Becoming of Great Britain

The party which wins most parliamentary seats at a general election, or which has the support of a majority of MPs in the House of Commons, usually forms the new government. Under the British system, that government need not have obtained an overall majority of the popular vote (representing the actual number of votes cast by the voting population). It is estimated that a party will generally have to gather more than 33 per cent of the popular vote before winning a substantial number of seats, and nearly 40 per cent in order to expand that representation and have a chance of forming a government with an overall majority. These figures will also depend upon whether support is concentrated in particular geographical areas, for a party may gain seats by its local strength. Smaller parties, which do not approach these percentages, will not gain many seats in the Commons. It is this system of representation that proponents of would like to change, in order to reflect more accurately the Popular vote and the anneal of minority parties.

Once the results of a general election are known, the majority party in the Commons normally forms the new government, and the largest minority party becomes the official opposition. The opposition has its own leader and 'shadow government'. It plays an important constitutional role in the parliamentary system, which is based on adversarial and confrontational politics. The seating arrangements in the House of Commons reflect this system, since leaders of the government and opposition parties sit on facing 'front benches', with their supporting MPs, or 'backbenchers', sitting behind them. The effectiveness of parliamentary arrangements is supposed to rest on the relationship between the government and opposition parties, in which the members are required to observe procedural conventions.

The opposition parties may try to overthrow the government by defeating it on a 'vote of no confidence' or a 'vote of censure'. In general these techniques are not successful if the government has a comfortable majority and can count on the support of its MPs. The opposition parties consequently attempt to influence the formation of national policies by their criticism of pending legislation; by trying to obtain concessions on bills by proposing amendments to them; and by striving to increase support for their performance and policies inside and outside the Commons. They take advantage of any publicity and opportunity which they think might improve their chances at the next general election.

Inside Parliament, party discipline is exercised by the Whips,

Political institutions

1 Press gallery 2 Voting lobbies 3 Speaker's chair 4 Civil servants 5 Government front bench 6 Dispatch box 7 Opposition front bench 8 Galleries for MPs. 9 Public gallery 10 VIP gallery 11 Bar of House 12 House of Lords

The House of Commons who are chosen from party MPs by the party leaders, and who are normally under the direction of a Chief Whip. Their duties include informing members of forthcoming parliamentary business; maintaining the party's voting strength in the Commons by seeing that their members attend all important debates or are 'paired' with the opposition (agreed matching numbers so that MPs need not be present in the House all the time); as well as conveying backbench opinion to the party leadership.

This line of communication is important if rebellion and disquiet are to be avoided. MPs will receive notice from the Whips' office of how important a particular vote is, and the information will be underlined up to three times. For example, a 'three-line whip' signifies a crucial vote, and failure to attend or comply with party instructions is usually regarded as a revolt against the party's policy. Party discipline is very strong in the Commons and less so in the Lords. But in both Houses it is essential to the smooth operation of party politics. A government with a large majority should not become complacent, nor antagonize its backbenchers. If it does so, a successful rebellion against the government or mass abstention from voting by its own side may destroy the majority and the party's policy.

Outside Parliament, party control rests with the national and local party organizations, which can be very influential. They promote the party at every opportunity, but especially at election time, when they are in charge of canvassing the public and electioneering on behalf of their party.

Parliamentary procedure

Parliamentary procedure in both Houses of Parliament is mainly based on custom, convention and precedent. It is also contained in standing orders which govern details of procedure, and which have been formulated over a long period of time.

The Speaker is the chief officer of the House of Commons, is elected by the MPs, and has full authority to interpret the rules and orders of the House. The Speaker is an elected MP who, on elevation to the Speaker's chair, ceases to be a political representative and becomes a neutral official. The parliamentary seat is not normally contested at a general election, although there have been exceptions to this convention. The Speaker protects the House against any abuse of procedure; may curtail debate in order that a matter can be voted on; has the power to adjourn the House to a later time: may suspend a sitting; controls the voting system; and announces the final result. In cases where there is a tie, the Speaker has the casting vote, but must exercise this choice in such a way that it reflects established conventions. The Speaker's position is very important to the orderly running of the House. MPs can be very combative and often unruly, to an extent that the Speaker is sometimes forced to dismiss or suspend a member from the House.

Debates in Parliament follow normal patterns. They are usually begun with a motion (or proposal) which, if supported, is then debated by the whole House. The matter is eventually decided by a simple majority vote after a division, which is called at the end of the discussion. MPs enter either the 'Yes' or 'No' lobby to record their vote, but they may also abstain from voting. Debates in the House of Commons used to be the occasion for the actual making of policy. But this practice is now impossible because of the weight and complexity of government business.

The proceedings of both Houses of Parliament are normally open to the public, and may be viewed from the public and visitors' galleries. The transactions are published daily in Hansard (the Parliamentary 'newspaper'), which records most events verbatim, and are also widely commented upon by the media. The proceedings of both Houses are now televised, and radio transmissions may be broadcast live or at a later time in recorded form.

Legislative proceedings

The courts may occasionally extend the common law by their decisions. But the creation of new law and fundamental changes to existing law (outside European Community legislation) are the responsibility of Parliament. This mainly means the implementation of the sitting government's policies. But it can also cover wider matters of a non-party nature, and responses to European Community rulings.

A government will usually issue certain documents before the actual parliamentary law-making process commences. A Green Paper is a consultative document which allows interested parties to state their case before a bill is introduced into Parliament. A White Paper is not normally consultative in this wide sense, but is a preliminary document which itemizes the details of prospective government legislation.

A draft law, which has usually been drawn up by parliamentary and government civil servants, takes the form of a parliamentary bill. Most bills are public in that they relate to public or state policies. Private bills involve individual, corporate or local interests. Public bills may be introduced in either House of Parliament by the government or by private MPs in their personal capacity. A private member's bill, which is usually on a topic of interest to that MP, is normally defeated for lack of parliamentary time or support. But some important private members' bills have survived the various hurdles and have become law, such as Acts concerning homosexuality, abortion and sexual offences. A government will sometimes prefer a private member to introduce minor or controversial legislation, with a promise of governmental support in Parliament. As a rule, politically contentious public bills go through the Commons first, but some of an uncontroversial nature may be initiated in the - Lords. Whichever procedure is used, the bill must have passed through both Houses at some stage.

The Commons is normally the most important procedural step in this process. A bill will receive a formal first reading when it is introduced into the Commons by the government or a private member. After a variable period ranging from one day to several months, the bill is given its second reading after a debate on its general principles. An alternative at this stage is that an uncontroversial bill may be referred to a committee to see whether it warrants a second reading. After either of these methods, the bill is then usually passed to a standing committee for detailed discussion and amendment. As an alternative it can be referred for detailed analysis to the whole House sitting as a committee. This committee stage is followed by the report stage, during which further amendments to the bill may be suggested. The third reading of the bill considers it in its final form, usually on a purely formal basis. However, debate is still possible at this stage if demanded by at least six MPs. This delaying tactic may sometimes be used by the opposition parties to hold up the passage of a bill. But the government, in its turn, can introduce a 'guillotine motion' which cuts off further debate.

After the third reading, a Commons bill will be sent to the House of Lords. It will then go through broadly the same stages again, except for those steps which are unique to the Commons. The Lords can delay a non-financial bill for two sessions, or roughly one year. It can also propose amendments, and if amended the bill goes back to the Commons for further consideration. This amending function is an important power, and has been frequently used in recent years. But the Lords' role today is to act as a forum for revision, rather than as a rival to the elected Commons. In practice, the Lords' amendments can sometimes lead to the acceptance of changes by the government, or even a withdrawal of the bill.

When the bill has eventually passed through the Lords, it is sent to the monarch for the Royal Assent, which has not been refused since the eighteenth century. After the royal signature has been added, the bill becomes an Act of Parliament and is entered on the statute-book as representing the law of the land at that time.

This process from bill to Act may appear unduly drawn out. But it does normally avoid the dangers of hasty legislation. It ensures that the bill is discussed at all levels. It also allows the opposition parties to join in the legislative process, either by carrying amendments or sometimes by voting down a bill with the help of smaller parties and disaffected members of the government party.

Private bills are usually initiated by groups or organizations outside Parliament, such as local government authorities, which need special powers to carry out their business. The procedure for passing private bills is generally the same as for public bills, although in practice most of the work is done by committees.

The government

The British government normally consists of over a hundred ministers and other officials chosen from both Houses of Parliament, who are appointed by the monarch on the advice of the Prime Minister. They belong to the party which forms the majority in the Commons, and are collectively responsible for the administration of national affairs. The government can vary considerably in the number of ministers and departments set up by the Prime Minister.

The Prime Minister, who is appointed by the monarch and is normally the leader of the majority party in the Commons, possesses a great deal of patronage in choosing ministers and deciding on the composition of the government. The Prime Minister's power stems from majority support in Parliament; from the authority to choose and dismiss minister; from the leadership of the party in the country; and from a control over policy-making. The Prime Minister usually sits in the Commons, as do most of the ministers, where they may all be questioned and held accountable for government actions and decisions. The Prime Minister has historically been the connection between the monarch and parliamentary government. This convention continues today in the weekly audience with the monarch, at which the policies and business of the government are discussed.

The Prime Minister consequently has great power within the British system of government, and there are arguments which suggest that the office has become like an all-powerful presidency. But there are considerable checks on this power, both inside and outside the party and Parliament, which make the analogy less than accurate. However, it does seem that there is a greater emphasis upon prime ministerial government in Britain today, rather than the traditional constitutional notions of Cabinet government.

The Cabinet is normally composed of up to twenty senior ministers from the government, who are chosen and presided over by the Prime Minister. Examples are the Chancellor of the Exchequer (Finance Minister), the Foreign Secretary, the Home Secretary, the Minister of Defence, the Secretary of State for Education and Science, and the Secretary of State for Trade and Industry. The Cabinet structure originated historically in meetings that the monarch had with leading ministers in a small royal Cabinet, outside the framework of the Privy Council. As the monarch gradually ceased to play a part in active politics because of the growth of parliamentary government and party politics, the Royal Cabinet developed more authority and independence, and became a parliamentary body.

Constitutional theory has traditionally argued that the Cabinet collectively initiates and decides government policy. It has control of the government apparatus and ministries because it is composed of members of the majority party in the Commons. But the convention that government rule is Cabinet rule seems to have become increasingly weaker. Since the Prime Minister is responsible for Cabinet agendas and for the control of Cabinet proceedings, the Cabinet itself can become merely a 'rubber-stamp' to policies which have already been decided upon by the Prime Minister, or by a smaller group sometimes called the 'Inner Cabinet'. Cabinet government appears to have lost some of its original impetus, although there are frequent demands that more deliberative power should be restored to it.

Much depends upon the personality of Prime Ministers in this situation. Some are strong and like to take the lead. Others have given the impression of working within the traditional Cabinet structure. Much of our information about the operation of the Cabinet comes from 'leaks', or information divulged by Cabinet ministers. Although the Cabinet meets in private and its discussions are meant to be secret, the public is usually and reliably informed of Cabinet deliberations by the media.

The mass and complexity of government business today, and the fact that ministers are very busy with their own departments, suggest that full debate in Cabinet on every item of policy is impossible. But it is widely felt that, while all the details cannot be discussed, the broad outlines of policy should be more vigorously debated in Cabinet. Critics argue that the present system concentrates too much power in the hands of the Prime Minister; overloads ministers with work; allows too many crucial decisions to be taken outside the Cabinet; and consequently reduces the notion of collective responsibility.

Ministerial responsibility is still an important constitutional concept, although some doubt its applicability today. Collective responsibility is that which all ministers, including those outside the Cabinet, share for government actions and policy. It means that Cabinet and other ministers should be seen to act as one. All must support a government decision in public, even though some may oppose it during the private deliberations. If a minister cannot do this, he or she may feel obliged to resign.

In addition to collective responsibility, a minister also has an individual responsibility for the work of the relevant government department. This means that the minister is answerable for any mistakes, wrongdoing or bad administration which occur, whether personally responsible for them or not. In such cases, the minister may resign, although this is not as common today as in the past. Such responsibility enables Parliament to maintain at least some control over executive actions because the minister is answerable to Parliament. The shadow of the Parliamentary Commissioner for Administration also hangs over the work of a minister and civil servants.

Government departments (or ministries) are the chief instruments by which central government implements government policy. A change of government does not necessarily alter the number or functions of these departments. However, some governments have occasionally instituted programmes which have involved the reorganization, or replacement of existing ministries. Examples of government departments are the Foreign Office, the Ministry of Defence, the Home Office, the Department of Education and Science, and the Treasury (of which the Chancellor of the Exchequer is head). Most of these central departments are in London and are collectively known as Whitehall.

The government departments are staffed by the Civil Service, which consists of career administrators. Civil servants are employed by central government in London and throughout the country, and are involved in a wide range of government activities. They are responsible to the minister in whose department they work for the implementation of government policies. A change of minister or government does not require a change of civil servants, since they are expected to be politically neutral and to serve the sitting government impartially. Restrictions on political activities and publication are consequently imposed upon civil servants in order to ensure neutrality. There are some 600,000 civil servants in Britain today. Nearly half of these are women, but few of them achieve top ranks in the service.

There have been frequent accusations about the efficiency of the Civil Service, and civil servants do not have a particularly good public image, in spite of attempts at reform. It is often alleged that the service imposes a certain mentality upon the implementation of government policies, which successive ministers have been unable to combat. There may be some areas of concern. But the stereotyped image of the typical civil servant is not reflected in many who do a thorough, independent job of serving their political masters. The Civil Service is also highly regarded in other countries for its efficiency and impartiality.

Local government

Some countries, such as the USA and Canada, are federal. They are made up of a number of states, each of which has its own government with its own powers to make laws and collect taxes. In these countries the central governments have powers only because the state have given them powers. In Britain it is the other way around. Local government authorities (generally known as 'councils') only have powers because the central government has given them powers. Indeed, they only exist because the central government allows them to exist. Several times in the twentieth century British governments have recognized local government, abolishing some local councils and bringing new ones into existence.

The system of local government is very similar to the system of national government. There are elected representatives, called councillors (the equivalent of MPs). They meet in a council chamber in the Town Hall or Country Hall (the equivalent of Parliament), where they make policy which is implemented by local government officers (the equivalent of civil servants).

Most British people have far more direct dealings with local government than they do with national government. Local councils traditionally manage nearly all public services. Taken together, they employ three times as many people as the national government does. In addition, there is no system in Britain whereby a national government official has responsibility for a particular geographical area. (There is no one like a 'prefect' or 'governor'). In practice, therefore, local councils have traditionally been fairly free from constant central interference in their day to day work.

Local councils are allowed to collect one kind of tax. This is a tax based on property. (All other kinds are collected by central government.) It used to be called 'rates' and was paid only by those who owned property. Its amount varied according to the size and location of the property. In the early 1990s it was replaced by the 'community charge' (known as the 'poll tax'). This charge was the same for everybody who lived in the area covered by a council. It was very unpopular and was quickly replaced by the 'council tax', which is based on the estimated value of a property and the number of people living in it. Local councils are unable to raise enough money in this way for them to provide the services which central government has told them to provide. In addition, recent governments have imposed upper limits on the amount of council tax that councils can charge and now collect the taxes on business properties themselves (and then share the money out between local councils). As a result, well over half of a local council's income is now given to it by central government.

The modern trend has been towards greater and greater control by central government. This is not just a matter of controlling the way local government raises money. There are now more laws governing the way councils can conduct their affairs. On top of this, schools and hospitals can now 'opt out' of local-government control. Perhaps this trend is inevitable now that national party politics dominates local politics. Successful independent candidates (candidates who do not belong to a political party) at local election are becoming rarer and rarer. Most people now vote at local elections according to their national party preferences, if they bother to vote at all, so that these elections become a kind of opinion poll on the performance of the national government.

Local government services

Most of the numerous services that a modern government provides are run at local level in Britain. These include public hygiene and environment health inspection, the collecting of rubbish from outside people's houses (the people who do this are euphemistically known as 'dustmen'). and the cleaning and tidying of all public places (which is done by 'street sweepers'). They also include the provision of public swimming pools, which charge admission fees, and public parks, which do not. The latter are mostly just green grassy spaces, but they often contain children's playgrounds and playing fields for sports such as football and cricket which can be reserved in advance on payment.

Public libraries are another well-known service. Anybody can go into one of these to consult the books, newspapers and magazines there free of charge. If you want to borrow books and take them out of the library, you have to have a library card or ticket (these are available to people living in the area). Sometimes CDs and video cassettes are also available for hire. The popularity of libraries in Britain is indicated by the fact that, in a country without identity cards, a person's library card is the most common means of identification for someone who does not have a driving licence.

Counties are the oldest divisions of the country in England and Wales. Most of them existed before the Norman conquest. They are still used today for local government purposes, although a few have been 'invented' this century (e.g. Humberside) and others have no function in government but are still used for other purposes. One of these is Middlesex, which covers the western part of Greater London (letters are still addressed 'Middx') and which is the name of a top-class cricket team. Many countries have 'shire' in their name (e.g. Hertfordshire, Hampshire, Leicestershire). 'Shires' is what the counties were originally called.

Boroughs were originally towns that had grown large and important enough to be given their own government, free of control by the country. These days, the name is used for local government purposes only in London, but many towns still proudly describe themselves as Royal Boroughs.

Parishes were originally villages centred on a local church. They became a unit of local government in the nineteenth century. Today they are the smallest unit of local government in England.

The name 'parish' is still used in the organization of the main Christian churches in England.

QUESTIONS

Why doesn^,t Britain have a written constitutions? Does it need one?

The Crown: What are the powers of the monarch?

Westminster: Why did the Commons become more important than the lords? Draw a diagram showing the shape and layout of the House of Commons debating chamber. Give reasons why you think this arrangement is better or worse than the more common semi-circular debating chamber. The House of Lords: Do you think the Lords has become a more democratic institution after the Constitutional reform of 1999?

The electoral and party system: Does Britain have an adequate parliamentary electoral system? Explain the main difference between the Conservative and Labour Parties.

Whitehall: What does "cabinet government" mean? What are its strengths and weaknesses? Examine the role of the Prime Minister in modern Britain. Why are modern British PMs so powerful?

Who rules Britain: The Crown, The Commons, The Lords, The Prime Minister, The Cabinet, The Civil Service?

What is the range of responsibilities of the local government in Britain?

VI. BRITISH NATIONAL ECONOMY

The structure of Industry and Trade

Industry in Action:

chemicals

pharmaceuticals

mechanical engineering

electronics

offshore industry

food and drink

aerospace

financial services

tourism

Agriculture

The Structure of Trade and Industry

Britain became the world's first industrialised country in the mid 19^th century. Wealth was based on manufacturing iron and steel, heavy machinery and cotton textiles, and on coal mining, shipbuilding and trade. Manufacturing still plays an important role and Britain excels in high-technology industries like chemicals, electronics, aerospace and offshore equipment, where British companies are among the world's largest and most successful. The British construction industry has made its mark around the world and continues to be involved in prestigious building projects.

The most important industrial developments in the past 20 years or so in Britain have been the exploitation of North Sea oil and gas, and the rapid development of microelectronic technologies and their widespread application in industry and commerce. At the same time service industries have been assuming ever-increasing importance and now account for around two-thirds of output and employment. There has been a steady rise in the share of output and employment - now around 80 and 75 per cent respectively - accounted for by private-sector enterprises as privatisation of the economy has progressed.

Britain, the world's fifth largest trading nation, belongs to the European Union (EU), the biggest established trade grouping in the world.

The Structure of trade and industry

The 'modernization' of business and industry happened later in Britain than it did in most other European countries. It was not until the 1960s that large corporations started to dominate and that a 'management class', trained at business school, began to emerge. Even after that time. many companies still preferred to recruit their managers from people who had 'worked their way up' through the company ranks and/or who were personally known to the directors. Only in the 1980s did graduate business qualifications become the norm for newly-hired managers.

British industry performed poorly during the decades following the Second World War (some people blamed this on the above characteristics). In contrast, British agriculture was very successful. In this industry, large scale organization (i.e. big farms) had been more common in Britain than in other European countries for quite a long time.

As in all European countries, the economic system in Britain is a mixture of private and public enterprise. Exactly how much of the country's economy is controlled by the state has fluctuated a great deal in the last fifty years and has been the subject of continual political debate. From 1945 until 1980 the general trend was for the state to have more and more control. Various industries became nationalized (in other words, owned by the government), especially those concerned with the production and distribution of energy. So too did the various forms of transport and communication services (as well, of course, as the provision of education, social welfare and health care). By 1980, 'pure' capitalism probably formed a smaller part of the economy than in any other country in western Europe.

From 1980 the trend started going in the other direction. A major part of the philosophy of the Conservative government of the 1980s was to let 'market forces' rule (which meant restricting the freedom of business as little as possible) and to turn state-owned companies into companies owned by individuals (who became shareholders).This approach was a major part of the thinking of Thatcherism (Margaret Thatcher was Prime Minister at that time). Between 1980 and 1994 a large number of companies were privatized (or 'denationalized'). That is, they were sold off by the government. By 1988 there were more shareholders in the country than there were members of unions. In addition, local government authorities were encouraged to 'contract out' their responsibility for services to commercial organizations.

The privatization of services which western people now regard as essential has necessitated the creation of various public 'watchdog' organizations with regulatory powers over the industries which they monitor. For example, Offtel monitors the activities of the privatized telephone industry, and OffWat monitors the privatized water companies.

The decline of the unions

In the 1980s the British government passed several laws to restrict the power of the unions. One of these abolished the 'closed shop' (arrangement which employers made with unions to hire only people who belonged to a union). Another made strikes illegal unless a postal vote of all union members had been conducted. In 1984 there was a long miners' strike. The National Union of Miners refused to follow the new regulations. Its leader, Arthur Scargill, became a symbol (depending on your point of view) of either all the worst lunacies of unionism or the brave fight of the working classes against the rise of Thatcherism. Previous miners' strikes in the twentieth century had been mostly successful. But this one was not (the miners dad not achieve their aims); a sign of the decline in union power.

How Industry is Organised

In some sectors a small number of large companies and their subsidiaries are responsible for a substantial proportion of total production, notably in the vehicle, aerospace and transport equipment industries. About 250 British industrial companies each have an annual turnover of more than ?500 million. The annual turnover of the biggest company, British Petroleum (BP), makes it the 11^th largest industrial grouping in the world and the second largest in Europe. Five British firms are among the top 20 European Union (EU) companies in terms of capital employed.

Manufacturing accounted for 22 per cent of gross domestic product (GDP) in 1993 and for about the same percentage of employment. About 82 per cent of visible exports consisted of manufactured or semi-manufactured goods. Virtually all manufacturing is carried out by private-sector businesses. Total capital investment in manufacturing was ?12,165 million in 1993, comprising ?10,146 million in plant and machinery, ?1,253 million in new building work and ?766 million in vehicles.

The construction industry contributed 5 per cent of GDP and employment about 1.2 million people in 1993, 4 per cent of the total number of employees. Total domestic fixed capital investment in construction was ?812 million.

Industry in Action

Chemicals

Britain's chemical industry is the third largest in Europe. The nation's fourth biggest manufacturing industry, it provides direct employment for 303,000 people. Around a half of its output is exported, making it Britain's greatest single export earner; exports in 1993 were worth ?17,300 million.

Many major chemical companies in Britain are multinationals; several are subsidiaries of overseas companies and others are specialist manufacturers of pharmaceuticals, such as Glaxo and Wellcome. Imperial Chemical Industries (ICI) is the sixth largest chemical company in the world, with a range of 8,000 products. In 1993 ICI was demerged into two companies to form 'new' ICI, built around industrial chemicals, paints, materials and explosives, and a separate company, Zeneca, comprising ICI's pharmaceuticals, agrochemicals and seeds, and specialities business.

A large proportion of world R & D in agrochemicals is conducted in Britain. Notable British discoveries include diquat and paraquat herbicides, pyrethroid insectisides, systemic fungicides and aphicides, genetically-engineered microbial pesticides and methods of encouraging natural parasites to eradicate common pests.

Pharmaceuticals

The British pharmaceuticals industry is one of the biggest in the world. It is the fifth largest manufacturer and fourth largest exporter of medicines. Scientific excellence underpins the success of the pharmaceuticals industry: British firms spend around ?1,500 million a year in the search for new technologies, new therapies and new ways to fight disease. In 1992 a quarter of the 20 most prescribed medicine in the world had been discovered by scientists in Britain.

The industry is made up of about 360 companies of all sizes. A small number of very big firms dominate production - the six largest are Glaxo, Zeneca, Wellcome, SmithKline Beecham, Boots and Fisons. The largest 21 account for 70 per cent of production and employment. Smaller firms spend less on R & D and tend to concentrate on producing generic prescription medicines and non-prescription medicines with expired patents.

The industry manufactures the whole range of medicines - human and veterinary medicines, medical dressings and dental materials. In the last ten years or so, the largest growth has been in medicines that act on the respiratory system, followed by cardiovascular, muscular and skeletal, anti-infectives and alimentary tract remedies. Over-the-counter medicines sold most often are cough, cold and sore throat medicines, analgesics, vitamins and gastro-intestinal remedies.

Discoveries by the industry include semi-synthetics and treatments for asthma, coronary heart disease and certain cancers. British researchers are also making breakthroughs in treatments for AIDS, malaria and hepatitis. Biotechnology and a growing understanding of the biology of cells are bringing new medical opportunities. As genes in the human body are gradually sequenced, scientists are beginning to discover the molecular basis of diseases, opening the way to new treatments. Three major research areas in which Britain leads are drug design, biotechnology and gene therapy.

Mechanical Engineering

Exports of mechanical machinery represented 13 per cent of total visible exports in 1993. Output includes pressure vessels, heat exchangers and storage tanks for chemical and oil-refining plant, steam-raising boilers (including those for power stations), nuclear reactions, water and sewage treatment plant, and fabricated steelwork for bridges, buildings and industrial installations.

Britain is among the world's major producers of tractors, which make up over three-quarters of total output of agricultural equipment. Sales of the tractor industry were valued at ?1,100 million in 1993. Massey Ferguson and Ford are major producers of tractors. Technical innovations include computer-controlled tractors, an ultra-efficient pesticide sprayer and combined mower/conditioners that reduce drying time for grass.

Britain is the world's eighth largest producer of machine tools with total sales of nearly ?900 million in 1993. British manufacturers have made technological advances in probes, sensors, co-ordinate measuring devices, laser melting and the installation of flexible manufacturing systems. Computer numerical-controlled machines account for an increasing proportion of output. The 600 Group is the biggest British machine tool company.

Most sales of textile machinery are to export markets. British innovations include computerised colour matching and weave simulation, friction spinning, high-speed computer-controlled knitting machines and electronic jacquard attachments for weaving looms.

Britain's mining and tunnelling equipment leads in the production of coal-cutting and road-heading (shearing) equipment, hydraulic roof supports, conveying equipment, flameproof transformers, switchgear, and subsurface transport equipment and control systems.

Electronics

Britain has the fourth largest electronics industry in the world. The computer sector produced an extensive range of systems, central processors and peripheral equipment, from large computers for large-scale data- processing and scientific work to mini-and microcomputers for control and automation system and for home, educational and office use. In 1993 exports reached a record level, around ?4,000 million.

Britain makes 40 per cent of Europe's desktop computers. Nearly half of these computers and peripheral equipment intended for export are made in Scotland. Several leading overseas manufactures of data-processing equipment - for example, IBM, Unisys and Compaq - have established manufacturing plants in Britain. The biggest computer manufacturer is the largely Japanese-owned ICL. Other companies, such as Psion, have concentrated on developing new products for specialised markets. These include pocket-sized computers and notebook and pen computers.

Another sector of the industry manufactures radio communications equipment, radar, radio and sonar navigational aids for ships and aircraft, thermal imaging systems, alarms and signalling equipment, public broadcasting equipment and other capital goods. Radar was invented in Britain and British firms are still in the forefront of technical advances.

Offshore Industry

Britain has substantial oil and gas reserves offshore on the United Kingdom Continental Shelf (UKCS). Before the 1970s it was almost wholly dependent on imports for oil supplies.

Around 34,000 people are employed offshore, while a further 250,000 work in support industries - building oil rigs, designing platforms and pipelines, operating helicopters and boats and so on. Gross capital investment from British sources in oil and gas extraction represents about 20 per cent of British industrial investment.

Output of crude oil and natural gas liquids in Britain average just over 2 million barrels (around 274,000 tonnes) a day in 1993, making Britain the world's tenth largest oil producer.

Food and Drink

Britain has large food and drink manufacturing industry, which has accounted for a growing proportion of total domestic food supply in recent decades. Approximately 500,000 people are employed in the industry.

Frozen and prepared children foods, annual sales of which stand at over ?3,600 million and ?1,800 million respectively, other convenience foods, yoghurts, dairy desserts and instant snacks have formed the fastest-growing sector of the food market in recent years. Demand for health and slimming foods also continues to expand and there has been a rise in sales of organically-grown produce as well as a variety of products for vegetarians (soya-based foods, for instance).

Of major significance among alcoholic drinks produced in Britain in Scotch whisky, one of Britain's top export earners. there are 110 distilleries in Scotland, where the best known brands of blended Scotch whisky, such as J& B, Johnnie Walker, Famous Grouse and Teachers, are made from the products of single malt and single grain whisky distilleries. About four-fifths of Scots whisky production is exported, to more that 200 countries; the value of exports was ?2,100 million in 1993.

The soft drinks industry is the fastest-growing sector of the grocery trade, with an annual turnover of about ?6,000 million.

Aerospace

Britain's aerospace industry is the third largest in the Western world, after the United States and France. With around 200 companies employing 134,500 people, it had a turnover in 1993 of ?10,300 million.

British Aerospace is one of the world's top defence companies and more than four-fifth of its military production was exported in 1993. It includes the Harrier, a unique vertical/short take0off and landing (V/STOL) military combat aircraft. BAe has a 33 per cent share in the development of the Eurofighter 2000. The Tornado combat aircraft is built by a company set up jointly by BAe, Alenia of Italy and Deutsche Aerospace. A ?5,000 million order for 48 Tornado bombers for Saudi Arabia was confirmed in 1993, making it one of Britain's biggest ever export deals.

Rolls-Royce is one of the world's three major manufacturers of aero-engines, with a turnover in 1993 of ?2,100 million for its aerospace division. Its RB211-535 engines have been selected by over 80 per cent of airlines for their Boeing 757 airliners.

Over 400 companies in Britain are engaged in space activities. The industry is strong in the manufacture of satellites and ground infrastructure for satellite systems and in the analysis and exploitation of data from satellites. Matra-Marconi Space is one of the world's leading producers of communications satellites.

Financial Services

Britain is a major financial centre, home to some of the world's most prestigious banking, insurance, securities, shipping, commodities, futures, and other financial services and markets. Banking, finance, insurance, business services and leasing contributed around 20 per cent of total output in 1993.

Financial institutions' net overseas earnings amounted to ?15,600 million in 1993. Banking, finance and insurance accounted for 13 per cent of employment in Great Britain in 1994.

Historically the financial services industry has been located in the 'Square Mile' in the City of London. This remains broadly the case, even though markets for financial and related services have grown and diversified greatly. Manchester, Cardiff, Liverpool, Leeds, Edinburg and Glasgow are also financial centres. The 'City', the collection of markets and institutional around the Square Mile, is noted for having:

the greatest concentration of foreign banks - 286 - in the world;

a banking sector that accounts for about 20 per cent of total international bank leading;

one of the world's biggest international insurance markets, handling about 20 per cent of general insurance business placed on the international market;

the largest centre in the world for trading overseas equities;

the world's largest foreign exchange market, with an average daily turnover of about US$300,000 million;

one of the world's most important financial derivatives markets;

the greatest concentration of international bond dealers;

important markets for transactions in commodities; and

a full range of ancillary and support services - legal, accountancy and management consultancy - contributing to London's strength as a financial centre.

Tourism

Britain pioneered the development of a professional tourism industry. Around 1.5 million people are employed in the industry in Britain, which contributes ?30,000 million annually to the economy - about 5 per cent of GDP. Britain is one of the world's six leading tourist destinations and by the year 2000 tourism was expected to be the biggest industry in the world.

Between 1980 and 1990 the number of overseas visits to Britain increased by 50 per cent. In 1993 over 19 million overseas visitors came to Britain, spending ?9,200 million. Business travel accounts for about a fifth of all overseas tourism revenue. An estimated 64 per cent of visitors came from Europe and 17 per cent North America. Britain's tourism attractions include theatres, museums, art galleries and historic houses, as well as shopping, sports and business facilities.

Domestic tourism was valued at ?12,400 million in 1992. Around one-half of British residents taking their main holiday in Britain choose a traditional seaside resort. Short breaks, worth about ?2,000 million in 1992, make up an increasingly significant part of the market, with shopping accounting for about a third of all expenditure on day trips. Scotland has several skiing resorts.

The largest hotel business in Britain is Forte, which has 344 hotels in the country. At the other end of the scale, numerous guest houses and small hotels have fewer than 20 rooms. Holiday camps offering full board, self-catering centres and holiday caravans are run by Butlins and Pontins; Center Parcs are enclosed holiday centres with swimming pools and other leisure facilities which are not affected by the vagaries of the British climate. Cuisine from virtually every country in the world is available in restaurants in London and elsewhere in Britain.

Most British holiday-makers wishing to go abroad buy 'package holidays' from travel agencies, where the cost covers transport and accommodation. The most popular package holiday destinations are Spain, France and Greece. Long-haul holidays to countries like the United States and Australia are becoming more popular as air fares come down. Winter skiing holidays to resorts in Austria, France, Italy and Switzerland and other countries continue to attract large numbers of Britons.

There are around 7,200 travel agencies in Britain. Although most travel agents are small businesses, there are a few very large firms, such as Lunn Poly and Thomas Cook, which have hundreds of branches.

Overseas Trade

Britain is fully committed to an open multilateral trading system. It exports more per head than the United States and Japan; overseas sales of goods and services are equivalent to about a quarter of its GDP. Invisible earnings of British companies place Britain in the top three countries in the international league table of overseas invisibles earners. It is the world's second biggest overseas investor and the leading destination for inward direct investment into the EU.

On 1 January 1994 the EU implemented an agreement with Austria, Finland, Iceland, Norway and Sweden on the creation of the European Economic Area (EEA). The EEA forms a free trade area with 380 million consumers, where there is free movements of goods, services and capital. The new World Trade Organisation was set up on 1 January 1995, providing a sounder basis for international trade, including implementation measures agreed during the recently completed GATT Uruguay Round of negotiations.

In 1993 Britain's exports of goods were valued at about ?121,400 million and its imports of goods at ?134,600 million. Manufactures account for 82 per cent of visible exports with machinery and transport equipment contributing about 40 per cent of exports. Aerospace, chemicals and electronics have become increasingly significant export sectors, while textiles have declined in importance. The share of fuels in exports was 7 per cent in 1993. North Sea oil and gas production has now passed its mid-1980s peak, when exports of fuels accounted for over 20 per cent of total exports. In 1993 the surplus on trade oil amounted to a little under ?2,500 million.

Britain's overseas trade is mainly, and increasingly, with developed countries. In 1972, the year before Britain joined the European Community, around a third of its trade was with the other 11 countries which made up the European Union in 1994. The proportion rose to around one-half in 1993. Western Europe as a whole takes three-fifths of Britain exports. EU countries accounted for seven of Britain's top 10 export markets and six of the 10 leading suppliers of goods to Britain in 1993. In 1990 Germany overtook the United States to become Britain's biggest overseas market; Germany is also Britain's largest single supplier. In 1993 it took 13 per cent of Britain's exports and supplied 15 per cent of its imports.

Exports to Japan, which is presently Britain's tenth largest export market, rose by 19 per cent in 1993. Japan has steadily increased its share of Britain's imports and now accounts for around 6 per cent. In 1993 there was also a sizeable increase - about 30 per cent - in Britain's exports to other expanding markets in the Asia-Pacific Rim. Hong Kong, Malaysia, Singapore, Korea, Taiwan and Thailand, together with the People's Republic of China and the Philippines, all showed strong growth in exports from Britain in 1993.

Agriculture

Agriculture, one of Britain's most important industries, supplies nearly 60 per cent of the country's food, directly employs over 650,000 people, and uses almost 80 per cent of the land area. However, its share of the gross domestic product is less than 3 per cent - the lowest figure among the developed capitalism countries. British agriculture is efficient, for it is based on modern technology and research.