PER 2015
Should the government support British manufacturing? Ed Tillson Britain dominated the world, so much so that by 1922 The Empire was occupied by 458 million people 71 and spanned nearly a quarter of the Earth’s total area. At the heart of this global network was Britain which asserted itself as a manufacturing supper power. Coupled with the vast supply of natural resources at home, such as coal and iron ore, ensured that a readily available factor of production was present. Subsequently Britain had resources available, the market from its empire which proved these factors compared to the lack of competition as a result of the world domination and the level of technological advances in the UK, such as James Watt who patented a steam engine which had a continuous rotary motion. As time has progressed the level of manufacturing has declined as emerging competitors, e.g Asia and the USA, have grown in the production of physical goods has declined causing a loss of 150,000 jobs in 2001 72 . Whilst the supply of natural resources such as steel has fallen exponentially due to the excess level of consumption during the industrial revolution, causing 170,000 job losses between 1984 and 1997. Manufacturing has been ingrained in the heritage of the country, yet there has been a shift towards a new type of industry and subsequently manufacturing is less important for the economic development of the UK. The United Kingdom was at forefront of the employment of low to medium skilled industries due to the extensive technology present and extensive low cost labour market thanks to minimal restrictions. As time developed Unions developed and movements which championed workers’ rights emerged this lead to heightened costs of production; as seen by the ongoing battle between the British Government and miners in the 1980s which ultimately lead to the beginning of the end for the industry in 1984 resulting in a cost of £3 billion over the 12 month period 17 . Furthermore it has become more expensive to employ a British worker due to the various rights and restrictions such as the minimum wage with currently sits at £6.50 3 ; whilst in the likes of China it sits at roughly £0.76 4 . Furthermore there is a reduced cost of maintenance due to minimal working condition regulations and a definite lack of striking which helps to reduce costs in the long term. Considering Figure 5, which shows the decline in manufacturing in recent decades, this emphasises the case that
there is now a skills gap in the market due to a depreciation in the level of productivity and skills of these workers, as a result of extensive periods of unemployment . High prices coupled with this decline in ability would require a greater than proportional level of investment compared to the potential growth generated.
Figure 5 5
71 The Origins of Empire, by Nicholas Canny 72 http://news.bbc.co.uk/1/hi/business/1861801.stm 17 http://www.bbc.co.uk/insideout/eastmidlands/series5/miners_strike_coal.shtml 3 https://www.gov.uk/national-minimum-wage-rates 4 https://en.wikipedia.org/wiki/List_of_minimum_wages_by_country
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