Welsh Journals

7. ECONOMIC AND SOCIAL CONSEQUENCES OF RATIONALIZATION IN THE SOUTH WALES COAL INDUSTRY Victoria Wass Lynn Mainwaring INTRODUCTION Since its heyday on the eve of the First World War, the South Wales coal industry has been in almost continuous decline. The structural and technological changes that were responsible for this secular contraction had arguably run their course by the early 1980s. By that time the British nuclear power programme had begun to slow down, the price of oil had risen to a point where it was uncompetitive in electricity generation, the major contractions in steel production had taken place and the conversion from steam to diesel traction had long since been accomplished. At the time when the UK demand for coal was showing signs of stabilizing, however, major changes were taking place on the supply side of the market. In particular, during the period following the 1973 oil shock there was a rapid expansion of coal capacity throughout the world and a consequent depression of internationally traded coal prices. This development coincided with the UK government's policy of opening up the home market to competition from imports, gradually relieving the British Steel Corporation (BSC) and the Central Electricity Generating Board (CEGB) of the obligations they once had to take nearly all of their coal from domestic sources. Consequently, the pressures on the British coal industry in general, and the high-cost Welsh coalfield in particular, have persisted through the 1980s with a resulting continuation of pit closures and redundancies.