Three conclusions about Britain’s postwar economic development emerged from Chapter 10: Britain has enjoyed faster growth since 1951 than ever before; but growth was slower than recorded in most OECD countries; and commentators believed that the British economy could have grown faster. Chapter 10 also concluded that ‘big theories’ to explain relative decline (inappropriate demand management policies, a simple external constraint, structural problems or low social capability for catch-up) lack conviction but the argument about supply-side weaknesses deserves consideration. This chapter reviews the performance of British industry since 1945 with particular reference to the impact of management and the institutional framework. The effects of labour on industrial performance will be a principal theme of Chapter 13.
As in most OECD countries, there has been continuing contraction of agriculture’s relative contribution to output and relative decline in manufacturing from a peak in the 1960s (Table 12.1). What is distinctive about the British postwar development pattern is the early start and extent of the contraction of manufacturing’s share. No other country has seen manufacturing’s contribution to GDP fall by 1989 to almost half the level of 1960. Table 12.1 illustrates the composition of output; in all countries GDP was expanding throughout the period but Britain has been the only economy in which manufacturing output has scarcely grown since 1973 (Godley 1988:9; Booth 1995b: extract 2.16). Table 12.1 merely underlines the conclusion of Chapter 10; many of Britain’s postwar economic problems lie in manufacturing. It would be helpful to have consistent figures of industrial output for the entire postwar period, but frequent changes of industrial classification cause problems. Table 12.2 attempts a consistent series using pre-1973 definitions but the difficulties are enormous and the figures are only a broad indicator of