Can you 'Buy British' on a budget?

The idea of buying British is naturally appealing. You are helping support the economy; you can be certain that the workforce is not being horribly exploited; you can be more confident about where the items are coming from; you can be assured of a quality benchmark; and you are helping to ensure less damage is done to the environment. Of course all this comes at a price.

When we're shopping on a budget, these considerations can easily come a distant second to price, and it's easy to assume that we cannot afford to take a moral position. However, this isn't entirely true.

Cheaper to manufacturer

There are two ways in which buying British is increasingly affordable. The first is that more low-cost manufactured items are being made in the UK rather than overseas.

There have been some dramatic changes in the UK economy since the onset of the financial crisis. Over the years, the value of our wages has fallen £2,000 in real terms (when you take inflation into account). That's an 8% drop in real income, and in the same period, young people have seen their real wages drop an astonishing 14%.

We have been struggling to deal with the impact of this change, but there is a flip side to it. At the same time as wages have been falling here, in some of the emerging economies, there has been real wage growth, as the economy has continued to expand. One research team found that for the average Chinese factory worker, pay increased by 19% a year between 2005 and 2010. It means that an increasing number of manufacturers have found the wage bill in these markets is no longer so much cheaper than the equivalent in the UK.

Simultaneously, the cost of transportation has been rising, and although it remains volatile, companies can no longer rely on consistently cheap shipping. It makes it more attractive for manufacturers to consider making the products closer to home.

Safer to manufacturer

This trend has been magnified by what is called 'supply chain concerns'. Over the years, some manufacturing has been divided across the world, so that each widget in the process is made wherever it is cheapest. It means that the major production line may be in one country, but components used in that production line may have been made in five other countries.

This has led to 'long supply chains' - which makes them highly vulnerable. Several major world events have revealed just how flimsy these chains are, as extreme weather, natural disasters and geopolitical turbulence has halted production of one or more of the components, and manufacturing has ground to a halt. It means that companies have been forced to dream up plan B, C and D, and in some cases they have concluded that the best solution is to shorten the supply chain dramatically, and bring at least some of the manufacturing back to the UK.

Another attraction of these shorter supply chains is that you don't need such long lead-in times. You can respond to fashions, tailor production more closely to sales, and offer a more customised product - with one week's waiting time rather than four. For companies in this sort of market, UK production makes much more sense.

Advances in technology

Many of these companies have invested in new technology, to make production in the UK cheaper too. Automated production costs the same across the world, so it makes sense to have your factory in the UK - close to your buyers. There are a number of manufacturers who have been committed to production in the UK, and developing automated solutions, and that commitment is paying off.

One recent study showed that one in six UK companies have already brought production back to the UK, and that 40% of companies currently manufacturing abroad are considering relocating to this country. Another study estimated that this trend could bring between 100,000 and 200,000 jobs back to the UK in the next decade, and increase national output by up to £12 billion.

For shoppers, this means that without facing a significant price increase, it should be possible to shop around for an equivalent product manufactured in the UK, and be part of this boost to the national economy - which the experts say could increase GDP by as much as 0.8%

Buy direct

The second way in which buying British has become more affordable is that changes in the way we shop mean that increasingly it's possible to buy direct from the manufacturer. This means we can cut out the middle men of marketers and retailers, and benefit from being close to the seller.

The oldest model for this is in agricultural areas, where farmers sell direct through markets, and the prices are rock bottom. These are 'farmer's markets' with a difference, and can be found in places like Milton Keynes and across East Anglia. Prices are often less than a third of the cost of the same fruit and vegetables in the supermarkets, because there's no middle man, and no waste.

For manufactured goods, buying direct from the manufacturer - through their online shop - isn't always cheaper. Many brands are so careful to protect their prices that they don't offer any discount at all for buying direct - despite the fact they are saving a small fortune by cutting out the retail middle man.

Factory shops

However, you can still bag a bargain direct from UK manufacturers by tracking down the factory shops - close to the production line - where the ends of lines, unsuccessful prototypes and seconds are sold off at a knock-down price.

These are even cheaper than the 'outlet' stores you will find at 'outlet villages'. They include, for example, a Barbour shop on an industrial estate in South Shields, a Mulberry shop in Shepton Mallet, a Burberry shop in Hackney and an Emma Bridgewater shop in Stoke-on-Trent. Typically they sell at half price, but often you'll find a bargain at a third of its usual selling price.

The changing economy, coupled with improved technology and some clever legwork on your behalf, means that buying British doesn't have to be expensive. But what do you think. Do you care enough to find British products at lower prices, or is price your only concern?

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