Should the UK have followed the French route with its industry?

[uk 75]

One of the great comparisons of the postwar era has been the decline of British industry while France, which was in far worse shape at the end of World War 2, has prospered.

At first sight it looks as if the French got their industrial policy bang on:

UK France

Foreign owned railway industry Major player (TGV etc)

Morgan is largest British owned car Citroen, Peugeot Renault
company

Hawk last British only military jet Rafale beats Typhoon for Indian order

No domestic nuclear industry Supplier to the UK

Shipbuilding dependent on UK Govt orders Significant supplier of civilian and military
and specialists

This has happened despite the radical surgery of "nationalisation" under Labour and "privatisation" under the Conservatives.

Was there a third way?

 

[martinbayer]

You could add France's dominance in Airbus and Ariane to the list.

Martin

 

[Stargazer]

You could add France's dominance in Airbus and Ariane to the list.

Ariane, for sure! Airbus? Well.. we French people love to consider it as a French product, just like the Concorde, but truly both were international products resulting from cooperation with other European countries, so I'm not sure if that counts here...

 

[Archibald]

It's not as rosy as it seems. Peugeot is in very bad shape.

The TGV is some astounding marvel of engineering, but it sucks all funds out of the SNCF "ordinary" railways that are somewhat underfunded. While the TGV fortunately goes through standard railways lines, well, there it has no clear advantage over a plain old passenger train. Except that the SNCF doesn't care and put more TGVs (at some ticket cost for the unfortunate passenger) than ordinary trains. The system has become a little perverted.
The Bayonne - Bordeaux line is typical of that. When buying your ticket, the SNCF makes sure that ordinary trains are scarce (2 a day) and stops at all railway stations, just to use your patience and force you buying TGV tickets instead. ;D
In the end the TGV barely save you 20 minutes of travel time... at a rather higher cost.

The nuclear industry has its share of issues - it's one hell of a political lobby, and is currently stuck with the EPR design for decades to come (an old fashioned water cooled reactor design while aternate designs are hardly considered).

The Rafale still hadn't score any foreign sales (although India is making good progresses) but, most importantly, the Mirage III / F1 / 2000 legacy of success (keep it simple, stupid) seems to have gone into the Grippen, not Rafale. Dassault currently strives on Falcons sales, not Rafales. The military branch is becoming troublesome.

Surely, Airbus and Ariane are mind-boggling successes considering Europe started from zero four decades ago, on the ruins of both Concorde and Europa. But space transportation remain marginal, while Germany enjoy Airbus as much as France.

But still, a decade of internet discussions on the subject, plus reading of Tony Butler and Derek Woods books, fuel some regrets over British aerospace industry.

I remember that seven years ago (time is flying!) at the whatif modelers board I listed British aerospace industry "missed opportunities" all the way from 1945 to the 80's. I found 24 of them. TSR-2 is only the tip of a major iceberg, for sure.

More recently on the alternate history board I was discussing the Eagle vs Ark Royal last carrier decision, happened around 1972. I wondered why the crippled Ark Royal, build during WWII from lower quality steel that aged very bad, had been selected for upgrade instead of its sister ship that seemed to be better suited. The Eagle might have lasted well into the 80's.
Someone answered me that it had been a deliberate move to kill the British heavy carrier force once and for all. I was aghast.
Of course a different outcome to the 1956 Suez crisis might have changed all...

 

[Anderman]

AFAIK the british Railways wer nationalized in 1946 and not privatised until the 1980s so more then enough time to prove that the state could do it better then the private sector didn´t he......

For the car industry British Leyland or British Elend (misery) as we say in Germany was nationalized in 1975 but not BAe or BMW could make a profit with it .

The difference in the aviation industry between France and the UK is that France wanted a jet fighter (Mirage III) and the UK not (Duncan Sandys and his White Paper)

France wanted an independend nuclear deterence so it has a nuclear industry to produce the fissile material and the SLBM it neesds. The UK buys american ...

 

[Stargazer]

AFAIK the british Railways wer nationalized in 1946 and not privatised until the 1980s so more then enough time to prove that the state could do it better then the private sector didn´t he......

For the car industry British Leyland or British Elend (misery) as we say in Germany was nationalized in 1975 but not BAe or BMW could make a profit with it .

The difference in the aviation industry between France and the UK is that France wanted a jet fighter (Mirage III) and the UK not (Duncan Sandys and his White Paper)

France wanted an independend nuclear deterence so it has a nuclear industry to produce the fissile material and the SLBM it neesds. The UK buys american ...

Back in 1986-87, when I lived in England, everyone was complaining about the state-owned railway system: old, inadequate, never on time... and the announcement of privatization was seen by most everyone as a blessing. However time proved them wrong. The investments needed to overhaul the entire railway network — trains of course, but especially rails and control terminals, not to mention prospective investment on modernizing the whole thing — would have been so costly that no-one, state or private investors, was really willing to take it up because there would have been no return on the investment. People will travel no matter what the condition of the network. But if you invest such amounts you need to increase the fares, and that can be done only up to a certain point.

The argument that Britain buys American and not France is only partly true. We did buy American material at times when we had no means to develop our own, but the goal was always to remain sufficiently independent to not depend on the American big brother (De Gaulle's thinking was especially indicative of that). I think both Britain and France have had an ongoing love/hate relationship with America but manifesting itself in quite different aspects.

I believe (and that's really only my personal analysis) that the only real difference between France and Britain is that in the aftermath of WW2, France understood that it no longer had a leading industrial role and that it needed to modernize. The French are stubborn and resist change, so things evolved at a slow pace but the various governments never stopped improving the rail network, the motorways, the airports. On the other hand, it took too long to Britain to realize the loss of her preemince. It continued to exist on the premices that it was the leading industrial power and failed to adjust to rapidly changing times. The resistance to "Europe" (almost a swear word for many Britons back then), the persistence of coal and steel well into the 1970s and early 1980s when other countries had begun to dismantle them are further examples of that difficulty in adjusting to a more global kind of thinking.

Although it's fair to say that aviation was a strong (maybe the strongest) asset and really would have deserved a better outcome, car design for instance kept being thought for Britons only and outdated by international standards. Only in the higher end segments of the market did they still have an edge (Jaguar, Aston Martin, Rolls-Royce) but that wasn't sufficient to keep the jobs and the factories open. To answer the question asked in the topic's title, perhaps if the French and British car, rail (and others) industries had come together to work on common projects like BAC and Aerospatiale did, the outcome wouldn't have been the same. The satisfactory creation of goods and services in common might have reinforced the European feeling and prevented (or at least delayed) the current situation.

Of course I'm willing to read adverse opinions to prove me wrong! As I said it's only my personal perception of two countries which I know and appreciate each in its own ways.

 

[martinbayer]

You could add France's dominance in Airbus and Ariane to the list.

Ariane, for sure! Airbus? Well.. we French people love to consider it as a French product, just like the Concorde, but truly both were international products resulting from cooperation with other European countries, so I'm not sure if that counts here...

Ariane is actually as much an international venture resulting from cooperation with other European countries as Airbus, see http://www.arianespace.com/launch-services-ariane5/industrial-team.asp (and that page doesn't even include lower level subcontractors like Volvo for the Vulcain nozzle)! However, although both are nominally paneuropean efforts, France tends to dominate politically in both.

Martin

 

[Grey Havoc]

Perhaps it should be noted that the British (Blue Streak based) contribution was the only really successful part of the Europa project.

 

[martinbayer]

Perhaps it should be noted that the British (Blue Streak based) contribution was the only really successful part of the Europa project.

True - the UK certainly had significant and remarkable technical aerospace capabilities, which were however unfortunately not matched by corresponding political vision and resolve. This was for example evident in the abandonment of the successfully developed Black Arrow.

Martin

 

[alertken]

uk75. The 3rd. way is what almost all States actually do: we Anglo-Saxons, with our Market Rules OK!, differ from Gallic dirigisme only at the margin. Way 3 is the Mixed Economy. Taxpayer subsidy to risk investors. France and UK do it at Central Govt. level, US there and at State level, evidently overlooked by Airbus Industrie's lawyers trying to defend against Boeing's WTO Case that (National) subsidies are illegal (but local are not. Odd that, because Airbus-Mobile was wholly "incentivised" not at Obama but at Alabama level {Ha!}).

Voters are believed by pols. to resist paying taxes once they are perceived to exceed c.46% of our hard-earned pay. We then embark on the Greek/Italian National Sport of tax evasion. So: taxes should be used only for what taxes must be used; commercial investment should be used wherever a firm so offers.
Aero operation - airlines - are now seen as of National Strategic Interest only in US and France, where ownership is Protected...by such taxpayer subsidy as (US) the Federal Pension Guaranty Board and (France) any wrecking move you can think of to keep Easyjet/Wizzair/Ryanair from doing at home what Emirates/Etihad are doing so well, away.
Aero design/manufacture is now seen as of National Strategic Interest...nowhere. We all buy quickest/cheapest/best.

UK (actually those advising the Iron Lady c.1981) chose to accept the risk of foreign ownership of almost anything foreigners cared to buy. Atomic Weapons Establishment is managed by a heavily-US Consortium; (ex-RAE Farnborough) QinetiQ is owned on the Stock Exchange with no constraints on nationality of shareholders. Anyone who cared to buy, then fund ongoing renewal, was free to buy UK infrastructure - so London has French electricity and German water. All of that arose from removing upfront capital (such as for transport fleet renewal) from Now! taxes to 30-year commercial Project Finance.

That might be dearer over the 30 years, but the Minister says hey! I won't be here then. France prefers to put taxes into...everything in post #1.
It's a judgement call. Neither way is best.

 

[Cjc]

AFAIK the british Railways wer nationalized in 1946 and not privatised until the 1980s so more then enough time to prove that the state could do it better then the private sector didn´t he......

British rail was never properly nationalized. To many tory voters who wanted to keep there trains to there areas that gust couldn't support them. Wich is why thatcher never wanted to nationalized the rail ways. When major came to power he had a brilliant idea of "privatization" the unprofitable lines were combined with profitable ones (so say London to Edinburgh, combined with a train line between two towns in the middenlands) with no ability to close or remove lines from the "package". Dose this sound like privatization to you, because this dosnt sound like it to me. This of course lead to company's that could gust barley break even (at best see the 6 company's who have tried to run the Edinburgh London "package) with no ability to reinvest into the rail lines. Proper privatization would have lead to half the rail lines in England closing but the ones remaing being of much better quality, or the hole thing should be nationalized so everyone has to pay for a rail lines few people use. At lest even with everything the rail lines are a lot better run now then they ever were under the government (lets see if the government can keep it that way)

And don't get me started on the idiotcy that was creating a separate company to manage the track insted of giving it the the company's that would actually be useing it and therefore instentivsed to keep it in good repair.

 

[Archibald]

Make no mistake, even as a public company there are pressures for the SNCF to be profitable and shut down a lot of secondary lines not profitable. More annoyingly, the TGV has cost so much it has to pay for itself at any cost, and there are some perverse effects with that. Such as TGV being slow TGVs on ordinary lines. Or big railways stations adapted to the TGV only, duplicating existing railway stations at high cost only to be half empty. In fact it is a bit like new airports, you know, in China, Spain and elsewhere, that run empty or half empty because they are too far from any large city. Such things happened to a string of "new TGV railway stations".
Nowadays with global warming the "all TGV" policy is slowly abandonned: old lines are re-opening with classic trains, such as the Bordeaux-Lyon one running across the Massif central.

One absurdity of the all TGV policy is that, like too many things in my country, is has Paris as a central hub. Back in 2007 I wanted to go from Bordeaux to Grenoble, so west to east. Yet I had to transit to Massy, south of Paris, to change trains. Instead of a straight line west - east, I made a triangle: west - north - east.

 

[Hood]

Actually I have been thinking a fair bit about British railways lately (unusual for me).
It appears a strange artefact of how railways were created and developed in the 19th Century that the various companies built and owned their own tracks and locomotives and carriages.
This continued well into the 20th Century and indeed British Rail was responsible for the entire rail network plus locomotive and carriage R&D and production on top of actually just running trains from A to B. Plus they ran harbours and hotels, their own police and tried to dabble in airlines too.

This is quite a curious anomaly from how most transportation networks are developed and run.
While some early aircraft manufacturers dabbled in flying schools and airlines to use their own products (product placement if you like), that stopped as it became unprofitable and in the US anti-trust laws broke up the big maker-airline monopolies. Some early airlines ran their own airports but you could get away with that when all you needed was a flat field and a wind sock and some weighing scales.
But modern airlines (post 1940) never attempted to build their own aircraft or run their own airports once you needed quite hefty infrastructure.
Shipping lines generally don't run shipyards and entire harbours. Car and truck manufacturers don't build roads and neither do haulage companies.

Nationalisation of the British rail system was always on the cards after the experience of state control during WW2 and indeed it was nearly nationalised in the 1920s (but for political dogma taking over and preventing it). So for me, it would have made sense for Labour in 1945 to have separated the operators from the infrastructure.
For example road haulage was nationalised in 1948 as British Road Services under the British Transport Commission. It could have created a British Rail Services to run the trains and a British Railways to run the infrastructure. That might at least have enabled the train services to run a modest profit.

The BTC was a monster, covering ports, haulage, hotels, its own transport police, trams and canals and soon broke up into smaller Boards. It failed in large part due to the unprofitability of the railways and its failure to harmonise ticketing and timetabling (still an issue today!).

 

[kaiserd]

Without getting ideological (pro or con nationalisations or privatisations in general) certain scenarios and structures are just not easily or efficiently privatised (generaly and ironically the same scenarios that also has nationalised equivalent/ mirror entity also very hard to manage etc.)

So you can end up with privatisation models that really only give an illusion of competition and are instead are more out-sourcing arrangements where return on capital investment competes with long term investment to the detriment of the later and continuing government subsidies (and needing to intervene or even effectively renationalise failing elements of the system) make the privatisation all rather pointless at best, apart from for purely party political/ ideological reasons.

Historically the British aviation industry as a whole seldom really flourished apart from on the back of UK government orders.
As such a version of industry consolidation under a version of nationalisation was probably inevitable.
And the British Aerospace (BaE) that eventually emerged was a much better basis for privatisation then successful competition than any of it predecessor entities.

 

[Deleted member 2278]

it was nearly nationalised in the 1920s (but for political dogma taking over and preventing it)

Dogma? Not sure what exactly you are referring to there. Far from being cruelly denied, nationalisation was simply unnecessary, unaffordable and undesirable for the 1921 act and was correctly determined to be such. Rationalisation was absolutely necessary and long overdue but the grouping into even just four companies was fundamentally flawed. Lumping companies together by way of geography, simplistic at best. Efficiencies were certainly to be had but grouping natural rivals (take the Caley and the G&SWR as an example) stymied competition and the benefits that offers. Internal culture wars, poorly considered, even more poorly managed, caused nearly as much waste and duplication as when separate entities! Financially stable constituent companies were saddled with ailing ones. All that writ large by grouping into just one? No thank you.

Chaotic and flawed though it was, the grouping was far preferable to nationalisation. In the 1920s and yes even in the lean 30s, there were considerable improvements made, improvements that would not have been forthcoming under public funds. Renewal of engines and rolling stock made necessary by the railways' hard war years alone would have been simply unaffordable on the public purse. Dilapidated and over-matched Edwardian and Victorian engines, interspersed with made-by-committee, austere Government monstrosities, too lightly (cheaply) built for the job would hardly have allowed the railways to survive long enough to do it all again in WW2 compared with the (relative) innovation and shear scale of renewal had under the private companies. Even if shareholders were compensated with mere peppercorns (not A.H.!), the country could not have afforded to absorb the monumental cost of running all the railways in 1923.

Come 1947 and all was changed. The war had seen to it, not just in damage, privation, dilapidation and financial strife but the new, substantial availability of road vehicles and persons trained in their use off of the back of the conflict. In the face of the devastation done, nationalisation begins to make sense. I fear the railway situation of the 1920s is being viewed through the prisms of the late-40s, 70s, 90s and perhaps even now. The truisms of those eras do not apply or only in part. If not night and day, certainly brunch and dinner!