‘Buy British’: A failed demand management policy?

David ClaytonUniversity of York

David Higgins*Newcastle University

Address for correspondenceNewcastle University Business School,5 Barrack RoadNewcastleNE1 4SEEmail: david.higgins@ncl.ac.uk

This paper is preliminary. Please do not cite without the permission of the authors.

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There has been a substantial debate on the causes of Britain’s poor economic

performance after 1945. Weaknesses in government policy, particularly with respect to

supply-side improvements, have featured prominently in explanations for this decline.

Broadberry and Crafts, for example, have argued that successive governments in the post-

war period accepted a social contract with trade unions to maintain high levels of

employment but the adverse consequences of this were that it increased the bargaining

power of trade unions, lowered the costs to firms of accepting restrictive practices and

generally encouraged high levels of ‘X’ inefficiency, especially over-manning and low

effort.1 A corollary of this was the growth of employment in the public sector, which

Thirlwall claimed led to a Balance of Payments constraint: the expansion of the non-

market sector was a symptom of the inability of the market sector to grow as fast as

productivity growth without the economy coming up against a Balance of Payments

Constraint. This constraint operated because Britain’s income elasticity of demand for

imports was 1.6 per cent, whereas world income demand for UK exports was 1 per cent.

Between 1965-74 for example, industrial productivity in the UK grew at 4%p.a while

output increased by only 1.7%. Thirlwall argued that the industrial sector could not have

grown at 4% and thereby have retained more of its resources because of the consequences

such an expansion would have had on the Balance of Payments. A 4% rate of growth of

national output would mean that imports would have increased at 6.4% pa but exports at

only 4% This, of course, was not sustainable.

In this article we do not intend to revisit these debates. Rather, we examine an

aspect of demand management policy which has been largely neglected: ‘Buy British’

campaigns in the mid 1960s and early 1980s.2 In theory, an aggressive marketing policy

by government, extolling the virtues of British-made products, could have alleviated the

Balance of Payments constraint. Moreover, such a policy could have prompted a supply-

side response from British manufacturers. For example, an advertising campaign which 1 Broadberry and Crafts.2 We elide ‘Buy British’, ‘I’m Backing Britain’, and ‘Think British’.

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reinforced consumer preferences for British products would have provided some

insulation from foreign competition and this would have facilitated investment and

innovation. Despite the potential appeal of these benefits we argue that there were a

number of major impediments to ‘Buy British’ campaigns. It is useful to divide our

analysis into two distinct subperiods: the 1960s, when Britain did not belong to the EU,

and the 1980s, when it did.3 For both periods, British governments were hesitant to

endorse a full-scale marketing campaign. Part of the explanation for this was surveys

indicated that British consumers at best had only limited preference for domestic

manufactures. A further problem was that successive British governments were at best

reluctant and at worst hostile to launching a BB campaign. Nonetheless, there were also

more mundane reasons for reluctance to become engaged. For example, which non-

governmental bodies should be asked to participate? The CBI, for example, did not

countenance involvement in the 1960s, but was more collaborative in the 1980s.

This article is organized as follows. In section I we briefly review the marketing

literature on country of origin. In section II we discuss the historical record of Buy

British by reference to campaigns in the 1930s. Sections III and IV analyze the reasons

why the campaign in the 1960s and 1980s, respectively were weak. Conclusions are

presented in Section V.

I Country of Origin and Marketing Literature

A substantial marketing literature has developed on country of origin. The study of this

topic by marketing scholars did not began in the early 1960s.4 Ernest Dichter stated, ‘The

little phrase “Made in…” can have a tremendous influence on the acceptance and success

of products over and above the specific advertising techniques used by themselves’.5 But

it was not until Schooler’s seminal study in 1965 that empirical testing of the country of 3 The EEC became the EU.4 Although, from the 1890s, contemporaries recognised, ‘Made in Germany’. Williams, Made in Germany.5 Dichter, ‘The World Customer’, Harvard Business Review, 1962, 40 (4): 116.

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origin effect began.6 Subsequently, the volume of research into this concept increased

rapidly: over 700 articles had been published by 2003 and in 2008, International

Marketing Review published a special issue on country of origin, and a recent search of

GOOGLE scholar using ‘country of origin’ appearing in article titles only, yielded 3,460

publications.7 Among marketing scholars there is general agreement that, ‘One of the

oldest and most persistent concerns in international marketing is whether the origin of a

product makes it more or less favourable to consumers’.8

Much of the early literature simply replicated Schooler: ‘single-cue’ studies were

employed in which country of origin was the only product cue. Unsurprisingly, this

simple methodology appeared to generate convincing results. According to Julie Pharr,

‘Decades of research scrutiny…led to one…unequivocal conclusion: a product’s country

of origin can influence consumers’ evaluative judgements of the product’. 9 However,

the ‘second unbundling’ encouraged marketing scholars to question the validity of single-

cue studies. The pioneering study of Papadopoulos and Heslop was critical of the

traditional country-of-origin literature on the grounds that this concept was too narrow and

misleading since it assumed a single place of origin. Their development of product-country-

image recognized that a country’s image need not be positive for all products: ‘Made in

France’ has positive connotations when applied to wine and cheese, but less so with

mechanical engineering.10

Subsequently, marketing scholars focused on multiple-cue studies in which

country of origin was one of many variables. A study by Godley et al, on the

determinants of the consumption of luxury products in seven countries revealed that

design and brand were ranked first and second, respectively, while country of origin had

the lowest rank.11 Growing complexity in global-supply chains suggests that country of

origin needs to be decomposed into: country of design, country of assembly, country of 6 Schooler7 Pharr, ‘Synthesising’: p.34. International Marketing Review 25 (4), 2008.

8 Koschate-Fischer, Diamantopoulos, and Oldenkotte, ‘Are Consumers’: 19.9 Pharr, ‘Synthesising’: 34.10 Papadopoulos and Heslop: book: 4-8; Dinnie, ‘Country of Origin’: 6-10; Jaffe and Nebenzahl, National Image: 53-55. 11 Godley et al.

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parts, and country of manufacture. 12 Other scholars argued that country-of-origin is

increasingly considered to be that country which consumers typically associated with the

product – irrespective of where it was actually manufactured. In other words, it was

consumer perception of origin which mattered.13

One theme which emerges from the marketing literature is that the interaction

between company brands and country of origin is sufficiently complex to cast doubt on

whether it is meaningful to distinguish the effects of either. Thus, origin clues are firmly

embedded within well-known brand names and the effect of the former cannot be

eliminated by changing the country of manufacture: telling experimental subjects that a

Toyota car was manufactured in the US may not stop consumers believing that the

Toyota is a Japanese brand. But the decisions of multinational companies to alter the

location of their manufacturing/assembly operations can result in country of origin

having less meaning than a particular brand. If consumers use brand name as a proxy for

country of origin this may undermine the information communicated by the latter. It is

recognised that many important brands are associated with countries possessing strong

country-of-origin images. This observation may explain why multinationals do not

support origin labelling since global sourcing is partly based on low-cost countries with

weaker country of origin image. For example, it has been claimed that ‘Mazda’ and

‘Honda’ become less attractive when these automobiles were produced in Mexico or the

Philippines.14

12 Aichner, ‘Country of origin’; 13 Usunier, ‘Relevance in business’: 62; Magnuson et al, ‘What? I thought’; Essousi, et al, ‘Brand Origin’: 973. 14 Ahmed and d’Astous, :79; Thakor and Kohli, :17; Essousi: 974; Godely et al; Samiee; Lee et al.

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II Historical Precedents

There can be no doubt that prior to 1914, British firms owned many of the world’s most

famous trademarks and brands. In other cases, images of Royalty, for example, Queen

Victoria, Prince Albert, and Queen Alexandra appeared on Empress Brand Condensed

Milk, Horniman’s Tea, and ‘Alexandra Oil. Similarly, images of the British empire, and

its most famous soldiers and explorers – for example, Stanley and Captain Scott,

appeared on adverts for Huntley and Palmers biscuits and Wills’s ‘Gold Flake’ cigarettes.

Pears soap was ubiquitous with its advert: ‘Good Morning! Have you used Pears’ Soap?’

The advertising campaigns of individual firms were complemented by

nationalistic campaigns – promoting the excellence of British manufacturing as a whole.

Thus: images of Britannia were used on Pears Soap, and Goddard’s metal powders and

furniture creams, and Jon Bull was depicted in a boxing ring knocking-out a ‘Made in

Germany’ boxer on Moreland’s ‘England’s Glory’ matches. In the pre-1914 period these

campaigns reached their zenith with the ‘All British Shopping Week’ in 1911 – again

featuring images of John Bull and Britannia. A press advert stated that the All-British

Shopping Week:

Which is being organized in every town of any importance throughout

the British Isles, will be the greatest Shopping Event of the Century ,

because it is a form of practical patriotism in which both the purchaser

and seller can participate to their mutual advantage’15

Many of Britain’s premier manufacturers endorsed this campaign because trade rivalry

between Britain and Germany was becoming intense in the post-1900 period.

15 Opie : 17

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However, a government sponsored campaign to promote consumption of British

goods did not begin until the 1920s against the backdrop of rising unemployment and

growing concern about government finances. The Federation of British Industries (FBI),

who were at the forefront of this campaign, reported that in 1924 Britain imported almost

£300m of manufactures. For the FBI, if only a small proportion of this expenditure could

be diverted from foreign to domestic producers, unemployment and government finances

would improve; the benefits to be obtained from a government sponsored advertising

campaign would far outweigh the initial outlay. The FBI proposed that their scheme

should be organized along the following lines: there should be an allocation of funds

sufficient to run an extensive advertising and publicity campaign on a national scale for

two years; this fund to be managed by a small group of people representing relevant

government departments, manufacturing, labour, newspapers and publicity experts. The

campaign would focus on newspaper advertisements and posters supplemented by

broadcasting and publicity campaigns. Finally, it was recognized that, ‘Every effort to be

made to encourage, and where necessary coordinate with the central campaign,

campaigns for the particular products by individual traders and individual industrial

centres’.16

Supplementing these private demands for a ‘Buy British’ campaign was the

formation of the Empire Marketing Board, which was established in 1926 to promote

inter-empire trade. A variety of motives have been discerned in this campaign. For

example, that imperialism was a solution to Britain’s economic difficulties and a as a

counter-ideaology to socialism17 (Constantine, 1986: 197). More recently, Trentmann has

argued that the EMB and related campaigns were based on consumer nationalism18

The EMB originated from the unwillingness of Baldwin to effect the

recommendations given by the British government to the Imperial Economic Conference

in 1923 (fn here). In lieu of this Baldwin agreed to allocate a sum of £1m per annum to

16 Times, 12 June, 1925: 13. 17 Constantine, ‘Bringing the Empire’: 197.18 Trentmann, Free Trade Nation: 231.

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finance schemes promoting the sale of Empire produce in Britain. As the scheme

developed, it was agreed by the Imperial Economic Committee that, ‘the United

Kingdom producer should have first place in the home market [and] ..that…precedence

should be given in the United Kingdom market for foodstuffs in the following order:

Home Produce – First Place; Empire Produce – Second Place; Foreign Produce – Third

Place’. It was inevitable that agricultural produce should feature prominently in the

scheme because Britain was a major importer of foodstuffs. Consequently, efforts which

helped the Empire to sell more to the mother country would be reciprocated to some

extent by larger exports of British manufactures to the Empire.

The EMB was proactive in its marketing and publicity campaigns. It instituted a

campaign of direct approach to bulk purchasers of foods and commodities to direct their

purchases toward the Empire; it conducted market intelligence reports fr [particular

commodities and it established trade committees. These committees maintained close

contact with the British retail trade and advised on the marketing of Empire produce and

the prospects of marketing new commodities of Empire origin. There is general

agreement that the EMB’s publicity campaigns were highly visible, but there are doubts

about its effectiveness. For example, although the Board was permitted an allowance of

£1m, much smaller sums were actually authorized: in 1927, only £400,000 was issued

and between 1928 and 1931, between £500,000 and £600,000 was approved; and the fact

that the EMB was short-lived, just six years. At a broader level, determining the precise

impact of the Buy British campaign is complicated by, for example, variation in UK and

Empire and non-Empire relative costs.19

III The post- 1945 context

Following reconstruction and the ending of austerity measures between 1945 and 1952,

the British economy entered a boom period which lasted until the mid-1970s, though

19 Ref.

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signs of long-run relative weakness were becoming apparent. Perhaps the most important

indicator was the relatively low levels of productivity (data). In turn, this fundamental

indicator of efficiency manifested itself in other ways. For example, between 1950 and

1980, Britain’s share of world trade in manufactures declined from 25.5 to 10.2 percent.20

More worryingly, it was recognised that British manufacturers were increasingly unable

to satisfy domestic demand and this was reflected in the rapid growth of import

penetration. Thus, over the period 1955-1980, import penetration for the manufacturing

sector increased from 8 to 30 per cent.21 This sectoral picture conceals substantial

differences between individual industries: between 1963 and 1974, the food, drink and

tobacco industries generally recorded a decline in import penetration, whereas metal

manufacture, engineering and electrical goods, vehicles, clothing and footwear

experienced substantial increases in import penetration.22

In the post-1945 period, the first ‘Buy British’ campaign began in July 1966 in

anticipation of the removal of the import surcharge in December 1966. This surcharge

was introduced to try and ameliorate the worst effects of the ‘Maudling Boom’ which

resulted in a potential Balance of Payments deficit of £800m, and when devaluation was

not envisaged. The surcharge was set at a single rate of 15 per cent. The surcharge was

non-discriminatory and applied to manufactured products and many semi-manufactures,

though food, tobacco and raw materials were exempted. 23

From its inception, the scheme was very modest in its aims: We do not expect to be able

to cut imports below their current level (EW4 /71: 112). The focus was to be on : appeals

to loyalty: there is a fund of good will; that people want to help the Balance of Payments

but they don’t know how! And appeals to interest: encourage consumers to reconsider

purchasing domestic goods: ‘Many have improved out of all recognition since you last

bought them; there are many new products on the market’. Turning to slogans, it was

emphasized that it was imperative to avoid ‘Buy British’, or make any appeal to the

‘Dunkirk spirit’. A variety of slogans were considered: Why not support a home industry 20 Williams, et al., Why are the British?: 117. Recent debates see Booth. 21 Williams, et al, Why are the British? 118-119.22 Thirlwall, 1977: 308-310. 23 Roberts, ‘Unwept, unhonoured and unsung’.

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– and support our foreign exchange’, or ‘Choose a local product when you can – and

keep our imports down’.24

However, no sooner was the scheme being contemplated but objections were

raised by civil servants. One concern was that any advertising scheme was nugatory. For

example, was there any basis for believing that the public would respond to a Buy British

campaign? There was the danger that any effort to promote British products would

backfire: it was thought that purchase of foreign goods was a symbol of affluence.

Moreover, the volume of advertising contemplated by the government seemed desultory

in comparison with that of private companies. In 1965, the government contemplated

spending between £0.5m and £0.75m on the campaign. In the same year, Unilever

expended £13m on their own products.

Because large sections of British manufacturing as a whole were under threat, it

was imperative that a national campaign, orchestrated by a body representing British

industry as a whole should spearhead a ‘Buy British’ campaign? The Confederation of

British Industry (CBI). This body was an obvious choice because it emerged from the

FBI which was proactive in campaigns during the 1930s. However, the CBI was firmly

against any such policy because it conflicted with its policy of trying to liberalise trade.

In 1966, in response to an approach from HMG, it stated:

A general campaign would however conflict with [our] view that

commercial freedom should be as complete as possible. British goods

must sell on their merits and their price in relation to those of our

competitors, not because they happen to be British (EW.4.71: 183

The government also approached the Retail Distributors Association and the Drapers’

Chamber of Trade, who both had the necessary national infrastructure to effect this task,

24 TNA, EW4/71, ‘A campaign to keep imports down?’ 8 July 1966.

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but they too did not want to sponsor a general BB campaign. The response of these three

bodies was disappointing: by operating at ‘arms length’ government influence exercised

via these bodies would have avoided complaints from other states that it was flouting its

international agreements. 25

Therefore, the only other solution was for an appropriate body in HMG to take

this task on. But, apart from Treaty constraints, there was considerable reluctance on the

part of HMG to do this. HMG had reviewed the role of public authority expenditure

decision and the extent to which British industry could be encouraged to purchase more

domestic producer goods, but neither of these options held much promise (EW4 .71:111-

112).

The first major concern was ambivalence about the purpose of a BB campaign. It

was believed that a direct BB campaign would be unappealing and ineffective and so

emphasis was placed on indirect appeals to loyalty and interest : ‘Give our goods a trial’

and ‘Why not support home industry and save our foreign exchange’. Simultaneously,

though, the view was expressed that, ‘obviously everyone must feel free to buy foreign

goods where no home-made substitute is available. Nor would we expect to be able to

cut imports below the current level. (EW 4/71: 112). It was claimed that Britain had one

of the most sophisticated markets in the World and a BB campaign would only succeed if

British goods really were the best (but was this the case? And did Britain’s trade record

support this)/

A second reason for hesitation was the lack of hard survey data, which heightened

official concerns about a ‘Buy British’ campaign: what beliefs do the public have about

‘British’ products – and were these sufficient to justify a campaign? Without suitable

knowledge no campaign could be launched. The government recognized that advertising

campaigns did have the ability to enhance the marketing of products already perceived to

be successful (EW4/71: 115), but it appears that official beliefs about the purchasing

25 Britain was a founding member of the EFTA, before it acceded to the EEC in 1973. During the 1960s Swedish industries argued that the British government was flouting EFTA rules on state support for public authorities and nationalised industries. Times, 26 April, 1968; 24 July, 1968;

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habits of British consumers were based on surveys over 20 years old. Certainly, it is the

case that the government never conducted its own survey. Responses to private

campaigns, for example, those conducted by the Daily Express, indicated that the public

became bored if they went on for too long (EW4/71: 180). Even more bizarrely, HMG

thought the typical British consumer was irrational:

Our impression is that “foreign goods” (Italian shoes, French cars,

Scandinavian furniture), are often bought as a symbol of affluence and

prestige and not because they are better value than our own products.

It is possible a campaign could help to counter this irrational element

in consumer buying’ (EW 4/71: 138)

A campaign which drew attention to the difference between British and foreign

goods might raise sales of the latter, ‘as a symbol of affluence, many people are inclined

to go for what is foreign; and to mark goods “Made in Britain” could well be counter-

productive until this general attitude can be changed. Concern was also expressed that

such a campaign ‘may be understood as implying that domestic products are inferior to

imported goods and therefore need an artificial boost. It may give the impression that the

Government is taking desperate measures’. But HMG Ministers appear to have taken a

diametrically opposite view: ‘British products should always be bought when they are of

good value even if their prestige is less than that of goods from overseas’26 (This

statement is bizarre and shows a complete lack of knowledge of even the basic economics

driving purchasing decision).

The Nationalised Industries (NI’s), appeared to offer some salvation for a ‘Buy

British’ campaign, especially because Britain no longer possessed an empire and

therefore its ability to rely on imperial sentiment to support this campaign was reduced.

In any case, Britain’s share of industrial countries’ exports to Australia, New Zealand,

and South Africa, between 1962 and 1976, declined by the biggest magnitude compared 26 TNA, EW 4/71: 124;126;140. This statement is bizarre and indicates a complete lack of knowledge about the factors which affect consumers’ purchasing decisions.

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to her shares of exports to other countries.27 This reinforces the perspective that the

empire was not a ‘soft’ market’. 28 In addition, because of their public ownership, they

represented a more captive market which could be used to enforce a ‘Buy British’

campaign. Viewed from this perspective, the NI’s were a more attractive bet compared

to the uncertainties of launching a mass marketing campaign aimed to persuade British

consumers to buy more British goods. Moreover, nationalised industries were immune

from growing international attempts to prohibit discriminatory public procurement in the

1960s and 1970s.29

It was recognized that ‘value for money’ was the key principle governing the

purchasing decisions of the NI’s, but other factors also had an influence, for example,

industrial efficiency. (Cmnd 3291; FV 66/33, jpegs 37-38). In any case, it is difficult to

believe how British governments could have directed its public purchasing and those of

the NI’s more strongly in favour of domestically supplied products. In the year ending

September 1971, 94 per cent by value of all government contracts for supplies, and 100

per cent of works contracts, went to British firms.30 Direct foreign purchases were

exceptional, and those which exceeded £1m required ministerial approval. In contrast, the

threshold for orders placed domestically was £10m.31 The principal reasons why the

public sector sometimes directed its purchases abroad were because products of particular

specifications were not always available from the British market and sometimes products

were needed urgently, but it was also acknowledged that ‘There are inevitably occasions

when British industry is frankly uncompetitive’. (FV 66/31 jpeg 60)

Taking the NI’s as a whole, their total purchases in the early 1970s were around

£2,000m, of which over 90 per cent went to domestic suppliers. Indeed, of all the NI’s,

there were only two notable exceptions: British Overseas Airways Corporation, were

27 Over this period, the percentage decline in Britain’s share of industrial countries’ exports to the world, industrial countries, other European countries, and Australia, New Zealand and South Africa were 40.2, 27, 33, and 57 per cent, respectively. Calculated from Williamson, et al, Why are the British? 16.28 Magee and Thompson, ‘A Soft Touch?’ See also Thackeray and Toye. 29 Nationalised industries were exempt from regulations on public procurement until the 1970s?30

FV 66/31 jpeg 52. 31

FV 66/31 jpegs 45-46.

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expenditure on foreign supplies (principally fuel and overseas crew accommodation),

accounted for 35 per cent of total expenditure, and British Steel Corporation were 70 per

cent of its expenditure was devoted to purchases abroad (FV 66/31, jepgs 59).

Unsurprisingly, the preference for domestic supplies was pronounced in the Ministry of

Defence which placed orders of £60m and £1,000m, to foreign and domestic suppliers,

respectively. The official supplier of stationary, HMSO, had developed close, large-

purchase relationships with the British firms Strachen & Henshaw, Linotype Machinery

Ltd, Timson, and Bell Punch Co Ltd, as well as entering contracts worth £3m per annum

with Bowaters. Similarly, the National Coal Board had consistently pursued a policy of

using home grown timber to the greatest possible extent and hoped to eliminate these

imports within five years. (FV 66/31 jpegs 52-60). Consequently, it was stated that

instructions to the NI’s to follow a Buy British policy were not necessary (FV 66/31).

In any case, there are other grounds for believing that the NI’s were not suitable

targets for a BB campaign. The first was that Britain was largely self-sufficient in the

products supplied by the NI’s: steel, coal, electricity. Second, and most worrying was the

observation that import ratios of consumer products were increasing rapidly. In 1966, the

Department of Economic Affairs (DEA), reported that the industries suffering most from

imports were, in descending order of the value of imports in 1965: clothing (73m); motor

vehicles (28m); shoes (24); carpets (15m); agricultural machinery (14); gramophones

(13), radios and televisions, and laboratory and scientific equipment (11m each), and

motor bikes, plastics, toys, and watches and clocks (10m each).

It is difficult to assess the general appeal and effectiveness of the ‘Buy British’

campaign. The campaign’s chairman, Sir Robert Maxwell, chairman of Pergamon Press,

was supported by Marks & Spencer, Littlewood’s and The Co-operative Wholesale

Society. Marks & Spencer were already renowned for their support of British industry

and claimed that 99 per cent of their merchandise was made in Britain. Similarly, Jack

Cohen, chairman of Tesco had directed his stores to, ‘give British goods and produce the

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best instore positions and the greatest volume displays’.32 Nonetheless, two major

weaknesses in the campaign were observed by some contemporaries. First, if consumers

were to be encourages to buy home-produced articles it would be necessary to distinguish

them from imports. But no general legislation existed to achieve this.33 Second, ‘Buy

British’ does not mean ‘Made in Britain: increased imports of semi-manufactures. (Heinz

Baked Beans). Consequently, the ‘Buy British’ campaign of the mid 1960s, was

subsequently summarized by civil servants as, ‘short lived…its effectiveness was never

publicly made known’34

IV Into the 1980s

By the late 1970s, the government was again contemplating the need to stem

imports. Between 1975 and 1979, the total value of imports (current prices) almost

doubled from £22,696, to £44,175. During the same period, the deficit on the balance of

trade averaged £2,861m. Between 1970 and 1980, imports as a percentage of home

demand increased from 16 to 26 per cent. The CBI was concerned that the growth in

imports was undermining the viability of Britain’s manufacturing base, especially in the

chemical process-plant industry.35

Unlike the un-informed campaign of the mid-1960s, the government

commissioned a MARPLAN survey to determine the importance of country of origin on

consumer purchases. Table 1, from which the key features are: preference for ‘British’

varied according to age. There was a strong ‘emotional’ attachment to British products

for those aged 45 years and above. Almost two-thirds of respondents in this category

stated they ‘always’ or ‘preferred’ to buy British. In contrast, only 33% of respondents in

the age group 16-25 expressed a similar preference. Another feature is that there are no

pronounced gender differences. Finally, taking the sample as a whole, there was an

32 Times, 2 February, 1968: 13.33 Trade Descriptions Acts, 1968 and 1972 replicate earlier legislation: origin to be indicated on imports only if a mark or trade description is false or misleading.34 TNA, INF 13/233. Proposed Buy British Campaign, 19 March, 1975 (jpeg 309). 35 MRC, CBI, mss.200/c/3/DDG6/125 (jpeg 001)

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almost equal division between those expressing a strong preference for buy British (50%)

and those who were indifferent or hostile (48%).

However, the preferences discussed above varied substantially when respondents

were asked to comment on particular products. Of 10 products used in the survey,

country of origin was only noticeable for motor cars. Even within this category, country

of origin was outranked by style/design and brand (well-known make). For other

products – adult and children’s clothes, carpets, shoes, washing machines -- brand,

quality and style/design were far more important determinants of consumer purchases.

Of interest also is the observation that ‘cheap price’ was never the most important

determinant of consumer expenditure decisions.36

A further difference between the 1960s and early 1980s, was the greater

willingness of the CBI to participate in a ‘Buy British’ campaign. This enthusiasm is

partly explained by recognition that growing imports affected all CBI members. To

address the problem of import penetration, British Leyland launched an independent

campaign, and its chairman Sir Michael Edwardes, arranged a lunch, involving senior

directors of Debenhams, Marks and Spencer, Sainsbury’s, The National Coal Board, and

the National Farmers Union, to discuss a possible campaign.37 The CBI was at the

forefront of a series of publicity events, and displays involving prominent British firms to

‘Win Through Better Buying’ and ‘Can You make It? A Challenge to British Industry’.38

The latter occurred in London, Nottingham, Solihull and Haydock Park.

In launching its campaign, the CBI was adamant that it would not support an

unqualified or patriotic appeal to British consumers. It recognized that a publicity

campaign on a scale large enough to be effective was too expensive; it was concerned

that such initiatives would be perceived as an attempt to undermine consumers’ own

preferences ad that hostile critics would claim it was an ‘admission of defeat’. Moreover,

‘Buy British’ diverted attention (and resources) from what it perceived to be the most 36 TNA, INF/12/1414. This observation suggests that low-productivity and its impact on prices was not especially important to consumers. 37 MRC, CBI, mss.200/c/3/DDG6/125, ( jpeg 44). 38 Ibid.

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important task: improving the competitiveness of British exports, independently of any

Buy British campaign. Even a qualified ‘Buy British’ campaign was considered suspect

until ‘British made’ an extra guarantee of quality – and this considered, ‘some distance

away’. In any case, the CBI acknowledged that: ‘Britain appears to be in a unique

position amongst other nations in having to even consider campaigns to persuade its

people to buy its own products’.39

The CBI concluded that the impact of its scheme was limited. It estimated that the

exhibitions resulted in new quotations valued between £15-£20m, whereas the total

annual expenditure on all exhibited items was around £100m. The Confederation

conducted a survey of the exhibitors which revealed that the single biggest factor why so

little new business was done was the inability of British manufacturers to compete on

price. The second biggest explanation was the inability to meet requied technical

specifications.40

One feature of the CBI and government deliberations which requires further

consideration is their emphasis on appropriate marking to help consumers distinguish

between domestic and imported product. This topic was recognized as crucial when the

government commissioned its MARPLAN survey. Responses indicated that indications

of geographical origin were important: 89 % thought products should be labelled with

this information; 82% believed products made in Britain should have a special tag; 55%

always looked for origin indicia, but 57 % had difficulty determining origin.41 But, how

did consumers comprehend the legend ‘Made in Britain’? The CBI thought that to

qualify for the ‘British made’ legend, 50 % value-added should occur within Britain –

though it believed compulsory origin marking had only a limited role as a measure of

consumer information. 42 The data presented in Table 2 show that almost the entire

sample believed British made meant products wholly-made in Britain by a British

company. Producing, as opposed to ‘assembly’ was the key issue for consumers.

39 Ibid. (jpeg 40). 40 Ibid jpeg 141.41 TNA, INF/12/1414. 42 MRC, CBI, mss.200/c/3/DDG6/125 (jpeg 009). This was subsequently raised to 51 %.

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But the ways in which this indicia could be communicated were severely

restricted once Britain acceded to the European Community. For our purposes, the

biggest obstacle to official support for a ‘Buy British’ campaign - and one which appears

to have hindered previous campaigns -- was contained in the Treaty of Rome

establishing the Common Market. Chapter Two of this Treaty addressed the elimination

of quantitative restrictions (tariffs and quotas) between Member States. Article 30 of the

Treaty stated, ‘Quantitative restrictions on imports and all measures having equivalent

effect…shall be prohibited’, and Article 31 stated, ‘Member States shall refrain from

introducing between themselves any new quantitative restrictions or measures having

equivalent effect’. 43

These articles were based on the premise that ‘soft’ barriers could be as effective

as ‘hard’ trade barriers, such as tariffs and quotas. There are numerous non-fiscal

restrictions that can be applied to imports, including regulations limiting the channels of

distribution and price fixing. Such impediments are referred to as ‘distinctly applicable

measures’ because they give more favourable treatment to domestic products compared

to imports. 44 For our purposes ‘origin marking rules’ are pertinent because they incite

the purchase of domestic products contrary to the Treaty of Rome. For example, faced

with serious economic problems, the Irish government initiated a ‘Buy Irish’ campaign in

1978 involving the Irish Goods Council and the use of a ‘Guaranteed Irish’ symbol. It

was anticipated that this scheme would generate 10,000 jobs and transfer three per cent of

total consumer spending from imports to Irish products. The European Commission

ruled that the ‘Buy Irish’ initiative was contrary to the Treaty of Rome because it was, ‘a

reflection of the Irish Government's considered intention to substitute domestic products

for imported products on the Irish market and thereby to check the flow of imports from

other Member States’.45

Use of compulsory origin marks was prohibited even when they were deployed to

combat fraud and consumer misrepresentation. The Trade Descriptions Order enacted by

43 Treaty of Rome, 1957. 44 Barnard, The Substantive Law: 81.45 Commission v. Ireland, Case 249/81 (1982):4022.

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the UK government in 1981 prohibited the sale of clothing and textile goods, domestic

electrical appliances, footwear and cutlery, unless accompanied by an indication of

origin.46 Such products were bedevilled by consumer complaints about false or

misleading indications of origin.47 The UK government defended this Order on the

grounds that it was vital to consumer protection, but this claim was flatly rejected by the

Commission:

…if the national origin of goods brings certain qualities to the minds of consumers, it is in manufacturers’ interests to indicate it themselves on the goods or on their packaging and it is not necessary to compel them to do so. In that case, the protection of consumers is sufficiently guaranteed by rules which enable the use of false indications of origin to be prohibited. Such rules are not called in question by the EEC Treaty48

Given the Commission’s ruling that this Statutory Order was illegal, compulsory marks

of origin were no longer pursued. The only other alternative was to rely on

manufacturers voluntarily marking their products as ‘Made in Britain’. But this option

was not as effective as a compulsory scheme: manufacturers were free to use this indicia

without satisfying a minimum value-added or content threshold. Moreover, to the extent

that consumers placed more reliance on brand, country of origin became less important.

V Conclusions

Our preliminary investigations, suggest a number of conclusions. First, it appears there is

a fundamental disjuncture between the findings on country of origin reported in the

marketing literature and the ‘Buy British’ campaigns. The former are usually based on

highly-controlled response/memory/attachment analyses using a limited range of 46 Trade Descriptions (Origin Marking) (Miscellaneous Goods) Order 1981(Statutory Instrument 1981, No. 121).47 For cutlery see Higgins, ‘Made in Sheffield’. And French efforts in textiles and clothing. Written Question No 1116/79. Official Journal of the European Communities 8 April, 1980, No C 86/21-22.48 Commission v. United Kingdom, Case 207/83, 1985: 1212

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products. They do not consider the substantial political-economy obstacles that arise in

their implementation.

Another conclusion is that the role of price competitiveness varied between consumers

and domestic manufacturers. For the former, price was not considered an important

determinant of expenditure, whereas for the latter, the CBI study indicated that inability

to compete on price was the biggest explanation for so little business emanating from its

exhibitions.

Another consideration is whether import-substitution policies are simply on the opposite

side of the coin to export promotion. If British manufacturers were able to claw back a

greater share of the UK domestic market this would reduce imports and ‘loosen’ the

balance of payments constraint. But it might be argued such policies are defensive – they

do not positively promote British products in foreign markets. Moreover, although use of

country of origin theoretically confers an advantage on domestic producers (since only

they are lawfully entitled to use ‘Made in Britain’), it does not follow that use of this

indicia generates positive results.

A final observation is that the failure of ‘Buy British’ only partly reflects a failed demand

management policy, but fully signalled weaknesses on the supply side. From 1982-1983,

the UK’s trade balance became significantly (and persistently) negative.

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Table 1. Overall attitude to Buying British

Total (%) Gender AgeMale Female 16-25 26-35 45+

Always make an effortTo buy British 12 10 14 6 11 19

I prefer to buyBritish 38 38 38 27 42 45

Indifferent betweenDomestic and foreign 30 31 29 38 31 22

No preference for 16 17 15 26 13 9British

Prefer not to buyBritish 2 3 2 4 2 1

Do not know 2 2 2 1 1 4

Total 100 101 100 102 100 100

Source: TNA, INF/12/1414. 1978

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Table II Respondent’s views on the meaning of ‘Made in Britain’ (%)

Made in Not made Unsure/Britain in Britain it depends

Goods wholly made in 98 --- 1Britain by a British Co.

Goods made in a British 49 31 14Factory which is ownedBy a foreign company

Goods assembled in 14 62 16Britain from parts madeAbroad

Goods assembled in 20 49 23Britain from British And non-BritishParts

Goods sold by a British 7 75 11Company but made in anOverseas factory

Source: Source: TNA, INF/12/1414. 1978

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