British engineering's down, but not out.
Triumph still (again) make the World's best motorcycles, thanks to John Bloor.
Swindon's Hondas are superbly made.
Cowley can't make BMW Mini Coopers fast enough.
Lotus are still the ride/handling gurus for the motor industry, and the Elise is a superb little car.
Even Vauxhall still have a few great products, some of which are 'Made in England'. My wife's Tigra is better designed and better engineered than my Audi.
The retro LEC fridge in my kitchen is better than a SMEG at half the price.
Bush still make great radios, and make them in England, and I believe some Roberts radios are still made here. (If you want a nice looking DAB, BEagle, how about the digital version of the Roberts Revival?).
Aerospace is more difficult. BAE have some excellent engineers, but have no real imperative to offer competitive prices, nor to deliver on time, because they have no real competition. You have a monopoly supplier who are also a fully commercial company, for whom maximising shareholder value is more important than meeting their customers needs. With other UK defence suppliers to compete with, it might work, but as a monopoly supplier it would work better nationalised - removing the profit/shareholder motive and focusing effort on providing the right kit to the customer on spec and on time.
Free market economics only work in a competitive free market.