Conservative Industrial Policy: The End of the Mixed Economy?

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.