BRITAIN’S INDUSTRIAL DECLINE*
The English, it is said, take their pleasures sadly, and brooding on the reasons for their industrial decline is now one of their pleasures. Book after book on the subject has appeared until writing such books has become something of a growth industry. The more British industry declines the more this small part of it expands.
In one sense British industry has been declining for over a century. That is, it has formed a smaller and smaller fraction of world industrial production. Other countries have grown faster and more countries have become industrialized. The contrast has been particularly striking in the years since the last world war between the rapid growth of industrial production in Europe and Asia and its much slower growth in Britain. Whereas British industrial production in, say, 1951 was greater than that of Germany and France combined, it is now only one-third of Germany’s and not much more than half of France’s. Similarly, British exports of manufactures, from being above the combined total for Germany, France and Japan at the beginning of 1951, are now no more than a mere one-sixth and are below those of Italy. The United Kingdom, once the workshop of the world, has dwindled to a small part of the international economy.
Before discussing this long-term decline I should indicate two more recent developments. One is a more troubling form of industrial decline that has been in evidence for the past twenty years and more especially since 1979: namely an absolute fall in employment in manufacturing industry from the postwar peak in 1966. This has been no less than 40 per cent and of that 40 per cent by far the larger part has taken place since 1979. Fewer than one person in four now works in manufacturing in the United Kingdom compared with more than two in five in 1960 and an even higher proportion in present-day Japan. The drop in manufacturing employment by 3.5 million has been offset only to a much smaller extent by an expansion in employment
* Chichele Lecture given at All Souls College, Oxford on 18 February 1988 and subsequently published in The Royal Bank of Scotland Review, September 1988.