In 1971, then prime minister Edward Heath took Britain into the Common Market on the back of a demand-led reflation.
Up until that time, the UK had a policy of hire purchase restrictions, which stopped products being bought on credit. To boost the economy, Heath withdrew the policy and unleashed a pent-up demand for furniture, carpets and cars. The problem was, at that time there wasn’t the likes of Ikea or even DFS around and the UK carpet industry was in a poor state.
The UK car industry was in no better shape, with major quality and employment issues. It was the era of Derek Robinson (‘Red Robbo’) and militant union power at British Leyland, while, in 1968, Ford’s plant at Dagenham had been the centre of the sewing machinists’ strike, which led to the Equal Pay Act of 1970. The industry was characterised by poor quality manufacturing, with a built-in obsolescence of nine months on some car parts.
The Government had become fed up with these poor standards and introduced the MoT in 1968. The outcome was that the UK-based car manufacturing plants were unable to respond to this sudden rise in demand, and foreign cars were sucked into the UK, especially from Japan. What followed in the 1980s was that the then prime minister Margaret Thatcher promoted the UK as being the gateway to Europe. The results included Honda opening its plant in Swindon and Nissan building its Sunderland facility – both with the intention of avoiding the 10% tariff on cars imported from outside the single market.
This was subsequently followed by investment from Toyota at Burnaston in Derby. From this time onwards, UK car brands were seen as attractive to foreign investors, as evidenced by BMW’s involvement with Rolls-Royce and Mini and Volkswagen Group’s ownership of Bentley.
Entry into Europe brought many benefits for the UK car industry – it encouraged foreign investment, provided world-class manufacturing and generated quality jobs. It has shaped our sector and made it more competitive. New types of business have started up as a result, with innovative intermediaries providing a diversity and richness to the offering made to the UK consumer.
Unless there is either no Brexit or the ‘softest of soft’ departures, the world outside the EU may be less attractive than the delusional vision of the future portrayed by the likes of Johnson, Gove and Farage.