At the Llanwern steelworks outside Newport, a crane is dismantling buildings that once anchored one of the world's great industrial complexes. Workers describe watching their own workplace disappear in real time, while the site's owner, Tata, runs the plant at only half capacity amid high energy costs and competition from cheaper imported steel. It is a stark illustration of a problem that extends far beyond south Wales: the long, uneven decline of British manufacturing.
A sector in retreat
Manufacturing accounted for roughly 30pc of UK jobs in the 1970s. Today that figure sits at 7.8pc, and the sector contributes just 8.3pc of national economic output, dwarfed by services at 81pc. The shift has hollowed out towns built around single large employers, from steel to cars to chemicals, and left behind communities with few equivalent jobs to replace what was lost.
Carmaking offers a vivid case study. Nissan's Sunderland plant, once held up as a model of post-Thatcher industrial success, is now running at half capacity, with executives pointing to electricity costs as a central problem. Stellantis has closed its Luton Vauxhall factory, and Jaguar Land Rover is cutting thousands of jobs while contending with tariffs and overseas competition. Ministers have been courting Chinese manufacturers such as BYD and SAIC's MG brand to fill the gap, a strategy that raises its own tensions: Western carmakers worry about being undercut by state-supported rivals, and there are open questions about whether Britain should follow the European Union toward tariff protection.
Chemicals, steel and the China effect
The chemicals industry, once a pillar of British manufacturing, has seen 25 factory closures since 2021 and a 60pc fall in output over the same period, according to the Chemical Industries Association. Industry figures including Ineos founder Sir Jim Ratcliffe have accused China of building excess production capacity and exporting the surplus at prices domestic firms cannot match. Economists are divided on what this means: cheap imports can benefit consumers, but they also raise strategic questions about dependency on a trading partner whose interests do not always align with the West's.
Steel sits at the sharpest edge of this pressure. British Steel, now under government control, is reportedly losing hundreds of thousands of pounds a day, and ministers have committed billions of pounds in support while weighing when to retire ageing blast furnaces in favour of electric arc technology. These are not quick fixes. They require sustained investment and political patience that has often been in short supply.
Can government reverse the trend?
Labour's leadership has promised what it calls a new era of industrialisation, invoking Harold Wilson's 1960s pledge to modernise industry through the "white heat" of technology. That earlier experiment, built on state-orchestrated mergers that created giants like British Leyland, is now widely regarded as having failed to deliver lasting growth, and most of the resulting companies collapsed or were broken up within decades.
The current proposals include billions in funding for shipbuilding and a "buy British" procurement push, alongside rhetoric about leading the world in artificial intelligence. Trade unions are pressing for something more sweeping: nationalisation across energy, water, transport and telecoms. Industry bodies are sceptical that speeches and strategy documents alone can shift business decisions. As Make UK's Stephen Phipson has put it, reindustrialisation depends on thousands of individual firms choosing to invest and hire - and many of those decisions are currently being delayed rather than made.
What is genuinely different this time
Not every sector is contracting. Pharmaceuticals, broader life sciences, defence and aerospace engineering continue to grow, supported by research-intensive business models less exposed to low-cost import competition. That divergence suggests any credible industrial strategy needs to be selective rather than nostalgic, backing sectors where Britain retains genuine advantages instead of attempting to resurrect industries that global economics has already moved beyond.