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Home » Elections and Governance

How British Industry gave up the Ghost

Submitted by on 09 Mar 2012 – 15:07

SurrenderBy Nicholas Comfort, Author

Within hours of the young Princess Elizabeth succeeding to the throne in 1952, the papers were talking of a new Elizabethan age of achievement, progress and plenty after the rigours of war and austerity. And nowhere did Britain’s future seem more promising than in manufacturing. The first – British – jet airliner was about to make its first commercial flight. Work was well advanced on the world’s first nuclear power station, at what became Sellafield. Britain was well up with the United States in developing commercial computers, and our electronics industry was thriving, the Coronation stimulating demand for television sets. Britain’s factories were working at full stretch – as were our shipyards, steel and chemical works. Half the workforce – over 12 million – was employed in manufacturing, and a quarter of the world’s manufactured exports were shipped out from Britain.

Fast forward to the Diamond Jubilee, and what do we see? Britain now has barely the capacity to manufacture an airframe. Our nuclear power station programme depends largely for its technology on the French. Our last computer mainframe producer, ICL, is part of Fujitsu. Britain’s last (Japanese-owned) television factory closed in 2009. What survives of our motor industry is now in Japanese and German hands. Ford no longer makes cars in Britain, most of our truck and van plants have gone and our merchant shipyards have all but vanished. Industrial giants like GEC and ICI have disappeared, and British Leyland has come and gone. Barely two million Britons now work in manufacturing, and our share of the global export trade is down to 2.9%.

Some put a brave face on this by saying that our future lies in service industries, especially financial services. Others insist that Britain could never have competed with the low-wage economies of the Far East, so it makes sense to let them get on with it while we become an importing nation of consumers. Some see nothing strange in Slazenger’s official Wimbledon tennis balls being made in the Philippines, Terry’s Chocolate Orange in Poland and HP Sauce at a Euro-glop factory in Holland. But to many, the haemorrhage of Britain’s manufacturing lifeblood over what were meant to be sixty glorious years has been a tragedy, even a betrayal.

Initially, the blame was placed on the refusal of inept management and bloody-minded unions to modernise, plus the loss of markets as countries of the Empire gained their independence and the freedom to buy where they chose. The quality of management has improved, industry has belatedly improved its quality and efficiency and the unions have belatedly realised that putting employers out of business does not advance the interests of their members. But the decline has continued, with new factors emerging.

The City’s “Big Bang”of 1986 led to the realisation in the business community that almost anything has a cash value that can be realised. Since then manufacturing businesses have been increasingly seen not as steady producers of goods but as casino chips to be sold off to the highest bidder, preferably one based overseas. The shift to foreign ownership – and, critically of top management in multinationals like Ford and Vauxhall from Britain to the Continent – has created a situation in which strategically important plants in Britain are just one decision not to re-invest away from closure. Moreover, the success of government in securing inward investment has been offset by the precipitate closures of brand new plants if the market slumps or production somewhere cheaper becomes a better option.

Government, indeed, has much to answer for. It was post-war governments who concentrated R&D funding on aircraft, to the exclusion of sectors like electronics where Japan and Germany invested heavily. It was Conservative governments who kept Britain at arm’s length from the Common Market during its period of most rapid economic growth, then brought Britain in at a disadvantage. It was governments who separated civilian and military nuclear and computer development. It was governments who refused to devalue the pound in 1964 and forced up the exchange rate after 1979, with disastrous effects for industry and export. It was a government that forcibly merged the successful Leyland Motors with the basket-case British Motor Corporation. The same (Labour) government pulled Britain out of the Airbus consortium for ten crucial years, during which France captured the lead in European civil aircraft manufacture. It was governments that concentrated on saving BL’s volume car operation and let its truck and bus business go to the wall. It was governments who failed to grasp that privatisation and deregulation of the bus and rail industries would have a disastrous effect on bus and train builders. And it was government that stood by as imprudent lending by bankers brought the global economy to its knees. The fault is not the politicians’ alone, but they have plenty to answer for.

One almost feels the need to run this story backward to ensure a happy ending. But the facts of our industrial decline deserve an airing in all their starkness, and hopefully we may yet learn from them.

(Surrender: How British Industry Gave Up The Ghost, 1952-2012, by Nicholas Comfort is published by Biteback, price £20.)