Soapbox John Hyde: From top manufacturing nation to one of service providers
BEFORE the financial crash of 2008-9, one of the most eagerly awaited sets of figures were the monthly trade ones. Now they are rarely mentioned. The fact our annual trade deficit with the rest of the world is a staggering £100 billion is probably the reason. Terrifying.
In simple terms, we are all spending that amount of money with nations worldwide. This colossal sum includes what we as a nation spend on gas and oil imports – and trinkets produced by China and the like.
We have gone from being a top manufacturing nation to one of service providers. While a job is a job is a job, this move has cost us dear. The service sector, from barristers, bankers, bus drivers to bar room staff, all provide a valuable service (hence the expression) but they are not producing anything.
And we, as individuals, all pay their wages and salaries. Until recently, the banking industry paid huge sums to the Treasury which helped mask the massive erosion of the manufacturing side. The bankers' spectacular fall from grace has changed everything.
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Apart from our own Rolls-Royce, JCB and BAE, it is hard to name another world-renowned British firm. So many, over the years, have become foreign owned.
Derby is eternally grateful to Bombardier for providing jobs in the city. But it is Canadian. Where are the British firms?
We are told that the British car industry produced well over a million cars last year. What British car firm was that, then? Morgan?
They are in foreign hands. Jaguar-Land Rover had a record year. Indian. The iconic Mini. German. The others, Japanese. Yes, all provided much valued jobs, granted, but what a sorry picture of "manufacturing Britain".
Company after company in the water, gas/electricity supply chain is foreign. Arriva is now German. The takeover of Cadbury by Kraft shocked us all. But it happens all the time.
Until fairly recently, we owned a company called Westinghouse which had enormous technical expertise in the nuclear industry.
Now, with the need for those skills paramount, we are having to go cap in hand to foreign firms because we sold it.
And all the material for these pesky wind farms is imported. We once had a firm making the enormous rotor blades but … well, you know.
Of course, the global economy is massively complicated. We cannot compete with the low production costs of firms in the Far East. A sad decline, which shows no sign of letting up.
2 Comments
by rbob123
Wednesday, February 27 2013, 6:43PM
“We live in a global economy, John. The British car industry may well produce cars of foreign ownership, but they are British jobs, British exports, they pay British taxes and employ British workers. What else do you want?
We are a small country, in every way you can quantify 'small' and yet our manufacturing base is highly skilled and highly technical, and if you take China, the USA, Japan and Germany as one to four, we come in the next group, roughly tied in fifth place, along with the likes of Italy, Brazil, India and France.
And Raglex, that 10% payment to shareholders you speak of (which is actually more like 3 or 4%) is more than made up for by the 25 to 30% higher efficiency enjoyed by the private over the public sector.”
by Raglex
Wednesday, February 27 2013, 12:52PM
“John, an excellent letter, but what are we going to do about it?
Our utility companies are foreign owned, so not only does the consumer have to pay for the water / gas / electricity and the maintenance of the infrastructure but also pay above the odds so that the companies can make huge profits for the share holders, most of which go abroad. If these utilities were owned by the nation our bills would be at least 10% cheaper! That is not just 10% for the individual but also businesses which in turn would mean cheaper goods in the shops.
The above also applies to the railways, if we did not have to pay a dividend to share holders then any profits could be reinvested in the infrastructure that the country needs. Bringing these basic requirements back 'In House' would encourage engineering expertise and manufacturing to develop to support these industries.”