I’ve just finished reading Nicholas Comfort’s “Surrender. How British Industry gave up the ghost 1952-2012”. It conveys a gloomy picture of the process of collapse in the latter half of the twentieth and early twenty-first century; when trying to make a list of the names of firms I knew well in my childhood, it reads like a roll call of the dead, with a few wraith-like survivors as part of other groups.
This process continued regardless of the party in power. The emphasis changed from well-meaning enthusiasm (Signpost for the Sixties and the white heat of technological revolution a la Wilson) to disinterest in the Thatcher years (very visible industrial wreckage after the invisible hand of the market had worked its wonders).
The author has worked as a journalist and in government and provides a fluent account of developments in various industries, the lack of coherence on the part of Government, lack of modernisation, weak management and the part played (in his opinion) by craft trade union structures.
The UK share of world manufactured trade decreased from 25.4 per cent in 1950 to 2.9 per cent in 2009. These are percentage figures, which should be viewed with caution (the total volume of trade was obviously much greater in 2009 so that the absolute figures may be rather less dramatic but probably still striking).
Comfort’s book is, however, not an academic text. There are no footnotes and not even a bibliography. Some of his statistics are hard to understand. In the above example of the UK share of world manufactured trade, I wonder what the UK share means – UK-owned or UK-located industry? This may be obvious to a professional economist but it’s not clear to me.
Despite these flaws, it is a book well worth reading, which made me aware of the gaps in my knowledge. For me it raises questions such as:
Where did capital go – was there a destruction of capital when large sections of manufacturing industry went under or had the smart money already moved elsewhere as in the case of Saab in Sweden where the old conglomerate Saab-Scania was demerged into the lorry firm Scania, and the defence industry sector, while carmaker Saab was sold to General Motors before its sorry conclusion.
What proportion of shares in manufacturing industry is UK owned (and how does this vary between companies of different size)? What are the proportions and historical development of the various categories of UK ownership, institutional, individual etc. on the UK stock exchange? What are the trends among institutional investors (movement from insurance company ownership to hedge fund ownership, for instance). What foreign assets do UK shareholders own?
These questions become particularly acute against the background of Brexit.
The view from the bottom is clearer – the sections of the population that viewed immigration as a threat, those that preferred the view in the rear view mirror and longed for an earlier Britain.
But trying to decipher the contours of the top, the “overdogs”, is more difficult. The fact that much of UK large industry is foreign owned presumably weakened the manufacturing sector’s ability to assert its interests. But what did the financial sector want? On the one hand, passporting rights, the ability for banks etc. to operate within the EU as on their domestic markets, must have been important. But were there other trends with world-wide interests, which wanted to be free of the various EU directives that controlled capital adequacy, insurance etc. etc? And were they at work supporting Brexit?
It’s hard to believe that Brexit was simply a spontaneous mass upsurge of protest while powerful financial interests looked on passively at the play of democratic forces.
I’m curious as to why I have not devoted more attention to this area before as it seems pretty central for understanding the UK. Part of the explanation is probably living abroad but spending much of my time in the UK in London and the relatively prosperous south is a factor too. Wandering around Barnsley and Rotherham and gazing at the mile after mile of industrial scrap between Sheffield and Rotherham has not left me unmoved.
It whets my appetite to read more and next on my list is a tip from a rather unlikely source, former PM Gordon Brown (a recommendation from a newspaper article I hasten to add not as a result of a Brown-Kendall tete-a-tete): “The UK Regional-National Economic Problem: Geography, globalisation and governance”, Phillip McCann.