On Friday morning, as Tony Blair saluted cheering Labour supporters at a party in the National Portrait Gallery in Trafalgar Square, 300 telecommunications workers in Liverpool were waking up to a different kind of post-election hangover.

Marconi, the telecommunications group, was putting up the shutters on another piece of Britain’s industrial history, and they were losing their jobs. The company’s Edge Lane works, which in 1912 built Britain’s first automatic telephone exchanges — “the girl-less, cuss-less telephone” — was to be closed and the workforce dispersed. That meant a highly skilled 300 people would be made redundant, while another 355 would be found other jobs around the UK. A further 450 jobs would go at the company’s base in Coventry.

Pat Moloney, an Amicus senior representative and software engineer at the doomed site, said: “The main reaction is shock and devastation, obviously, but there is also a lot of anger at the timing of the announcement. For it to come out on the day of the election result smacks of someone choosing a good day to bury bad news.” A company spokesman said the election had played no part in the timing of the announcement.

It has been a bad news month for British industry. First MG Rover collapsed, with 5,000 Midlands workers thrown on the dole. Then Marconi dropped its jobs bombshell, followed quickly by IBM, which is cutting 13,000 jobs in Europe, 1,500 of which are expected to go in the UK.

They could be the first of a flood swollen by a fall in consumer spending. ABN-Amro, in a gloomy report on jobs, last week predicted 500,000 would go over the next three years, in retailing, manufacturing and construction. The recent spate of redundancies, it said, was not a flash in the pan.

“Optimists, including the Bank of England, argue that the current slowdown in consumer spending will prove temporary,” said James Carrick, UK economist at ABN-Amro. “We disagree. The worst is yet to come as the explosion in household debt in recent years has made the economy more vulnerable to rising unemployment.”

More worrying was the structural shift implied by the Marconi closure and the IBM withdrawal. High-tech companies such as Marconi were thought to be the last bastions of UK manufacturing, having earned through decades of investment and experience a degree of immunity to the low-cost competition that laid old-economy stalwarts low.

But last week’s contract announcement from BT, in which the Chinese group Huawei was among the foreign companies chosen to take part in the construction of the UK’s next-generation telephone network ahead of the British champion, showed that such beliefs to be bunkum.

The technology gap that western economies and companies assumed would protect them is not as wide as once thought, and in many cases does not exist at all. Nor did Marconi have the size and global reach to make it an attractive, long-term partner to insulate it from the loss of a single, albeit important, contract.

“The perception that we have a knowledge-based economy is wrong. Knowledge resides only with individuals. We cannot take leadership in any area for granted,” said Lord Bhattacharyya, founder of the prestigious Warwick Manufacturing Group at Warwick University.

Bhattacharyya pointed out that in the 1960s and 1970s, Japanese car and electrical-equipment manufacturers, having started from scratch, quickly overhauled their American rivals, who had assumed their technology base made them unassailable. “They took what the Americans were doing and did it better in just a few years,” he said.

Something similar is now happening to the UK, with the economy being hollowed out by the encroachment of cheaper competitors. If Britain cannot hold on to a Marconi, then what jobs will be on offer to future generations?

LAST Wednesday hundreds of onlookers gathered to watch the second flight of the Airbus A380, the world’s largest passenger aircraft. It has been assembled in Toulouse, France, where the test flights take place. But half the aircraft, by value, is British. Airbus UK, based in Broughton, near Chester, and Filton, Bristol, makes the aircraft’s wings and is responsible for its landing gear and fuel systems. Rolls-Royce, which has its headquarters in Derby, built the engines.

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