
Originally Posted by
WanChaiMiller
Kerr said to me "Thatcher’s policies didn’t kill off major industries as you assert."
In short, I think it did. The feature of the early 80s recession is that it hit mananufacturing harder than other sectors. Britain lost 20% of its manufacturing in 18 months.* Add in Thatchers policy of closing down coal and steel. The net result is many of our factories closed forever.
The reason the recession hit manufacture hardest was a triple whammy of the increase in interest rates (to squeeze money supply), a strong rise in the pound (due to North Sea Oil sales) and sharp fall off in domestic demand.
Manufacturers lost its export markets at the same time as being hit by cheap imports. Manufacturing output fell by a third through the recession. Agree it hit many lame ducks but killed off very many good ones too. "By April 1983, Britain, once known globally as the "workshop of the world" became a net importer of goods for the first time in modern times."
The first few years under Thatcher saw unemployment rise to 5m (the headline figure is 3m but adjusted taking into account youth unemployment) hitting the North hardest devastation towns and cities up here. Many are yet to recover.
The landscape of Britain changed. The recovery was in the South. Our reliance shifted from manufacture to the financial service sector in the City. Today, the South and South East are the only regions in Britain that have a nett surplus in tax revenue.
Thatchers introduction of neoliberal policy and her creation of the Single Market changed how we produce things and trade internationally.
The recovery in manufacturing post the Thatcher recession is built off the back of outsourcing globally, global integrated supply chains and free access to EU markets.
She attracted Japanese firms (Honda, Toyota, Nissan and more) to the UK on the promise of easy* access European Markets (see link to her Lancaster House speech where she launches her 'Europe is Open for Business' campaign in 1988).
Globalisation coupled with privatisation allowed foreign companies the chance to buy British companies losing it the UK.
Its pretty clear to me we lost much of our manufacturing industries as a direct result of Thatcher policy.