Made in Britain
Britain was once the global giant of the textiles industry, but found itself unable to compete with the relentless growth of cheaper overseas producers. Now though, shifting global economics and the desirability of the Made in Britain brand mean the UK’s textile industry is enjoying a renaissance.
Matthew Field, Investment Manager, Rathbones
As the world’s first industrial nation, Britain was a manufacturing powerhouse. In the 19th century, the UK dominated the international textile trade and the industry was the nation’s largest employer.
At the heart of this success was cotton spinning. Using steam power, Manchester earned a place in history as the world’s first centre of mass production and the city and surrounding towns became known as ‘Cottonopolis’. This was the epicentre of the UK’s cotton industry at a time when the nation was responsible for 80% of global cotton yarn and fabric production.
By the time the UK cotton industry reached its peak in 1912, it was producing 8 billion square yards of cloth a year — the equivalent of more than 1.6 million football pitches.
The outbreak of the First World War, however, proved disastrous for British textiles. Cotton could no longer be exported to nations around the world. Many countries that had previously been lucrative markets opened their own factories and began producing cotton themselves — and more cheaply.
The industry was further damaged by a boycott of British cotton led by Mahatma Gandhi as part of his campaign for India’s independence from British rule.
In the years between the First and Second World Wars, 800 British cotton mills closed — and 345,000 workers left the industry.
By the 1960s, the textile industry still provided jobs for 1.5 million people and as recently as the late 1970s, Marks & Spencer — the nation’s favoured purveyor of shirts, socks and underwear — could still boast that 90% of its clothing was produced in the UK.
The impact of cheaper overseas producers was growing though and despite spirited ‘Buy British’ campaigns from Marks & Spencer and others, the UK could not compete with lower labour and raw material costs in countries such as Bangladesh and China. During the 1980s and 1990s hundreds of thousands of textile jobs were lost as UK retailers and fashion brands moved production to Asia.
In the painful decades of deindustrialisation, textile production was reduced to a shadow of its former self — and it was not alone. From ship-building to steel-making, car production to kitchen appliances, British manufacturers found themselves unable to compete with cheaper overseas producers.
In this respect the UK suffered more severely than many other developed economies. In what University of Cambridge academics Michael Kitson and Jonathan Michie have called the ‘age of decline’, the process of deindustrialisation happened faster in the UK during the period from 1973 to 2007 than in most other Western countries — and the loss of jobs was much greater.
Coventry, which was a major manufacturing centre and one of the birthplaces of the British car industry, has been described as a ‘microcosm of deindustrialisation’. The city’s 15 largest companies shed 55,000 jobs between 1975 and 1982, in a city of around 300,000 people, according to a 2012 report by academic Dr Anton Popov, then of Warwick University.
Protectionism versus globalisation
It is hardly surprising then that Brexit campaign rhetoric about protecting British jobs found a receptive audience in areas that suffered particularly badly from the decline or loss of local industries. Coventry, for example, voted to leave the European Union by 85,097 votes to 67,967.
As we examined in more detail in the Winter 2016 edition of Rathbones Review though, history has shown that protectionist policies are not the way to safeguard jobs in Britain — or anywhere else. One of the lessons of the Great Depression of the 1930s is that creating barriers to free trade has a negative impact on economies and jobs.
Today, the single most powerful argument against protectionism is the interconnected nature of the modern world. Trade tariffs risk damaging domestic companies relying on foreign suppliers as much as they do overseas exporters.
Globalisation and prosperity
We should remember that globalisation has brought unprecedented prosperity. It emerged for good reasons and we believe that with some adjustments it will continue to enhance living standards well into the future.
Policy-makers now appear to be recognising the need to address some of the factors that have driven people to push back against globalisation. If, for example, we take the example of rising economic inequality, the UK government has begun to address this through increases in taxes for those owning a second home or investment property.
The idea is to cool the housing market so more first-time buyers can afford to get on the housing ladder. At the same time as action is being taken to address these concerns, we are also seeing encouraging developments in British manufacturing, with both factory production and employment numbers increasing this summer. Supercar-maker McLaren has unveiled proposals for a new factory in Sheffield and aircraft giant Boeing has announced plans to open its first manufacturing plant in the UK.
UK textiles industry growing
In the textiles industry too there are positive signs. We are unlikely to ever see a return to global dominance in mass production, but there is certainly evidence of a growing market for clothing produced in the UK.
The UK fashion and textiles sector is enjoying significant growth, with the value of exports increasing to just over £9 billion in 2016 — up 28% since 2012, according to the UK Fashion and Textile Association.
Around 10,000 new jobs could be created in the UK textile industry by 2020 and an extra £500 million contributed each year to the economy over that period, according to a report for businessman Lord David Alliance’s eponymous Alliance Project and the N Brown Textiles Growth Programme.
Liberal Democrat leader Sir Vince Cable, former Secretary of State for Business, Innovation and Skills, has said the revival of UK textile manufacturing is “real and growing”.
“The textile industry was widely thought to be extinct in the UK, but some outstanding entrepreneurs, using new technology plus modest government help under coalition industrial strategy, have turned things around,” he said.
Economic factors support revival
Global economic factors are helping this revival. The cost of production in overseas factories has increased, as wages have risen, and weaker sterling has compounded this effect for British retailers and fashion houses buying abroad — while UK-produced goods are now cheaper for overseas buyers.
The report for Lord David Alliance found that UK retailers are increasingly recognising the hidden costs of relying on lower-cost overseas suppliers and that considerations such as security of supply were judged to outweigh higher production costs in the UK.
The case for using UK suppliers is particularly strong for ‘fast-fashion’ retailers, who place a premium on the shorter lead times from design to delivery made possible by using British manufacturers.
Online fashion retailer Boohoo.com, which sells rapidly changing fashion styles primarily aimed at those aged between 16 and 30, is one of the businesses using British suppliers to cut delivery times.
“We are proud to source over 50% of our products from the UK,” said CEO Carol Kane, who added that the industry was going from “strength to strength”.
“Having our suppliers nearby is a crucial part of our business model. We are a fast-fashion business with a focus on speed to market, so being able to manufacture our products in the UK allows us to lead the way in offering the very latest trends and styles.”
While the growth in UK textile production has been widely welcomed, the industry has come in for some criticism. Earlier this year, Nick Beighton, Chief Executive of online fashion retailer ASOS, and Anders Kristiansen, Chief Executive of high street chain New Look, joined forces to warn about unsafe working conditions in textile factories in Leicester, which is home to a third of domestic textile production. They called for stronger measures to protect workers before their companies can increase investment in UK production.
A University of Leicester report in 2015 suggested that, while there had been a striking revival in clothing manufacturing in the UK, the majority of those working in Leicester’s garment industry earned around £3 per hour at a time when the National Minimum Wage was £6.50 an hour.
The Alliance Report, however, found that many of the new jobs being created in UK textiles were highly skilled jobs in areas of high unemployment.
Upmarket high street retailer Jigsaw is another company that has benefited from the faster turnaround times made possible by using UK manufacturers. Last winter, when a premium quality £39 Scottish-made woollen hat became a best-seller, it was able to reorder and replenish supplies with a four-week turnaround, rather than what could have been four months using an overseas supplier.
Jigsaw’s Chief Executive, Peter Ruis, said the UK remained a textile leader with a “unique and differentiated” point of view.
While the bulk of Jigsaw’s clothing is still produced overseas, Mr Ruis said the company valued the speed to market and ease of communication provided by British manufacturers — and more importantly still, their creativity and quality.
For consumers, some simply liked the Made in Britain label, but for many the big attraction was the uniqueness of products like tweed or Shetland wool, he said.
“I think we should stop talking about the issue in terms of cost. At the end of the day we only use high-quality suppliers. The UK is very good at certain things: Northampton-made shoes, worsted flannels from the South West and tweeds from across the UK. These are beautiful artisan products.”
Cotton spinning returns
In the town of Dukinfield, just outside Manchester, a small moment of history was made last year when English Fine Cottons brought commercial cotton spinning back to the UK, more than 30 years after the last cotton mills closed in the 1980s.
The new facility is in Tower Mill, a refurbished Victorian cotton mill first used for cotton spinning in 1886. Today’s operation uses state-of-the art technology to produce luxury yarn for domestic and global markets.
The company says it has brought cotton spinning back to its spiritual home and is “breathing new life into a British industry that used to be the envy of the world”.
The company’s yarns are being used in a new range of luxury scarves from Oscha, a family-run business based just outside Edinburgh.
Zoe Masters, who founded Oscha with her father, said: “We know that provenance is very important to our customers and sourcing as locally as possible is something that we’re particularly passionate about, so we’re always looking for high-quality, natural and local yarns.
“We’re delighted to able to support English Fine Cottons and see this industry kick-started in Britain once again.”
Tracy Hawkins, Vice President — Sales and Marketing at English Fine Cottons, said the company hoped that using cotton spun in the UK would be a successful strategy for businesses like Oscha.
“After a year in production, we’ve come across more and more businesses like them — that have a loyal base of customers who not only love their products, but the story behind their products. We’re proud our yarns are reaching companies that are as passionate about provenance as we are,” she said.
Looking ahead, few believe the future for British textile producers lies in mass production. In the view of Jigsaw’s Peter Ruis the nature of the global textile industry and of the UK economy means it would be very hard for volume production to be competitive again.
Instead, he believes the future lies at the premium end of the market, saying: “Our heritage is around top-end, high-quality textiles. In this area we can compete with anyone in the world.”