The State and Industrial Policy in Britain, 1950–1974

Abstract

An industrial policy is commonly a blend of normative ambitions allied to scepticism as to the positive efficiency of market mechanisms in achieving those sought outcomes. Those ends are often unsurprising: increased rates of productivity and economic growth are familiarly stated objectives. It is the means to the ends which are often more contentious. The 1945–1951 Attlee governments had sought to maximize production from existing capacity and to effect improvements in the performance of industries sometimes by means which sought to compensate for perceived market failings. The restructuring of major industries such as coal, textiles, and iron and steel was sought respectively through nationalization, subsidies for the withdrawal of excess capacity and the implementation of federation-planned restructuring of the industry. Where development was thought to be stifled by an absence of capital, then, in the case of small-and-medium-sized firms, this ‘Macmillan Gap’ was sought to be filled by the establishment of the Industrial and Commercial Finance Corporation in 1945. For larger companies whose projects were deemed often to be too politically or technologically risky for conventional markets the Finance Corporation for Industry was created, also in 1945, to provide long-term development capital.