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This article sets out to study whether the dramatic events which took place in the U.K. economy since 1979 can be shown to have had any effects on certain crucial parameters which determine the export performance of the U.K. manufacturing sector. It is generally agreed that the policy changes introduced by the Conservative government since it came to power in June 1979 had a strong impact upon certain macro-economic variables, in particular upon the level of unemployment and the rate of inflation. In this article we will examine whether there is evidence to suggest that one such parameter, the income elasticity of demand for U.K. manufacturing exports (to be called fl henceforth), has shifted as a result of developments from 1979 onwards. This parameter has been widely recognised[1] as being of crucial significance for the U.K.'s competitive performance, and its low value (significantly less than unity) over the post-war period has been widely interpreted as being responsible for the trend decline in market shares of British producers in world markets. This exercise has attempted to show that a structural shift in a crucial parameter determining the demand for U.K. manufacturing exports in the longer-term might have resulted from the dramatic events which affected British manufacturing industry after the Conservative administration came into power in 1979. Finally, any improvement in the competitive performance of one country must be accompanied by a systematic loss of one or more competitor countries. An analysis of losers and gainers in this context is the subject of current research. [ABSTRACT FROM AUTHOR]