February 24, 2012 9:53 pm

The workshop that was

A historical analysis of Britain’s industrial successes and failures explains how manufacturing lost its way

Surrender: How British Industry Gave up the Ghost, 1952-2012, by Nicholas Comfort, Biteback Publishing, £20, 354 pages

 

Queen Elizabeth celebrates her diamond jubilee this year at a poignant moment for what remains of British industry.

When she came to the throne in 1952, the talk was of a New Elizabethan Age of technological achievement, founded on ground-breaking wartime research and backed by the financial might of the City.

Britain was about to launch the world’s first jetliner, on the verge of becoming the first nation to generate nuclear power and a close second to the US in developing the computer. Half the working population was employed in manufacturing. Its 25.4 per cent share of world manufactured exports was higher than before the second world war.

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IN Non-Fiction

Sixty years on, as Nicholas Comfort writes in this sobering account, that optimism has vanished. Entire sectors of industry have disappeared and millions of jobs have been lost. Household names have gone; most of those that remain are a shadow of their former selves or under foreign ownership. Britain’s share of global manufacturing trade had shrunk to 2.9 per cent by 2009.

Its mainframe computer industry barely got off the ground. The nation scarcely has the capacity to manufacture an airframe and its next generation of nuclear power stations will require French assistance. It still has a car industry, mostly foreign-owned and currently doing quite well, but its truck and bus industry, once a world leader, has largely evaporated. As Lord Mandelson, former business secretary, lamented in 2010: “We have forgotten how to make things.”

Britain is far from alone: manufacturing has in large part shifted to the developing world. To a degree, this was inevitable. But the British, having pioneered the industrial revolution, feel it acutely. “How is it that Germany retains a Siemens and France an Alstom, but there is no longer a British General Electric Company?” Comfort asks. “Why are there booming shipyards in Italy, but not in Britain? Why have Austin, Morris, Standard, Triumph, Hillman and many other British car marques disappeared while Renault and Volkswagen have survived?”

Comfort has witnessed the saga over more than 40 years as a journalist, government adviser and lobbyist for manufacturing industries. He acknowledges that Britain remains a world leader in defence, aero engines, pharmaceuticals and some niche markets. He praises companies that have come through, such as Unilever and JCB. These successes, though, only underline the litany of failures.

Reasons usually put forward for the decline include poor management, failure to invest, outdated working practices and trade union obstructionism, and the loss of empire while postwar Germany and Japan rebuilt from scratch. To these, Comfort adds about 25 other factors including short-termism in the City and the Treasury, near-suicidal exchange rate policies, failure to adapt to obvious market trends and treatment of Europe as a handicap rather than an opportunity.

At times it is not easy to hold the thread as he guides us through the complex spiral of takeovers and break-ups. The book’s main strength is its appraisal of the strategic errors that deepened the decline.

Many were made by governments, such as concentration of research and development funding after the war on aircraft development to the exclusion of other promising sectors, notably electronics. Tony Benn, a government minister in the 1960s and 1970s, takes the blame for miscalculations such as the shotgun marriage of Leyland Motors with the British Motor Corporation in 1968 and withdrawal from the Airbus consortium a year later.

There are also plenty of examples of corporate suicide, most spectacularly GEC’s decision under Lord Simpson to abandon heavy electrical engineering and, renamed Marconi, concentrate on communications just as the dotcom bust came along to destroy the company.

At the end, Comfort finds causes for optimism. For every 10 British manufacturers that have given up, there are a handful of new ones driven by a thirst for success. There is some hope that when new technologies emerge, the UK will “turn a respectable proportion into world-beaters”. Yet for that to happen, there are many lessons to learn.

Brian Groom is the FT’s UK business and employment editor

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