From Thatcher to Mandelson UK industry used as a political football

The mention of Margaret Thatcher brings a wide range of responses in Britain today, from hate to admiration but I guess that many of those who express even the most negative views will agree that UK industry simply had to change. British industry was undoubtedly inefficient compared with the rising post war stars of Japan and Germany and with the major part of UK industry still operating out of dirty, century old and in many cases war ravaged facilities it is not therefore surprising that major sectors of the UK manufacturing industry found it difficult to compete by the 1970’s.

British Leyland under its many guises, which finally ended as Rover Group five years after BMW sold it for just £10 to the Phoenix consortium, was supported by successive governments with piecemeal grants and subsidies which although substantial in total were never enough to revive the huge motor company which at one time employed over 100,000 people. This drip feed kept the patient alive but was never enough to enable it to compete with new, purpose built facilities that were taking larger slices of the UK and world car market and were certainly never enough to keep new model development (around £500 million per car) ahead of the curve. Many will also be surprised to discover that the government aid provided to Rover was far less than the French and Italian governments used to support their motor industries.

The image of Britain’s brave new world in the seventies and since has been that of service industries, banking and finance, tourism, communications and high value specialist research and development but I have always been sceptical about how such an economy could absorb the millions of semi skilled and unskilled people who once worked in the motor, steel, shipbuilding, mining and other industries - the fact is that for the most part it didn’t. Many of those who were thrown out of work when steel mills, coal mines and car factories closed down never worked again.

But what about the investment in training and other initiatives that successive governments have made? It was mostly wasted according to a massive, 30 year study of new business start ups carried out by Professor David Storey of the Warwick Business School Centre for Small and Medium Enterprises. This study has compared new business start ups in the industrial North East of England with the entrepreneurial South East and it has shown that the gap has remained as constant as in railway lines.

Mrs Thatcher and her successors may have been correct in following the philosophy that ‘you can’t make an omelet without breaking a few eggs’ but having broken the eggs by dismantling most of the UK’s manufacturing and heavy engineering industry, they seem to have forgotten the recipe for omelets. Napoleon said the UK is ‘a nation of shopkeepers’ although Adam Smith first used the phrase in 1776. We can’t just be a nation of shopkeepers, neither can we be a nation of bankers, computer specialists or tourist guides. A country with a population and economy as large as the UK needs a robust mixed economy which must include a viable, competitive manufacturing sector which is significantly owned or controlled in the UK. This is of major strategic importance and a failure to recognise this has implications for many other sectors including education. Without a sound manufacturing sector, there is nothing to attract young people to train as engineers and if we are no longer seen as having a tradition of engineering excellence, why would students come to this country to learn?


I am afraid that I take no encouragement from Peter Mandelson’s recent package of measures; it is simply another transfusion which will keep the patient alive on the operating table without putting him in a position to get up and fight again. It looks like a long drawn out death for what is left of our once mighty manufacturing and engineering industry and it makes me sad. This is partly because I come from Coventry and the motor industry is in my blood; this city used to boast 86 motor car makers, 75 motor cycle manufacturers, 35 body makers and 25 engine makers, no other city in the world has had such an influence on the automotive revolution – and all we have left now is one taxi maker.

It is not just the fact that I come from a motor industry background that I feel so strongly. Ministers, pundits and even professors have given their opinion, created policy and studied the industry for years but I have witnessed the reality of government policies in real terms and the effects they have had on real people. Having spent many years in the motor industry at manufacturing plants in Longbridge, Cowley, Solihull, Canley, Ryton and others, I have seen at first hand and face to face what it means when large workforces are told that they are no longer wanted. These are people who had the right to expect that their government had the knowledge and experience to plan for the future and have been let down. The numbers of redundancies being reeled out on the news every day are not just statistics; every one relates to a real man or woman who has lost their income, every one is a devastated family.

Thatcher’s big plan has failed because it did not recognise that we need a truly mixed economy and that manufacturing has a significant role to play in that. Successive governments have been happy to be party to the demise of large scale manufacturing in the UK partly, I believe, because they have been too concerned about the power of organised labour and partly because the interests of lawyers and bankers are well represented in our legislature but entrepreneurs and engineers are very thin on the ground in the House of Commons.