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The UK government has published the Future of Payments Review report, which provides recommendations for improving the country's payments landscape. The main recommendation is to develop a National Payments Vision and Strategy that focuses on safety, simplification, consumer protection, and inclusivity. Other recommendations include improving bank transfer processes, reforming Strong Customer Authentication requirements, prioritizing consumer protection in Open Banking, developing alternative payment options, reviewing fraud and scam rules, and assessing regulatory requirements for FinTechs. Additionally, HM Treasury is seeking views on a clearing exemption for pension schemes, which currently allows them to be exempt from clearing obligations for a temporary period. The call for evidence seeks input on how pension funds hedge risks, the use of bilateral OTC derivatives markets, accessing clearing and meeting margin requirements, the impact of the exemption on the LDI crisis, and the potential impact of removing the exemption on pension schemes. [Extracted from the article]

Purpose: A company that is registered with share capital may issue different classes of shares and may confer rights on members, which place them in different classes in the company's organisational structure. This paper is concerned with the propensity for encroachment on such vested class rights as companies strive to wriggle out of business challenges spawn by the COVID-19 pandemic. The purpose of this study is to ascertain the extent of protection that the law accords to the different classes of shareholders and members in a company especially when the company seeks to vary the vested class rights. Design/methodology/approach: A doctrinal methodology, which relies on existing literature, case law and statutory instruments, is adopted to explore the nature of class rights and the adequacies of the remedial measures availed by statute to the aggrieved bearers of class rights in the context of the South African Companies Act 71 of 2008 with inferences drawn from the UK companies statute and case law. Findings: The findings indicate that accessing the remedies available to aggrieved shareholders under the relevant statutory provisions are fraught with conditionality, which could make them elusive to those who may seek to rely on such provisions to vindicate any encroachment on their class rights. Practical implications: The paper embodies cogent information on the interpretation and application of the relevant statutory provisions geared at the protection of shareholders class rights, which should serve as guides to companies and the courts in dealing with matters that affect the vested class rights of shareholders and members of a company. Originality/value: The paper shows that protections offered to classes of shareholders under the law can also be extended to classes of members who are not necessarily shareholders, and that shareholders who seek to vindicate their class rights may conveniently rely on Section 163 that provides for unfair prejudice remedy to avoid the onerous conditions under Section 164 of the South African Companies Act 71 of 2008, which directly deals with class rights. [ABSTRACT FROM AUTHOR]

Several biophysical characteristics underlay Britain's Industrial Revolution: improvements in agricultural productivity, large increases in use of coal‐energy supply, and physical construction of infrastructure for industrialization and urbanization. These characteristics are represented in a four‐sector model of Britain's economy (1760 to 1913) including agriculture, mining, construction of capital, and the production of goods and services. The model has a novel mathematical representation of a dynamic general equilibrium between capital, labor, and energy in an economy. Historical data are used to calibrate the model for growth of Britain's capital stock, coal use, and employment during the Industrial Revolution (first and second periods). Model simulations explore the impacts of two biophysical constraints: stagnation in agricultural productivity and reduced efficiency in coal mining in the absence of steam engines. Both scenarios exhibit substantial reductions in the growth of capital stock and significant changes to the distribution of labor. This article met the requirements for a gold‐gold JIE data openness badge described at http://jie.click/badges. [ABSTRACT FROM AUTHOR]

Energy is required both to build the capital stock and to produce goods and services from the use of the capital stock. These two energy demands are together constrained by the available energy in the macroeconomy. Here, I develop a mathematical theory expressing the relationship between available energy and the capital stock as a first‐order differential equation. Three specific solutions are derived for the cases of a steady‐state economy with fixed capital stock, for an economy with a linearly increasing capital stock, and for an exponentially growing capital stock. Empirical data for the United Kingdom's nineteenth century economy are used to examine the energy required to access energy supplies; the energy intensity of capital formation; and the energy intensity of capital use. Magnitudes and trends in the energy intensity of capital use differ for four sectors of the economy—mining, residential, utilities, and railways. Data for the United Kingdom's ratio of available energy to capital from 1850 to 1913, are examined for the case of a linearly increasing capital stock. This corroborates the overall theoretical model and demonstrates that the change in energy to capital ratio is impacted by the magnitude of the capital stock. Further analysis of the mining sector shows that higher coal prices follow after increases in capital investment and increased coal production. This helps demonstrate how energy constraints play out in the macroeconomy. This article met the requirements for a gold – gold JIE data openness badge described at http://jie.click/badges. [ABSTRACT FROM AUTHOR]

Executive Summary: Infrastructure investment can substantially increase a nation's capital stock and thereby boost productive, or supply-side, potential. It can also be useful as a tool in macroeconomic stabilisation, while public spending on quality infrastructure projects has been shown to have significantly greater multiplier effects than tax cuts – so the case for an increasing spend is not undermined by a country's overall debt level. These arguments are especially apposite for post-Brexit UK. Britain's investment performance in general has been especially poor since the 2016 EU referendum. Fixed capital formation as a proportion of GDP is low by international standards, while the government's share of fixed capital formation, at 2.5 per cent, is also below average. It would make sense to target an increase in public and private infrastructure spend to 3.5 per cent of GDP which is the OECD's recommended level. While major infrastructure projects continue to generate controversy on grounds of cost overruns and other issues, UK policy-makers have recently taken a more constructive approach to infrastructure development, notably with the creation of an independent National Infrastructure Commission. But the UK's infrastructure remains unsatisfactory, with significant parts of its energy, water, transport and communications networks in need of renewal or replacement, and infrastructure project delivery remains poor. In summary, much of Britain continues to operate well into the 21st century largely with 20th century, sometimes 19th century, infrastructure assets that are creating bottlenecks, crimping productivity, putting off potential foreign investors, undermining the economy's competitiveness, increasing inequality, and leaving the economy ill-equipped to face future challenges such as Brexit and climate change. The government needs to be bolder, setting out a more ambitious set of priorities including energy projects, regional spending, and fostering capital recycling and private sector investment. A still more ambitious, but eminently feasible, proposal would be to establish a National Investment Bank to offer project guarantees, recommend user fees, lend to projects with the proceeds of National Investment Bonds and simplify planning among other tasks. In a serious downturn, with monetary policy exhausted, the NIB could also help to co-ordinate and finance a response. [ABSTRACT FROM AUTHOR]

The article presents a long-term growth outlook for Great Britain. It states that there was a potential output growth due to several factors such as net inflows of migrants, a decrease in the non-accelerating inflation rate of unemployment (NAIRU), and shift to high value-added sectors. It notes the existence of a link between demand shifts and NAIRU changes via hysteresis, profile changes in age affecting a potential output growth, and growth from capital stock expansion.

This paper describes a capital services dataset for the United Kingdom developed for use in empirical work, and some of its key features. The estimates are consistent with National Accounts output estimates, making them ideal for use in growth-accounting or business-cycle analysis. The divergence between the volume of capital services and the volume of the capital stock after 1980 is highlighted. This divergence is driven by a shift in investment towards short-lived and more productive information and communication technology assets for which the flow of capital services is high. Standard capital stock measures understate growth in the productive input of capital, especially after 1990. [ABSTRACT FROM AUTHOR]

The article offers updates on laws in Great Britain. These include the law involving the share sale and purchase agreement in which it states that the notional payment could only be intermediate or provisional where the set-off was disputed. Meanwhile, in the loans used for gambling, it is stated that whether or not a person was carrying on a business depended on a number of factors, the activity's regularity was not the only indicia in taking into considerations. Further, it is also said that the significance of a fiduciary relationship was that the relations between the parties is by which parties were such that one of them had to subordinate an own interests.

The circular flow diagram, whether in its limited form in macroeconomics, or broader form in ecological economics, depicts a duality of flows – physical resources in one direction with financial transactions in the opposite. Biophysical models of the economy can be constructed based on the physical flows and their associated stocks. In previous work, I demonstrated how the accumulation of wealth – measured by the capital stock – can be established using a biophysical model. With capital, energy use, and the distribution of labour determined by biophysical economics, here I investigate the range of potential distributions of wealth – profits versus wages – that follow in the political economy. The analysis is conducted using a four-sector model of Great Britain's economy from 1760 to 1913, including agriculture, coal mining, construction & materials, and production of goods and services. Energy price is a key variable in the model, influencing the distribution of income between different sectors. Taking the price of coal at historically observed values, the distribution of total factor income per worker is plotted as a trade-off between annual wages and profits per worker for example years of 1761, 1817, and 1871. The plots reveal how possible alternative distributions of income might be achieved under different political-economic regimes, subject to the same biophysical constraints. Conclusions are framed in the context of the grand challenges faced by ecological economists of developing environmentally sustainable economies with a just and equitable sharing of resources. [Display omitted] • The paper frames the challenge of wealth distribution subject to biophysical constraints. • Prices, wages, and profits are added to a biophysical model of the Industrial Revolution. • The distribution of total factor income per worker is posed as a trade-off between wages and profits per worker. • Changes in energy price are shown to impact the distribution of income between and within sectors. • The influence of the political economy on the biophysical economy is also discussed. [ABSTRACT FROM AUTHOR]

Theory tells us that output, the capital stock and the user cost of capital are related. From the capital accumulation identity, it also follows that the capital stock and investment have a long-run proportional relationship. The dynamic structure thus implies a multicointegrating framework, in which separate cointegrating relationships are identifiable. This has been used to justify the estimation of investment equations embodying a reduced-form long-run relationship between investment and output (rather than between the capital stock and output). In this paper, a new investment equation is estimated in the full structural framework, exploiting a measure of the capital stock constructed by the Bank, and a long series for the cost of capital. A constant elasticity of substitution production function is assumed, and a well-determined estimate of the elasticity of substitution is obtained by a variety of measures. The robust result is that the elasticity of substitution is significantly different from unity (the Cobb–Douglas case), at about 0.45. Overidentifying restrictions on the long-run relationship are all accepted. Thus there is strong evidence for a significant effect from the user cost of capital. [ABSTRACT FROM AUTHOR]

Assesses the effects of military spending on investment and economic growth in small industrializing economies. Component of military spending; Depreciation of capital stock; Impact of military burden on human capital.

Summarizes the results of major revision of on the study of the productivity position in an international perspective of Great Britain. Examination of the productivity record relative to U.S., France and Germany; Changes to the definition of national accounts of value added; Inclusion of a division of capital stocks by asset type.

While the UK's capital stock seems to have embodied technical progress at a fairly steady, though probably increasing, rate since the mid-nineteenth century, a fundamental shift in the nature of that embodied technical progress occurred during the early part of the twentieth century. During the nineteenth century commercial buildings and infrastructure were the dominant components of capital investment, both quantitatively and as carriers of the new technologies. However, during the twentieth century, faster rates of technical progress in the manufacture of equipment compared to buildings ensured that its share of capital investment has increased, while its growing dominance as the engine of growth has been reinforced by taking over as the main carrier of new technologies. Whilst this has relegated commercial building to a secondary role as driver of productivity growth, the complementarity of structures and equipment means that the function of buildings as an integrated component of business capital remains as vital as ever. These findings have important implications for the property industry as it attempts to adapt to the demands of the new information economy. [ABSTRACT FROM AUTHOR]

Examines the method for calculating depreciation rates and the implied capital stocks in Great Britain. Sequence of the calculations; Growth of capital; Task of data-providing agencies in gathering depreciation charges.

This article sets the goal of measuring the impact of plant closures on estimates of the, plant and machinery, capital stock in Great Britain 1970-93, and the consequences for estimating total factor productivity when premature scrapping is not taken into account. The unique contribution here is the use of the individual records from the annual census of production in Great Britain, which by definition allow historic estimates of capital expenditure in each plant to be used to calculate plant-level estimates of capital stock. Plants that close can then have their contributions to capital stock removed from the aggregate. The article begins by considering the perpetual inventory approach to estimating the capital stock, along with its associated limitations. An accurate measure of the capital stock that is intended for use in estimating production relations should represent the total amount of capital services available for producing output. This means taking into account efficiency losses due to deterioration. However, there is a second economic accounts measure of the capital stock that takes into account capital that is used up in production, that is, depreciation. The main difference between them is that deterioration measures the current services lost from using the capital stock in any one period, and thus the loss in potential for next period's production, depreciation measures the lifetime deterioration in the capital stock that reduces the long run income flow from that stock.

An interpretative essay "Keynes's General Theory" stimulated a large number of responses both before publication and after. Many of the comments were generous. Several expressed broad agreement. A few correspondents went beyond such agreement to indicate their pleasure at finding an interpretation of the General Theory. Economist John Maynard Keynes' main criticism of the classical theory is that the theory does lot provides an explanation of the supply of output. This failure of classical theory is a direct consequence of the classical assumption that equilibrium output is identical to maximum output, whereas Keynes believed that maximum output could be achieved only when society holds the optimum capital stock. Keynes and many of his contemporaries, favored policies to reduce the unemployment that persisted in Great Britain throughout the twenties and in many countries during the thirties. Before the General Theory and before the Treatise On Money, Keynes offered proposals to expand output and increase employment.

This article examines the determinants of short-term variations in the aggregate of capital retirement, drawing upon information from the capacity decommissioning programmes in a publicly owned corporation. It demonstrates that, in the short run, planned retirement varies in a way which is systematically related to changes in financial pressure, to excesses or shortages of capital stock anticipated for the short-term future, and to investment cycles. The study adds to existing evidence on capital retirement behaviour from an ex ante or planning perspective. Tests performed employ primary data on plans and expectations as explicitly formed by the firm at the time of taking retirement decisions. Concentration on changing expectations and targets set during successive retirement programmes has the advantage of providing a better indication about the forces which motivate closure decisions within the firm. By contrast, an ex post approach may lose part of this potential because additional factors may intervene between plans and realizations.

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The article explains the estimation of gross capital stock in Great Britain. It discusses the assumptions by which the method is based. The assumption that physical depreciation takes place at a constant rate is examined. The article shows that the implication of declining efficiency during the service life of plant is that estimates of Great Britain's gross capital stock are exaggerated. It also discusses the effect on international comparisons of capital intensity and productivity.

The article explores the relationship between gross capital stock and net capital stock in Great Britain. It describes the conceptual differences in estimates of gross capital stock and net capital stock. It examines the argument that because gross capital stock ignores the time dimension, it is these estimates which can be most closely related to statistics of the physical quantity of capital in use. The rate of growth of net and gross capital stocks in Great Britain is discussed. It states that, in the absence of cataclysmic events, the net/gross ratio can change only slowly through time.

The article focuses on a study which produced evidence for short-term labor productivity in Great Britain manufacturing industries. The specification of the relationship between short term, monthly or quarterly, fluctuations in output and in factor inputs has been of particular interest since the discovery of Okun's Law, in the 1960s. Okun's Law observed that, through the business cycle, employment fluctuates rather less than output, so that productivity is high during booms and relatively low in recessions. A large body of literature has attempted to rationalise Okun's law, mostly following the work of economists Frank Brechling and R.J. Ball and E.B.A. St. Cyr. These writers suggested that labour is variable in the short-term, but not freely variable, since there are costs associated with making changes in the level of the labour input. In this article evidence have been produced that short-term labour productivity in fourteen manufacturing industries in Great Britain is an inverted U-shaped function of output. This evidence should invalidate, at least for work on short-term disequilibrium or cyclical economic fluctuations, the standard neo-classical production function assumption that the marginal productivity of labour is everywhere a decreasing function of output. The results also, of course, challenge another frequently encountered assumption; that production coefficients are fixed in the short-term when capital stock cannot be varied.

This article discusses the effect of different forms of investment incentive on the composition of the capital stock among assets differing in durability in Great Britain. At first sight different prescriptions for non-discriminatory fiscal investment incentives appear to derive from different criteria for neutrality. The difference in the recommendations advanced in the recent literature is attributed to a different specification of the comparison across competing assets. The net present value and internal rate of return criteria yield identical results. The significance of these results for policy purposes is a matter which requires fuller consideration. Neutrality is neither an end in itself for synonymous merely with a fiscal system which does not discriminate among different durability of capital. The concept of and rationale for a neutral tax system are readily comprehensive; the justification for a system which is neutral in some respects but not others is considerably more elusive.

Appraises the problem of errors in the estimation of the value of capital stock in the United Kingdom. Improvement of the estimates using existing methods; Use of direct estimation to derive improved current and retrospective estimates; Uses of capital stock estimates of a country; Methods of estimation; Definition of capital stock; Time series profile; Estimation of scrapping.

Estimates the contribution of physical capital to explaining labor productivity difference in Great Britain and four other countries. United States, Germany, France and Japan as competitors; Estimation of capital stocks; Arguments against using official capital stocks; Aggregate economy and manufacturing differences.

The article discusses the effects of transfer or offload of responsibilities for services of the state to the private and voluntary sectors on the frontiers of Great Britain. In 1979, the central government owned five percent of the fixed capital stocks of the government but it had fallen to 4.6 percent in 1986. The government also failed to roll back the frontiers on fixed capital stocks. In terms of sales of activities, the government was even less successful. It had to produce a financial framework that would permit the activity. In 1979, the central government has shareholdings in British Petroleum Co. PLC and whole equity in Cable & Wireless PLC but these had been disposed in 1987.

The article examines a policy of how the housing system should operate to raise the quality of the housing stock to the desired level in Great Britain. If the government is interested in providing a quality stock for generations to come, it would be more effective to subsidize the young who want to do the renovations needed at the time they transfer to the houses vacated by the older people. The effect of the policy change must be to cut down investment significantly in comparison with other previous levels.

This paper examines the disposals of plant and machinery by manufacturing industry in the UK from 1959-79.
Disposals reflect relative costs as well as the effects of changing demand and liquidity levels. This is first investigated for the aggregate case of total manufacturing. Reasons are advanced for why different behaviour might be expected for concentrated and nonconcentrated industries and separate sets of results are presented for each of these cases, which are then contrasted.
The decision of firms in respect of scrapping or capital retirement is analogous to the decision on replacement investment which has received some attention in the literature (Feldstein and Foot, 1971; Nickell, 1978).
However, when the capital stock is being varied, the categories of scrapping and replacement are not equivalent and either can take place independently of the other. The focus of this paper is on scrapping behaviour. It has been convincingly argued that the actual decision-making process of firms centres on the categories of gross investment and scrapping rather than on replacement. The latter is a somewhat nebulous concept and may not be the subject of direct managerial decision making (Lioukas, 1980; Bitros and Kelejian, 1974). Section II below discusses the theoretical framework adopted in this paper in the light of previous studies. The model and results are presented in subsequent sections. [ABSTRACT FROM AUTHOR]

This paper examines investment behaviour in the context of a nationalised industry. It is concerned with aggregate investment and seeks to infer, from the outcome of the internal decision process, the factors at work behind the determination of investment. In this context, the paper attempts to ground the analysis on administrative procedures and timetables, and to take appropriate account of the framework of government control over investment. The specific setting which provides the subject matter of the study is the UK Central Electricity Generating Board.
Within this framework, which has been largely unexplored in the literature, adjustment of investment to output, finance and other factors is considered. In particular: target capital stock, financial pressure (emanating from government), capital slippage and capital retirement variables are defined and used to explain investment. Two dynamic models are developed and estimated with data from 'rolling' plans; one for investment in generating capacity and the other for total capital expenditure. The results show that investment is systematically related to these variables. The analysis offers insights into the planning process and adds to existing work from another perspective. [ABSTRACT FROM AUTHOR]

The cyclical behaviour of capital retirement has been ignored or inadequately treated in the literature on investment. This is partly due to a priori acceptance of the 'proportionality' hypothesis. According to this hypothesis capital retirement, and under certain conditions replacement investment, is a constant proportion of the existing capital stock. Jorgenson and others have supported the proportionality thesis on the grounds of steady-state conditions of renewal theory. This treatment has implicitly assumed away any determinants of systematic short-term cycles, as irrelevant to the capital accumulation process. For a discussion of related issues see, for example, Jorgenson (1965, 1971), Jorgenson and Handel (1971), Feldstein and Foot (1971), Eisner (1972, I974), Feldstein and Rothschild (1974) and Klein (1974).
The present paper presents some new findings on the cyclical behaviour of capital retirement. A dynamic model is estimated which accounts for retirement backlogs and thus avoids related biases. The analysis is complementary to previous research and builds on a previous paper by the author (Lioukas, 1980). The proposed model is estimated using British data on power plant closures, over the period 1959-77. Estimates are obtained for both actual and planned capacity retirement. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to consider output price, inventories and order backlog jointly with output and factor inputs. Such a problem may arise for a firm maximizing present value under uncertain market conditions. In particular if the demand curve is downward sloping and stochastic, production smoothing may require adjustments to inventories and/or order backlog within each decision period, while production itself can only be achieved using factors of production which are costly to employ and to adjust. Factors such as labour force and capital stock may be used more or less intensively by changing hours per man and the capital utilization rate respectively. Labour service flows, for example, can be provided by a smaller labour force with more overtime or a larger labour force with less overtime, a rise in labour services considered to be of a long-term nature suggests that the second method may be optimal while the first one may be best for very short-term changes in labour service flows. If the production function is non-stochastic and factor inputs are considered joint decision variables with output then either output or one of the factors may be considered as implied by the other production related decision variables. [ABSTRACT FROM AUTHOR]

The historical background and present methodology used in compiling the U.K. official estimates of the stock of fixed capital are described. Mention is made of the possibility that with the development of commercial accounting direct estimates of capital stock may be derived from enterprise accounts at some future time. For the present, however, an indirect perpetual inventory approach is followed. Some of the deficiencies of the present estimates are discussed including the effects of possible biases in the life-length assumptions, price indices and the treatment of secondhand assets. Estimates of gross capital stock are given analysed by industry group of ownership and by type of asset. Some conceptual issues are discussed in relation to user requirements, including the distinction between the stock of capital and the flow of services from it. The authors conclude that little can be done to improve the perpetual inventory estimate of fixed capital in the U.K. without devoting more resources to the collection and analysis of new information, particularly on the service lives of fixed assets, the extent of leasing and the transfer of assets between industries. [ABSTRACT FROM AUTHOR]

This article examines the origin and establishment of the gas industry in Great Britain. The gas industry has some distinctive claims to attention. Gas was one of those manufacturing enterprises developed first in Britain in the midst of the industrial revolution and an understanding of its evolution may shed light on the wider issue of invention and innovation in this critical period of British economic history. During the first half of the nineteenth century gas supplies were brought to all major towns and even to most small centers numbering no more than three thousand or so inhabitants. Investment in gas companies was substantial: capital stock was in the order of 11 million pound by 1846 and more than 20 million pound by 1860. Moreover, the industry was a major consumer of iron and coal, and its demands had a marked impact on particular sectors and regions. There are two paths along which commercial supplies of coal gas developed, namely the purchase by consumers of equipment with which to manufacture their own gas, and the establishment of gas companies which manufactured gas themselves and supplied it through street mains to consumers.

This paper adds (taxable) unemployment insurance payments and wage subsidies (and the assumption of a rigid wage as opposed to a rigid price) to the fixed capital stock version of the Blinder--Solow model. The analysis shows that the employment and price effects of wage subsidies arc not nearly as clear-cut as more conventional analyses would suggest. [ABSTRACT FROM AUTHOR]

The article examines the effects of cost-plus defense contracts on employment in Great Britain. British aircraft firms are taken as typical defense contractors. The central hypothesis predicts that cost-plus defense contracts result in excess employment, which will be reflected in a relatively labor-intensive reaction to an increase in sales and a sluggish employment response to cancellations. It is implied that a Grin's employment behavior will differ as between military sales to the British Government and sales in more competitive civil aircraft markets and between cost-plus and fixed price contracts. The suggestion is that firms are less cost conscious for both domestic military work and cost-plus business, the outcome being excess employment. A standard employment model provided a general analytical framework, which was used to isolate the influence of other variables on a firm's labor force. Such a model suggests that for a profit-maximizer, employment in the short-run will be determined by given technology, the capital stock and by output, with firms taking time to adjust actual employment to its desired level.

The study of technological change and productivity in the construction industry requires the development of some measure of the fixed capital stock available to the industry. There are serious theoretical and methodological weaknesses in the traditional neo-classical approaches to valuation of the capital stock. This paper is intended to overcome some of those problems in solar as they affect the construction industry and to present a suitable method of measurement using readily available published statistics. The paper also considers a method of deriving the average age of the capital stock from the estimated value of capital so calculated. This will help to facilitate empirical checks on the assumptions used and will also provide another dimension of technical change. [ABSTRACT FROM AUTHOR]

The article focuses on trade unions and confidence of the owners and managers of Lancashire, Great Britain cotton industry during 1945-1965. Lancashire enjoyed a period of relative prosperity during the 1940s. Between 1950 and 1968 Great Britain's share of world cotton cloth exports fell from 15.6 per cent to 2.8 percent, and employment in the spinning and weaving section also declined. The decline in output and employment was accompanied by a substantial reduction in the industry's capital stock. The weaving unions turned a blind eye to double-shift working in automatic loom sheds in the late 1940s. Under the Factory Acts it was illegal for women to work at night. Despite the co-operative attitude of the trade unions, Lancashire continued to lag behind its overseas competitors in the adoption of shift working during the 1950s and 1960s. Many cotton firms attempted to improve their products, through the introduction of crease resistant fabrics, non-shrink finishes, and new combinations of natural and man-made fibres.

THERE, is a growing awareness in the United Kingdom of a conflict between size of firm and competition. That is, the size of the United Kingdom market is such that in many industries the number of firms of minimum optimal size which the market could support is not large enough to ensure effective competition. The importance of this conflict is found in the fact that for capitalist economies competition has been the "control mechanism" in the system. In other words, competition has been relied upon to force the economy to achieve certain objectives which are desired by society. It is not possible to state the objectives of the economic system without the intrusion of personal values, but there are three objectives which would probably command general agreement. Perfect competition as a control device can achieve objectives one and three as listed above, but will not necessarily achieve two. There is nothing in the competitive model viewed as a control mechanism that can force firms to innovate in the same way that the model forces firms to be efficient or to leave the industry: perfect competition is neither a necessary nor a sufficient condition for innovation.[1]. [ABSTRACT FROM AUTHOR]