Академический Документы
Профессиональный Документы
Культура Документы
GEOFFREY DUDLEY
Privatization has its own distinctive dynamics, resulting particularly from the insti-
tutional restructuring which tends to transform policy networks and communities.
This happens principally for two reasons. Firstly, the crucial balance of resource
dependencies is changed irrevocably, and established policy communities break
down. Secondly, the separation between the principal actors tends to produce a 're-
framing' of major policy issues. Here, Schon and Rein's (1994) concept of issue
'framing' offers a useful metaphor for how actors give a coherent organization to
a complex reality by selecting for attention a few salient features. At the same time,
they argue also that the nature of 'objective' reality might be found in the world's
tendency to resist our interpretations, leading to a discovery of the limitations of
particular frames. The case of British Steel offers a good example of the dynamics
of this process. In the days of state ownership, the British Steel Corporation and
government generally shared similar 'frames' on major issues. Since privatization,
however, the two actors have tended to adopt separate 'frames' and have become
more independent of each other. Multi-arena politics, such as Europeanization, can
drive them still further apart. Nevertheless, in recent years British Steel has come
to appreciate some of the limitations of its own frame, and has sought to reconstruct
its relationship with government. There is an imbalance in the resource depen-
dencies, however, which precludes the reconstruction of a policy community.
INTRODUCTION
As time passes since the initial phase of privatization of the former national-
ized industries (for example, the Hrst tranche of British Telecommunications
shares was sold by govemment in 1984; British Gas was privatized in 1986;
British Airways in 1987; and British Steel in 1988), it becomes possible to
gain a clearer picture of the changes brought about by privatization, not
only to the companies themselves, but also to their networks of relation-
ships, particularly those with govemment. In assessing the actual type and
degree of change brought about by privatization, it is important to appreci-
ate that it is not in itself a necessary pre-condition of major policy change.
As Plender points out, the privatized British Steel (BS) now ranks as one
of the lowest cost steel producers in the world, while the renaissance in the
fortunes of British Airways (BA) has been similarly impressive. Yet, ironi-
cally, much of the improvement took place while these companies were
still in the public sector. Where state enterprise operated in competitive
product markets, the introduction of more commercial management given
the go-ahead to address extensive overmanning was probably more
important than privatization (Plender 1997).
Nevertheless, privatization does have its own characteristic dynamics of
change. In particular, the enforced institutional restructuring engineers the
destruction of established policy networks and communities, but then
reconstructs these networks in a new form. Rhodes emphasizes the struc-
tural relationship between political institutions as the crucial element in a
policy network, rather than the interpersonal relations between individuals
within those institutions (Rhodes and Marsh 1992, p. 9). When the struc-
tural relationship between government and industry changes radically,
therefore, as in privatization, then we would expect the networks of
relationships between them to change also. For example, the crucial balance
of resource dependencies is changed irrevocably. Rhodes employs Benson's
definition of a policy network as 'a cluster or complex of organizations
connected to each other by resource dependencies and distinguished from
other clusters or complexes by breaks in the structure of resource depend-
encies' (Rhodes and Marsh 1992, p. 13).
During the days of state ownership, the relationship between the British
Steel Corporation (BSC) and govemment was indeed characterized by
resource dependencies, with the BSC dependent on the govemment for the
provision of finance (particularly subsidies to meet mounting operational
losses during the late 1970s and early 1980s), and govemment dependent
on the BSC for technical and financial expertise (see Bryer et al. 1982; Abro-
meit 1986; and Dudley and Richardson 1990). Given the predominance of
the BSC within the steel sector, there existed a typical policy community
(Richardson and Jordan 1979) characterized by stability of relationships,
continuity of a highly restricted membership, vertical interdependence
based on shared service delivery responsibilities, and insulation from both
other networks and, invariably, the general public (including Parliament)
(Rhodes and Marsh 1992, p. 13).
With privatization, as these resource dependencies fell away, so the com-
munity was destroyed. In a wider sense, privatization itself must be per-
ceived as part of a long term trend within British govemment towards a
'hollowing out of the state.' In addition to privatization, this 'hollowing
out' includes the loss of functions by central and local govemment depart-
ments to alternative delivery systems (such as agencies); the loss of func-
tions by British govemment to European Union institutions; and limits set
to the discretion of public servants through the new public management,
with its emphasis on managerial accountability, and clearer political control
They select for attention a few salient features and relations from what
would otherwise be an overwhelming complex reality. They give these
elements a coherent organization, and they describe what is wrong with
the present situation in such a way as to set the direction for its future
transformation. Through the process of naming and framing, the stories
make the 'normative leap' from data to recommendations, from fact to
values, from 'is' to 'ought' (Schon and Rein 1994, p. 26).
Schon and Rein argue that the general relevance of frame-reflective policy
inquiry is constructed around the central idea of a reflective policy conver-
sation. Participants in such a conversation must be able to put themselves
in the shoes of other actors in the environment, and they must have a comp-
lementary ability to consider how their own action frames may contribute
to the problematic situations in which they find themselves (Schon and Rein
1994, p. 187). It can also be the case, however, that actors holding separate
'frames' discourage a reflective policy conversation, and are not inclined to
put themselves in the shoes of others. A cognitive gap emerges in which
they occupy separate 'orders of comprehension'. On any particular 'plane',
therefore, one may expect to find a 'cognitive community' of people who
'talk the same language', understand the world in a mutually recognizable
way, inhabit the same 'universe of discourse', and have heard of one ano-
ther's concems and interests. Conversely, if one moves to another 'plane',
one may find communication somewhat difficult (Dunsire 1978, p. 158).
Schon and Rein refer to the relativist trap, and pose fundamental ques-
tions, such as is there an objective basis for choosing among frames, or
reframing policy issues, in one way rather than another? How can we poss-
ibly resolve frame conflicts when frames themselves determine what counts
as evidence and what interpretations of evidence are acceptable? They con-
cede that if no credible answers can be found to these questions, we are
caught in the predicament of epistemological relativism. There can be no
reasonable basis for deciding among policy frames, all of which may be
intemally consistent and compelling in their own terms and, hence, equally
worthy of choice. They solve this conundrum by quoting Scheler's proposal
that the nature of 'objective' reality might be found in the world's tendency
to resist our interpretations. Thus if the world resists our acts of willing
and interpreting, stubbomly presenting us with phenomena mismatched
to our frames, then we may be able to discover the limitations of our frames,
even though it is only through them that we can detect their mismatch to
reality (Schon and Rein 1994, p. 41-2).
This solution to the relativist trap provides a key insight into understand-
ing the dynamics of network destruction and reconstruction in the case of
BS and govemment. Here, three phases can be identified.
First, in the days of state ownership, the British Steel Corporation (BSC)
and govemment held similar 'frames' to reality on most (but not quite all)
major issues. Thus there was a common identity generally on matters such
as investment, management style and corporate objectives (although sig-
nificant differences on crisis management did emerge during the three-
month national steel strike of 1980 and, as we will see, the closure of the
Ravenscraig steelworks).
This symmetry between BSC and government was particularly evident
during the mid-to-late 1980s, where the govemment took pride in portray-
ing the tumaround in BSC fortunes as a triumph for managerialism, i.e.
the introduction of private sector management methods to the public sector
which stress hands-on professional management, explicit standards and
measures of performance; managing by results; value for money; and close-
ness to the customer (Rhodes 1996, p. 655).
Second, superficially, it might have been expected that this close identity
of 'frames' would have continued between the privatized BS and govern-
that the company can no longer regard the British govemment as 'reliable'.
Instead, ministers have their own agenda priorities. As Mazey and Richard-
son conclude, the unique institutional structure of the EU, far from
'strengthening the autonomy of national leaders vis-a-vis particularistic
social groups within the domestic polity' (quoting Moravcsik 1993, p. 507)
is, logically, just as likely to undermine it. This is because in the context
of multi-level, multi-arena and nested games, the uncertainty principle is of
enormous importance (Mazey and Richardson 1996, p. 212, original
emphasis). The complexity and uncertain outcomes of these multi-level
games can indeed have the effect of pushing domestic actors further apart.
In order to counteract its more problematic relationship with government,
BS has sought transnational alliances on specific issues with like-minded
companies.
There is a paradox, therefore, in that, although BS has enjoyed relative
commercial success since privatization, it has also appeared more politically
isolated and vulnerable since the days of state ownership. In commercial
and financial terms, BS may retain the identity of a national champion.
Politically, however, although it has enjoyed some significant successes in
furthering its expansionist and free-market strategy, at other times it also
appears as something of a 'lonely giant' searching the globe for new part-
ners and alliances. Given the unpredictable outcomes of this multi-arena
environment, it can no longer turn to the British govemment as a reliable
ally. For its part the govemment , more tied to a domestic and European
institutional agenda, and with the steel industry generally less politically
salient than in the 1970s and 1980s, holds a different 'frame' to reality.
Third, although BS holds separate policy 'frames' to those of government,
the company has come to realize that it is too politically isolated. On such
issues as state aids and the value of the pound (which has a profound effect
on the finances of the company) it must lobby govemment and forge new
alliances. In order to do this effectively, it has embarked on a systematic
process of 'frame reflection', in which it seeks to put itself in the shoes of
other actors, particularly govemment, and to consider how its own actions
can improve the relationship. This does not mean that BS will necessarily
shift its core values, but does indicate the development of a refiective policy
conversation. For government, however, the steel industry is less politically
salient than in the days of state ownership, and so there is some imbalance
in terms of resource dependencies. Consequently, five main arguments
emerge from the BS case study:
benefited from the lead given by Michael Edwards, Chairman of the state-
owned British Leyland motor company, who helped to create public sym-
pathy for rolling back the power of the unions and for factory closures in
the public sector. Consequently, the constant factor at each stage of the
recovery in the commercial and financial fortunes of the BSC during the
1980s was the senior management team. As in the previous Labour period,
the Conservative govemment was the accomplice, rather than the instigator
of charge. The key factors in the recovery plan were the emphasis on plant-
level operational improvement and plant-based performance-related bar-
gaining, together with the maintenance of a dominant position within the
UK market (Beauman 1996, pp. 27-9). As a result of this major policy
change, the numbers employed by the BSC fell from 207,900 in 1977 to
51,600 in 1988.
The major policy change initiated by BSC management in the late 1970s
was undertaken, like that at British Leyland, as a response to a deep com-
mercial and financial crisis. As Kingdon argues, sometimes crises come
along that simply bowl over everything of prominence standing in the way
on the agenda (Kingdon 1995, p. 96). The loss of the official arms-length
relationship derues BS management the institutional connection to impose
its own 'frame' on govemment. For its part, govemment no longer has the
power to assert the dominance of its 'frame' on matters such as the Rav-
enscraig closure. On the other hand, the privatized BS has been less politi-
cally salient than its public sector predecessor, although the relatively stable
management of the company does provide an important thread of conti-
nuity. Nevertheless, the complexity and uncertainty of BS's environment is
illustrated particularly well by its post-privatization quest for a new glo-
bal identity.
some of the joint ventures between Japanese and US companies, and which
were also taking place on a limited basis within Europe. This BS strategy
was derived from a policy 'frame' of the steel industry, which envisaged
a set of multinational companies operating in a free market.
Scholey had a particular ambition for BS expansion into Europe, not only
in terms of physical assets, but also exporting what he considered to be
the company's distinctive brand of US style liberal capitalism (interview 4
November 1996). The steel industry, however, like airlines, is one where
the 'national champion' culture is traditionally strong. Even in the case of
BS itself, the govemment held a 'golden' share which restricted the size of
individual share holdings to 15 per cent of the equity, and which ran for
five years after privatization. In the case of many other EC counfries,
governments had an even more protective attitude to their 'national cham-
pion' steel companies, and were not willing to see policy through the same
'frame' as BS.
For example, BS encountered enormous political difficulties when it
attempted to take over the Arisfrain group, the largest producer of steel
sections in Spain. Although Spain had accepted more than £12.4 billion of
inward acquisitions since joining the EC in 1986, BS's bid of £250 million
for Arisfrain was regarded as a step too far in a culture where govemment
fraditionally has an interventionist approach to the steel industry. The state
Ensidesa company feared BS gaining a toe-hold in the domestic Spanish
market, and together with the indirectly state-owned Altos Hormos de Viz-
caya Company (AHV) launched a rival bid for Arisfrain through the state
bank, the Instituto de Credito Oficial (ICO). BS was sensitive to the political
situation, and orgartized a joint bid with Banco Espanal de Credito, in
which each would hold 40 per cent of the company, and Ensidesa could
acquire 5 per cent if it wished to join. The family owners of Arisfrain were
keen to sell, and initially accepted the deal, but in September 1990 pulled
out. When BS re-opened negotiations, the Spanish govemment openly
expressed its enormous concem about the deal, and the threat it would
pose to Ensidesa. Consequently, BS found itself excluded from ownership
of a significant Spanish steel producer.
Around this time, BS had also set its sights on acquiring a German com-
pany. As the largest market in the EC, BS had long-standing ambitions to
improve its position in Germany, but had not enjoyed great success. As the
largest of the former West German steel companies were all privately
owned, it might have been thought that foreign acquisitions would be more
easily accepted. Once again, however, BS was to find the political obstacles
too high to overcome. BS was successful in acquiring the relatively small
Troisdorf plant, but when it began preliminary negotiations with the large
Hoesch company, the infiuential German interests closed ranks. Signifi-
cantly, the President of the German Steel Industry Association complained
about increased BS imports into the country, and referred to the 'British
giant' (Financial Times, 10 October 1990). In 1991, therefore, with the encour-
company had returned to its 'home' base after the frusfrations of over-
seas adventures.
Nevertheless, Scholey's successor as BS Chairman, Sir Brian Moffat, has
expanded his predecessors' global ambitions. Where Scholey saw BS as
primarily a European company, Moffat has sought to increase the com-
pany's involvement in the growing Asian market. In this respect, BS is fol-
lowing the lead of its customers such as General Motors (GM), the biggest
US vehicle manufacturer. Thus, GM's Director of Steel Purchasing for North
American Operations has urged steelmakers to follow his company in con-
stmcting plants in the Asia-Pacific region, particularly China (Schuster
1996). Again, however, although BS has set up a number of relatively small-
scale joint ventures and acquisitions in counfries such as Malaysia and
India, as in Europe and the US, the company has found penefrating national
markets to be a difficult proposition. Consequently, BS continues to cam-
paign for a change in the 'policy frame' elsewhere. For example, in 1995, Sir
Brian Moffat called for a new management culture in the steel companies of
the Organization for Economic Co-operation and Development, which he
believed should be less defensive and instead more imaginative and finan-
cially driven. His words continued to echo those of Scholey:
The successful steel companies of the future are Ukely to have a wide,
international spread of assets, to be embracing new technologies, to be
intemationally cost competitive in their areas of operations and to be
financially driven. They are also likely to have a number of partners, in
a variety of joint ventures, requiring a much greater fiexibility of
approach than has been exhibited by the industry in the past (Steel News,
April 1996).
This excellent summary of the BS management culture, as it had developed
over the previous decade, demonsfrated how BS retained its policy 'frame'
and dreams about the future. It had discovered, however, that in the world
generally by no means everyone shares this dream. In many counfries,
national steel networks remained sfrong, particularly where issues of large
company ownership were concemed (we will see below that company-
government splits could occur on other issues in at least some EU
counfries). For BS domestically, the old arm's-length relationship with
govemment had disappeared. At least on matters such as works closures,
this institutional change favoured the BS 'frame'.
ical debate (Hudson and Sadler 1989, p. 1). Nevertheless, during the 1970s
and 1980s, successive British govemments normally preferred to invoke the
arm's length principle on the matter of individual steelworks' closures, and
claim officially that such operational matters were the responsibility of BSC
management. There were two significant exceptions to this rule. The first
of these occurred in 1974-75, when the Labour govemment ordered a
review of all proposed BSC closures to be undertaken by a junior Industry
Minister, Lord Beswick. The outcome of the Beswick Review did postpone
some closures, although the BSC crisis of the late 1970s eventually led to
the cessation of steelmaking at all these works (see Bryer et al. 1982, pp. 249-
53; Dudley and Richardson 1990, pp. 57-78).
The second exception proved to be of more long-lasting political salience
and significance. In 1982 the govemment instructed the BSC to keep all of
its five main integrated works open for another three years. These five
included the Ravenscraig works in Scotland, which BSC management had
been seeking to close. Ravenscraig had been born in political confroversy
through a political decision made by the govemment in 1958 to split new
sfrip mill development between there and Llanwem in South Wales (see
Vaizey 1974, pp. 169-77). The political character of this decision, taken
nearly a decade before steel nationalization in 1967, is a good example of
how a type of arm's-length relationship existed between the industry and
government even in the days of private ownership. This political element
was to haunt Ravenscraig in the 1980s and 1990s, so that it was not difficult
for BSC, and later BS, management to brand it with the image of an 'out-
sider' plant, with most of the markets for its products lying hundreds of
miles away in Cenfral England.
A key element in the govemment's decision in 1982 was a threat by the
Scottish Secretary, George Younger, to resign if the plant closed. This depar-
ture would obviously have been a considerable embarrassment to the
govemment within a few months of a likely general election in 1983. The
govemment also claimed that Britain had already made enough sacrifices
on steel closures, and that it was now the turn of other counfries within
the European Coal and Steel Community to close steelworks and cut
capacity (HC Debs, 21 December 1982, Cols. 672-74). As in 1958, therefore,
the perceived sfrategic economic and political significance of steel had led
ministers towards the interventionist approach. The arms-length relation-
ship assumed a more official orthodoxy, with the govemment directing a
sfrategy for the BSC to execute. The government might support the BSC
on its overall objectives and management style, but on Ravenscraig they
held separate 'frames'. On this occasion, however, the BSC was reluctantly
compelled to accept the govemment's more political 'frame'.
When the three-year guarantee ran out in 1985, Ravenscraig once again
became vulnerable. In addition to the earlier political factors, there was the
added element that Ravenscraig had played a prominent role in main-
taining national steel output during the year-long miners' sfrike of 1984-
85. This gave the govemment a still greater sense of political obligation to
the worl«. Nevertheless, although the five main steelmaking plants were
given a further guaranteed life of three years, the BSC significantly secured
the govemment's agreement to the closure of the Gartcosh cold sfrip rolling
mill in March 1986. As Gartcosh took one-third of Ravenscraig's hot mill
steel, many of the interests which had fought to save the major Scottish
plant now feared that the loss of Gartcosh was the thin end of the wedge
which would eventually see off Ravenscraig (Dudley and Richardson 1990,
p. 216). Notwithstanding its potential importance, the Scottish Secretary
chose not to make the Gartcosh closure a resigning matter, and despite a
vigorous campaign to save the works, it closed as scheduled in March 1986.
Although the political 'frame' of govemment still held sway in guarantee-
ing the future of Ravenscraig, the BSC had asserted its typical power to
manipulate ministers towards its own 'frame' which envisaged no future
for Ravenscraig.
In 1987, however, Scholey was compelled to give one final political com-
mitment to govemment before privatization when he agreed that Rav-
enscraig would remain in operation for at least another seven years, subject
to market conditions (a proviso which would obviously allow a consider-
able degree of discretion to a privatized BS). On the other hand, Scholey
encountered little difficulty in persuading ministers that the BSC should be
privatized as a whole, so precluding a plan proposed by a wide spectrum of
Scottish interests that a materials group, which would include Ravenscraig,
Shotton, Clydesdale and Dalzell, should be fioated off separately. The BSC
did not want to retain Ravenscraig, but also had no intentions of allowing
it to become a competitor.
Once privatization had taken place, BS initiated the process of securing
the final 're-framing' of the Ravenscraig issue by marginalizing and running
down the Scottish steel industry. Politically, Scholey referred to the Scottish
lobby as the 'Ravenscraig claque' (Financial Times, 19 December 1989), and
took every opportunity to emphasize the plant's weaknesses. There was
one more major political obstacle for BS to overcome, however, when in
1990 the company announced that the Ravenscraig hot sfrip mill would
close in 1991. The Scottish Secretary, Malcolm Rifkind, immediately
declared that he deplored the decision, which he found arbifrary and
unreasonable. He added that BS might have to be pressured to sell the plant
to a competitor in order to retain the Scottish steel industry (Financial Times,
17 May 1990). To Rifkind's disappointment, it soon became clear that,
unlike a decade earlier, ministers were sensitive about challenging Scholey.
Privatization had been promoted by the govemment as a means of freeing
the industry from political interference, and so there would be considerable
political embarrassment in now challenging the BS 'frame'. Scholey himself
put this point plainly: 'Following privatization my responsibility is to BS
shareholders. It is my understanding that when we were privatized this
was very much the idea of govemment. I would have thought the govem-
support a plan that would help create a more stable environment and assist
in returning the Corporation to viability.
In the 1990s, however, European steel policy has driven a wedge between
BS and the British govemment. As noted above, steel offers a good example
of the uncertainty principle at work in multi-arena politics, with events in
the European arena having the effect of pushing domestic actors further
apart. In this problematic and unstable environment, BS has sought frans-
national alliances in seeking to avoid being placed in a politically isolated
and vulnerable position.
Two examples in particular illusfrate how BS and the British govemment
come to hold separate 'frames' within the EU. First, there was the ultimate
failure of a Commission led pan-European solution to a fresh crisis in the
steel industry in the early 1990s. As part of this plan, steel companies from
eastern Germany, Italy, Spain and Portugal sought permission for nearly
£5.33 biUion in fresh subsidies, and in retum were prepared to offer five
million tonnes of capacity cuts. BS was totally opposed to the payment of
these subsidies, and sought assistance in its campaign from French and
former West German steel companies. Article 95 of the Treaty of Paris
allowed a loophole for the subsidies to be paid, but a unanimous vote was
required in the Council of Ministers. The British government was not wil-
ling to be isolated on this issue, and in December 1993 agreed to the pay-
ment of the subsidies in return for strict monitoring conditions. BS con-
sidered that it had been deserted by its own govemment, and called the
package ' . . . a compromise driven by political expedience' (Financial Times
18 December 1993), but the British govemment had been forced to concede
a deal under heavy pressure from other industry rrunisters and the Com-
mission. BS refused to let the matter rest, however, and in 1994 took the
matter to the European Court, maintaining that the subsidies granted to
Ilva of Italy and CSI of Spain fell outside the State Aid Code agreed in 1985
by the Council of Ministers (Steel News, June 1994) (in 1997 the European
Court came down in favour of the Commission, although BS intended to
appeal). The company argued that it could not operate in a Single European
Market in which different cultures existed. Where BS had developed a
sfrong corporate culture which depended on a free market 'frame', the Brit-
ish govemment took a more pragmatic approach (it should be noted, how-
ever, that BS's deeds did not always match its public 'frame'. For example,
BS was fined £24 nullion by the Commission for its part in a cartel selling
beams to the construction industry).
Also in 1994, the fransnational alliance of BS, Usinor Sacilor of France,
and the steel companies of Western Germany, fiatly refused to co-operate
with the Commission in any co-ordinated plan to rationalize output. These
companies argued that the subsidies allowed to state-owned steel makers
had distorted fair frade, and so any capacity cuts made by themselves
would be unjustified. The consensus which held together the Davignon
Plan in the 1980s had broken apart, and in the 1990s BS and the British
govemment were on opposite sides.
The second example conceming subsidy being granted to an ailing Euro-
pean steel company caused BS to become even more embroiled with the
British govemment than in 1993-94. In this second case, the Irish govem-
ment wished to inject £39 million into Irish Steel prior to its privatization,
but BS argued that this subsidy would threaten the continued existence of
its own Shelton plant, and would once again breach the Steel Aid Code.
For a period in late 1995 the British government held out within the Council
of Ministers, but then withdrew its opposition. There were sfrong sugges-
tions that the govemment feared continued opposition would endanger the
Northem Ireland peace process, which was then gaining momentum. The
govemment therefore had its own distinctive 'frame' and priorities, and
some issues constituted more of a 'special case' than others. The British
government believed that the agreement did not endanger Shelton jobs, but
BS would not accept the decision, and once more took its case to the Euro-
pean Court on the grounds of illegal state aid.
It is significant that BS was seeking redress in the Court. It could no
longer rely on British ministers as loyal allies, and so had to seek new
arenas where it hoped to find a more sympathetic ear. The fears of BS were
also taken up by the British Iron and Steel Producers Association (BISPA),
a group dominated by BS. In 1996 BISPA complained that many of the
companies which had earlier been granted subsidies were now producing
more steel than before restructuring, and had effectively compensated for
the reduced capacity that was meant to be the price for aid. BISPA itself
took the issue of a subsidy to Arbed to the European Court, and also lob-
bied the Commission on the question of aid to a number of German compa-
nies (Steel Times, February 1996). Consequently, British Steel interests were
seeking to put their case directly in Bmssels, and had been compelled to
accept that they could no longer rely on British ministers to successfully
fight their case.
In 1995, an apparent compromise between steel interests and government
emerged when a joint group was set up to monitor state aids within the
EU between the Department of Trade and Industry, BS, BISPA and other
govemment departments. It could be argued, however, that although
govemment might accept the BS free market 'frame' in principle, practical
politics within the EU continued to give it a separate 'frame'! Ministers
might be willing to help the steel industry in discovering subsidies, but
were not necessarily prepared to help stop them.
Schon and Rein (1994) distinguish between rhetorical and action frames.
By the former they mean frames that underlie the persuasive use of story
and argument in policy debate; by the latter, frames that inform policy
practice. They then also distinguish three levels of action frames: metacultu-
ral, institutional action and policy. Metacultural frames, organized around
generative metaphors, are at the root of the policy stories that shape both
rhetorical and action frames; institutional action frames are local
expressions of metacultural frames; while a policy frame is the frame an
institutional actor uses to construct the problem of a specific policy situation
(Schon and Rein 1994, pp. 32-4). If globalization and support for free mar-
kets represents the metacultural frame of BS, and these values have been
expressed in EU arenas, then domestically its policy frame is more aware
of the company's institutional weaknesses and the need to construct net-
works. The presence of frame refiection in the domestic arena is indicated
by the company's new-found desire to understand the mechanics of White-
hall. For example, BS places great emphasis on understanding the relation-
ship between the Department of Trade and Industry and the Treasury, and
in reading the minds of key officials. The company has also targeted delib-
erately advisers in the Prime Minister's Policy Unit. During 1997-98, BS put
this knowledge to use on the key issue of the high value of the pound,
which has an adverse effect on the company's terms of frade. On this issue,
however, the 'hollowing out of the state' was evident when in 1997 the
new Labour govemment handed over to the Bank of England the responsi-
bility for setting interest rates. Consequently, BS has also set about the task
of cultivating relationships with the Bank, and understanding the nunds of
its key individuals.
A problem for BS in reconstructing networks, however, is that the system
of resource dependencies is unbalanced. From the point of view of govem-
ment, there is no longer the sense of responsibility for the welfare of the
industry to be found in the days of nationalization, and consequently the
need for frame refiection is lower. On such major issues as the value of the
pound, although BS is listened to by government, its input is only one
amongst many interests. In addition, the greatly reduced political salience
of steel is refiected institutionally. In the days of nationalization. Iron and
Steel occupied a whole Division in DTI. Now, steel matters are dealt with
by one of five sections within the Metals, Minerals and Shipbuilding Direc-
torate. Officially, the policy objectives of the DTI are to promote the inter-
ests and improve the competitiveness of the steel industry. In reality,
although the department works with the industry on developing such tech-
ruques as benchmarking, it has neither the inclination nor the resources to
involve itself on major policy issues such as investment or rationalization.
The dynamics of institutional change mean that there is no possibility of
reconstructing the old steel policy community. Instead, the new arm's-
length relationship has a high level of uncertainty. There is a confrast
between BS's rhetorical and action frames, and an evolving quest for frame
reflection on the part of the company, but institutional factors and the inter-
linked development of separate 'frames' also inhibit the development of
netv^orks. Nevertheless, new pattems of relationships are emerging. BS and
govemment may continue largely to circle in separate orbits, but there con-
tinues to be a gravitational pull between them which transforms the net-
works.
ACKNOWLEDGEMENT
This article forms part of a project: Policy Change and Policy Stabihty in
Britain: British Steel Policy 1987-1997, funded by the Economic and Social
Research Council (Ref. No: R000236193). The author would like to thank
Professor Jeremy Richardson and two anonymous referees for their valu-
able comments on earlier drafts of this paper.
REFERENCES
Abromeit, H. 1986. British Steel. An industry between the state and the private sector. Leamington: Berg.
Baldwin, R, (ed.). 1995. Regulation in question. The growing agenda. London: LSE.
Baumgartner, F.R, and B.D. Jones. 1993. Agendas and instability in American politics. Chicago: University Press,
Beauman, C. 1996, 'British Steel: a tumaround under public ownership'. Business Strategy Review 7, 3,16-29.
Bryer, R.A,, T,J. Brignall and A.R, Maunders, 1982, Accounting for British Steel. Aldershot: Gower,
Dudley, G,F, 1994, T h e Next Steps agencies, political salience and the arm's-length principle: Barbara Castle
at the Ministry of Transport 1965-1968', Public Administration 72, 2, pp, 219-40,
Dudley, G,F, and J.J, Richardson, 1990, Politics and steel in Britain 1967-1988. Aldershot: Dartmouth,
—, 1996, Policy change in European steel: the rise of free market ideas 1985-1996. Paper presented at Robinson
College, Cambridge, 20 Nov,
Dunsire, A. 1978, Implementation in a bureaucracy. Oxford: Martin Robertson,
Foster, C D , 1971, Politics, finance and the role of economics. London: Allen and Unwin,
Grant, W, 1993, Business and politics in Britain. London: Macmillan,
—, 1995, 'Britain: the spectator state' in J, Hayward (ed,). Industrial enterprise and European integration. Oxford:
University Press,
Hannah, L. 1982, Engineers, managers and politicians. London: Macmillan,
Hayward, J, 1995, 'International industrial champions' in J, Hayward and E,C, Page (eds,), Gmeming the
new Europe. Cambridge: The Polity Press,
Held, D, 1996. Democracy and the global order. Cambridge: The Polity Press,
Hirst, P, and G, Thompson. 1996, Globalization in question. Oxford: Blackwell,
Hudson, R. and D, Sadler, 1989, The intemational steel industry, restructuring state policies and localities. Lon-
don: Routledge,
Kingdon, J,W. 1995, Agendas, altematives, and public policies (2nd edn.). New York: Harper Collins.
Maloney, W.A, and J,J, Richardson. 1995, Managing policy change in Britain. The politics of water. Edinburgh:
University Press,
Mazey, S, and J,J, Richardson, 1996, ITie logic of organisation, interest groups', pp, 200-15, in J,J, Richardson
(ed.), European Union power and policy-making. London: Routledge.
MSny, Y, and V, Wright, 1987, 'State and steel in Westem Europe', pp, 1-110, in Y. M t o y and V. Wright
(eds.). The politics of steel: Westem Europe and the steel industry in the crisis years (1974-84). Berlin:
de Gruyter,
Moravcsik, A, 1993, 'Preferences and power in the European Community: a liberal intergovemmentalist
approach', Joumal of Common Market Studies 3, 4, 473-524.
Plender, J, 1997, 'An accidental revolution'. Financial Times, 17 Nov,, p. 21.
Reynolds, P, and D, Coates, 1996, 'Conclusion', pp. 241-68, in D, Coates (ed,). Industrial policy in Britain.
London: Macmillan,
Rhodes, R.A.W, 1996, The new govemance: goveming without government'. Political Studies 44, 4, 652-67.
—, 1997, Understanding govemance. Buckingham: Open University Press.
Rhodes, R,A,W, and D, Marsh. 1992, 'Policy networks in British politics' in D, Marsh and R,A,W, Rhodes
(eds,). Policy networks in British govemment. Oxford: Clarendon Press,
Richardson, J,J, and A,G, Jordan, 1979, Goveming under pressure. Oxford: Martin Robertson,
Schbn, D,A, and M, Rein, 1994, Frame reflection. Toward the resolution of intractable policy controversies. New
York: Basic Books,
Schuster, R,R. 1996, 'A major car maker's view', in World steel towards a truly global industry. London: Finan-
cial Times,
Vaizey, J, 1974, The history of British Steel. London: Weidenfeld and Nicolson,