Edgerton 19 A Nation Lost
19
A Nation Lost
… when American and Japanese companies invest in Europe, we are their first choice. Britain no longer has an overmanned, inefficient, backward manufacturing sector, but modern, dynamic industries.
Margaret Thatcher’s last House of Commons contribution as prime minister, 19901
Free trade is the greatest force for prosperity and peaceful cooperation … I would like to see the European Community – embracing … the former Communist countries to its East – agree to develop an Atlantic free trade area with the United States.
Margaret Thatcher, speech at The Hague, 19922
While UK Ltd had certainly existed, UK plc very quickly did not. As a phrase, ‘UK plc’ suggested a tough-minded approach to the nation, a nation competing economically with other nations. Its duty was to export, its beating heart was manufacturing industry. However, the idea of a national economy, the economic nation, became ever less important from the late 1980s. A new kind of economy emerged in which there was no longer any concern for national champions, for the ownership even of firms operating within the UK, or the balance of payments. From the 1990s talk of any problem in productivity had become much more muted, though some, such as the future Labour chancellor Gordon Brown, saw low productivity as a continuing British problem.
In one sense there was a return to the cosmopolitanism and free trade of the Edwardian years. But there was a profound difference. At the beginning of the century a small measure of democracy, strong national sovereignty and integration into the world market could be combined in the British case at least. In 1914 British capital owned the infrastructure, the banks, the ships, the communications of half the world; it was flush with the incomes of these investments. But in 2000 London was not a centre for the export of capital, but a tax haven attracting it. The United Kingdom was, to an extent not known before, owned by foreigners – the big City institutions, the service companies, the infrastructure operators, the car makers, even the chocolate makers were now owned abroad. Global capitalism was unleashed into the United Kingdom, but British capitalism itself suffered. What had been unleashed was not British entrepreneurial genius, but that of foreigners. What Mrs Thatcher and above all her successors did was to change the country and the economy, but not its relative economic standing in the world. Now the question arose for the United Kingdom as for any other nation – was it possible to combine democracy, national sovereignty and integration into the new world economy?3
Figure 19.1: Percentage of UK stock market owned by foreign capital, by value, 1963–2000
Source: ONS, Ownership of UK Quoted Shares: 2010 (ONS, 2012), figure 3.
Figure 19.2: Real GDP, logged, 1948–99 (£ billion)
Source: ONS, Long-term profile of Gross Domestic Product (GDP) in the UK, release August 2013.
Of all this, politics could take only passing cognisance, by invoking clichéd terms such as ‘globalization’ and ‘neo-liberalism’. The terms ‘entrepreneurship’ and ‘innovation’ were bandied around, implying a transformation in the supply side of the British economy. The economy was now ‘post-industrial’, a creative or ‘knowledge’ economy. Thus a powerful contrast was implied between the post-war settlement, social democracy, consensus, Keynesianism, welfarism and the new neo-liberalism. But what had changed the most was not the capacity of the state to manage the economy or the welfare budget, which grew, but all the things that welfare and Keynesian analysis, or monetarism, did not deign to discuss – the instruments of industrial policy, trade, trade union legislation, taxation and much else. Nor did ‘neo-liberalism’ as a notion speak to the realities of a transformed economy. It sometimes meant little more than the free market, at others (rather oddly) a rationalizing, technocratic state.4 What had changed above all assumptions about the nature of a national economy, the nationality of capital and indeed even of machines.
A NEW BRITISH CAPITALISM?
The late 1980s, and especially the 1990s, saw a change in elite self-understanding. For many, Thatcher had saved the country, reversed the decline, made Britain great again. This revivalism was as unfounded as the declinism of earlier years. There might have been a minor temporary small change in relative performance with respect to the richer parts of Europe, but the relative decline with respect to the rest of the world continued. The rate of growth of the economy was not greatly changed by the liberalization and globalization since the 1980s. To be sure, from the depths of the early 1980s, the rate of growth was slightly higher than the post-war average, but never enough to make up for the effect of the depression. Growth from the late 1980s was at a lower rate than that in the long boom of the 1950s and 1960s (See figure 19.2). To put it another way, the average rate of growth of the economy was higher and steadier in the years 1948–79 than between 1979 and 2000. Looking at the United Kingdom comparatively shows that in 2000 it still lagged behind the European leaders in labour productivity. Compared to France and Germany, GDP per hour worked was in these countries 20 per cent higher in 2000 than in the UK.5 If the problem the United Kingdom had was poor growth, and low labour productivity, the changes of the 1980s and 1990s did little to change this.
If the problem to be solved was a weakness in the balance of payments, as many had suggested in the 1970s and before, the record since 1979 was catastrophic. Before the 1970s the British economy was in fact generally in surplus on the current account, while in the last decades of the twentieth century it was generally in deep deficit. In particular, to take the net figures, the United Kingdom went, from the early 1980s, into a permanent and very large trade deficit in manufactures. None of this was a matter of concern; in itself it was a marker of a change in economic thinking and practice. In nationalist political economy the balance of payments was talked of as if it were a national profit and loss account. In the new internationalist political economy, it was merely a record of the net flow of one kind of money, necessarily balanced by inward flows in the capital account.
Finally, if the problem was unemployment – ‘Labour isn’t working’ was the nice, ambiguous slogan the Conservatives used on a 1978 poster – the record was disastrous. Not only did it climb to nearly 4 million, it did not return to 1970s levels until the twenty-first century. Unemployment was one cause of a heroin and crack cocaine use explosion from the 1980s onwards – heroin and cocaine had been in much more limited use in the 1960s and 1970s, concentrated among students. Unemployment, and the new hard drug epidemic among the young unemployed, among other factors, drove a relentless increase in crime, which peaked in the early 1990s.6 Drugs and criminality were very much more significant in the late 1980s and 1990s than during the supposedly lax and permissive 1960s and 1970s. The prison population surged by more than 20 per cent from the early 1990s to 2000 – ‘prison works’ was the policy. By the end of the century there were roughly half as many prisoners as there were hospital beds.
One unexpected development was a remarkable expansion in financial services which radically changed the nature of the elite, and of the capital city. It was the product of the liberalization of many activities especially in and around the London Stock Exchange. Stock Exchange membership had been limited to UK firms, which were restricted to particular activities, and charged cartelized prices. In 1983 the decision was taken to introduce a wholly new regime all at once in 1986 – hence the name, ‘Big Bang’. In this case deregulation, unlike in most other cases, really did lead to new business on a huge scale, to huge increases in employment as well. There was a much larger change in the City, which grew as a centre for the trading of offshore dollars and other financial transactions on a global scale. The City sold itself as an exporter of ‘financial services’.7 But it was not British-owned businesses which prospered, but giant foreign banks which moved in, taking over small enterprises, and transforming the culture of the City from a leisurely, gentlemanly one to something distinctively meritocratic and money-driven and American. It operated within the EEC, as well as within a wider global economy. The power of the City was not a left-over, but something new and not particularly British.
The Big Bang, and other developments, transformed London. The City rebuilt the city. It had been a city in decline: its population had been falling since the war, reaching a trough in 1981. Its expansion as a financial centre was a key factor in driving up population, and indeed diversifying it. The financial sector spread from the City eastwards, into those parts of London which had been the home to the docks. The London that had traded things became the London that traded money. Trading in money yielded huge salaries for a few. At the very top end of the City, young men (typically) could earn not simply a lot more than their fathers, but could imagine earning in a year what their fathers earned in a lifetime as, say, a bank manager.
One important change not noticed was the displacement of national elites, old and new, by a new cosmopolitan elite. In the first Sunday Times Rich List, that of 1989, its publication in itself a notable indicator of a change in the treatment of wealth in the public sphere, the richest were British. In the top ten, the British rich with interests primarily in the United Kingdom were the queen, the duke of Westminster, the Sainsbury family, Sir John Moores, the Vestey family and Sir James Goldsmith. Two others, including Garfield Weston of Associated British Foods, were rich through British interests. A decade later most of these were still in the top twenty. But of that top twenty fewer than half were British with mainly British interests, of which only one was a manufacturer, Sir Anthony Bamford of JCB. The United Kingdom was now the residence of rich people from around the world, with interests largely outside the United Kingdom, for example, the steel magnate Lakshmi Mittal, who did not own British steel mills. It was far removed from the kind of capital the Thatcherites dreamed of – a dynamic British capitalism, perhaps even manufacturing capital.
We can get a sense of the profound changes in the direction of capital by returning to the London Stock Exchange. This market in shares boomed through the 1980s, and especially the late 1990s. The FTSE 100 index, created in 1984, and accounting for the bulk of the stock market by value, surged to a peak in December 1999. It did this because investors had come to believe in what was called the New Economy. Extraordinary price-earnings ratios resulted as investors piled into enterprises which ultimately found the laws of economic gravity all too real. The bubble burst, and the FTSE 100 did not reach these unsupported heights again for more than a decade.
Over that time the composition of the index changed. In 1984 the largest firms by capitalization on the London Stock Exchange included a number of manufacturing companies, most of whose workers were in the United Kingdom. Some, such as Imperial Chemical Industries, once without doubt British, now had half their employees abroad, some, such as BAT, a much higher proportion. But most of the others were more British than multinational in their workforces, notably GEC, an enterprise employing more than 130,000 in the UK, by far the largest manufacturer in the UK.
In 2000 the composition of the index was very different. Firstly, most of the large firms in the FTSE 100 were much less representative of economic activity within the United Kingdom. Most of the top manufacturing firms in the FTSE 100 had more employees abroad than in the United Kingdom. This was almost certainly true of the large pharmaceutical companies with headquarters in the UK like Astra-Zeneca and GlaxoSmithKline. Large overseas employment was also typical of the oil companies, some of the main banks (HSBC and Barclays), service companies such as Compass, and Serco, and even supermarkets such as Tesco. Even a company such as Rolls-Royce had perhaps a third of its employees overseas; the arms firms BAE, inheritor of the airframe and military electronics industries, had more than half its employees overseas. The national firms were things like Sainsbury, Lloyds Bank, Marks and Spencer.8
A second critical point is that the London Stock Exchange was a place where the global elite invested, not just the British elite. By the end of the twentieth century nearly 40 per cent was owned by overseas owners (see figure 19.1). Remarkably, for all the rhetorical ambition under Thatcher to create a share-owning democracy, the proportion of shares held by individuals was lower in 1989 than in 1975 and would fall even lower, down from 38 per cent in 1975 to 16 per cent in 2000.9 The controllers of British capitalism were no longer necessarily in the City of London, and if they were, they were no longer necessarily British.
A third – and this was perhaps the most critical and least understood point – was that very many of the large employers in the United Kingdom were no longer in the FTSE 100. They were often listed on foreign stock exchanges, or not listed at all. The FTSE cannot include the US and European and other investment banks in London, the foreign owners of energy infrastructure, the owners of the motor car industry and much else besides, which as we shall see came to hold a new and vitally important place in the British economy.
One should not assume that British capitalism became more successful at the global level, whatever its fate at home. Of the top fifty global companies by revenue in the recent past, only one and a half were British: the Anglo-Dutch Royal Dutch Shell and BP, both very old oil companies. In a listing by market capitalization these would also be in the top fifty with at other recent times perhaps Vodafone or HSBC. In short, the United Kingdom no longer stood out as the headquarters of more large global enterprises by size than, say, France or Germany. Internationally it is where one would expect a country of its size and wealth to be. Nationally, however, it was not. In no other major capitalist economy was there no approximation to a national major car firm, chemical firm, electrical engineering or electronic firm operating on its territory. Nor did it have any large ‘technology’ companies like Facebook or Google. Whatever it did, the programme of Thatcher, Major and Blair did not revive a decaying British national capitalism, but rather brought the benefits of international capitalism to the United Kingdom.
The opening up and expansion of the EEC was of fundamental importance. The United Kingdom joined the six, with Ireland and Denmark, in 1973. But the European Union, as the new body was called following the Treaty on European Union (the Maastricht Treaty of 1992), was very much larger than the EEC the United Kingdom joined. Greece (1981), Spain, Portugal (1986), Sweden, Finland and Austria (1992) had joined, as well as the former GDR (1990). The 1986 Single European Act, strongly supported by the Conservative government, aimed to remove all sorts of non-tariff barriers within the expanding Community, changes which came into full effect in 1992. These were transformative developments leading to a radical liberalization of European trade, in the context of more liberalized global trade. From 1992, trade within the European Union was as free as it was previously within national economies. Technical norms, specifications and all the hidden apparatus of trade and regulation were the province of the EU, an instance of a politically rather invisible change with major administrative and economic consequences. The white dominions, once so central to British trade, were now minor trading partners, but Canada, Australia and New Zealand now had a combined population comparable to that of the United Kingdom. Indeed, in terms of global heft we would do well to think of the United Kingdom at the end of the twentieth century as a large Canada rather than, say, a small United States of America.
THE NEW ECONOMY
This opening of markets was of significance in ways that grew less visible as it became the norm. For example, it would have been unthinkable in the 1950s and 1960s to have our telephones or cars or computers made abroad or by foreign companies. Now it was unthinkable to deprive the British consumer of such devices. There was a great internationalization of British life, well expressed in the case of elite football. In the 1980s it was rare but not unknown to have foreign-born players, for example the Argentine Ossie Ardiles. In the early 1990s, around 70 per cent of top English league players were English. However, by 2000 the proportion was down to fewer than half.10 Boxing Day 1999 saw Chelsea start a premier league match with an entirely foreign XI on the pitch. Among the greats of the 1990s were the Frenchmen Eric Cantona and Thierry Henry. Furthermore, the United Kingdom, once an exporter of football managers, started importing them towards the end of the 1990s, especially to the biggest teams – notably Arsène Wenger at Arsenal and Ruud Gullit and Gianluca Vialli, both player-managers at Chelsea.
Trade was no longer a matter of importing food and raw materials and exporting manufactures. It was a swirl across political (rather than economic) boundaries of everything from food to manufactures. Indeed, such was the movement of components that to speak of the nationality of a motor car made little sense. A vast service industry grew up importing, storing, distributing and retailing manufactures from abroad. The jobs they provided in, say, a warehouse, or driving a lorry, were less skilled than the average of the older manufacturing jobs and were highly routinized. The new and expanding retailers were now the largest employers of labour, not the old manufacturing firms. The retailers, and their warehouses, were, with the partial exception of food stores, emporia of foreign manufactures.
Figure 19.3: United Kingdom estimated gross value added by sector at constant prices, 1948–2000 (£m)
Source: Estimated from ONS, UK GDP(O) low level aggregates (Q2 1916 edition). Industry classification SIC2003.
In this new world, importing ports were now central once more, but this time were an invisible feature of the British economy. New importing ports for manufactures were built, such as Thames Port and Sheerness, sometimes on the sites of older industrial enterprises like oil refineries, which imported raw materials. A whole new method of importing came into being with the creation of the Channel Tunnel. This long-discussed venture came of age in the late 1980s. It was ‘high time we became involved in an industrial enterprise of this scale’ was the sentiment expressed about the Channel Tunnel by Mrs Thatcher in 1984, as long as it was privately funded. She herself was keen on a road tunnel, but it was not to be.11 Instead it was a railway tunnel, which took passenger trains, freight trains and, by special train, freight lorries too. Opened in 1994 it in effect became a major new port, handling nearly 20 million tonnes by 2000. From the point of view of the private investors the Tunnel was a costly failure. The private sector could also produce white elephants but at least this one was useable. Airports, too, became enormous places moving millions of people and increasingly goods too. By the end of the twentieth century more people were employed, about three times as many indeed, within the perimeter of Heathrow airport as had been employed within the port of London at its peak.
Another rapidly expanding sector also dealing with things was the many-faceted food supply system. By 2000 the streets of British cities had been transformed by the appearance of astonishing numbers of places to drink and eat. The selling of food – standardized branded food, though some prepared within the shops – took off, replacing all manner of older businesses. Labour intensive, profitable and expensive compared to home preparation but cheaper than formal restaurants and cafés, coffee and sandwich shops were now everywhere. Catering businesses (canteens, restaurants, coffee shops, etc.) were now employing more than food and drink retailers, each more than 1 million.12 The United Kingdom had become a land of servers, waiters and cooks, not of shopkeepers but of shop-workers.
Then there were the service industries as they are more usually thought of – the retail banks, the estate agencies, the call centres. By 2000 armies of proletarianized office workers and call-centre operatives were making a mockery of the earlier notion that white-collar work was superior in status to a manual manufacturing job. Finally, there were the public sector and publicly financed service jobs. They were far more important than a politically driven picture of the recent past would suggest. The welfare state continued to grow, and the United Kingdom was far more of a welfare state in 2000 than in 1990 or 1980.13 In both absolute and relative terms such spending was higher at the end of the twentieth century (and higher still in 2018), than it had ever been. British state expenditure has never been as welfare oriented as in 2000 (or 2018).14 Increasing welfare expenditures by the state were a significant aspect of the rise of the ‘service economy’. Benefits represented 10 per cent of GDP and health 5 per cent in 2000. State education, too, was an expanding industry. Indeed, we may reflect backwards even further – not only was welfare spending higher than at any other period at the end of the twentieth century, it was also higher with respect to other forms of state expenditure than ever before – especially defence expenditure and investment (see figure 18.1). The welfare state peaked at the moment it was supposed no longer to exist, and the moment at which it had been supposed to have existed turns out to be better described as a warfare-developmental state.
The economy continued to grow from the 1970s, if not at such a sustained pace as before. Between 1975 and 2000 total income nearly doubled. Society was affluent as never before, more devoted to consumption than ever. Superior goods, often more expensive ones, drove out inferior ones. Holidays overseas replaced a week in Blackpool or Skegness. The pet budgerigar, a little parrot from Australia, was on its way out. 3.3 million were kept as pets in 1965, and only 1 million in 2000 and falling. By contrast, the more expensive dogs increased from 4.7 million to 6.1 million and cats were overtaking, growing from 4.1 million to 8 million, between the same dates.15 On average life became very much fuller of things. The quality of food and services generally increased.
While seen from the perspective of the economic nationalist much of the discussion above would have a critical tenor, from the internationalist perspective it is a story of progress, of equalization across now disappearing economic boundaries. It was surely a good thing that efficient foreign enterprises drove out poor British ones. Didn’t the quality of football improve? What did the nationality of capital matter to workers, a left internationalist would say. British people now had access on a routine basis to the goods of Europe and to a lesser extent the world, and more goods than ever before. That made the British economy, and society, much like that of the rest of Europe, in particular, in a way it had never been before. There were other benefits. The British people were free of the huge burdens of arms spending and of the techno-nationalist delusions that led to wasting resources, which could otherwise have provided prosaic pleasures for millions. Openness to the world, to other people as well as other things, brought many benefits, and much happiness. The new internationalized economy was overall more productive than the old national one. There were indeed good reasons to believe that things could only get better.
We need, partly to complete our story, partly to illustrate further how profound the changes had been, to return to the economic activities which were at the core of British life into the 1970s: energy, food and manufacturing. In each there was an extraordinary transformation.
ENERGY AND FOOD
Returning newly nationalized manufacturing companies to the private sector or selling shareholdings in oil companies was one thing. Selling utilities, most built up by the state and state agencies from even before the 1940s, was another thing altogether. Here matters of principle were more obviously important, and measures had to be taken to prevent abuse of monopoly power. Privatization in this sector also involved another element – that of direct sale to small investors, as an attempt to create what was called a ‘share-owning democracy’. It concerned essentially two privatizations only. The first was that of British Telecom, formerly part of the Post Office, which came at the end of 1984. Just over 50 per cent was sold, for £4 billion. This was followed by the massive £7 billion privatization of British Gas in 1986. The other utilities would not be privatized until the 1990s.16
That the opening up of markets and the ending of protections for British industries were central can be clearly seen in the case of energy supply. From a national perspective one might assume that the decline in British coal mining was due to a process of modernization by which coal was replaced by more modern fuels. But coal was not a fuel of the past. At a global level its use was increasing. In the United Kingdom usage was dropping slowly. In the new energy regime coal was far from redundant, but British coal and British miners were.
Coal remained essential to electricity supply. Apart from nuclear reactors ordered in the 1970s the only new capacity came from cheap and quickly built combined-cycle gas turbine power stations, powered by North Sea gas. All the rest of the electricity supply system in place in 2000 consisted of ‘legacy assets’; the focus was on ‘sweating inherited assets’, rather than creating new ones.17 At the core were the coal-powered stations of the 1960s and 1970s. From the early 1990s the consumption of coal in these power stations fell from a position close to the peak to, by 2000, the level of around 1960.
The second great change was that coal for these stations now came from abroad, though this was barely noticed. By 2001 more coal was imported (35½ million tonnes) than was produced (32 million tonnes); the level of home production was equivalent to that of the very early nineteenth century. Coal imports were at levels similar to the coal exports of the 1930s. So large were they that they increased the overall bulk of British imports to unprecedented levels.18 By 2000 Grimsby/Immingham overtook London as the busiest port by bulk, not least because of this. It had once been one of the great coal-exporting ports. Even in the 1970s British Steel and the National Coal Board had built a new export dock for coal and steel there alongside a major oil import centre for new refineries built nearby, and for iron ore. The same story was repeated elsewhere. Hunterston, built as an iron-ore-importing facility to supply the blast furnaces at Ravenscraig, became a coal-importing port, connected by rail to both Scottish and English power stations.
Mrs Thatcher, her government and the nationalized CEGB wanted to import coal from the 1980s, but it did not happen quickly. It was only in 1993, when coal contracts had to be renewed by a newly privatized electricity industry, that the prospect for British coal became catastrophic. In the face of political pressure (the defeated miners of 1993, and miners who had worked through the strike, had more sympathy than the striking miners of 1984–5 had), a partial reprieve was engineered by the government.19 But it was only temporary, and domestic coal production continued downwards. A barely existing coal mining industry was privatized in 1994, or rather the operation of remaining mines – the huge liabilities remained in the public sector. There were now only 7,000 miners, down from 50,000 or so in 1990, and a mere one-hundredth of the employment of around 1950.
Liberalization and internationalization of energy could have destroyed British national nuclear supply as well. However, government was more concerned to protect the nuclear reactors than the coal mines. In the late 1980s privatization plans for the CEGB included one company with the nuclear ‘fleet’ and another without. Since no one wanted the nuclear part, plans were changed, and the nuclear stations remained in state ownership. The efficiency of the AGRs improved radically, because the managers were now interested in doing this, as opposed to arguing for PWRs.20 British Energy, which had only AGRs and the one PWR, and promised to build no more, was privatized in 1996; the price achieved revealed that the AGRs were valued at zero.21 The market, not rational public or expert inquiry, stopped the nuclear juggernaut.22 The state was left with the retiring Magnox stations of the 1960s and their clean-up costs. Indeed, nuclear waste management was a case of a costly last gasp of techno-nationalist enthusiasm for nuclear. In 1978 parliament (with cross-party support) approved the construction of the THORP nuclear reprocessing plant at Windscale (following a large public inquiry) – the plant was not completed until 1994 and closed in the next century, having amassed huge losses.
The national technocrats who had once had so much power were destroyed by liberalization and privatization. A singular case was state nuclear physicist Walter Marshall. He was, unusually for a British nuclear baron, an advocate of the PWR and was appointed to run the CEGB by Margaret Thatcher, who also wanted many of these US-designed reactors. He was instrumental in getting the CEGB ready for the miners’ strike. He kept the lights on and was rewarded with elevation to the House of Lords. But the government decided to break up the CEGB in order to privatize it in parts, as we have seen, and he resigned. Sir Denis Rooke, a chemical engineer of distinction, ran British Gas. Unlike Marshall, he succeeded in keeping British Gas as one, on technical grounds. But it too was later broken up. Many of the bits would end up in the hands of European companies. The electricity generator Powergen was taken over by the German E.On in 2002, National Power by RWE, again German, in the same year and Scottish Power by the Spanish Iberdrola in 2006. British Energy, which had the AGRs and the PWR, collapsed in 2004 and was effectively renationalized; it was then sold on to the French nationalized company EDF, Electricité de France.
In the case of food the dynamics of internationalization were rather different. Agriculture was under an EEC regime, the common agricultural policy, not a national one. British agriculture, as part of Common Market agriculture, was protected by a high common external tariff and supported by subsidies. As a result it did very much better than coal mining. By 2000 there were still around 200,000 farm workers, but there were hardly any coal miners left. By 2000 self-sufficiency in food diminished from its peak in the 1980s, though it was still much higher than in the 1950s. What was radically different from the 1950s was the source of imports. They now generally came from the EU. Indeed, there was a continentalization of British food tastes. With imported Mediterranean foods, from citrus to tomatoes to avocados, aubergines and courgettes, the British diet became varied and interesting. Tea consumption fell, while coffee increased, beer gave way to wine, potatoes to pasta. Where bottled mineral water had once been rare, in a country with good drinking water, pointless French and Italian mineral waters were now everywhere. Yet the United Kingdom remained a significant exporter of food, mainly to the EU. It sold grains and meat and more. The case of beef is exemplary of what would have been unthinkable in 1950. In the mid-1990s the United Kingdom was almost wholly self-sufficient in beef, with one-third of production exported. However, because of the intensive production methods which led to the BSE infections, the EEC responded with a ban of exports (partial in 1990, full in 1996), causing total exports to fall to nearly nil. There was an extraordinary massification and mass production of food, largely hidden away, a story exemplified by the rise of chicken meat to dominate meat consumption.
A Nation Lost
… when American and Japanese companies invest in Europe, we are their first choice. Britain no longer has an overmanned, inefficient, backward manufacturing sector, but modern, dynamic industries.
Margaret Thatcher’s last House of Commons contribution as prime minister, 19901
Free trade is the greatest force for prosperity and peaceful cooperation … I would like to see the European Community – embracing … the former Communist countries to its East – agree to develop an Atlantic free trade area with the United States.
Margaret Thatcher, speech at The Hague, 19922
While UK Ltd had certainly existed, UK plc very quickly did not. As a phrase, ‘UK plc’ suggested a tough-minded approach to the nation, a nation competing economically with other nations. Its duty was to export, its beating heart was manufacturing industry. However, the idea of a national economy, the economic nation, became ever less important from the late 1980s. A new kind of economy emerged in which there was no longer any concern for national champions, for the ownership even of firms operating within the UK, or the balance of payments. From the 1990s talk of any problem in productivity had become much more muted, though some, such as the future Labour chancellor Gordon Brown, saw low productivity as a continuing British problem.
In one sense there was a return to the cosmopolitanism and free trade of the Edwardian years. But there was a profound difference. At the beginning of the century a small measure of democracy, strong national sovereignty and integration into the world market could be combined in the British case at least. In 1914 British capital owned the infrastructure, the banks, the ships, the communications of half the world; it was flush with the incomes of these investments. But in 2000 London was not a centre for the export of capital, but a tax haven attracting it. The United Kingdom was, to an extent not known before, owned by foreigners – the big City institutions, the service companies, the infrastructure operators, the car makers, even the chocolate makers were now owned abroad. Global capitalism was unleashed into the United Kingdom, but British capitalism itself suffered. What had been unleashed was not British entrepreneurial genius, but that of foreigners. What Mrs Thatcher and above all her successors did was to change the country and the economy, but not its relative economic standing in the world. Now the question arose for the United Kingdom as for any other nation – was it possible to combine democracy, national sovereignty and integration into the new world economy?3
Figure 19.1: Percentage of UK stock market owned by foreign capital, by value, 1963–2000
Source: ONS, Ownership of UK Quoted Shares: 2010 (ONS, 2012), figure 3.
Figure 19.2: Real GDP, logged, 1948–99 (£ billion)
Source: ONS, Long-term profile of Gross Domestic Product (GDP) in the UK, release August 2013.
Of all this, politics could take only passing cognisance, by invoking clichéd terms such as ‘globalization’ and ‘neo-liberalism’. The terms ‘entrepreneurship’ and ‘innovation’ were bandied around, implying a transformation in the supply side of the British economy. The economy was now ‘post-industrial’, a creative or ‘knowledge’ economy. Thus a powerful contrast was implied between the post-war settlement, social democracy, consensus, Keynesianism, welfarism and the new neo-liberalism. But what had changed the most was not the capacity of the state to manage the economy or the welfare budget, which grew, but all the things that welfare and Keynesian analysis, or monetarism, did not deign to discuss – the instruments of industrial policy, trade, trade union legislation, taxation and much else. Nor did ‘neo-liberalism’ as a notion speak to the realities of a transformed economy. It sometimes meant little more than the free market, at others (rather oddly) a rationalizing, technocratic state.4 What had changed above all assumptions about the nature of a national economy, the nationality of capital and indeed even of machines.
A NEW BRITISH CAPITALISM?
The late 1980s, and especially the 1990s, saw a change in elite self-understanding. For many, Thatcher had saved the country, reversed the decline, made Britain great again. This revivalism was as unfounded as the declinism of earlier years. There might have been a minor temporary small change in relative performance with respect to the richer parts of Europe, but the relative decline with respect to the rest of the world continued. The rate of growth of the economy was not greatly changed by the liberalization and globalization since the 1980s. To be sure, from the depths of the early 1980s, the rate of growth was slightly higher than the post-war average, but never enough to make up for the effect of the depression. Growth from the late 1980s was at a lower rate than that in the long boom of the 1950s and 1960s (See figure 19.2). To put it another way, the average rate of growth of the economy was higher and steadier in the years 1948–79 than between 1979 and 2000. Looking at the United Kingdom comparatively shows that in 2000 it still lagged behind the European leaders in labour productivity. Compared to France and Germany, GDP per hour worked was in these countries 20 per cent higher in 2000 than in the UK.5 If the problem the United Kingdom had was poor growth, and low labour productivity, the changes of the 1980s and 1990s did little to change this.
If the problem to be solved was a weakness in the balance of payments, as many had suggested in the 1970s and before, the record since 1979 was catastrophic. Before the 1970s the British economy was in fact generally in surplus on the current account, while in the last decades of the twentieth century it was generally in deep deficit. In particular, to take the net figures, the United Kingdom went, from the early 1980s, into a permanent and very large trade deficit in manufactures. None of this was a matter of concern; in itself it was a marker of a change in economic thinking and practice. In nationalist political economy the balance of payments was talked of as if it were a national profit and loss account. In the new internationalist political economy, it was merely a record of the net flow of one kind of money, necessarily balanced by inward flows in the capital account.
Finally, if the problem was unemployment – ‘Labour isn’t working’ was the nice, ambiguous slogan the Conservatives used on a 1978 poster – the record was disastrous. Not only did it climb to nearly 4 million, it did not return to 1970s levels until the twenty-first century. Unemployment was one cause of a heroin and crack cocaine use explosion from the 1980s onwards – heroin and cocaine had been in much more limited use in the 1960s and 1970s, concentrated among students. Unemployment, and the new hard drug epidemic among the young unemployed, among other factors, drove a relentless increase in crime, which peaked in the early 1990s.6 Drugs and criminality were very much more significant in the late 1980s and 1990s than during the supposedly lax and permissive 1960s and 1970s. The prison population surged by more than 20 per cent from the early 1990s to 2000 – ‘prison works’ was the policy. By the end of the century there were roughly half as many prisoners as there were hospital beds.
One unexpected development was a remarkable expansion in financial services which radically changed the nature of the elite, and of the capital city. It was the product of the liberalization of many activities especially in and around the London Stock Exchange. Stock Exchange membership had been limited to UK firms, which were restricted to particular activities, and charged cartelized prices. In 1983 the decision was taken to introduce a wholly new regime all at once in 1986 – hence the name, ‘Big Bang’. In this case deregulation, unlike in most other cases, really did lead to new business on a huge scale, to huge increases in employment as well. There was a much larger change in the City, which grew as a centre for the trading of offshore dollars and other financial transactions on a global scale. The City sold itself as an exporter of ‘financial services’.7 But it was not British-owned businesses which prospered, but giant foreign banks which moved in, taking over small enterprises, and transforming the culture of the City from a leisurely, gentlemanly one to something distinctively meritocratic and money-driven and American. It operated within the EEC, as well as within a wider global economy. The power of the City was not a left-over, but something new and not particularly British.
The Big Bang, and other developments, transformed London. The City rebuilt the city. It had been a city in decline: its population had been falling since the war, reaching a trough in 1981. Its expansion as a financial centre was a key factor in driving up population, and indeed diversifying it. The financial sector spread from the City eastwards, into those parts of London which had been the home to the docks. The London that had traded things became the London that traded money. Trading in money yielded huge salaries for a few. At the very top end of the City, young men (typically) could earn not simply a lot more than their fathers, but could imagine earning in a year what their fathers earned in a lifetime as, say, a bank manager.
One important change not noticed was the displacement of national elites, old and new, by a new cosmopolitan elite. In the first Sunday Times Rich List, that of 1989, its publication in itself a notable indicator of a change in the treatment of wealth in the public sphere, the richest were British. In the top ten, the British rich with interests primarily in the United Kingdom were the queen, the duke of Westminster, the Sainsbury family, Sir John Moores, the Vestey family and Sir James Goldsmith. Two others, including Garfield Weston of Associated British Foods, were rich through British interests. A decade later most of these were still in the top twenty. But of that top twenty fewer than half were British with mainly British interests, of which only one was a manufacturer, Sir Anthony Bamford of JCB. The United Kingdom was now the residence of rich people from around the world, with interests largely outside the United Kingdom, for example, the steel magnate Lakshmi Mittal, who did not own British steel mills. It was far removed from the kind of capital the Thatcherites dreamed of – a dynamic British capitalism, perhaps even manufacturing capital.
We can get a sense of the profound changes in the direction of capital by returning to the London Stock Exchange. This market in shares boomed through the 1980s, and especially the late 1990s. The FTSE 100 index, created in 1984, and accounting for the bulk of the stock market by value, surged to a peak in December 1999. It did this because investors had come to believe in what was called the New Economy. Extraordinary price-earnings ratios resulted as investors piled into enterprises which ultimately found the laws of economic gravity all too real. The bubble burst, and the FTSE 100 did not reach these unsupported heights again for more than a decade.
Over that time the composition of the index changed. In 1984 the largest firms by capitalization on the London Stock Exchange included a number of manufacturing companies, most of whose workers were in the United Kingdom. Some, such as Imperial Chemical Industries, once without doubt British, now had half their employees abroad, some, such as BAT, a much higher proportion. But most of the others were more British than multinational in their workforces, notably GEC, an enterprise employing more than 130,000 in the UK, by far the largest manufacturer in the UK.
In 2000 the composition of the index was very different. Firstly, most of the large firms in the FTSE 100 were much less representative of economic activity within the United Kingdom. Most of the top manufacturing firms in the FTSE 100 had more employees abroad than in the United Kingdom. This was almost certainly true of the large pharmaceutical companies with headquarters in the UK like Astra-Zeneca and GlaxoSmithKline. Large overseas employment was also typical of the oil companies, some of the main banks (HSBC and Barclays), service companies such as Compass, and Serco, and even supermarkets such as Tesco. Even a company such as Rolls-Royce had perhaps a third of its employees overseas; the arms firms BAE, inheritor of the airframe and military electronics industries, had more than half its employees overseas. The national firms were things like Sainsbury, Lloyds Bank, Marks and Spencer.8
A second critical point is that the London Stock Exchange was a place where the global elite invested, not just the British elite. By the end of the twentieth century nearly 40 per cent was owned by overseas owners (see figure 19.1). Remarkably, for all the rhetorical ambition under Thatcher to create a share-owning democracy, the proportion of shares held by individuals was lower in 1989 than in 1975 and would fall even lower, down from 38 per cent in 1975 to 16 per cent in 2000.9 The controllers of British capitalism were no longer necessarily in the City of London, and if they were, they were no longer necessarily British.
A third – and this was perhaps the most critical and least understood point – was that very many of the large employers in the United Kingdom were no longer in the FTSE 100. They were often listed on foreign stock exchanges, or not listed at all. The FTSE cannot include the US and European and other investment banks in London, the foreign owners of energy infrastructure, the owners of the motor car industry and much else besides, which as we shall see came to hold a new and vitally important place in the British economy.
One should not assume that British capitalism became more successful at the global level, whatever its fate at home. Of the top fifty global companies by revenue in the recent past, only one and a half were British: the Anglo-Dutch Royal Dutch Shell and BP, both very old oil companies. In a listing by market capitalization these would also be in the top fifty with at other recent times perhaps Vodafone or HSBC. In short, the United Kingdom no longer stood out as the headquarters of more large global enterprises by size than, say, France or Germany. Internationally it is where one would expect a country of its size and wealth to be. Nationally, however, it was not. In no other major capitalist economy was there no approximation to a national major car firm, chemical firm, electrical engineering or electronic firm operating on its territory. Nor did it have any large ‘technology’ companies like Facebook or Google. Whatever it did, the programme of Thatcher, Major and Blair did not revive a decaying British national capitalism, but rather brought the benefits of international capitalism to the United Kingdom.
The opening up and expansion of the EEC was of fundamental importance. The United Kingdom joined the six, with Ireland and Denmark, in 1973. But the European Union, as the new body was called following the Treaty on European Union (the Maastricht Treaty of 1992), was very much larger than the EEC the United Kingdom joined. Greece (1981), Spain, Portugal (1986), Sweden, Finland and Austria (1992) had joined, as well as the former GDR (1990). The 1986 Single European Act, strongly supported by the Conservative government, aimed to remove all sorts of non-tariff barriers within the expanding Community, changes which came into full effect in 1992. These were transformative developments leading to a radical liberalization of European trade, in the context of more liberalized global trade. From 1992, trade within the European Union was as free as it was previously within national economies. Technical norms, specifications and all the hidden apparatus of trade and regulation were the province of the EU, an instance of a politically rather invisible change with major administrative and economic consequences. The white dominions, once so central to British trade, were now minor trading partners, but Canada, Australia and New Zealand now had a combined population comparable to that of the United Kingdom. Indeed, in terms of global heft we would do well to think of the United Kingdom at the end of the twentieth century as a large Canada rather than, say, a small United States of America.
THE NEW ECONOMY
This opening of markets was of significance in ways that grew less visible as it became the norm. For example, it would have been unthinkable in the 1950s and 1960s to have our telephones or cars or computers made abroad or by foreign companies. Now it was unthinkable to deprive the British consumer of such devices. There was a great internationalization of British life, well expressed in the case of elite football. In the 1980s it was rare but not unknown to have foreign-born players, for example the Argentine Ossie Ardiles. In the early 1990s, around 70 per cent of top English league players were English. However, by 2000 the proportion was down to fewer than half.10 Boxing Day 1999 saw Chelsea start a premier league match with an entirely foreign XI on the pitch. Among the greats of the 1990s were the Frenchmen Eric Cantona and Thierry Henry. Furthermore, the United Kingdom, once an exporter of football managers, started importing them towards the end of the 1990s, especially to the biggest teams – notably Arsène Wenger at Arsenal and Ruud Gullit and Gianluca Vialli, both player-managers at Chelsea.
Trade was no longer a matter of importing food and raw materials and exporting manufactures. It was a swirl across political (rather than economic) boundaries of everything from food to manufactures. Indeed, such was the movement of components that to speak of the nationality of a motor car made little sense. A vast service industry grew up importing, storing, distributing and retailing manufactures from abroad. The jobs they provided in, say, a warehouse, or driving a lorry, were less skilled than the average of the older manufacturing jobs and were highly routinized. The new and expanding retailers were now the largest employers of labour, not the old manufacturing firms. The retailers, and their warehouses, were, with the partial exception of food stores, emporia of foreign manufactures.
Figure 19.3: United Kingdom estimated gross value added by sector at constant prices, 1948–2000 (£m)
Source: Estimated from ONS, UK GDP(O) low level aggregates (Q2 1916 edition). Industry classification SIC2003.
In this new world, importing ports were now central once more, but this time were an invisible feature of the British economy. New importing ports for manufactures were built, such as Thames Port and Sheerness, sometimes on the sites of older industrial enterprises like oil refineries, which imported raw materials. A whole new method of importing came into being with the creation of the Channel Tunnel. This long-discussed venture came of age in the late 1980s. It was ‘high time we became involved in an industrial enterprise of this scale’ was the sentiment expressed about the Channel Tunnel by Mrs Thatcher in 1984, as long as it was privately funded. She herself was keen on a road tunnel, but it was not to be.11 Instead it was a railway tunnel, which took passenger trains, freight trains and, by special train, freight lorries too. Opened in 1994 it in effect became a major new port, handling nearly 20 million tonnes by 2000. From the point of view of the private investors the Tunnel was a costly failure. The private sector could also produce white elephants but at least this one was useable. Airports, too, became enormous places moving millions of people and increasingly goods too. By the end of the twentieth century more people were employed, about three times as many indeed, within the perimeter of Heathrow airport as had been employed within the port of London at its peak.
Another rapidly expanding sector also dealing with things was the many-faceted food supply system. By 2000 the streets of British cities had been transformed by the appearance of astonishing numbers of places to drink and eat. The selling of food – standardized branded food, though some prepared within the shops – took off, replacing all manner of older businesses. Labour intensive, profitable and expensive compared to home preparation but cheaper than formal restaurants and cafés, coffee and sandwich shops were now everywhere. Catering businesses (canteens, restaurants, coffee shops, etc.) were now employing more than food and drink retailers, each more than 1 million.12 The United Kingdom had become a land of servers, waiters and cooks, not of shopkeepers but of shop-workers.
Then there were the service industries as they are more usually thought of – the retail banks, the estate agencies, the call centres. By 2000 armies of proletarianized office workers and call-centre operatives were making a mockery of the earlier notion that white-collar work was superior in status to a manual manufacturing job. Finally, there were the public sector and publicly financed service jobs. They were far more important than a politically driven picture of the recent past would suggest. The welfare state continued to grow, and the United Kingdom was far more of a welfare state in 2000 than in 1990 or 1980.13 In both absolute and relative terms such spending was higher at the end of the twentieth century (and higher still in 2018), than it had ever been. British state expenditure has never been as welfare oriented as in 2000 (or 2018).14 Increasing welfare expenditures by the state were a significant aspect of the rise of the ‘service economy’. Benefits represented 10 per cent of GDP and health 5 per cent in 2000. State education, too, was an expanding industry. Indeed, we may reflect backwards even further – not only was welfare spending higher than at any other period at the end of the twentieth century, it was also higher with respect to other forms of state expenditure than ever before – especially defence expenditure and investment (see figure 18.1). The welfare state peaked at the moment it was supposed no longer to exist, and the moment at which it had been supposed to have existed turns out to be better described as a warfare-developmental state.
The economy continued to grow from the 1970s, if not at such a sustained pace as before. Between 1975 and 2000 total income nearly doubled. Society was affluent as never before, more devoted to consumption than ever. Superior goods, often more expensive ones, drove out inferior ones. Holidays overseas replaced a week in Blackpool or Skegness. The pet budgerigar, a little parrot from Australia, was on its way out. 3.3 million were kept as pets in 1965, and only 1 million in 2000 and falling. By contrast, the more expensive dogs increased from 4.7 million to 6.1 million and cats were overtaking, growing from 4.1 million to 8 million, between the same dates.15 On average life became very much fuller of things. The quality of food and services generally increased.
While seen from the perspective of the economic nationalist much of the discussion above would have a critical tenor, from the internationalist perspective it is a story of progress, of equalization across now disappearing economic boundaries. It was surely a good thing that efficient foreign enterprises drove out poor British ones. Didn’t the quality of football improve? What did the nationality of capital matter to workers, a left internationalist would say. British people now had access on a routine basis to the goods of Europe and to a lesser extent the world, and more goods than ever before. That made the British economy, and society, much like that of the rest of Europe, in particular, in a way it had never been before. There were other benefits. The British people were free of the huge burdens of arms spending and of the techno-nationalist delusions that led to wasting resources, which could otherwise have provided prosaic pleasures for millions. Openness to the world, to other people as well as other things, brought many benefits, and much happiness. The new internationalized economy was overall more productive than the old national one. There were indeed good reasons to believe that things could only get better.
We need, partly to complete our story, partly to illustrate further how profound the changes had been, to return to the economic activities which were at the core of British life into the 1970s: energy, food and manufacturing. In each there was an extraordinary transformation.
ENERGY AND FOOD
Returning newly nationalized manufacturing companies to the private sector or selling shareholdings in oil companies was one thing. Selling utilities, most built up by the state and state agencies from even before the 1940s, was another thing altogether. Here matters of principle were more obviously important, and measures had to be taken to prevent abuse of monopoly power. Privatization in this sector also involved another element – that of direct sale to small investors, as an attempt to create what was called a ‘share-owning democracy’. It concerned essentially two privatizations only. The first was that of British Telecom, formerly part of the Post Office, which came at the end of 1984. Just over 50 per cent was sold, for £4 billion. This was followed by the massive £7 billion privatization of British Gas in 1986. The other utilities would not be privatized until the 1990s.16
That the opening up of markets and the ending of protections for British industries were central can be clearly seen in the case of energy supply. From a national perspective one might assume that the decline in British coal mining was due to a process of modernization by which coal was replaced by more modern fuels. But coal was not a fuel of the past. At a global level its use was increasing. In the United Kingdom usage was dropping slowly. In the new energy regime coal was far from redundant, but British coal and British miners were.
Coal remained essential to electricity supply. Apart from nuclear reactors ordered in the 1970s the only new capacity came from cheap and quickly built combined-cycle gas turbine power stations, powered by North Sea gas. All the rest of the electricity supply system in place in 2000 consisted of ‘legacy assets’; the focus was on ‘sweating inherited assets’, rather than creating new ones.17 At the core were the coal-powered stations of the 1960s and 1970s. From the early 1990s the consumption of coal in these power stations fell from a position close to the peak to, by 2000, the level of around 1960.
The second great change was that coal for these stations now came from abroad, though this was barely noticed. By 2001 more coal was imported (35½ million tonnes) than was produced (32 million tonnes); the level of home production was equivalent to that of the very early nineteenth century. Coal imports were at levels similar to the coal exports of the 1930s. So large were they that they increased the overall bulk of British imports to unprecedented levels.18 By 2000 Grimsby/Immingham overtook London as the busiest port by bulk, not least because of this. It had once been one of the great coal-exporting ports. Even in the 1970s British Steel and the National Coal Board had built a new export dock for coal and steel there alongside a major oil import centre for new refineries built nearby, and for iron ore. The same story was repeated elsewhere. Hunterston, built as an iron-ore-importing facility to supply the blast furnaces at Ravenscraig, became a coal-importing port, connected by rail to both Scottish and English power stations.
Mrs Thatcher, her government and the nationalized CEGB wanted to import coal from the 1980s, but it did not happen quickly. It was only in 1993, when coal contracts had to be renewed by a newly privatized electricity industry, that the prospect for British coal became catastrophic. In the face of political pressure (the defeated miners of 1993, and miners who had worked through the strike, had more sympathy than the striking miners of 1984–5 had), a partial reprieve was engineered by the government.19 But it was only temporary, and domestic coal production continued downwards. A barely existing coal mining industry was privatized in 1994, or rather the operation of remaining mines – the huge liabilities remained in the public sector. There were now only 7,000 miners, down from 50,000 or so in 1990, and a mere one-hundredth of the employment of around 1950.
Liberalization and internationalization of energy could have destroyed British national nuclear supply as well. However, government was more concerned to protect the nuclear reactors than the coal mines. In the late 1980s privatization plans for the CEGB included one company with the nuclear ‘fleet’ and another without. Since no one wanted the nuclear part, plans were changed, and the nuclear stations remained in state ownership. The efficiency of the AGRs improved radically, because the managers were now interested in doing this, as opposed to arguing for PWRs.20 British Energy, which had only AGRs and the one PWR, and promised to build no more, was privatized in 1996; the price achieved revealed that the AGRs were valued at zero.21 The market, not rational public or expert inquiry, stopped the nuclear juggernaut.22 The state was left with the retiring Magnox stations of the 1960s and their clean-up costs. Indeed, nuclear waste management was a case of a costly last gasp of techno-nationalist enthusiasm for nuclear. In 1978 parliament (with cross-party support) approved the construction of the THORP nuclear reprocessing plant at Windscale (following a large public inquiry) – the plant was not completed until 1994 and closed in the next century, having amassed huge losses.
The national technocrats who had once had so much power were destroyed by liberalization and privatization. A singular case was state nuclear physicist Walter Marshall. He was, unusually for a British nuclear baron, an advocate of the PWR and was appointed to run the CEGB by Margaret Thatcher, who also wanted many of these US-designed reactors. He was instrumental in getting the CEGB ready for the miners’ strike. He kept the lights on and was rewarded with elevation to the House of Lords. But the government decided to break up the CEGB in order to privatize it in parts, as we have seen, and he resigned. Sir Denis Rooke, a chemical engineer of distinction, ran British Gas. Unlike Marshall, he succeeded in keeping British Gas as one, on technical grounds. But it too was later broken up. Many of the bits would end up in the hands of European companies. The electricity generator Powergen was taken over by the German E.On in 2002, National Power by RWE, again German, in the same year and Scottish Power by the Spanish Iberdrola in 2006. British Energy, which had the AGRs and the PWR, collapsed in 2004 and was effectively renationalized; it was then sold on to the French nationalized company EDF, Electricité de France.
In the case of food the dynamics of internationalization were rather different. Agriculture was under an EEC regime, the common agricultural policy, not a national one. British agriculture, as part of Common Market agriculture, was protected by a high common external tariff and supported by subsidies. As a result it did very much better than coal mining. By 2000 there were still around 200,000 farm workers, but there were hardly any coal miners left. By 2000 self-sufficiency in food diminished from its peak in the 1980s, though it was still much higher than in the 1950s. What was radically different from the 1950s was the source of imports. They now generally came from the EU. Indeed, there was a continentalization of British food tastes. With imported Mediterranean foods, from citrus to tomatoes to avocados, aubergines and courgettes, the British diet became varied and interesting. Tea consumption fell, while coffee increased, beer gave way to wine, potatoes to pasta. Where bottled mineral water had once been rare, in a country with good drinking water, pointless French and Italian mineral waters were now everywhere. Yet the United Kingdom remained a significant exporter of food, mainly to the EU. It sold grains and meat and more. The case of beef is exemplary of what would have been unthinkable in 1950. In the mid-1990s the United Kingdom was almost wholly self-sufficient in beef, with one-third of production exported. However, because of the intensive production methods which led to the BSE infections, the EEC responded with a ban of exports (partial in 1990, full in 1996), causing total exports to fall to nearly nil. There was an extraordinary massification and mass production of food, largely hidden away, a story exemplified by the rise of chicken meat to dominate meat consumption.
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