THE

BRITISH
ECONOMY
American and British Studies
Lecturer: Nguyen Hoang Hai

Nguyen Hoang Hai

Table of contents

01 02
The modern Social class and the
economy workforce

03 04
The different Other aspects
economic
institutions
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Introduction

• The British economy is complex and

shaped by historical shifts and
continuous adaptation.
• Cyclical economic fluctuations play a
significant role in the national
experience.
• Recent economic challenges,
particularly the financial crisis
(2007-10) and Brexit (2016), have
created a complex economic
landscape.
Gross domestic product of the United Kingdom
from 1948 to 2023 (in million GBP)
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Introduction
• From Rural to Industrial: Britain's
economy was primarily agricultural
until the 18th century. Economic
growth was supported by trading
networks established through its
colonial empire.
• The Industrial Revolution:
Fuelled by manufacturing
innovations, abundant resources,
and strong trading systems, Britain
underwent an industrial revolution
in the late 18th century. This led to
This bridge across the river Severn at Ironbridge, Shropshire, England,
mass production, urbanization, was part of the industrial revolution. It was the first major iron bridge
and made Britain a globally in the world, represented the use of iron in industrial architecture, and
dominant economic power. was built by Abraham Darby in 1779.
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Introduction
• Social Impacts: Industrialization
had both positive and negative
consequences. While it generated
wealth and technological progress,
it also led to harsh working
conditions, population shifts, a
decline in traditional industries,
and social unrest.
• Relative Decline: By the late 19th
century, Britain's industrial
dominance waned in the face of
competition from countries like
Germany and the USA. However,
Britain's financial and commercial Working conditions were suboptimal in 19th-century factories.
expertise remained influential
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worldwide.
01
The modern
economy
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Three ideas

Economic Economic Recent

policies structure performance

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Economic
policies
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Economic policies
● Shift from Laissez-Faire to Intervention

● Conservative vs Labour:

q Labour: Initial focus on central planning and

nationalization of essential industries, but
gradually adopted more market-oriented
policies.

q Conservative: Preference for free markets

and minimal intervention, but have
intervened when necessary.

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Economic policies
● Nationalisation vs. Privatisation:

q Nationalisation: Supported by Labour.

Transfer of key industries (rail, coal, utilities,
etc.) to public ownership, run by the state
for the benefit of all. Aim: address
inefficiencies, protect services.

q Privatisation: Supported by Conservative.

Sell off state-owned industries to private
owners with shares sold to the public. Aim:
boost efficiency, reduce government
spending, encourage share ownership.

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Economic policies
● Both Labour and Conservative
governments have moved away from fully
public or fully private models since the
1990s.

● Mixed Approaches: Privatization continues

with some adjustments, and both major
parties now embrace more private sector
involvement in public services.

● Public-Private Partnerships (PPP) &

Private Finance Initiatives (PFI): Aim to
save money and improve services, but face
criticism over cost and potential for
collapse.
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Economic
structure
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Economic structure
The United Kingdom's economy combines
public and private sectors.

● Public Sector: Less than one-third of the

economy is state-run (with potential for
further decline due to privatisation, e.g. the
case of Royal Mail)

● Private Sector: The dominant force (two-

thirds of the economy), made up of
individual businesses, publicly traded
companies, and privately owned
companies. It accounts for around half of all
new jobs.
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THE CASE OF ROYAL MAIL (2014)

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 GROUP WORK
Case study: Royal Mail
Royal Mail was privatised in 2014 and is
argued to be the most ambitious
privatisation since the railways in 1994.
The floating on the stock exchange
allowed retail investors to buy shares and
ended nearly 500 years of state control.
However, the government did retain 30%
of shares and 10% were given to Royal
Mail employees.
Discuss the possible advantages and
disadvantages of this privatisation.

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Two ideas

Advantages
It would be in a better position
to raise any necessary funds to
invest in new technology and
compete more effectively for a
share in the growing market.
Disadvantages
• The nature of its
infrastructure made Royal
Mail a natural monopoly
• The privatisation could lead
to a loss of jobs

It is not clear-cut whether the privatisation of the 500-year-old

service can be called an outright success or failure.

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Economic structure
Foreign Investment:
● Britain attracts significant foreign
investment in many areas such as
electronic and high-technology equipment,
leisure facilities, hotels, finance and cars,
with foreign corporations controlling
approximately 10% of the economy and
workforce.

● Brexit raises concerns about the future of

foreign investment into the UK The once-flourishing British car industry is now much reduced, with
British company collapses. But the Mini production line at BMW,
Cowley, Oxford continues to produce new models which sell well
worldwide and other foreign-owned car companies have success-
fully opened in the north-east and the Midlands.
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Economic structure
Owners and Control:
● Shareholders: Real owners of businesses
where they invest, but usually more
interested in dividends than the company's
daily operations.

● Boards and Management: Companies are

run by boards of directors and senior
executives.

Bombardier is the last remaining major train maker in the

UK. Its production plant is based in Derby and it won a
big contract to provide trains for the London west–east
Cross- rail tube service (under construction).
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 Recent
economic
performance
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Recent economic performance

The United Kingdom

The UK's post-WWII economy
has been plagued by cycles of
recession, inflation,
unemployment, trade
imbalances, and low
productivity.

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 Recent economic performance
● Structural Changes: The decline of
traditional industries (textiles, steel,
shipbuilding, coal mining) in areas reliant on
a single industry has caused hardships
despite government revitalisation efforts.
For example, employment in the coal
industry declined from over 200,000 in the
1980s to under 10,000 by 2015.

● Global Competition: Increased competition

from abroad has shrunk Britain's share of
Data source: UK Department for Business, Energy & Industrial Strategy (BEIS)
global exports (from 15% in 1970 to under
5% in 2010), highlighting the need to
revitalize manufacturing.

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Recent economic performance
● Energy: While North Sea oil and gas
provided temporary relief, declining
reserves and the environmental risks of
shale gas pose new challenges. UK oil
production peaked in 1999 at 2.9 million
barrels a day, declining to 1 million barrels
by 2020.

● Recovery: While the economy improved

into the early 2000s, slowdowns returned
later in the decade.

● 2008 Financial Crisis: The global recession

hit Britain hard, leading to bank bailouts The Lloyd’s Building, London is the base for an association of
and a massive budget deficit. Recovery has individuals who provide insurance for a wide range of
activities, such as oil exploration and shipping.
been slow and uneven.
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Recent economic performance
● Contemporary Concerns (2014-present):
Mixed economic signals include high
employment with low wage growth, falling
inflation, and a shrinking trade deficit.

● Other indicators of economic health had

improved. Inflation had moved to 1.5 per
cent in 2014; the unemployment rate had
fallen to its lowest level since the 2008
financial crisis with 2.02 million
unemployed or 6.2 per cent of the Inflation rate (% consumer price index), 2014–19

workforce; but youth unemployment was

(at one quarter of the total) still high.

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02
Social class and
the workforce

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What factors determine social class in the UK?
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Social class and the workforce

The British class

system
Class in Britain has been defined
by factors such as wealth;
ownership of land and property;
control of the means of
production as against the sellers
of labour; education; job or
professional status; accent and
dialect; and birth and breeding.

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Social class and the workforce

Working class Upper class

Middle class

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Social class and the workforce

Earlier centuries
Hierarchies were based on
wealth, the ownership of
property, aristocratic privilege
and political power.

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Social class and the workforce
19th century

Working class Upper class

Divided into skilled and Still largely defined by
unskilled workers birth, property and
inherited money

Middle class
Split into lower, middle
and upper sections,
depending on job
classification or wealth

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Group Occupational characteristics
1 Higher professional and managerial occupations

2 Lower professional, administrative and managerial occupations

Middle class
3 Intermediate occupations

4 Small employers and non-professional self-employed workers

5 Lower supervisory and technical occupations

6 Semi-routine occupations
Working class
7 Routine occupations

Never worked and long-term unemployed ‘underclass’ with

8 little social mobility.

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 Modern social
class
It seemed that class identification
was as much a matter of different
social habits and attitudes as it
was of occupation and money.
The old gaps between the classes
have lessened and class today is a
more finely graded hierarchy
dependent upon a range of
characteristics.

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 Modern social
class
New model:
• Economic capital: income,
assets, savings
• Cultural capital: interests and
activities
• Social capital: networks and
connections
This resulted in seven classes,
reflecting greater complexity
within British society.

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Nguyen Hoang Hai
Changing Work Skills &
Patterns Unemployment Training Future Outlook
Traditional models Unemployment Skills shortages High-tech
have given way to rates have are a major industries and
more diverse fluctuated, hitting concern, as the service trades are
patterns: certain areas and educational likely to grow,
increased self- demographics system doesn't with increased
employment, (youth, ethnic fully meet the demand for skilled
part-time work, minorities) harder. needs of a workers.
temporary jobs, modern industry.
and a decline in
manual labour.

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Nguyen Hoang Hai
The influence of social class on the economy

● Constantly evolved

● Inequalities of opportunity
Social class
● Greater complexity

● Dominated by service sector

Workforce & ● A mix of various types
employment ● Significant wealth inequality

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 DISCUSSION

To what extent does the performance of the national

economy affect individual Britons’ daily life?

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03
The different
economic
institutions
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04
Other aspects

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 Thanks!
Do you have any questions?

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Nguyen Hoang Hai