When the Iron Lady Ruled Britain (24 page)

I had known Brian Bottomley since before my American assignment. Shortly before going to America I had spent some time in Coventry, reporting that city at the geographic heart of England as a metaphor for Britain's post-war rise and fall. First, the regeneration – hope, Basil Spence's cathedral, pioneering comprehensive schools, shopping precincts, the ring road, the municipal theatre, car factories – for two decades Coventry had been the future. Then the disillusionment – shoddy materialism, the vandalized and violent walkways, unemployment, hopelessness. The day I met Mr Bottomley proved to be the worst day of his life. He was the managing director of a large machine-tool company, the subsidiary of a national giant. Or rather he had been. A few hours before I called, he – and several hundred of his workforce – had been made redundant. At first he was too hurt to tell me what had happened. Suddenly, he rose, closed the door to his outer office, and – on the strict condition that I revealed neither his name nor his industry – told me his story. It was a microcosm of the accelerating disaster that was overwhelming British industry. Here was a man, then aged fifty-three, of immense enterprise and ability, who had worked his way from the shop-floor via night school – he had left school at fourteen – gaining an incomparable knowledge of his business, from the smallest technical detail, to design, production and a first-hand knowledge of foreign markets. ‘I have tried very hard, and feel that it has been a waste of time,' he said. He accused Mrs Thatcher of killing the national golden goose.

We went our separate ways, and, as the unemployment figures rose and British manufacturing crumbled, occasionally I thought of Mr Bottomley and what a national defeat his personal disaster symbolized, regretting that I was unlikely ever to learn what happened to him. However, a few months after my return from America, he telephoned. This time he had a story of remarkable success to tell. He was still in machine tools, running his own business, and taking on new workers proportionately faster than almost any employer in Britain. He was back where he started, in Atlantic Street, Broadheath, near Manchester, a few yards from where he served his apprenticeship. With his son, Nigel, the firm's financial director, at his side, he brought me up to date. Back in 1981, after ten weeks out of work, he had been taken on as managing director of a firm called Kearns-Richards, another machine-tool subsidiary of a large conglomerate. As soon as he arrived, the bottom fell out of the business. He was charged with the unpleasant task of laying off three hundred people and trying to sell the company. The more he looked at the figures he had prepared, the more confident he was that he himself could save and run the company, pulling off what is known as a management ‘buy-out'. The parent company was sceptical and protective, worried that Mr Bottomley might ruin himself in the attempt.

They were not the only ones with cold feet. The Bottomleys rapidly discovered the large gap between the theory and reality of Britain's supposed ‘enterprise culture'. Although Mr Bottomley had adapted his proposals to the realism of the market, supporting a machine-tool company was considered to be as desirable as cuddling up to a gorilla. Eventually, one bank had faith: the Bottomleys had their deal. When I met him again, he had increased the workforce of thirty-seven by one hundred people, and profits were handsomely exceeding forecasts. Twice during my visit Mr Bottomley had led me with pride to the cavernous works, where huge machine tools, worth upwards of £200,000, awaited shipment to all parts of the world. Asking him why he had risked so much so late in his career was almost a superfluous question. ‘The alternative was to sell my house, buy a smaller one and hibernate. I love work and the industry, and have always wanted to do something on my own,' he said. There were still frustrations: the Ministry of Defence had been three weeks late paying a bill; while the Bottomleys waited, the Inland Revenue gave them a mere three hours to pay a much smaller amount, threatening to send in the bailiffs; the bank had pressured them when a storm in the Bay of Biscay held up an export order – although the bank knew the money was on its way and that the firm had security in buildings, plant and machinery far exceeding its overdraft. The Bottomleys were convinced also that foreign governments unfairly subsidized their overseas competitors. But these problems seemed like small clouds in a blue sky.

Nine months later Mr Bottomley phoned again. The roller coaster had taken another dip. The bank was bouncing cheques although profits were good and the firm was still secure: subsidies to Spanish and East German companies by their governments had cost him four orders in the home market – the foreign companies were quoting finished prices below the cost of materials and labour. The Bottomleys were embroiled with the bank and the government, losing business while they battled for survival. They had incurred £55,000 in fees to financial consultants. I returned. Once again the Bottomleys were struggling back to their feet. A deal was about to be struck with venture capitalists, which would free them from the bank's clutches; orders were picking up; profit forecasts, despite the time wasted fighting unnecessary financial battles, looked healthy. As the Bottomleys told me the history of the past year; I began to understand what unusual resilience is required to run a manufacturing business. There were battles with the bank, dealing sometimes with faceless people, sometimes with ignorant ones – the Bottomleys had one horrific encounter with a man with the power to break them, who had outlined the history of
their
company to
them
getting virtually every fact wrong. There were battles with civil servants – Brian said: ‘I vented my spleen on them. I told them that in other countries civil servants are aware that their salaries are paid by enterprise.' We were again touring the works, when he suddenly burst out: ‘I cannot honestly believe that a country of our size can live by service industry. The City seems geared up to shipping money out of the UK rather than investing it here.' It was an anguished cry from a man in the front line of British manufacturing.

The Bottomleys' perspective has made them exceedingly patriotic: Nigel wears a union flag badge in his lapel, and the company's logo is based on the same motif. They buy everything British they can, though they have to go to West Germany for the computer controls and electronics they need for their machines. From Atlantic Street, where warehouses employing one hundred people handling foreign goods have replaced factories employing one thousand people manufacturing British goods, even the notion of protectionism looks attractive. Why is it, asked Brian, that the British will buy anyone else's goods except their own! He told of a recent Kearns-Richards triumph, when they were the only company to meet the deadline to equip an aircraft engine factory in Singapore. Japanese and German firms, supplying other machinery, were both late. The Bottomleys released a press notice, which was almost disregarded. ‘If it had been the other way round, you can bet the press would have made a great song and dance,' said Brian. When I first met Nigel, he had, much to his dismay, just been forced to buy a foreign camera because there were no British ones left. Once, they even made cameras on Atlantic Street.

Frank Smith, like the Bottomleys, had exports and banks engraved on his heart. He had given up working as a manager for others because he was tired of being instructed to sack people. ‘No way am I in business to put blokes on the street,' he said. With a British Coal Enterprise loan, like Mr Philpott's, he had started Yorkshire Reproduction Furniture in a Wakefield mill, part of which had been converted into twenty-three units for small enterprises. He was fifty-nine, an age when most men are thinking of taking it easy. Three years later, by then employing nine people, he was a deeply frustrated man. He had products that British and foreign retailers wanted, he had the know-how and the workforce: all he lacked was £50,000 to re-equip. ‘We could have seven-day working till kingdom come. I could double my staff,' he said. The business, he said, was on his mind twenty-four hours a day. ‘I go to church on Sundays praying, “For God's sake get me through next week.” It's daft that, but that's how it gets you.'

His anger was aimed at the high street banks and the government. The high street banks for their pusillanimity, and the government for failing to provide alternative sources of capital for small business. A natural Conservative, he was nonetheless thinking of voting Labour because the Labour Party promised an enterprise bank. I frequently encountered businessmen who made the same basic complaint against banks – that they are not in the business of taking risks, simply of underwriting success – but few people gave rein to their feelings with such picturesque enthusiasm as Mr Smith: ‘I've not a good word for any bank manager walking: they're a load of washouts. There's one or two I'd gladly strangle.'

A company with a national chain of furniture superstores wanted to place a large order with Mr Smith, but, without further plant to machine the parts, he could not get the work through his small factory quickly enough. ‘I could go out of business just dealing with that one order,' he said. He knew there were export markets for his furniture – he had been invited to exhibit in Dallas – but without seed money, for demonstration furniture, an agent, promotion, a visit, he could not even explore the possibilities. A retailer fifteen miles away was importing £300,000 worth of chairs annually from Cyprus and Malta: Mr Smith knew also that, with new plant, he could match the order for price. His lack of £50,000 was, therefore, costing the country lost exports and creating sizeable markets in Britain for foreign goods. He had approached the government through his MP, and had been told to go back to the high street banks.

‘It's criminal, bloody criminal,' he said, ‘the banks simply look at last year's balance sheet. Unless they understand the industry, they have no idea. If there's a risk, they don't want to know. They're not looking at the future of the industry or the commitment of the company. Nothing is going to happen until the banks start taking a calculated risk. There must be lots of firms like mine. We're importing more than we're making. It's all wrong. I'll keep going, but it's not the firm I envisaged.' Why, I asked him, as I had asked Brian Bottomley, at his age did he struggle on? ‘There's no way I can stop. The work's out there. There's a huge market for my stuff, and there are thirty or forty thousand Yorkshiremen out of work.'

Two floors below Mr Smith's small workshop, another tenacious Yorkshireman ran a business he had started against the odds. Derek Barville is crippled: his right arm is withered, and he lives in a wheel-chair. He was made redundant at the age of forty-five after twenty years with one company, an educational publisher. The following morning he started his own enterprise from his dining-room and garage, using outworkers. What he does is known in the trade as ‘print finishing', a grand way of describing activities like assembling board games, punching the printed tops of egg boxes out of sheets of cardboard, distributing calendars, and dispatching mailings. His workers, called ‘table hands', sit at long trestle tables carrying out these repetitive tasks on piecework rates. Many are ‘married ladies', who, during school holidays, are replaced by sixth-formers. ‘It looks,' said someone who had seen this subterranean exercise, ‘like a Victorian sweatshop.' But the atmosphere was friendly and the workers cheerful. There were up to sixty people on Mr Barville's books, with about forty working at any one time.

In a labour-intensive, low-tech business, capital had not been a problem, but, like other small entrepreneurs, Mr Barville complained about government pressures – especially VAT (value-added tax). He had to pay his wages immediately, while bills might not be settled for two to three months, yet no leeway was allowed for VAT payments. He had recently asked for a delay until his customers settled, and received a curt letter back telling him to pay at once or face proceedings. He was, therefore, not only gathering taxes on behalf of the government but having to borrow money from the bank to do so. ‘I was paying for the privilege,' he said. The National Federation of Self-Employed and Small Businesses publishes two pieces of guidance for their members, one headed ‘Taking On An Employee' and the other ‘Starting Up In Business'. To the lay eye, they look like instructions to pass through a minefield, with headings and notes, arrows and alternatives: tax and VAT, insurance and health, fire safety requirements and planning licences, union regulations, and provisions covering race and disablement, and many arcane obligations besides.

Mr Smith's and Mr Barville's landlord was a 130-year-old textile firm, M.P. Stonehouse, whose red-brick mill is a short walk from Wakefield city centre. There a visitor could imagine himself in the nineteenth century: he waits in a tiny room overlooking the dark mill yard. A notice advises: ‘Would visitors please note that suppliers of wool and tops cannot be seen on Thursdays.' The firm had a long waiting list for its enterprise units, and had had three inquiries in the week before I visited. Its managing director, James Sugden, said: ‘By many laws we were the sort of business that should have been closed, a private textile concern that could have quietly faded away.' But they had invested in computer-aided spinning machinery, introduced shift working to justify the investment, and found new markets. Turnover had doubled in four years, and staff, inevitably, declined. But the firm still employed 180 people, and, with 250 working in the units, the premises were providing employment for almost as many workers as in the mill's heyday. Mr Sugden was convinced Thatcherism had worked, both in his own business – in which surviving firms were leaner and more efficient – and beyond. ‘We live more excitingly, more dangerously. Ten years ago we would get orders twelve to eighteen months ahead. It made us complacent. Now we never know more than three months ahead, sometimes three weeks,' he said.