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Gabriella: Top 5 Most Important Facts About British Energy and Manufacturing.
Gina: The topic of this lesson is the five most important things to understand about British energy and manufacturing.
Gabriella: Yes, we’re going to move on and talk about energy and manufacturing in Britain, and this is our little introduction lesson.
Gina: So, what are we going to start with?
Gabriella: Something very British, I think! Number 5 is that British energy and manufacturing used to be government run.
Gina: The British government has had, and still continues to have in some areas, a lot more control over things than governments in other countries. A good example of this is nationalisation.
Gabriella: Nationalisation is where companies are at least partly owned by the government and run by them.
Gina: Many manufacturing companies were nationalised for many different reasons.
Gabriella: What reasons were there?
Gina: Rolls-Royce, for example, was nationalised after it fell into administration in 1971. It was a way of saving the company.
Gabriella: It worked, as Rolls-Royce is a very successful privatised company now.
Gina: It is, and we’ll talk about it in future lessons, I think! However, a company like British Steel was nationalised because the steel industry was broken into pieces and struggling. Nationalisation brought it together and made it competitive.
Gabriella: The energy companies were all nationalised at one point, weren’t they?
Gina: Yeah. Energy used to be very localised in Britain with many small companies. In 1948, electricity and gas were nationalised and the companies merged into twelve regional boards and the same happened with water in 1971.
Gabriella: And then everything was privatised again throughout the 70s, 80s and 90s.
Gina: It was Margaret Thatcher that privatised most of the companies and also the energy industry during her time as prime minister. For some companies it helped them but for others it hindered them.
Gabriella: Our number 4 is that it’s expensive.
Gina: Imagine that you’re a manufacturing company. It doesn’t really matter what you manufacture, but in order to make your goods you’re probably going to need to buy the raw materials from somewhere.
Gabriella: So you’ll have to pay for them. And if they’re not naturally found in the same country, you’ll have to pay for them to be imported too.
Gina: Then when you have the raw materials, you have to manufacture them. And that entails very expensive machines.
Gabriella: Also their repair and maintenance. If they’re really specialised machines, then they may have been developed by the company and that will have cost too.
Gina: Then there’s the energy to power these machines.
Gabriella: And people to check they’re running okay and do the tasks that machines simply can’t do. Plus there’s the admin and sales side.
Gina: See? It’s very expensive. We mentioned Rolls-Royce earlier so let’s go back to them. In 2012 their net income was an impressive £1.559 billion but their revenue, excluding any costs and expenses was £12.16 billion.
Gabriella: Really expensive! Let’s move onto number 3 – being environmentally friendly isn’t easy.
Gina: Being friendly to the environment is very important these days. Many governments are writing laws that limit air pollution, control disposal of hazardous waste and also the conditions employees are expected to work under.
Gabriella: Companies themselves are also becoming more aware, aren’t they? Some are going beyond what the law expects of them.
Gina: They are. But it doesn’t come cheaply or easily to manufacturing companies. Manufacturing naturally produces waste material so it means reforms of working processes and even new machinery.
Gabriella: But if they don’t follow the laws and aren’t environmentally friendly, it can be even more expensive.
Gina: Yes. This is a bit of an extreme example, but do you remember the Deepwater Horizon oil spill in 2010?
Gabriella: With the BP oil rig? Yeah, I remember that. It was the worst oil spill ever, wasn’t it?
Gina: It was. BP, as well as some other companies, were found to be at fault for the incident and BP alone have paid $4.525 billion in fines, that’s roughly £2.8billion. They’ve also paid a further $42.2billion, which is approximately £26 billion, into a trust fund to cover future civil and criminal payments.
Gabriella: Being environmentally friendly might be difficult, but it’s easier than the alternative.
Gina: I think so too.
Gabriella: So number 2 is that manufacturing began with the Industrial Revolution.
Gina: It did! And where did the Industrial Revolution start?
Gabriella: Britain!
Gina: Manufacturing changed rapidly from 1760 to around 1830. Instead of goods being produced by hand, newly invented machines did the tasks instead and were able to greatly increase productivity.
Gabriella: And from Britain, the Industrial Revolution spread across Europe and to the USA and spurred on manufacturing everywhere.
Gina: The Industrial Revolution didn’t just impact on the actual manufacturing of goods though. It led to an improved transport system and also had the side effects of helping food transportation and in turn bringing food prices down.
Gabriella: Yes, the Industrial Revolution had a great social impact too. The average wage increased and slowly, living standards did also. Shall we move onto number 1 now?
Gina: I think we should!
Gabriella: Okay, number 1 is that without energy, manufacturing couldn’t survive. And neither could the world.
Gina: The two are intrinsically linked. Manufacturing has always relied on energy in one form or another. In the days of the Industrial Revolution machines were driven by steam energy so water and coal were needed in great quantities.
Gabriella: Of course now the machines are a little more sophisticated than that, but they still need energy to drive them.
Gina: Without energy, nothing would ever be made. And just think of our daily lives. We need water to shower.
Gabriella: Electricity for our lights, computers and phones.
Gina: Yes...and gas to heat our homes. Energy keeps our world and the manufacturing world moving.
Gabriella: And I think that is the perfect note to finish this lesson on.
Gina: Yes, it wraps up nicely!
Gabriella: So please join us next time for the next lesson.


Gina: Yes! See you then!
Gabriella: Bye!