Britain’s Economic Growth Record

Abstract

Over the decades countries in general and the UK in particular have become concerned about their relative growth rates. From a UK perspective the problem has been one of explaining why the UK growth rate has lagged behind its major competitors. Growth is seen as bringing many of the benefits required by society, in the form of improvements in real incomes and the ability to provide goods and services, to all sectors of the economy without having to resort to high levels of taxation in order that redistributions of income take place. The generation of growth may follow from a highly motivated, highly skilled and highly productive workforce, coupled with innovation, quality capital investment, and a high level of skill training and education. Thus the UK’s slower growth rate has been blamed on the lack of these factors being in place, the result of which has led to the UK experiencing a decline in its percentage of total world manufactures. This chapter, therefore, concentrates on the major factors which have been put forward to explain the UK’s poor growth record and in particular it highlights the performance of the UK economy over the 1980s. In this time period two contrasting points of view can be taken, firstly, that the Thatcher Administration has shaken British industry out of its lethargy and produced a manufacturing sector which is ‘leaner and fitter’.