to stimulate and support the economic prosperity of Wales. It has done this in many ways, stimulating the growth of business in the country, encouraging new companies to invest there, and working with local communities to encourage prosperity. Some of the main advertising points used by the Welsh Development Agency included a skilled workforce, a well-developed infrastructure with modern road, rail and air links, the availability of advanced factory sites with quality buildings at competitive rates and a local market.
The Cardiff Bay project began in 1987 and was one of Europe’s largest and most impressive urban regeneration projects, transforming over 1,000 hectares of derelict docklands and neglected industrial areas. Over £2 billion was invested in the area to regenerate it completely into a smart quayside location for modern commercial, government and leisure buildings. The project created 17,000 new jobs, reducing unemployment in the region after the de-industrialisation in the iron and steel industries, and 5,000 new buildings were produced.
Money has also been spent on landscaping old industrial areas that became unsightly due to the previous manufacturing industries located there, such as lower Swansea Valley. This creates a more pleasant, and attractive area for new, modern industries.
Finally, regeneration after the decline of the iron and steel industries in South Wales has been achieved by the building of new industrial estates, including those at Port Talbot and Bridgend. These estates provide new companies with brand new, ready made or custom made buildings, excellent access, and possible grants or reductions in rent for locating there, thus attracting new companies into the South Wales region and aiding its regeneration.
All of the above attempts to restore the region have proved successful, and by the end of the 20th century South Wales had a much more varied and broad economic base than it had ever had before.