The ‘anti-Dyson’: John Elliott is on a mission to clear the trade deficit and reverse the decades-long decline of British-made consumer goods

John Elliott, founder, chairman and CEO, Ebac
Education
1959-64 – Apprentice draughtsman, Westool
Career
1965 – Junior draughtsman, Westool
1967 – Design draughtsman, the Science Research Council’s Rutherford High Energy Laboratory
1969 – Sales application engineer, Westair Dynamics
1972 – Founded Ebac as an industrial dehumidifier manufacturer
1980 – Developed the UK’s first mass-produced domestic dehumidifer
1993 – Moved into the water cooler market
2004 – Chairman of the successful ‘North East Says No’ campaign against the John Prescott’s plans for a regional assembly
2005 – Moved into the leisure industry with the opening of the Waterfall Spa in Leeds
2006 – Appeared on one of the first episodes of Channel 4’s The Secret Millionaire, giving thousands of pounds to good causes
2012 – Formed the Ebac Foundation as the permanent owner of Ebac to prevent it from being moved from County Durham
2012 – Launched the Stop Gap initiative to campaign for the elimination of the UK’s trade deficit
2012 – Announced plans to reintroduce washing machine manufacturing to the UK
2013 – Purchased bankrupt chest freezer manufacturer Norfrost
John Elliott is not a man who holds back. Two minutes into our interview on why he’s decided to bring washing machine production back to the UK, he launches into an ardent sermon on the dangers of trade deficits and the illusions of globalisation. He speaks so quickly it’s sometimes hard to keep up, hinting at the anger and frustration with those who’ve allowed Britain’s industry to decline that bubbles beneath his otherwise agreeable demeanour.
“I don’t think we can get enough from high-value products because demand isn’t there. British housewives spend twice as much in a year on washing machines as the entire world does on Rolls Royce cars
‘When we buy something from China and the price is low because the labour is cheap, then I’ve got to pay out again to the person in the UK who would have made it but is on benefits,’ he exclaims. ‘So it doesn’t cost us any less overall as a country.’
Hailing from a small mining village in County Durham, Elliott started from humble beginnings to become one of Britain’s most successful businessmen (although he is still based in nearby Bishop Auckland). Influenced by his technically minded grandfather, at 15 he became an apprentice draughtsman and at 28 started his own company producing industrial dehumidifiers.
Forty years later, after building Ebac into a multi-million pound business, the nearly 70-year-old could just retire and enjoy the fruits of his labour. Instead he’s planning to start making washing machines, not just as a way of expanding the firm but also with the aim of countering the decades-long decline of British-made consumer goods. Unlike the government and most of what we could call the industrial establishment, Elliott thinks Britain’s economic rebalancing can’t be achieved by focusing on exports of high-value advanced products in the aerospace, automotive and electronics sectors. Instead, we should make more for the internal market.

‘I don’t think we can get enough from high-value products because demand isn’t there,’ he says. ‘British housewives spend twice as much in a year on washing machines as the entire world does on Rolls Royce cars. Rolls Royce cars are a great success story but you just can’t get the volume to get rid of our trade deficit, so we’ve got to go for the things that you and I consume day in and day out … And we sometimes think we’re the only ones who can make high-value products. That isn’t true either. The benefit of [making goods for domestic consumption] is that it’s easier to do. We don’t actually depend on other countries doing well because we control it ourselves.’
Haven’t we been down that route and failed? The government and numerous economists would argue high-value manufacturing has more realistic growth potential for Britain than volume mass production. ‘If I could choose, yes I’d rather make high-value goods. But there isn’t enough demand for it. And no one can give me an example of it. They all say we’ll innovate and make these pie-in-the-sky high-value goods. Yeah, what?’
Elliott grew up at a time when it was possible to buy most available goods from a British manufacturer and when the UK typically exported more than it imported – something we’ve not managed now for almost 20 years. Which perhaps goes some way to explaining why he is so vehement – unlike the modern politicians whose main worry is government spending – that the country’s number one problem is its trade deficit. He’s even started a campaign group, Stop Gap, to highlight the issue.
“The reason we’re in a financial crisis in the world is because of trade imbalances. So we’ve got to get rid of it.
‘We’ll be where Greece is in a few years’ time because we’re consuming more than we produce,’ he says. ‘[The trade deficit is] £27bn. That’s £400 per person. That’s not small beer… I mean where do we get this £27bn from to pay for the imports? We either print it, which is crazy, or we borrow it. The reason we’re in a financial crisis in the world is because of trade imbalances. So we’ve got to get rid of it.’
Although Elliott’s persona is that of a straight-talking, no-nonsense northerner, he’s full of apparent contradictions. He’s a self-made millionaire who has appeared in the Sunday Times Rich List but gave his company away to a foundation to ensure his workers never lose their jobs. His success comes from exporting clever new products but believes innovation is a distraction from the more pressing need to manufacture basic goods for British consumers.
He’s also a Eurosceptic who has railed against bureaucracy but ends up arguing for effective protectionism, state ownership (but not operation) of industry and dramatic restrictions on personal finance to enforce lower living standards until we pay our way. He complains of being hassled to take on more apprentices but thinks university is a waste of time and says it would be better for government to invest in factories to create jobs than pay for the dole.

Yet however confusing and sometimes confused his arguments can be, some of his underlying points are hard to disagree with. The UK’s trade deficit isn’t really being addressed and the focus on high-value manufacturing has yet to have a real impact on rebalancing the economy. We don’t have real free markets when countries like China artificially inflate their currencies and subsidise their workers to keep costs low. Foreign investment isn’t free money and we’d benefit from more UK companies spending their cash piles.
And he freely admits his idea of limiting global trade by forbidding deficits would never happen. In light of that, what can the UK government do to improve things? ‘The £50bn we’re going to spend on High Speed Two, if that was invested in factories to make things that we consume, picking the high-value-added things first, that would get rid of our trade deficit.’ So he’d like a socialist economy? ‘It’s to compensate for the lack of a free market now, and everyone would benefit.’ But what would be the difference between that and creating apprenticeships that aren’t real jobs? ‘I’m not in favour of supporting lame ducks. You’ve got to have competition. What I’m saying is now there isn’t competition. There isn’t a level playing field. We cannot compete.’
There’s another problem with his proposal to revive low-value manufacturing in the UK. Elliott is taking the very noble step of making lower profits in order to create jobs here rather than in cheaper locations, something most businesses probably wouldn’t be so patriotic about. He’s not even interested in working out how much he could save by going abroad.‘I’m not going to do that. I don’t need to do it and it’s not right. Sometimes you’ve got to do things for the greater good. I don’t want to sound too high and mighty, here but sometimes … you’ve got to do what’s right rather than go for the last penny.’
He stresses that he’s still running a commercial business, not a charity. And automation will help keep costs down. ‘We’ve got a good strategy. We do sell consumer products already. We know how to make things and we understand this market so it isn’t a big step. But our strategy is to do something that is totally risk-free. We’re not trying to do something clever. We’ll make a bog-standard washing machine that’ll do a good day in, day out at a reasonable price.’
Still, his idealism is admirable. ‘I think you’re being too nice to me,’ he replies. ‘I think it’s common sense and it’s obvious we should be doing it.’ Modest and sticking defiantly to making a bog-standard product in the UK? It’s like he’s the anti-Dyson.
How easy does he find it to recruit? ‘Good people are very, very scarce,’ he says. ‘Our education system leaves a lot to be desired. We teach people lots of things they never need and don’t teach them what they do need. It’s amazing we spend £90bn on our education system and probably 80 per cent of it is wasted teaching people things they’ll never, ever use in their lives. Like how do you work out the volume of sphere? If you wanted to find that out it would take you two seconds on the internet.’ What does he think kids should be taught? ‘The only musts are to read and write and be able to add, subtract, multiply and divide. After that it should be life skills and have fun.’
Would he forgive me if I said he had quite an old-fashioned way of thinking? ‘More common sense I think. I think people just complicate things and then you get locked in debate rather than saying what’s the real thing. People just can’t see the wood for the trees.’
With such strident opinions, I wonder if Elliott has ever considered politics? He actually defeated John Prescott’s campaign for a north east regional assembly in 2004. ‘Party politics is the reason we underperform as a country,’ he says when I contact him via email a few weeks after our interview. ‘Think of the system that we use to pick our leaders and imagine doing the same for a business. It wouldn’t last very long. What was right 300 years ago is unlikely to be right for now but turkeys don’t vote for Christmas.’
Elliott’s probably too willing to speak his mind for politics anyway. And I’m not sure I’d want him to be head of the World Trade Organisation. But British manufacturing would probably be better off if a few more business owners were willing to follow his example of looking at the bigger picture.
Absolutely wonderful reading!!
John Elliot has it absolutely right. This is the true blueprint for the future prosperity of this country. I can’t wait for the washing machines to come out and all my friends are keeping theirs going until they do.
The rush to bring in lower cost consumer goods from the Far East has been driven by greedy retailers owned by greedy private financiers. Until they are reined in, no-one will be able to buy UK-made goods, because they won’t be offered in their shops. And the current bunch in power only ever put greedy rich men ahead of the country’s needs.
I was starting to think I was the only person in the world who thought like that.
I’m not alone……………
Having worked in the last large scale domestic appliance manufacturer for many years, I can confidently say that it failed from very bad management not any fundamental problem of economic viability.
Ebac can certainly retake the market just as Triumph did with motorcycles. It just takes good management and a good team of engineers.
Thank goodness there are growing numbers thinking like this. For example http://www.britishfamily.co.uk/ At the family fayre they ran, Ebac were there, I had a chat with them, they really know what they are aiming to acheive, it was a real pleasure. This site is excellent too and part of a growing trend.
http://www.makeitbritish.co.uk
John Elliott should be Knighted for his stand on this issue.
So who designed John Elliot’s washing machines if he thinks that all one needs is basic arithmetic and that understanding how to calculate the volume of a sphere is higher mathematics?
Perhaps he just wants drones for his factory!
A breath of fresh air for a change!
Somebody arrange a meeting between this chap and Osborne. It’s not the economy. “It’s the trade gap stupid!”
This type of thinking could save the Uk economy, make people proud to buy British. It could also resurrect our car industry. We have the workers and even the management just no government wanting to invest’ lets hope this will open their eyes.
I applaud John Elliot and hope he survives the modern shoppers views that buying foreign is best – Thats what virtually destroyed UK owned car manufacture and white goods manufacture destroying British Jobs and demand for British Steel – You saw it in the 1980’s outside British Steel’s factories and car factories – cars packed with foreign built cars.
If we dont buy British made goods how can we expect others – The Governments of the 1970’s and 1980’s tried to reverse the decline by Buy British Campaigns but the British Public brought foreign make of the back of ‘Vorsprung Durch tecknic’ and ‘Zanussi the Appliance of Science’ Adverts.
Go to Germany – They buy German products and have a strong wealthy industrial base to give economies of scale to export German Products AND buy the best industries in other countries.
Go To France and you seldom see a non- French car with French Number plates – why are we perverse here!!!!!
If we all spent 10% less on imports and 10% more on UK manufactured goods each year that would revive the UK manufacturing base in the way John Elliot is trying.
As a former NEI and then GEC employee I also applaud John Elliot for making his business a trust that cant be purchased and stripped out by foreign competitors.
We have lost UK owned train and car businesses brought by foreign investors and given up in multi national merger like the GEC Alsthom merger becomming Alstom. On Merger there were 83,000 UK and French jobs split equally between the UK and France in manufacturing business units BUT all but one plant is closed down to preserve jobs in France. The business unit I worked in was sold to Siemens and they have tried to treansfer jobs to eastern Europe. At the same time my business Unit was transferred from Alstom to Siemens the Metro Cammell train manufacturing works won a major export order that ‘guaranteed’ the plant amnd emp;loyment for 10 years according to public mass meeting with Alstom UK management BUT within weeks Alstom corporate in France clossed Metro Cammell down because the factories in France couldnt get orders and the work was transferred to France!!!!
I dont know how we can protect good small businesses that will grow into the big industries in Future because companies like Siemens buy them out to strip their ideas and IPR out
All good sense: and splendid to read.
I used to think that I too was the only person who had spotted this ‘hole’ in the accounts of UK plc! Hopefully John and others are the folk to plug it.
BUT if I can offer a caveat from ‘my’ industry: the root of the home or foreign supply problem is indeed the shear unadulterated greed of the retail trade, in all sectors, but particularly in textiles. Let us be frank: as a buyer -an individual seeking to show his/her seniors that he/she is worth their salary its much more fun personally getting into a Cathay Pacific jet and flying to Beijing that taking the train (even if it is not HS2!) to Bradford. The retailers want the mass of the population to be their customers (they have little choice) but NOT their suppliers -for the reason suggested above?
Best
Mike B
Apropos the post-war success of the two main losers? Their leadership had indeed shown that they were outrageous..and in future were not to be trusted to make either weapons, ammunition, nor the platforms for their delivery, so the clever folk made everything else. That bought by citizens with their own money in billions, not in ones and twos by Governments with ours, or borrowed?
Let’s start a circle of like-minded believers who pledge to buy some of his British products when available. Perhaps Mr Elliot or someone could start a website campaign and collect pledges, which can be reeled in when his factories are rolling. This web-based initiative could kick-start the broken down UK juggernaut.
I completely agree with all in this article. Anyone who reads my contributions will be in no doubt of my belief that the UK must avoid being dependant upon others.
It is also abundantly clear that the downfall of British manufacturing was almost entirely caused by incompetent management, albeit with a lot of help from the restrictive practices of the major Unions.
As for a circle of like minded believers, it’s already there. Each member is called a Voter. We need to make clear to those who choose to enter politics about their priorities in supporting us voters. If that means a major shake-up of the current batch of ‘Jobsworth’ MP’s, then so be it.
Yesterday my CFI (cheap foreign import) fan heater gave up the ghost, after two years of work – so out came my twenty-five year old fan heater from Belling (I used to work next door in Thorn Elecrical ) to give me service again.
I don’t know where I stand on this subject, I’m just relating info to aid the discussion.
John Elliott is essentially correct in his assertion that lower value added products can still be made successfully in higher cost economies – it all depends on the direct labour cost of the finished product as a proportion of the real total product cost – if direct labour cost is less than 10% of product cost there is no advantage in building in a low wage (or even zero wage) economy. The labour cost saving will be more than offset by the increased logistics/management/quality/cycletime costs that are inevitable when offshoring production.
Many British companies went down the route of offshoring products because direct labour cost could be reduced, whilst forgetting to look at the overall cost of the offshored product. The end result is that many companies showed no financial improvements at all from offshoring – and some even went under as a result.
The issue was further compounded by the City, who were obsessed with ‘improving ‘ manufacturing companies by encouraging them to use other people’s assets to actually build the product – I had many a disagreement on this point with Financial Analysts whilst working for a quoted semiconductor company.
My current company, whilst owning an overseas manufacturing plant, manufacturers over 80% of product in the UK, and exports 90% of that. Our investors are very supportive of manufacturing in the UK, so maybe the view in the City is also changing for the better.
It is interesting that the Japanese started their success by understanding how to make things and how to develop the manufacturing.
If one does not know how to make something then designing is limited.
If you know how to make things then you can do exciting new designs that are innovative.
If you let other people make things then you do not know what can be made and how much it should cost.
Losing manufacturing ability and understanding is something the Germans did not want to do. Perhaps we can remember ours — but only if we appreciate how important manufacturing is.
Dear Mr. Harris,
I have to take issue with your suggestions that Mr. Elliott’s thinking is muddled. I’m sorry to say it but you seem to be a child of reductionist philosophy.
There is nothing he’s saying which is contradictory it merely doesn’t fit the meta narrative which has been peddled for decades now: free markets, globalisation, capitalism…
in fact none of these are laws merely rules which have taken on talismanic status.
One doesn’t need to export more to reduce the trade deficit, simply manufacture more for domestic consumption.
His actions towards Ebac aren’t socialist but they are socialistic. What Mr. Elliot realises is that there are NO free markets, all markets are a product of culture and regulation. Just look at the number of German cars in Germany, French in France or American in the USA.
What he is doing is called joined up thinking. Rather than analysing everything in little boxes he’s taking a wider, holistic approach.
Its not wrong just different to the reductionist approach common today.
When Honda first took over what was the BMC it could not believe the philosophy followed. Namely design and build it cheap and try and get quality in afterwards. They did the opposite, namely design and build the highest quality and cost engineer going forwards. Easy to see which way works best.
So, to today, we still have management that follows the ‘Cheapest at any cost’ way of doing things. Utter Lunacy.
I’m certainly pleased to hear this sort of talk. However it’s important that if we make bog standard products, they are good quality. Why not concentrate on selling products that are differentiated by being built to last with spares readily available. It worked for Volvo at a time when most cars would rust through in 3 years.
I would say that EBAC make good quality dehumidifiers in my experience. Let’s hope the same is true of the washing machines.
I can’t believe these are exactly my beliefs too. Good luck to this guy.
Having met some of the Ebac people I am confident the washing machines are going to be excellent products.
This design of the fall of British Manufacturing was designed outside of Politics by the City of London banks and finance where they said they could make more money for the UK economy through finance and hence the trend has continued with a decline in manufacturing since the 1960s in the UK, with perhaps divisively the Japanese invited over to see how we manufactured products and in recent times banks not lending money to industry because they simply did want manufacturing in the UK.
It does make me think that when we vote politicians in that we are voting the wrong people in to control our country and they are just puppets at the end of the day. There is no dignity for many people in the UK today to make a contribution to their country and it’s well being.
As usual the comments are aimed at others when in all honesty we have been the authors of our own destruction. We have been taken in by the promises of politicians, the public buys products hyped beyong belief and priced both down on cheap goods and stupidy high on so called “premium” products especially foreign cars and other luxury goods. At home we have been betrayed by the press and let down by bankers and business, the incessant pushing of the “old” heavier (particularly labour intensive) industries by the Unions has diverted attention away from everybody doing a better job for a reasonable wage. It is no good expecting the average SME to expand and supply the world, but a little long term investment by all of society would go a long way.
I’ll buy a good product. I’m not too nationalistic about it though. Make something that works and doesn’t have bits falling off and that doesn’t make me feel like I’m a mug to be paying so much for it.
Triumph is an example – I wouldn’t buy one for its nationality but because it’s a good bike. It has foreign sourced components where they make sense.
The idea that I’ll knowingly buy something crap for any reason is utterly ridiculous. Do any of you have iPhones? Android? Why didn’t you all by Symbian stuff – that was at least designed in Britain and supported many British jobs. Well the problem is that it became crap through mismanagement and was put to the sword and good riddance. It provided a poor quality experience for consumers and the people making it thought everything else was more important.
Consumers can choose from everything the world has to offer as long as the pound is strong. To get them in you have to make things that are at least as good as their other choices and you have to undo many years of perception that was created for good reasons. As a consumer I don’t want to subsidise you. Make good products.
He’s right!
British education is still based on failed, discredited 1960s idealism… rather than 21st century genetics!
It still assumes most children are potential mathematicians and graduate physicists, empty bottles waiting to be filled with equations. Those sorts of minds are born and not educated in our conveyor-belt schools. That is why they fail so many and earnestly encourage so few.
We need to make school OPTIONAL, so only those who WANT to be educated go and feed their minds there, those who see knowledge as their route upwards and wish to get on with being useful to themselves.
For the rest? Can’t we provide rock-breaking for food or toiling in the fields for the wages migrant workers accept? They can be cheaper than the machines that might easily replace them… for a while!
I am sorry to be the bearer of bad news. The future may not be very rosy but it might work and may, at best, benefit the majority.
For a sound analysis of where Britain went wrong I suggest people read Corelli Barnett’s The Collapse of British Power. He highlights the glorification of liberal arts education promulgated by the Headmaster of Rugby on one hand and the emphasis on the “practical man” on the other. Poor management, complacency, adversarial trade unions as opposed to the German mitbestimmung, and excessive influence of the financial institutions have all played their part. It needs fundamental change across the board.
Mr Elliot I take my hat off to you–I too thought I was all alone in this crazy country.
We need more like him–sadly a heck of a lot more.
From an ex Durham Toolmaker
Clive
John’s message is clear and unambiguous, and as a professional working in product design I’ve long waited for an industrialist to tell it like it is…..and crucially put his money where his moth is!
But for some notable exceptions in automotive and aerospace, much of the UK’s volume manufacturing is virtual – Household brands with a satellite office in Asia and a warehouse somewhere just off the M6
Fantastic news I always try to buy products made in the UK but white goods are almost impossible. I need to replace two washing machines, when can I buy one of yours?
I think this is excellent news and I hope it works out well.
As far as other British made white goods are concerned, the White Knight range of tumble dryers are made in the UK (I have one and am very pleased with it). I also understand that some (all?) Hotpoint tumble dryers are made in the UK but not their washing machines or fridge/freezers.
I absolutely love this guy. What he stand for, what he believes in. Perhaps a change in attitude from the consumer would be helpful as well. I can remember some years ago, certain products made in Britain where given a Japanese sounding name to make them sell better. My next washing machine will be a ebac one, even if it means paying a bit more. Helping to keep a UK worker employing rather than a foreign one and then subsiding an unemployed person through tax.
I totally agree about bad management being the fault . If it were the work force here Nissan,Mini,Toyota et al would not have such successful world beating factories based in the UK with a British workforce . Lack of investment and our banks strangle hold on finance and reluctance to lend to businesses is also a massive problem here.