UK: Editorial - The first priority FOLLOWING ELECTION.

UK: Editorial - The first priority FOLLOWING ELECTION. - "You know, there is a new mood on the shop floor ... a realisation that pulling together actually produces results. It's not happening just for the sake of being nice ... it really does work ... an

Last Updated: 31 Aug 2010

"You know, there is a new mood on the shop floor ... a realisation that pulling together actually produces results. It's not happening just for the sake of being nice ... it really does work ... and I believe it will last." Not the words of a dyed-in-the-wool Tory captain of industry, but a grizzled trade union leader, expounding on the new spirit of co-operation between shop floor and management he has detected in the midst of a savage recession.

Indeed, British industry is now getting its act together in a way rarely seen except in wartime. Strikes are at an all-time low and productivity, after a sticky patch early in the recession, is growing at a healthy 6%. Up and down the country, industrialists have taken the lessons of the last recession to heart, moving up-market or into new niche areas. True, profits have been clipped and jobs shed, but for industry the pain has been nothing like as dreadful as it was in the early '80s. Management is also being more intelligent today.

Take ICI - its recent profits may have fallen by a headline-grabbing £93 million. But in the early '80s, it actually went into loss. Indeed the group has done extraordinarily well to minimise the effects of recession. In seven key business areas identified by management consultancy P-E International - among them overheads, materials costs and usage - ICI's fall of just 0.23% in each for 1991 shows a keen eye firmly on the ball.

Yet there is still much more to be done, as Sir Geoffrey Owen, the distinguished former editor of the Financial Times and leading authority on British industrial competitiveness, points out in his article, The End of the Beginning (p40): "Any sense that the battle has been won, which some companies may have felt during the mid-1980s, will be highly damaging. Meeting international competition in the 1990s will require an unrelenting drive for quality and efficiency."

This is where the politicians should be playing their role in preparing the ground for British industry to flourish into the next century. Yet far from debating how to tackle what will inevitably be a yawning balance of payments problem once the upturn comes, or how to tackle growing long-term unemployment, we have been treated in the General Election campaign to petty arguments over tax cuts and double whammys. Endless chatter over whether the green shoots of recovery can be spotted or seemingly limitless spending promises are no substitute for debate.

Paradoxically, the very trivialisation of the election issues may be the result of the convergence of policies of the main parties over the broad thrust of economic policy. Both support continuing membership of the European exchange rate mechanism (ERM) and both rule out devaluation. As a result, there is limited room for manoeuvre or debate between them. While the stability afforded by the ERM is welcomed by industry with open arms (and is perhaps one of the major reasons why both sides of industry are working together so well today) this is no excuse for turning a blind eye to problems that will plague whatever government is in power.

For if there is one fact, above all, that the British public simply has to take on board, it is this: wealth creation must be given the absolute highest priority by all politicians. It is no use simply planning to spend money the nation hasn't earned as a sop to one interest group or another. And in valuing the wealth creators, politicians and public alike must put industry at the very top of their agenda.

In Germany and Japan, those who work in industry are regarded as national heroes. If we are all to enjoy any real long-lasting prosperity in the '90s, then we too must regard those toiling at the sharp end of industry as true heroes.

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