Modified from a previous answer of mine,

The most important factor was that the quality of technical management was much poorer in Britain than in other advanced European countries. One of the reasons for this was that people who would normally go into Industry in France or Germany would choose instead to enter into financial services or in public service which placed British Industry at a major disadvantage as compared to their peers. Part of the reason was that salaries for a person in middle management was almost half of France and Germany adjusted for cost of living. Britain did not stress upon the quality of technical, engineering and scientific education as did France (the Polytechnique and the Ponts et Chaussees, etc). The effect was this most noticeable in transportation. The British Government had undertaken two large public projects but had to cancel both.

The second was the organization of trade unions with respect to their management. In Britain, there were 115 trade unions as compared to 6 major trade confederations in France and 17 major Industrial unions that were integrated into DGB in Germany. This prevented one craft in Industry to pursue it's interests as against others. Closed shops was illegal in both France and Germany as it was against the Constitution. In Germany it was illegal to go on a strike before the wage agreement had expired. This further compounded the problem in securing Industrial development. British trade unions had played a very key role in securing safer conditions for workers but they had not secured higher wages (as productivity was lower) nor shorter working hours.

Britain also made a very major mistake in it's foreign policy. After World War 2, Britain wanted to be an independent power that was separate from USSR and the United States by associating itself with the Commonwealth. This was supported as early as 1920’s by Ramsay MacDonald by stating that he supported free association between free people as the model of relationship between the colonies and Britain. The Labour Party actually tried their hardest to keep colonial powers within the British sphere of influence and declared that they felt closer to Australia, New Zealand and US rather than Continental Europe. Britain had hoped to be the chief power in Europe and organize it along a British-French axis. It was for this reason that Britain refused to join the European Single Market in 1954. However, Britain continued to lose it's influence because of Suez Canal misstep and the consequent loss of influence because of decolonization. When Britain had finally joined the Single Market,Europe had reconstituted along a German-French axis.

Britain had over extended and over estimated itself economically and by refusing to join Italy, Belgium, Netherlands, France, Germany and Luxembourg in the Treaty of Rome, it had missed the opportunity to use it to it's advantage. Because it was deeply embedded with the United States, France under De Gaulle had always been distrustful of Britain. Britain had missed the opportunity to increase it's trade with the six countries that participated in it and thus British Industry could not face the discipline of market forces and the high standards of quality control for Industries which would have forced it develop further particularly in high technology products. The six participants of the Treaty were able to increase their trade with each other while Britain was left out. Britain's offer for a free trade deal with Canada was also turned down by Ottawa.

Another structural problem was that Britain had comparatively few number of students take up engineering or other hard sciences especially when compared to Germany. The US for instance also has similar problems and as per recent OECD data has the lowest number of people who go into "STEM" fields. This is compounded by the fact that vocational training was promoted less as compared to traditional university learning. Good Vocational programs have been essential to maintaining a competitive manufacturing sector as you can see in Switzerland, Taiwan, Germany, South Korea. One Japanese developmental expert (who was appointed by the Malaysian Government to advise on Industrial policy) once noted that "firm learning" was superior to classroom training and this has been a major problem for countries like Malaysia which stuck to the British approach to higher education. The context for Industrial technology development is firms that compete in global markets. Consider South Korea, where there are specialized "colleges" within firms like POSCO and research centers that were opened near to it with help from universities in 1970's to tackle specific problems related to particular Industries. Taiwan had 70 percent more engineers per capita than US as early as 1970's!.

When the oil crisis stuck, the growth rate in every developed country fell (including the Soviet Union and Eastern European countries, Yugoslavia, Japan). British employment in textiles had already halved between 1945 and 1970. This was made worse by the fact that a large number of enterprises were unprofitable and excess of labour was employed in order to keep unemployment low. The British Government also ran a loose monetary policy along with the above mentioned policy which caused inflation to rise further adding to the problems.Ha Joon Chang has shown that inflation need not necessarily lead to less growth by referring to the case of South Korea and Brazil. However, fast economic growth has been achieved by Taiwan, Singapore and Japan post World War 2 while running macroeconomic policy that favoured low inflation. Moreover, South Korea did bring down inflation from mid 30's to 10's in 1980's and in Brazil where it was allowed to grow, it turned hyperinflation and slowed growth. Ultimately, this made the crisis in 1970's much worse and contributed to the general sense of Britain's decline.

References:

Britain's decline; its causes and consequences by Nicholas Henderson

Relative Decline and British Economic Policy in the 1960s by Hugh Pemberton