Читать книгу From Empire to Europe: The Decline and Revival of British Industry Since the Second World War - Geoffrey Owen - Страница 26

How did British performance in textiles compare with that of other European countries? In the 1950s and 1960s the British textile industry faced two problems which its European counterparts did not share – the unfinished task of adapting Lancashire cotton to its changed position in the world, and the early exposure to low-cost imports from developing countries. Lancashire was in the direct line of fire from imports, and, because of its size at the start of the post-war period, the contraction was bound to be more severe than in the two other main sectors of the industry (TABLE 4.2). On the other hand, it was not inevitable that, by the mid-1990s, the cotton textile sector in Britain would be smaller than in Italy, Germany or France (FIGURE 4.1).

TABLE 4.2 Employment in British textiles, 1914–84

FIGURE 4.1 Cotton textile sector spinning production, selected European countries, 1957–95

Source: Eurocoton, published in Textile Outlook International, May 1997.

Part of the explanation relates to intra-European trade, TABLE 4.3 shows the extent to which Continental manufacturers depended on exports to neighbouring Common Market countries in the 1960s; for British firms, the shift to Europe did not get under way until later. As tariffs within the EEC came down, the Continental manufacturers were operating in a fast-growing, homogeneous market which was more effectively protected against low-cost imports than Britain. The industries which made the best use of this opportunity were those of Italy and Germany.

The Italians had the initial advantage of low labour costs, but this factor became less important as wages and living standards rose, and the success of the industry was based on design flair, flexibility and speed of response to changing customer demands. A unique feature of the Italian industry was its dependence on small, family-owned firms clustered together in districts which concentrated on particular segments of the market, such as Prato which specialised in wool textiles and Carpi in knitwear.⁵³ This cottage industry structure, which bore some resemblance to nineteenth-century Lancashire, involved a high degree of co-operation among members of each network, while trade associations and other industry-wide organisations provided common services in such areas as overseas marketing, research and training. A few large firms such as Benetton did emerge, but they relied on small sub-contractors for much of their manufacturing. Of the larger European countries, only Italy has maintained a substantial trade surplus both in textiles and in clothing (TABLE 4.4).

TABLE 4.3 Exports of textiles and clothing from Britain, Germany, France and Italy to the six original Common Market countries as a per centage of total exports of textiles and clothing

The other European success story was the West German textile industry. When low-cost imports first posed a threat in the early 1960s, the response among German manufacturers was to go for a capital-intensive, mass-production strategy similar to that of Courtaulds in Britain. But it soon became clear that the savings in labour costs would not be enough to withstand import competition in the simpler types of yarn and fabric, and that the future for the industry lay in doing things which manufacturers in the developing countries could not match – differentiated, technically demanding, fashion-sensitive products, generally made in small batches.⁵⁴ Most firms looked for niches where they could combine the use of modern technology with a strong emphasis on marketing.⁵⁵ This strategy suited the small and medium-sized companies which constituted a large part of the German textile industry. Between the mid-1960s and the mid-1970s, when the British textile industry was going through a wave of mergers, the concentration ratio in Germany hardly changed (TABLE 4.5).

TABLE 4.4 Exports and imports of textiles and clothing in 1995

The adjustment process in Germany was market-led, with the Federal government playing almost no role.⁵⁶ Requests for protection were met with the argument that the German economy as a whole depended on free trade and that the textile industry must adjust as best it could to the changing international division of labour. The government was more interested in keeping markets open for the country’s capital goods industry (including the textile machinery makers) than in preserving jobs in textiles; Germany was more liberal than other Common Market countries in its application of the Multi Fibre Arrangement.⁵⁷ The fact that, in contrast to Britain, there were no large concentrations of textile employment in particular regions reduced the textile industry’s lobbying power. Nor was it necessary for the synthetic fibre manufacturers to involve themselves directly in the reorganisation of the industry as they did in Britain. While they provided technical advice and support, they did not acquire textile firms.⁵⁸

TABLE 4.5 Concentration in European textiles 1966–75

High German wages made it difficult for the labour-intensive clothing industry to remain competitive, and during the 1960s many apparel manufacturers began to transfer production to countries with low labour costs. This was often done in co-operation with their fabric suppliers. Under the outward processing system authorised by the European Commission, German-made fabric was made up into garments outside Germany and then re-imported free of duty. International sub-contracting allowed German clothing manufacturers to reduce their production costs while concentrating more of their attention on marketing and distribution.⁵⁹

The least successful of the three largest Continental textile industries was that of France.⁶⁰ In common with much of the rest of French industry, the textile manufacturers were highly protected during the 1950s, and much of their export trade was with the colonies. The opening-up of the domestic market following the creation of the EEC put the industry under greater pressure, and the government, which had taken little interest in textiles in the early post-war years, sought to encourage modernisation. In line with the prevailing belief in ‘national champions’, attempts were made to restructure the industry into larger groups, somewhat along the lines of what was happening in Britain during the same period.⁶¹ Although concentration did not go as far as in Britain, some large textile conglomerates were formed, including Prouvost, DMC, Agache-Willot, and Boussac, and they were not much more successful than their British counterparts.

What prevented the British textile industry from following a strategy similar to that pursued in Germany or Italy? There had been a long tradition, especially in Lancashire, of supplying yarns and fabrics in large quantity to non-European countries, and the industry was organised in a way which suited this trading pattern. Post-war developments in world textile trade made these arrangements obsolete. With hindsight, the right response to developing-country competition in the 1950s and 1960s would have been a shift to high-value-added fabrics, which were less vulnerable to competition from low-cost imports, and a reorientation of overseas marketing to Continental Europe. But this would have required a change of mindset in a long-established industry which had been struggling for years with continuous decline and chronic over-capacity. As it was, the attempt by Courtaulds to breathe new life into the industry led in the wrong direction.⁶² It is conceivable that if Courtaulds had not intervened in the way that it did more firms might have pursued a specialisation strategy along German or Italian lines, although whether this would have led to a spontaneous revival of the industry must be open to question.

Britain’s delayed entry into the Common Market was a disadvantage, and it was not the only factor which slowed down the Europeanisation of the industry. The concentrated structure of the retail trade, and the domination by Marks & Spencer in particular, made it difficult for manufacturers to establish their own brands in competition with retailers’ brands, except at the top end of the trade. Manufacturing under contract for Marks & Spencer was a profitable business, guaranteeing steady orders for firms which could meet the retailer’s specifications.⁶³ This tended to reinforce the industry’s attachment to long runs of relatively undifferentiated products. If the retail market had been as fragmented as in Italy or Germany, there would have been greater opportunity for manufacturers to develop independent design and marketing skills, and to promote their own brands. The distinctive character of the British clothing market helped to isolate the textile industry from Continental Europe. Many of the East Midlands knitwear producers, for example, preferred to concentrate on the British retail trade, offering medium-quality, low-fashion products at low prices, rather than build up their export business.⁶⁴

Because of history and because of the Commonwealth connection, the British textile industry faced a very difficult adjustment after the Second World War. The attempt to solve the problem through scale, standardisation and vertical integration was a mistake. As for the three institutional weaknesses mentioned in Chapter 1 – labour relations, training and education, and the financial system – none of them seem central to the textile story. Labour relations were generally stable throughout the post-war period. The trade unions did not resist the modernisation efforts of the 1960s, and they were largely passive during the contraction which took place in the 1980s and 1990s. On the issue of skills, the German industry’s emphasis on up-market, technically demanding fabrics may have been facilitated by the well-organised apprenticeship system, but deficiencies in British training arrangements played no more than a marginal role in the textile industry’s decline. There were, after all, some successful firms, like the Scottish knitwear producers, operating at the high-fashion end of the trade. That there were not more of them cannot be blamed on a shortage of workforce skills. Equally, the textile industry was not held back by lack of support from banks and financial institutions; it may even have been too easy for Courtaulds to finance its ambitious investment and acquisition programme. If there was a weakness in the financial system, it lay in the failure of shareholders and their advisers to scrutinise more rigorously the claims made by Courtaulds and others about the benefits of large-scale mergers.

The impact of public policy was unhelpful. Successive governments cannot be criticised for the failure of Kearton’s grand design since they were not responsible for initiating or implementing it. They were, however, sympathetic to the plan and, by partially conceding the industry’s demands for protection, they may have encouraged unrealistic ideas of what could be achieved through scale and standardisation. The government would have done better to have left the industry alone, as the German government did, instead of intervening in an erratic and inconsistent way. According to a study carried out by the Organisation of European Co-operation and Development, ‘Government policies for the textile and clothing industries have primarily affected the rate at which change has occurred, rather than the direction or broad thrust of change’.⁶⁵ Britain’s experience confirms this judgement. Government intervention had the effect of delaying the textile industry’s integration into the world market; this is a theme which will recur in later chapters.