Abstract
In June 1979, the DTI Longer Term Steering Group made a presentation to the CBI, based on work done over the previous two years. ‘The message … was … that the causes of Britain’s industrial decline are long established and deep-rooted. If Britain’s decline continues at the rate it has done since the mid-50s, Britain will shortly descend past Italy in the league’.1 This exchange typified such discussions in the 1960s and 1970s: a strong belief that British manufacturing was failing, allied to a desperate hope that this might be reversed if only a better connection could be made between the state and ‘industry’. To this end, successive governments devised ‘Industrial policy’. This was largely concerned with manufacturing, with Britain as the ‘workshop of the world’. Not many politicians thought it was necessary to assist, for example, banking or insurance. The policy had three main elements. Firstly, the state itself owned and ran enterprises, often those that had failed in private hands. Secondly, governments assisted declining, or, at least, struggling, industries and regions. Finally, but much more uncertainly, governments sought to develop an industrial ‘strategy’. This involved positive intervention. All this activity aimed to redress British economic decline by achieving improvements in productivity.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Similar content being viewed by others
Notes
J.W. Grove, Government and Industry in Britain (London, 1962) pp. 165–239, 243–386, 389–422, 425–494.
John Campbell, Edward Heath: a Biography (London, 1993) pp. 266/267.
Lewis Johnman, ‘The Conservative Party in Opposition’ in R. Coopey, et al. The Wilson Government 1964–1970 (London, 1993) at pp. 184–206, esp. pp.195–198.
See Graham Ingham, Managing Change: A Guide to British Economic Policy (Manchester, 2000).
See Wyn Grant and David Marsh, ‘The Confederation of British Industry’, Political Studies vol. 19, no. 4 (Dec. 1971) pp. 403–415, at p. 403.
This sentiment led to the formation of the Industrial Policy Group in 1967: Trevor Smith, ‘The United Kingdom’ in Raymond Vernon, Big Business and the State: Changing Relations in Western Europe (London, 1974) pp. 87–104 at p. 101.
See Harold Watkinson, Turning Points: A Record of our Times (Salisbury, 1986).
Richard Powell, Industry and Government: The Third Sir George Earle Memorial Lecture, given by Sir Richard Powell on Tuesday 10th December 1968 at Ironmongers’ Hall, London (London, 1968);
Sir Richard Clarke, ‘Mintech in retrospect—II’, Omega vol. 1, no. 2 (April 1973) pp. 137–163.
Sir Richard Clarke, Ministry of Technology and Industry (London, 1970) p. 14.
Tom Boardman, Industry: its relations with government and Parliament; a symposium (London, 1969) p. 28, quoting an industrialist (Sir Stephen Brown).
See, for example, Arthur Knight, Private Enterprise and Public Intervention: the Courtaulds Experience (London, 1974) esp. pp. 173–182.
See, generally, Confederation of British Industry, The Road to Recovery (London, 1976)
and Confederation of British Industry, Britain Means Business (London, 1978).
See Harold Watkinson, Blueprint for Industrial Survival: What has gone wrong in industrial Britain since the war? (London, 1976) pp. 128–134, and quotation at p. 143 (author’s emphasis).
Hansard Society, Politics and Industry — The Great Mismatch (London, 1979) esp. pp. 10–17, 21, 58–59.
Martin Wiener, English Culture and the Decline of the Industrial Spirit, 1850–1980 (Cambridge, 1981) p. 126 and p. 100 (quoting Baldwin).
See, for example, Neville Abraham, Big Business and Government: The New Disorder (London, 1974).
See Nicholas Crafts, Britain’s Relative Economic Decline, 1870–1995: A Quantitative Perspective (London: Social Market Foundation, 1997) pp. 15, 25, 30.
Stephen Broadberry and Karin Wagner, Human Capital and Productivity in Manufacturing during the Twentieth Century: Britain, Germany and the United States (London: Centre for Economic Policy Research, 1994) p. 24.
See Richard Caves, ‘Productivity Differences among Industries’ in R. Caves and L. Krause (eds) Britain’s Economic Performance (Washington, DC, 1980) pp. 135–195, at p. 138 for TFP figures.
Richard Pryke, The Nationalised Industries: Policies and Performance since 1968 (Oxford, 1981) pp.238–242.
For the contrary view, see James Foreman-Peck and Robert Millward, Public and Private Ownership of British Industry, 1820– 1990 (Oxford, 1994) pp. 306–314.
Frank Blackaby, De-industrialisation (London, 1979).
Bernard Nossiter, Britain: A Future that Works (London,1978) p. 75. The statistics seem to bear out this contemporary impression: Crafts, Britain’s Relative Economic Decline, 1870–1995, p. 61.
See, for example, Daniel Kramer, State Capital and Private Enterprise: The Case of the UK National Enterprise Board (London, 1988).
Labour Party, 1931 Labour Party Election Manifesto (London, 1931).
Harold Macmillan, The Middle Way (London, 1938) pp. 238–239, 260–262, and 289–300.
Daniel Norman Chester, The Nationalisation of British Industry, 1945–51 (London: HMSO, 1975) pp. 1–2.
Martin Chick, Industrial Policy in Britain, 1945–1951: Economic Planning, Nationalisation and the Labour Governments (Cambridge, 1998) p. xi.
Correlli Barnett, The Verdict of Peace: Britain Between her Yesterday and the Future (London, 2001) pp. 398/399.
Nick Tiratsoo and Jim Tomlinson, The Conservatives and Industrial Efficiency, 1951–64: Thirteen Wasted Years? (London, 1998) esp. pp. 32–34, 165–170.
Samuel Brittan, Steering the Economy (rev. ed. Harmondsworth, 1971) pp. 238–245, 290.
Andrew Shonfield, Modern Capitalism: The Changing Balance of Public and Private Power (London, New York, 1965) esp. pp. 71–120, 151–175.
Labour Party, 1964 Labour Party Election Manifesto (London, 1964).
See, for example, Nicholas Kaldor, Causes of the Slow Rate of Economic Growth of the United Kingdom: An Inaugural Lecture (Cambridge, 1966).
See generally, Jim Tomlinson, The Labour Governments 1964–1970, vol. 3, Economic Policy (Manchester, 2003) pp. 94–123.
By the Industrial Reorganisation Corporation Act 1966: S. Young and A.V. Lowe, Intervention in the Mixed Economy: The Evolution of British Industrial Policy, 1964–72 (London, 1974) p. 40.
Jim Tomlinson, Government and the Enterprise since 1900: The Changing Problem of Efficiency (Oxford, 1994) pp. 267–271.
See Charles-Albert Michalet, ‘France’ in Raymond Vernon, Big Business and the State: Changing Relations in Western Europe (London, 1974) pp. 105–125; Romano Prodi, ‘Italy’ in Vernon, Big Business and the State, pp.45–61;
Wyn Grant, Government and Industry: A Comparative Analysis of the US, Canada, and the UK (Aldershot, 1989) Table 4.1, p. 95.
John O’Sullivan, ‘The Direction of Conservatism’, The Swinton Journal vol. 16 no. 1, (1968) pp. 30–36, at p. 33.
See Reginald Maudling, ‘Moderation in Politics’, Crossbow, vol. 13, no. 50 (Jan. 1970) pp. 9–11.
Minutes of Meeting of EPG, EPG/66/70, 8.2.68, CRD 3/7/6/2. She was then spokesman on Power. This sentiment is absent from the two recently published and admiring biographies: see Moore, Margaret Thatcher, pp. 189–191 and Robin Harris, Not For Turning: The Life of Margaret Thatcher (London, 2013) pp. 64–65.
Conservative Political Centre, Masterbrief 21: Denationalisation (London, CPC, 1968) pp. 10–12.
See, for example, David Alexander, Dial ENTerprise: the case for a Private Enterprise telephone service (London, CPC, 1968); Paper by Brendon Sewill, ‘Savings and Ownership’, 3.1.69, CRD 3/7/26/38.
For the background to these events generally, see Robert Taylor, ‘The Heath Government, Industrial Policy and the “New Capitalism”’ in A. Seldon, and S. Ball (eds) The Heath Government, 1970–1974: A Reappraisal (London, 1996) pp. 139–159.
Tom Boardman and Nicholas Ridley, The Future of Nationalized Industries: Two Essays (London, Aims, 1979) p. 5.
Nicholas Ridley, My Style of Government (London, 1991) pp. 2–3.
By contrast, much of the literature on the privatisation programme suggests that it developed momentum well after Thatcher was in power. See , for example, Richard Stevens, ‘The Evolution of Privatisation as an Electoral Policy, c. 1970–90’, Contemporary British History, vol. 18, no. 2 (2004) pp. 47–75.
Barry Supple, ‘Fear of failing: economic history and the decline of Britain’, pp. 9–29, in P. Clarke and C. Trebilcock (eds) Understanding Decline: Perceptions and Realities of British Economic Performance (Cambridge, 1997) at p. 28.
For a selection of views from this perspective, including a contribution from Thatcher herself, see David Coates, The Question of UK Decline: State, Society and Economy (London, 1994) pp. 61–136.
See Jim Tomlinson, British Macroeconomic Policy since 1940 (Beckenham, 1985)
and George Bernstein, The Myth of Decline: the Rise of Britain since 1945 (London, 2004) p. 669.
For the rhetoric of decline, see Jim Tomlinson, ‘Inventing “Decline”: The Falling behind of the British Economy in the Postwar years’, Economic History Review, vol. 49 (1996) pp. 731–757.
J.D. McCallum, ‘The Development of British Regional Policy’ in D. MacLennan and J. Parr, Regional Policy: Past Experience and New Directions (Oxford, 1979) pp. 3–41, at pp. 3–9.
See generally: ibid. at pp. 15–19; Gavin McCrone, Regional Policy in Britain (London, 1969) pp. 120–148;
William Miernyk, ‘British Regional Development Policy’, Journal of Economic Issues, vol. 3, no. 3 (Sept. 1969) pp. 33–42.
Andrew Gamble, ‘Economic Policy’ in Zig Layton-Henry (ed.) Conservative Party Politics, pp. 26–49 (London, 1980) p. 33.
Ibid. p. 3. Not everyone in the Party agreed: see, for example, Peter Warne, Withering Heights — A Contribution to the Debate on Britain’s Industrial Ills (London, Bow Group, 1977).
Norman Lamont, Government and Industry: A Lecture in the Series ‘Government and Industry’ (Sheffield, 1978) p. 15.
John Jewkes, Delusions of: a critique of the theory of large-scale industrial dominance and of the pretence of government to restructure British industry (London, Institute of Economic Affairs, 1977) p. 9.
See Colin Clark, The Conditions of Economic Progress (2nd edn, completely rewritten, London, Macmillan, 1951) pp. 366, 395, 404.
Daniel Bell, The Coming of Post-Industrial Society; A Venture in Social Forecasting (New York, 1973).
See, for example, Bob Rowthorn, ‘De-industrialisation in Britain’ in R. Martin and B. Rowthorn (eds) The Geography of De-Industrialisation (Basingstoke, 1986).
The Times, 27.4.67, p. 2. Joseph denied that he was an advocate of laissez-faire: see Letter to The Times, 22.5.67. However, some thought Joseph was setting out in a new direction: see Eric Moonman, Reluctant Partnership: A critical study of the relationship between government and industry (London, 1971) pp. 74–75.
See Edward Boyle, ‘Government and Society’, Swinton Journal, vol. 15, no.1 (1969) pp. 8–15.
Norman Lamont, ‘When should the State interfere?’, Crossbow, vol. 12, no.45, (Oct. 1968) pp. 21–23 at p. 21.
See, for example, Edward Boyle, Conservatives and Economic Planning (London, CPC, 1965) esp. pp. 15–29.
John Nott, Here Today, Gone Tomorrow: recollections of an errant politician (London, 2002) pp. 31/32.
For the virtues of competition, see, for example, Bow Group, The Conservative Opportunity: Fifteen Bow Group Essays on tomorrow’s Toryism (London, 1965) pp. 99–101; for the lack of ideas, see Joseph’s somewhat hapless attempt to set up a working party on competition in 1969/1970, CRD 3/7/4/1.
See, for example, Jock Bruce-Gardyne, ‘An Open Letter to John Davies’, Swinton Journal, vol. 18, no. 3 (1972) pp. 52–56.
Victor Keegan, ‘Industry and Technology’ in D. McKie and C. Cook (eds) The Decade of Disillusion: British Politics in the Sixties (London, Basingstoke, 1972) pp. 137–148, at p.148.
Jock Bruce-Gardyne, Whatever Happened to the Quiet Revolution?: The Story of a Brave Experiment in Government (London, 1974) esp. pp. 76–99, 140–147.
Philip Norton, Conservative Dissidents: Dissent within the Parliamentary Conservative Party, 1970–74 (London, 1978) p. 93.
For his dissent, see, for example, Jock Bruce-Gardyne, ‘An Open Letter to John Davies’, Swinton Journal, vol. 18, no. 3 (1972) pp. 52–56.
By Patricia Hodgson, a member of the Bow Group Council: see James Barr, The Bow Group: A History (London, 2001) p. 127.
See John Biffen, ‘Rolls-Royce: The Lessons’, Crossbow, vol. 14, no. 54 (April 1971) pp. 15–16;
Jock Bruce-Gardyne, ‘Chataway’s Hurdle Race’, Crossbow, vol. 16, no. 60 (Oct. 1972) pp. 8–10.
See R. Kelf-Cohen, ‘Nationalised industries — still looking for a Tory Approach’, Crossbow, vol. 16, no. 60 (Oct. 1972) pp. 31–33.
Peter Lilley, Patricia Hodgson, and Nigel Waterson, Alternative Manifesto (London, Bow Group, 1973).
For a full exposition, see Tony Benn, Frances Morrell, and Francis Cripps, A Ten-Year Industrial Strategy for Britain (Nottingham: Institute for Workers’ Control, 1975).
For a full account of the Act, see Thomas Sharpe, Industry Act 1975 (London, 1976).
Tom Forester, ‘Neutralising the Industrial Strategy’ in Ken Coates (ed.) What Went Wrong? (Nottingham, 1979) p. 85.
See, for example, Stuart Holland, The Socialist Challenge (London, 1975) pp. 223–253.
Stuart Holland, The Regional Problem (London, 1976) p.ix, pp. 121–135.
Labour Party, TUC-Labour Party Liaison Committee, Into the Eighties: An Agreement (London, 1978) pp. 6/7.
Coventry Trades Council, State Intervention in Industry: A Workers’ Inquiry (2nd rev. ed. Nottingham, 1982) pp. 5, 7, 160–161; CTC document, 10.10.78, at Warwick University, The Modern Records Centre, Coventry Trades Council Collection, CTU MSS.5/3/59.
Conference of Socialist Economists London Working Group, The Alternative Economic Strategy: a response by the labour movement to the economic crisis (London, 1980) p. 136.
Of course, the Left did not have the same supply side reforms in mind: see Noel Thompson, Left in the Wilderness: the political economy of British democratic socialism since 1979 (Chesham, 2002) pp. 30–51.
Frank Broadway, State Intervention in British Industry, 1964–68 (London, 1969) p. 140.
See Ivy Papps, Government and Enterprise: an analysis of the economics of governmental regulation or control of industry (London: Institute of Economic Affairs, 1975) pp. 39–41.
See Frank Broadway, Upper Clyde Shipbuilders: a study of government intervention in industry — the way the money goes (London: Centre for Policy Studies, 1976);
Jock Bruce-Gardyne, Meriden: Odyssey of a Lame Duck. A study of government intervention in the motor-cycle industry — the way the money goes (London, Centre for Policy Studies, 1978).
Colin Jones, The £200,000 job!: a study of Government intervention in aluminium smelting…the way the money goes (London, Centre for Policy Studies, 1977).
The phrase ‘economic evolution’ occurs frequently in the literature: see, for example, Adam Smith Institute, The Omega File: Industry Policy (London: Adam Smith, 1984) pp. 13–29.
John Burton, Picking Losers -?: the political economy of industrial policy (London: Institute of Economic Affairs, 1983) p. 47.
Brittan, The Economic Consequences of Democracy (London, 1977) pp. 132–135; and compare: Brittan, Steering the Economy.
Denis, O’Brien, ‘Hands Off Industry — A New Humility in Economic Policy’ in Flemming, et al. Catch ‘76?: 14 escapes from economic derangement (London: Institute of Economic Affairs, 1976) pp. 95–102 at pp.100/101. See also, to similar effect: Ivor Pearce, ‘Stimulants to Exertion’ in Flemming, et al. Catch ‘76, pp. 113–121;
Alan Peacock, Structural Economic Policies in West Germany and the United Kingdom (London: Anglo-German Foundation for the Study of Industrial Society, 1980).
Involving asset sales, self-financing arrangements and cash limits. See , for example,: John Redwood, Public Enterprise in Crisis: the future of the nationalised industries (Oxford, 1980) Table 12.1 p. 201;
Frank Broadway, Controlling the Nationalised Industries (London, 1973, Aims of Industry).
Graham Hallett, Second Thoughts on Regional Policy (London, CPS, 1981) p. 10.
Merlyn Rees, The Public Sector in the Mixed Economy (London, 1973) pp. 7, 234. For an expression of the pre-1979 consensus on the Labour and Trade Union side, see the conclusions of Report of the Wilson Committee to Review the Functioning of Financial Institutions (London, HMSO, 1980) Cmnd 7937, paras 1002–1060, setting out the views of Wilson and the Trade Union members.
Barry Moore and John Rhodes, ‘Evaluating the Effects of British Regional Economic Policy’ The Economic Journal, vol. 83, no. 329 (March, 1973) pp. 87–110;
Brian Ashcroft and Jim Taylor, ‘The Movement of Manufacturing Industry and the Effect of Regional Policy’, Oxford Economic Papers New Series, vol. 29, no. 1 (March 1977) pp. 84–101, at pp. 98–99.
Wyn Grant, The Political Economy of Industrial Policy (London, 1982) pp. 49/50.
Wyn Grant and Stephen Wilks, ‘British Industrial Policy: Structural Change, Policy Inertia’, Journal of Public Policy, vol. 3, no. 1, Industrial Policies in OECD Countries (Feb. 1983) pp. 13–28, esp. pp. 25–26.
Keith Joseph, Monetarism is Not Enough (London, 1976) [Stockton Lecture 5/4/76].
Keith Joseph, Conditions for Fuller Employment (London, CPS, 1978) esp. at v, xiii.
See Paper by Howe, ‘Liberating Free Enterprise’, about June 1977, HWLL 2/4/1/1.
See, for example, Rosemary Brown, Small Businesses: Strategy for Survival (London: Conservative Political Centre, 1976); ‘Smaller Businesses Policy Document’, 18.7.77, HWLL 2/4/1/8.
See, in particular, Department of Trade and Industry, A Review of Monopolies and Mergers Policy: a consultative document (1978) London: HMSO, Cmnd 7198;
Department of Trade and Industry, A Review of Restrictive Trade Practices Policy (1979) London: HMSO, Cmnd 7512.
As to which, see Leslie Hannah, The Rise of the Corporate Economy (London, 1976).
Walker, The Ascent of Britain (London, 1977) pp. 26–29, 101–105.
See Paper on ‘The Chrysler Rescue’, 15.12.75, LCC 1/3/9; Michael Grylls and John Redwood, National Enterprise Board: a case for euthanasia (London: Centre for Policy Studies, 1980).
The casus belli was BL, which Thatcher believed should face liquidation immediately: Michael Heseltine, Life in the Jungle: My Autobiography (London, 2000) pp. 176/177.
See Michael Crick, Michael Heseltine: A Biography (London: Penguin, 1997) p. 188; CRD Memo, 24.1.76, summarising Heseltine’s Speech of 10.1.76 as ‘Heseltine backs state intervention’: THCR 2/1/1/28.
Particularly in France, Belgium and Italy. See, for example, Note of meeting between Benn and CBI, 19.3.74, CBI MSS.200/C/3/P5/58; Stuart Holland, ‘Europe’s New Public Enterprise’, in Raymond Vernon, Big Business and the State: Changing Relations in Western Europe (London, 1974) pp. 25–42, esp. at pp. 31–39.
See Speech by Howe, 26.6.78, at Geoffrey Howe, ‘Enterprise Zones’ in Margaret Thatcher, et al. The Right Angle: Three Studies in Conservatism (London, 1978) pp. 11–19.
Quoted in Nigel Harris, Competition and the Corporate Society: British Conservatives, the State and Industry, 1945–1964 (London, 1972) p. 138.
Author information
Authors and Affiliations
Copyright information
© 2015 Adrian Williamson
About this chapter
Cite this chapter
Williamson, A. (2015). Conservative Industrial Policy: The End of the Mixed Economy?. In: Conservative Economic Policymaking and the Birth of Thatcherism, 1964–1979. Palgrave Studies in the History of Finance. Palgrave Macmillan, London. https://doi.org/10.1057/9781137460264_5
Download citation
DOI: https://doi.org/10.1057/9781137460264_5
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-68974-3
Online ISBN: 978-1-137-46026-4
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)