THE MYTH OF BRITAIN’S POST-WAR SETTLEMENT: Privatisation plans were in the works well before 1979

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Date:
25 Mar 2015

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The so-called ‘post-war settlement’ – in which everyone agreed that big state-owned enterprises should sit alongside private firms in a ‘mixed’ economy – was not as deeply rooted as is often believed. Nor was privatisation an invention of the Thatcher years.

According to research by Adrian Williamson, to be presented at the Economic History Society’s 2015 annual conference, influential Conservatives were seeking to advance a 'denationalisation’ agenda in the early 1960s. And Labour led the way on privatisation by selling its stake in BP – as well as devising a demanding financial regime for the nationalised industries.

The new study re-examines the historiographical consensus around the so-called post-war settlement, with particular reference to privatisation. The sale of nationalised industries to the private sector is usually thought of as a creature of the 1980s and beyond. Until then, the post-war consensus prevailed.

The ‘post-war settlement’ (or the ‘post-war consensus’) is indeed a dominant idea in much of the literature on post-war British history. This idea also plays a large part in contemporary political and social debate. It is often asserted that a ‘political contract’ was made between the high contracting parties of the state, industry and the unions. In particular, the economy was ‘mixed’, in that the state owned and ran large enterprises, but a substantial private sector remained.

This study argues that the ‘mixed economy’ consensus was not as deeply rooted as often believed. Nor was privatisation a creature simply of the post-1979 world. From 1964 onwards, influential Conservatives were seeking to advance a 'denationalisation’ agenda, and to move away from the mixed economy.

Tory policy-makers were sometimes tentative and confused over tactics, but clear enough about their objectives. Labour policy-makers did not share this ideological mindset, but in the 1960s and 1970s, they devised a much more demanding financial regime for the nationalised industries. Labour also showed the way on privatisation by selling its stake in BP.

Governments were struggling to pay their way. They reduced capital spending in consequence. Commercialising, or selling, the nationalised industries helped to bridge the funding gap. Any previous Tory argument between ‘commercialisers’ and ‘hard-liners’ had become moot by the mid-1970s.

ENDS

Privatisation and the post-war settlement
Adrian Williamson, Trinity Hall, Cambridge

ajghw2@cam.ac.uk

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