United Kingdom Industry
Large parts of the British industry have had problems since the early 1990s, after a relatively successful period in the 1980s and 1990s, when the industry was modernized and productivity increased. High costs and low demand both in the export market and in the country created new difficulties for the manufacturing industry in the 2010s. The imminent exit from the EU further contributed to the problems.
In 2017, the manufacturing industry employed about 9 percent of the workforce. Nowadays, manufacturing of aircraft, trains and other vehicles, electronics, optical instruments and chemicals (mainly pharmaceuticals) dominates. Food processing and paper production are other important industries.
The British car industry had problems in the 1970s. The automotive industry’s strategy of concentrating production to a few factories helped to turn several British plants back in the early 00s. But several foreign companies, including Toyota, Nissan and BMW, which, for example, produce Rolls Royce, have vehicle manufacturing in the UK. The aerospace and automotive sectors are among the industries that have grown the most in recent years. The weapons industry is also growing. The most important manufacturer is BAE Systems. In 2017, according to the Peace Research Institute Sipri, Britain was the world’s third largest arms exporter after the US and Russia.
In early 2019, however, Honda announced that it would close its car production in British Swindon in 2021. The factory then had 3,500 employees, but since a closure will also affect many subcontractors, several thousand more jobs are at risk. The Japanese company’s decision has been at least partially motivated by Brexit.
- COUNTRYAAH: List of top trading partners of United Kingdom. Includes countries that imported most shipments from and exported most goods to the country.
Large parts of the British industry today have foreign owners. In 2007, for example, the last parts of the British steel industry were sold to Indian Tata, which also bought car brands such as Jaguar and Landrover. At the same time, British companies have moved manufacturing to low-wage countries, while development, design and more often have remained in the UK.
In 2016, Tata announced that the company would close its British steel mills, which had then been at a loss for several years. However, it was saved, including after merging with a German company.
Since 1998, the United Kingdom has a trade deficit. For many years the exchange rate of the pound was high which led to British exports becoming more expensive, while imports became cheaper. However, the trade deficit has continued to be large even in recent years as the pound lost in value and crises in the euro zone and the US has reduced demand for British goods.
The falling exchange rate for the pound, especially after the referendum on EU membership in June 2016, has made British goods cheaper in the export market. However, in the fall of 2016, this had not led to any new major export successes. Instead, exports fell by a few percent while imports to the country increased by just over 1 percent.
The most important export goods are machinery and transport equipment, chemicals, pharmaceuticals, oil and other fuels as well as medical and technical equipment. There is also a significant export of food, especially Scottish whiskey.
More than half of the trade is done with other European countries, particularly with EU members such as Germany and the Netherlands. Germany is also the most important importing country. The United States is also one of the UK’s leading trading partners. An increasing proportion of imports come from China.
The country has also had a significant current account deficit for several years, which includes, in addition to trade in goods, such as tourism and trade in services. It has gradually risen in recent years, and the period 2010-2015 averaged almost 4 percent. In the past, it has to some extent been offset by the large foreign investment made in the UK, but these have declined since the 2008 financial crisis.
FACTS – FOREIGN TRADE
US $ 468 031 M (2018)
US $ 652 144 million (2018)
– US $ 108,752 million (2018)
Commodity trade’s share of GDP
41 percent (2018)
Main export goods
computers and other electronic equipment, vehicles, pharmaceuticals, workshop products, crude oil,
Largest trading partner
EU countries, in particular Germany, the Netherlands and France, the USA and China
London with its rich cultural life, its historic buildings and many museums is the most visited tourist resort, but also other parts of the country have a lot to offer. The beautiful scenery around the Lake District in the northwest, Edinburgh and the Scottish Highlands also attracts many visitors. In Northern Ireland there is the new Titanic Museum, which opened in Belfast in 2012.
In recent years, more and more tourists have made their way to Northern Ireland to visit recording locations for the TV series Game of Thrones.
In 2014, tourism contributed just over 7 percent of GDP and employed almost 3 million people. In 2016, over 39 million tourists visited the UK, most from EU countries, the US and Australia.
FACTS – TOURISM
Number of foreign visitors per year
55558 000 000 US dollars (2016)
The share of tourist income from exports
7.5 percent (2016)
The austerity policy continues despite economic growth
When Finance Minister Osborne presents his image of the UK economy at the beginning of the month, he can show positive growth figures. Forecasts indicate that growth for 2013 will be around 1.4 percent, and that GDP will grow even faster in 2014. However, Britain’s GDP is still longer than it was before the crisis. Osborne continues with its austerity policy, but at the same time promises that more students will be entitled to free school meals, married couples will be given new tax relief and the ceiling for when you have to pay property tax will be raised. Tankesmedjan Institute of Fiscal Studies (IFS) comes shortly afterwards with a report, which states that there is hardly more room left for new savings in the public sector and that the next government must consider a tax increase. It is also pointed out that many of the cuts will become even more noticeable in the coming years.
New play by Cameron on immigration
Prime Minister David Cameron, in an article published in The Financial Times, makes new proposals to limit immigration to the UK. He again talks about introducing new rules that will make it more difficult for EU citizens to get unemployment benefits. According to the proposal, they must live in the country for at least three months before being able to receive “a-cash”, and that they may not stay for more than six months if they do not have “reasonable opportunities” to get a job, and that everyone who be caught begging or lacking housing should be expelled and not allowed to return for at least one year. He argues that all this can be done without breaking any EU rules. Liberal Democrat leader Nick Clegg also supports the proposals presented in the article. The new restrictions that are planned are very much about the UK worrying about a major immigration from Bulgaria and Romania when the restrictions that apply today will be removed at the turn of the year. Cameron encounters bribes from László Andor, the European Commissioner for Social Affairs, who warns of hysteria, claiming that Britain benefited from immigration from Eastern Europe and now risks being portrayed as the EU’s “nasty country”.
Cameron threatens to intervene against the Guardian
Prime Minister Cameron says he is considering an intervention against the Guardian if the newspaper does not stop publishing information from documents leaked by Edward Snowden (see June 2013). He claims that the magazine helps Britain’s enemies and makes it difficult to keep the country safe.
The British economy is growing
New economic figures show that GDP grew by 0.8 percent in the third quarter of 2013. This is the highest growth figure for the UK since 2010, which means that GDP increased during all of the first three quarters of the year.
High electricity prices create debate
Households’ increasingly high electricity bills are creating debate, especially as it puts additional pressure on families with low incomes. John Major, Conservative Prime Minister 1990–1997, makes a proposal at the end of the month in which he proposes that power companies pay a one-time tax on their profits to help the government withhold the cost of fuel subsidies (people living on income support of various kinds receive an extra contributions if the temperature is below zero degrees more than seven days in a row). Previously, Labor leader Ed Miliband has demanded a freeze on electricity prices. Almost all major electricity companies have announced price increases of between 8 and 10 percent. Major’s speeches, however, are considered to strike his own party leader by saying that he knows how ordinary people are when they have trouble getting the economy together,
The NSA scandal is growing
The Guardian reveals in August that the United States has paid £ 100 million to GCHQ, according to the newspaper, to ensure access and influence over British intelligence material. Several UK telecom companies including BT, Vodafone Cable and the US company Verizon Business admit that they have provided GCHQ with information. After the British government said it was considering legal action against The Guardian, the newspaper editors choose to destroy the hard drives where leaked documents were found. Guardian journalist Glenn Greenwald’s partner had been detained a few days earlier by the police for nine hours, in accordance with legislation intended to combat terrorism.
The lower house says no to military intervention in Syria
David Cameron is withdrawing Parliament from the holiday because of the Syrian crisis. The lower house will decide on a possible military intervention following suspicions that the regime used chemical weapons against the rebel bricks east of the capital Damascus on August 21, with hundreds of deaths as a result. In this case, an intervention would take place without a mandate from the UN Security Council. However, what is being discussed is a limited operation to mark that the regime has crossed a border, but one that has weak support in public opinion. Labor, which initially supported the government’s proposal for an intervention, says it can only happen after UN weapons inspectors submit their report. The government loses the vote with the numbers 285 against and 272 for. 30 Conservative members and nine Liberal Democrats have voted no. In addition, some thirty Conservative members have voted to abstain. To explain the government’s defeat, many assessors refer to the trips before the Iraq war, when Blair’s statements that Saddam Hussein’s regime had access to weapons of mass destruction proved to be incorrect.
Protests against hydraulic cracking
The search for shale oil and gas provokes protests in Sussex and in several other places in England. By the middle of the month, dozens of protesters were arrested in connection with actions. Those who are positive about the exploitation of deposits see them as the solution to the country’s energy problems, others, like the protesters, worry about the consequences for the environment.
Dispute between Spain and Gibraltar
Diplomatic tensions arise between Gibraltar and Spain. The British Crown Colony has dumped a number of concrete blocks into the sea off Gibraltar (which it is said to form an artificial coral reef), Spain responds by tightening border controls leading to hour-long queues. Basically, the dispute is about fishing rights and both Gibraltar and Spain claim the sea area.
A new heir to the throne is born
The Duke and Duchess of Cambridge, William and Kate, have their first child, a son named George Alexander Louis. In April, the succession changed, so that the monarch’s oldest heir was allowed to inherit the crown regardless of gender. In the future, a British monarch will also have the right to marry a Catholic. But only Protestants are allowed to become king or queen.
Abu Qatada is expelled to Jordan
Muslim preacher Abu Qatada is expelled to Jordan. This is possible after the UK and Jordan have concluded an agreement which means that evidence obtained during torture cannot be used against him (in September 2014 he is released by a Jordanian court for lack of evidence) (see also April 2013).
Ready for same-sex marriage
Parliament’s two chambers adopt the bill that legalizes same-sex marriage in England and Wales.
The British Post Office is privatized
The government decides to privatize the post office. Sales are expected to give the equivalent of just over SEK 30 billion to the Treasury. Trade unions oppose the decision and threaten with strike.
Signal voltage authority in eavesdropping scandal
A major interception scandal is revealed when a former CIA employee Edward Snowden revealed that the US National Security Agency (NSA) is provided with large amounts of telephone and internet data from nine major US internet companies, including Google, Microsoft, Yahoo and Facebook. According to information in the British newspaper The Guardian, which has access to the documents leaked by Snowden, also the British signal tensioning authority GCHQ (Government Communications Headquarters) has had access to the same material since 2010. The scandal is growing further as it turns out that the NSA also intercepted its allies, including several major EU countries.
New savings are announced
At the end of the month, Finance Minister Osborne announces new savings of more than £ 11 billion for the 2015/2016 financial year. Most ministries get their funding cut by up to 10 percent, while schools and aid are protected and even get more money. The health care sector is also given priority, while new cuts must be made within the welfare system (among other things, one week’s waiting time before before unemployment benefits can be obtained). Those employed by the government, schools, police and hospitals will not automatically have their salaries raised (exceptions are made for the military). Special support will be put in place for the construction of new housing at reasonable costs, and a number of new infrastructure projects will be launched, including the expansion of the high-speed rail network from London to Leeds and Manchester.
Compensation for Kenyan torture victims
The UK government agrees to pay damages to over 5,200 Kenyans who were tortured by British colonial forces in connection with the mau-mau uprising in the 1950s. The damages negotiations started after a British court in October 2012 ruled that three Kenyan torture victims could sue Britain. A total of almost £ 20 million will be paid to the victims. British Foreign Minister William Hague apologizes to the victims.
Soldier killed in terrorist act
An employee of the British Armed Forces is murdered in Woolwich, south-east London. Two men are arrested at the scene of the act. One of the arrested says he killed the man in revenge for British soldiers killing Muslims in Iraq and Afghanistan every day. The incident causes Prime Minister Cameron to cancel his state visit to France and return home. Britain’s Muslim Council condemns the deed. Later that day, the police meet with supporters of the English Defense League (English Defense League, EDL) in Woolwich. At the end of the month, EDL organizes demonstrations in, among other places, London, when EDL and other groups try to play on xenophobia, and especially anti-Muslim sentiments. Reports come of a fire bomb attack against a mosque in Grimsby, and other acts of violence targeting Muslims.
The EU issue divides the Conservative Party
The question of a referendum on EU membership continues to divide the Conservative Party. It draws attention when two Conservative ministers, Education Minister Michael Gove and Defense Minister Philip Hammond, say in mid-May that they would vote for an EU exit if they could vote on the matter now. 114 Conservative MPs show their displeasure that the issue of a referendum was not mentioned in the Queen’s speech during a vote in the House of Commons. Even if EU critics do not win, this is seen as a setback for Prime Minister Cameron. However, the Conservative Party has presented a bill to make the promise of a referendum binding. But it will be presented in the lower house as a motion from an individual member, as the Liberal Democrats do not support the proposal. 19 prominent business representatives; Richard Branson, among others, criticizes the week after EU-critical MEPs for prioritizing “politics over the economy” and argues that it would hurt the country financially if the UK leaves the EU, and that the British government should instead do more to strengthen the EU’s common market. Shortly thereafter, when the government presents its new legislative proposals in the Queen’s speech, it contains a point about tougher rules for immigrants (including that more people who do not have the right to reside in the country should be expelled, measures to prevent immigrants from accessing services they are not considered have the right to and that private landlords must check that their tenants have a residence permit). This is seen as an attempt to reclaim the initiative from Ukip.
Success for Ukip in local elections
Local elections in England and Wales on May 2 will be a setback for the ruling parties, while Labor is progressing somewhat. What attracts the most attention, however, is the success of Ukip, which receives 147 municipal seats, 139 more than in the 2009 elections. The party has played on the strong dissatisfaction with EU membership and immigrant-critical moods. Voting is low, not even every third voter votes.
May refuses to expel Islamist preacher
The United Kingdom concludes an agreement with Jordan, which provides a mutual guarantee of fair trial. The agreement is seen as a step in the British government’s attempt to expel radical Muslim preacher Abu Qatada to Jordan, where in his absence he was sentenced to life imprisonment for terrorism and accused of further crimes. British courts, however, have refused to expel Qatada as evidence used against him may have been obtained through torture. In 2009, the European Court of Human Rights said he could not be deported because he risked torture in Jordan. Also, a British court, The Court of Appeal, is on the same line on April 23, and does not grant a permit for Interior Minister Theresa May to bring the matter to the Supreme Court.
The UK’s credit rating is lowered
The International Monetary Fund (IMF) predicts that economic growth will be lower than expected. The IMF urges Finance Minister Osborne to do more to stimulate the economy, something he believes the UK has room for. Shortly thereafter, the credit rating agency Fitch announces that the UK is downgraded from the highest credit rating, from AAA to AA1. In the past, Moody’s has done the same.
Margret Thatcher dies
Former Prime Minister Margaret Thatcher dies at the age of 87. The reviews of the so-called Iron Lady vary. While some see her as a great politician who reshaped British society in a way that in the long run created greater prosperity in the country, others consider her as a person whose tough politics broke the cohesion of Britain. In several places, street parties are held to celebrate her passing. She is buried April 17. Among the more than 2,000 funeral guests are Queen Elizabeth, Prime Minister Cameron, former Prime Ministers John Major and Tony Blair, and several former US presidents.
Tighter rules for EU immigrants
At the end of the month, Prime Minister Cameron announced a tightening of immigration rules from other EU countries; Those who move to the UK must show that they are really there to look for work, that they speak English and that they have a reasonable chance of getting a job. The measures are considered to be aimed at citizens of new EU countries such as Romania and Bulgaria and are seen as a way for the government to undermine the support of the EU-critical Ukip, which has a strong headwind in public opinion. Cameron also talks about limiting the right to free healthcare for immigrants who do not work and that private landlords must take responsibility for their tenants being legally located in the country. New labor immigrants should not queue for a municipal housing until they have lived in the country for at least two years. A 2012 study shows that only 13,000 immigrants from new EU countries in Eastern Europe receive unemployment benefits. Labor and the Liberal Democrats have also made an impact on immigration.
Protests against “bedroom tax”
The opinion is growing towards a so-called bedroom tax that is due to be introduced in April. This means that people who receive social assistance will have their rent allowance reduced if they have an extra bedroom in the apartment or house. The purpose of the new tax is both to lower the cost of social assistance and to help the needy families to get larger housing. The new tax, and housing policy, are being criticized from several directions, and it is feared that many will have to change housing because they will not be able to afford to stay.
New savings and reduced corporate tax
In the middle of the month, Finance Minister Osborne presents new measures to accelerate housing construction, among other things, the state will offer interest-free loans to those who buy newly built housing. Corporate taxes are to be reduced by 1 percent from April 2015. Most ministries have their appropriations reduced by 1 percent, exceptions are made for schools and care.
New regulations for the press
The three major parties are preparing a new regulatory framework for the press that does not go as far as the proposal as the one proposed by Judge Brian Leveson in his report (see November 2012). The deal will be completed on the same day as the lower house would have voted on the government’s proposal for a new regulatory framework, a vote that looked to be a defeat for Prime Minister Cameron. But there will be no legislation on the new press ethical regulations, but a royal treaty (Royal Charter) that applies to England and Wales. The parties have agreed on a clause which means that no amendments can be made unless they are supported by at least two thirds of the members of both chambers of Parliament. A new independent supervisory board will be created to ensure compliance with the press ethical rules, and that may require newspapers that have broken the rules to publish an apology in an advanced location. It should also be able to impose heavy fines for violations. The new regulations apply only in England and Wales. Most of the major media groups were critical of the new regulatory framework. Representatives of the press who participated in the previous discussions on the press ethical rules have not been allowed to participate in the final negotiations. However, it will be voluntary for them to join, and several newspaper houses say they are going to boycott the new press committee.
The Anglican Church criticizes cuts
Justin Welby, the new Archbishop of the Anglican Church, criticizes the government’s plans to cut down on a number of grants, as they affect children in vulnerable families to such an extent.
EU resistance is growing
Cameron achieves success when EU countries agree to cut just over 3 percent in the Union’s long-term budget for the years 2014-2021, especially as the European Commission has proposed an increase of just over 4 percent. He also says he has ensured that the UK is allowed to keep its previous budget discount. Despite the agreement, the British will still pay more to the EU than before due to a previous settlement made during Tony Blair’s term as prime minister. According to an opinion poll, only one third of Britons want the UK to remain in the EU.
Yes to same-sex marriage
The lower house votes to introduce same-sex marriage with the vote numbers 400 for and 175 against. 136 Conservative members voted against the proposal, as did most of the Northern Ireland members. The fact that so many Conservative members voted against the proposal raises new speculation about whether Cameron can remain as party leader
British military to Mali
The British government decides to send 330 militia to Mali to contribute to the international force on the ground in the country (see further Mali: calendar).
The British will have a referendum on the EU
Cameron promises a referendum on membership by the end of 2017 at the latest, if the Conservatives win the 2015 election. Until then, he will try to renegotiate the terms of British membership. Both Labor and the Liberal Democrats are critical of the promise, which they believe creates an uncertainty, not least for business.
A ceiling for grants is introduced
A majority of the lower house votes to temporarily set a ceiling of 1 per cent on how much the allowance for people of working age may be increased (this concerns, among other things, job seeker’s allowance, income support, parental benefit and sickness benefit). Four Liberal Democrats voted against the opposition.