Well I'd go as far as saying that the UK car industry probably wasn't that bad off in the 1960s. There's the Morris Minor, Mini, Jaguars, etc. It's really what comes afterwards in the 1970s. In fact you can probably say this about everything in the UK, not just cars, but somehow, even though they had the brains, they had the engineers, they had the trained tradesmen, their products just didn't appeal anymore. And that's across the board in any respects.
Whether it's because their designers & marketing people, just got the 1970s way of doing business completely wrong, which IMHO is their problem, but I think there's also a cultural issue as well to understand. In that respect I mean the "flower power" era. I might be wrong, but I get the impression that the UK got stuck in the 60s "flower power" era, whilst the rest of the world moved on.
As a result, designs that worked in the 60s as well as continuing to do business as if it was still the 60s, whilst everyone else moved on, well you're left behind as your competitors, not only offer products which the public actually now want, but even the way you market & do business is no longer competitive either. And it's things like these which means the British car industry got left behind - not really industrial relations, union power, or govt policies et al (although they have their part).