Posted in : - Blog -, Britain's Economic Policy, UK Training Policy on by : petersen Comments: 0

From about 1960 to 1979, most economists believed that the UK economy was in a dreadful state, and that something ought to be done about it. Between 1945 and 1948, the Labour Government  implemented some policies which were helpful to the whole of society, such as initiating a National Health Service and a social security system. It nationalised some industries which were strategically important to the economy at the time but were failing, such as coal mining and railways. These industries were failing as a consequence both of inevitable neglect of modernisation during a long terrible war, but also from previous decades of neglect under the control of incompetent private management. Other serious problems over the last a hundred and fifty years which that government failed to  address was Britain’s neglect of provision for adequate high quality education and training.

After the second world war, manufacturing industry in Europe, particularly in West Germany, recovered rapidly. But Britain’s share of world manufacturing went into decline. For example. the motor industry in Britain was very poorly managed. It consisted of British owned companies such as Austin, Morris, Rootes (Hillman), Triumph and Rover; and American owned companies: Ford, and Vauxhall (owned by General Motors). The press and many politicians blamed workers and  trades unions for the industry’s troubles. But the principal problems arose from poor management, in terms of engineering (particularly production engineering), and industrial relations: and from neglect of training at all levels, from assembly workers, craftspeople and technicians to professional engineers and managers.  Nevertheless,  a brilliant designer , Alec Issigonis designed the Morris Minor, and later the Mini. While the production engineering and quality of the mini were  terrible –as in most of the rest of the British-owned car industry –its innovative design became the concept underlying the design of the majority of cars still produced  throughout the  world.

Subsequently, nearly all the British and American owned car manufacturers collapsed, with the exception of Vauxhall, owned by General Motors of the USA; and of Jaguar, now owned by the Indian corporation Tata. Japanese car manufacturers Nissan, Toyota and Honda set up assembly plants and some manufacturing in Britain which, together with BMW’s facility making medium-sized cars branded minis on the site of an old Morris factory near Oxford, successfully resurrected a motor industry in Britain. Nobody now talks or writes about useless British car workers because these companies are committed to training all their workers to be competent. The companies were attracted to Britain largely because of its membership of the European Union  and the easy access to its huge market which that membership still provides. According to the Financial Times , in the light of Brexit the companies are now considering ensuring that most of their future production and employment will continue inside the EU, with inevitable adverse consequences for the industry’s  present workers in the UK.

For a short period after 1964, the two main political parties, Conservative and Labour, agreed to tackle the long term inadequacy of British artisan level training by creating Industrial Training Boards which initially levied employers and used levy money to finance much needed training. But within a few years, the value of  Industrial Training Boards was greatly impaired as a consequence of the incompetence of both Labour and Conservative governments in implementing and revising the legislation embodied in the 1964 Industrial Training Act, which originally had been supported by both.

Nevertheless,a few hi-tech industries such as pharmaceuticals ,aerospace and information technology have enjoyed considerable success in the UK. In aerospace, Britain has mainly succeeded in relation to military aircraft –  in which it pioneered jet engines during the second world war. Hi tech military products have been developed through massive government expenditure, and large sales achieved, a substantial proportion  of them to disreputable regimes such as Saudi Arabia.

After a government rescue from bankruptcy in 1971, Rolls- Royce has continued to produce a significant proportion of the jet engines installed to power civil airliners.The outstanding British success in the civil aircraft market itself has been manufacturing wings for Airbus –one of the very few significant surviving successful challenges to USA dominance of world civil aircraft markets since 1945. This success is at risk on account of Brexit

Margaret Thatcher came to power in 1979 and she, her government and the majority of the media promoted the message that she was going to transform the failing British economy. The present Government, the media, and  the Labour Party (until very recently)   now seem to  believe that she and her successors – including her most prominent disciple, Tony Blair – actually succeeded, and that the British economy is now strong. Over the next few years, events  are likely to demonstrate that this is one of the many lies and deceptions which constitute the received wisdom about Britain’s economic performance. Such lies constituted the essence of the ill-informed debate which preceded the referendum which eventually resulted in Brexit.

The financial markets’ Big Bang in 1986 resulted in enormous expansion in the essentially parasitical operations of financial markets, including the creation of huge opportunities for trading in derivatives. The financial sector of the economy became much more important in terms of its share in GDP, and the City of London benefited enormously from such developments. Surely after Brexit, European bankers will achieve larger shares of such semi-criminal feasts at the expense of the UK.

In 1989, on the basis of other people’s research and my own, I reviewed the economic achievements of Thatcher’s government during its first ten years. I suggested that “it could take twenty years or more to demonstrate that the British economy had been transformed.”,  and concluded that there was no reason to believe that Margaret Thatcher’s confused policies had accomplished such a miracle.

But many politicians and economists now seem to believe that Margaret Thatcher’s governments did, indeed, achieve a miraculous transformation of the British economy. Despite the beliefs of numerous  eminent politicians and analysts, I persist in believing that they have  all been writing and talking nonsense. In particular, I suggested in 1989 that the UK’s industrial Research and Develpment was insufficent , and that vocational education and training at all levels remained inadequate in terms of both quantity and quality, particularly in the construction industry. In the period 1979 to 1989, privatisation of firms with extensive market power was not accompanied by appropriate regulation or measures to stimulate efficiency. This had “brought about private ownership in the circumstances where it had least to offer and had failed to stimulate efficiency “. (1)

Since 1979, it is largely because of Britain’s membership of the EU that its economic performance has been somewhat better than it would otherwise have been . Few if any improvements were related to the chaotic and confused policies which Thatcher and successive governments implemented. In particular, the decline of the British motor industry has not been as catastrophic as it might have been competently run Japanese and other overseas companies have set up production facilities in Britain, attracted here by the opportunities of selling their products into EU markets. British housing construction has continued to be grossly inadequate to meet rapidly growing needs for social housing created by Thatcher governments selling off  a very large number of council houses to their occupants. Shortages of well-trained construction workers have been alleviated by recruitment of immigrant workers- many  from the EU. In relation to the NHS, shortages of well educated and trained doctors and nurses have been alleviated by recruiting them from all over the world, including the EU. Immigration from all over the world has alleviated some of the numerous shortages of skills which resulted from Thatcherism and neoliberal economic policies. But the failures of successive governments to improve the UK’s disastrous education and training policies will be further exacerbated by the new incompetent immigration policies of Boris Johnson’s Brexit regime which are being implemented in 2021. Sadly, many of the jobs that immigrants now perform could not have been undertaken by British people because employers and successive governments have combined to deprive the UK economy of well educated and trained British workers.

For at least the last forty years we have been fed continual lies and false interpretations of the effects of actual and proposed economic policies. In these notes, I have tried to begin to disentangle some of the lies so as to get just  a little bit closer to the  truth.

The thoroughly misleading Brexit campaigns on both sides served mainly to add to our confusion. Both the “remain” and “ leave” campaigns compounded and added to the lies and distortions about economic policies and their effects which have been fed continually to the British public by politicians and the majority of the media, especially but not exclusively since 1979.

1 Peter Senker, Ten years of Thatcherism: triumph of ideology over economics, The Political Quarterly. April-June 1989,pages 179-189

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