The Rise (and Fall?) of State-Owned Enterprise

Abstract

One of the main barometers of British industrial policy since 1945 has involved those enterprises taken into public ownership after the war. The nationalisation of inland transport (chiefly the railways), coal, gas, electricity, airways and steel was undertaken by the Labour governments of 1945–51 in a spirit of economic and political idealism about the advantages of industrial management by the state, although the precise aims of the new enterprises were left rather vague, and the legacy of government-industry relations during the inter-war years played an important part in the process, as will be argued below. There then followed a long debate about the organisation and performance of the public sector model in a mixed economy. Criticisms of the alleged inefficiency of the nationalised industries gained ground in the 1960s and reached a crescendo in the more difficult economic conditions of the 1970s. The post-1979 Thatcher administrations pursued a consistent and determined policy of ‘rolling back the public sector’, such that ‘privatisation’ became the watchword of the 1980s quite as much as ‘nationalisation’ was in the late 1940s. In this chapter the main features of these developments are sketched out, and an attempt is made to provide a long-term perspective on state-owned enterprise in Britain.