Managing the economy

Abstract

Britain was the first country to have an industrial revolution and to develop a capitalist economy. Over 40 per cent of the world’s trade once involved British goods. Two hundred years later Britain had an ailing economy and a 6 per cent share of world trade. For many years the economy has been in relative decline, with Britain apparently unable to shake off the reputation of being the ‘sick man of Europe’. Successive governments seemed content to manage Britain’s decline so as to soften the blows and mitigate its worst effects. Some were critical of this fatalistic attitude and argued that there was nothing inevitable about Britain’s decline. They believed that Thatcherite economics would reverse Britain’s fortunes. Were they justified in thinking this? When the economy began recovering during John Major’s Conservative administration, why did the electorate refuse to reward his party by supporting it in the 1997 general election? Have the Conservatives lost their traditional reputation for economic competence to Labour?