Monday 6 May 2013

So what did kill off British industry all those years ago?

Imagine you wrote a book about the threat to the middle classes and implied that one person in particular deserves at least some of the blame - then the Sunday Times handed your book to that man's son to review.    What would you feel?  Nervous?

The prospect of reading Dominic Lawson's review of my book Broke: Who Killed the Middle Classes? nearly prevented me from reading the papers at all this morning.  But, in the event, Dominic is highly professional and I needn't have worried:

"Boyle's call to bourgeois arms ... has a pace and passion that elude most chroniclers of economic change."

"... engagingly sensitive to the sentiments of what is sometimes called 'middle England'."

For those sentences, I'm prepared to forgive the Lawson family almost anything, though he did say I ruined the second one by 'hyperbole'.  Yet he had clearly read the book carefully, and you can't ask for more than that from a reviewer.

There are three areas where he fundamentally disagrees with me though.  He claims that house prices are more affordable than they have been for a generation outside south east England.  Perhaps so, but I don't see why it is acceptable that the middle classes should be excluded from living in the south east either - renting or working - in the next generation.

He also ridiculed the idea that people sometimes worry (I certainly do), when they are in confined spaces, whether their children are on the autistic spectrum after all, as they bang into furniture and break small ornaments.  Dominic Lawson says this idea "takes the organic biscuit".  Perhaps he has never had to look after children in a confined space.

But what I found fascinating was that he disagreed that the discovery of North Sea Oil had destroyed UK manufacturing industry.  What was it then?

I don't believe the rhetoric from the left that Margaret Thatcher's ministers somehow roamed the nation slashing and burning any factories they might find.  Certainly, British industry was staggeringly under-invested and badly managed by the 1970s, but what was it that gave the coup de grace?

The answer was that, to the surprise of Nigel Lawson, Geoffrey Howe and their team, ending exchange controls in 1979 did not lead to a sinking pound.  The value of the pound just kept on rising, because it was now a petro-currency.  That was what brought to a juddering halt the continued industrial development of the cradle of the Industrial Revolution.  Because nobody could afford our products.

There has been some manufacturing recovery over the past generation, but the swathes of former industrial land across the Midlands and the North, still lying empty, is testament to the disaster.

Speaking of which, I was delighted recently to find myself on the fourth floor of the Science Museum to find it completely untouched since I was last there - admiring the ship models - at the age of twelve or so.  And pride of place has to go to their huge model of London Docks with the label: 'The busiest port in the world'.  No mention of the Docklands Development Corporation, Canary Wharf, yuppies, the Dome or any of the rest.

It really is extraordinary, and somehow life-enhancing, to find that the last four decades has passed them by.

It set me wondering.  Could London Docks have been saved by containerisation, or investment, or modern labour relations?  Probably not, and their closure is some evidence on Dominic Lawson's side.  It was the disastrous 1970s that did for the Docks, just as the same years undermined the foundations of British industry.  But it was the pound, turbo-charged by North Sea Oil which struck the final blow - not to London Docks, but to so much of the rest.


Mark Pack said...

I'm intrigued by the London docks point. Amsterdam managed to survive the big changes in the shipping industry and has prospered as one of Europe's leading ports. Why was it Amsterdam and not London that managed that?

I suspect the answer to that helps answer the other questions raised in the post.

Joe Zammit-Lucia said...

Yes, the pound did play its role but it is always dangerous to try to pinpoint a single cause. The Deutschmark appreciated but never killed German industry - it just made it more specialized, more professional and more productive. British industry let its huge advantages go and failed to evolve with the times. That was then. Now there is a realization of what it takes to be successful and new industries are emerging. Better late than never. I suggest that resistance to change was a bigger factor than the appreciating pound.