Page last updated at 06:58 GMT, Monday, 14 September 2009 07:58 UK

Was this Thatcher's greatest legacy?

By Giles Edwards
Producer, BBC Radio 4's Where Did It All Go Right?

What was Margaret Thatcher's greatest success as prime minister?

Nissan factory, Sunderland
The Nissan factory opened 23 years ago and is still going strong

The question always prompts a long list of suggestions - and sometimes an argument.

But here is one which is not often discussed: attracting the Japanese motor giant Nissan to build cars in Sunderland.

The effort Mrs Thatcher and her government put in has paid off handsomely.

Nissan's arrival, in 1986, kick-started a wave of foreign investment - from Japan and elsewhere.

Sir Robin Mountfield, the civil servant in charge of the negotiations, told BBC Radio 4's Where Did It All Go Right? that this was "one of the few occasions where government intervention has had a beneficial effect at relatively minor cost in improving not only the volume of UK car manufacturing, but setting a sort of gold standard for manufacturing technology right through the engineering sector".

And industry experts believe that investment, and the improvements it stimulated, saved British manufacturing.

"If those things were not done at that time, getting the inward investment, getting Japanese companies here, we would have been wiped out from the point of view of manufacturing. I mean there would have been nothing left here," according to Lord Bhattacharyya, who advised both Mrs Thatcher and Tony Blair.

Lingering resentment

But when Nissan's interest in building a factory in Britain first became public, the response was chilly.

Plenty of organisations with a vested interest in the status quo lined up to block or slow the investment.

British car makers were nervous about the increased competition, unions were worried about Nissan's demands for a single union deals and no strike agreements, and there was lingering resentment about Japanese behaviour during World War II to contend with.

Mrs Thatcher was not much interested in any of that - although the complaints from other car makers fell on particularly deaf ears.

Politically speaking, what Mrs Thatcher done to this area can never be forgiven
Eric Timmins, Labour

As her former private secretary Lord Butler put it: "I think Mrs Thatcher would have given them pretty short shrift. What she was in favour of was competition, geeing them up, stimulating them, and that was a lot of the motive for having Nissan in. If they couldn't compete, she thought they shouldn't survive."

Oddly enough, the only opposition which might have derailed the plan came from within Nissan itself.

The ageing chairman, Katsuji Kawamata, thought the company should slow down its expansion plans.

But here Mrs Thatcher came into her own.

As leader of the opposition in 1977 she had visited one of Nissan's automated plants and saw it as a model for how she wanted things done in Britain.

She had stayed in touch with Mr Kawamata and in 1982 made a point of visiting him personally to put the case for Britain.

No surprise, then, that once Nissan had decided to build in Britain and she was invited to open the factory, she painted Nissan's decision as a vindication of everything she was doing.


"It was confirmation from Nissan, after a long and thorough proposal, that within the whole of Europe the United Kingdom was the most attractive country politically and economically for large-scale investment and offered the greatest potential," she told her audience.

And she was right.

Many Japanese businessmen were enamoured with her, and after winning the 1983 general election, she received a telegram from the Nissan board.

"It is refreshing to see that the British people have once again shown their support for your firm leadership and your consistent free enterprise policies," they wrote. "May we wish you every success in continuing your relentless drive against recession, and in leading your great country to new heights of prosperity in the coming years."

If Nissan's arrival helped save British manufacturing, its impact has been felt most strongly in the car industry.

In the early 1980s the British car industry was a byword for everything that was wrong with Britain: inefficient, unproductive, riven by seemingly endless industrial disputes - and producing terrible cars.

Today, while the big factories from the early 1980s - Longbridge, Luton and Dagenham - have mostly stopped making cars, the Japanese companies which Mrs Thatcher's government pushed so hard to get in are expanding.

'Better cars'

Nissan and Toyota both recently announced plans to invest in electric car technology.

And the quality of British-built cars has improved out of all recognition, too.

In the early 1980s they were plagued by quality and reliability problems.

Today, in the words of motoring journalist Chris Goffey, "it's very difficult actually for a motoring writer today to analyse a car and say this is rubbish because, due to the Japanese influence, things have moved on so well that everything is reliable, and most cars by and large are pretty good.

"You know we're now talking about nuances of handling and ride and things like that. We're not talking about fundamentally bad cars that in some cases were dangerous."

In Sunderland, Nissan's enormous factory sits on the outskirts of town churning out cars - it has made five million since 1986, four million of which have been exported.

Tens of thousands of jobs have been created and under the guidance of the local authorities the whole city has undergone a Nissan-powered renaissance.

But many in the North East revile Mrs Thatcher for the impact her policies had on their region. What about this, where she did so much to help get Nissan in?

We put the question to Eric Timmins, a Labour councillor in Sunderland for more than 30 years, and someone who has seen the huge benefits which Nissan has brought to his city and his region.

"Politically speaking, what Mrs Thatcher done to this area can never be forgiven," he said. "But that didn't get in the way of us winning what we wanted. If Mrs Thatcher helped us, thank you."

Where Did It All Go Right is on BBC Radio 4 at 2000 BST on Monday 14 September.

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