From Dreams to Disillusionment: Economic and Social Planning in 1960s Britain

From Dreams to Disillusionment Economic and Social Planning in 1960s Britain Glen O’Hara From Dreams to Disillusionme...

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From Dreams to Disillusionment Economic and Social Planning in 1960s Britain

Glen O’Hara

From Dreams to Disillusionment

Also by Glen O’Hara THE WILSON GOVERNMENTS OF 1964–1970 RECONSIDERED (editor, with H. Parr)

From Dreams to Disillusionment Economic and Social Planning in 1960s Britain Glen O’Hara Oxford Brookes University

© Glen O’Hara 2007 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identiﬁed as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2007 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN-13: 978–0–230–01347–6 ISBN-10: 0–230–01347–3

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This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data O’Hara, Glen, 1974– From dreams to disillusionment : economic and social planning in 1960s Britain / Glen O’Hara. p. cm. Includes bibliographical references (p. ) and index. ISBN 0–230–01347–3 (hardback) 1. Great Britain–Economic policy–1945–1964. 2. Great Britain–Economic policy–1964–1979. 3. Great Britain–Social policy. I. Title. HC256.5.O35 2007 320.60941′09046–dc22 10 16

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Printed and bound in Great Britain by Antony Rowe Ltd, Chippenham and Eastbourne

Contents List of Tables and Figures Acknowledgements

vi vii

1

Introduction

1

2

The Planning Fervour of 1959–1964

9

3

Macroeconomic Planning

37

4

Planning the Public Sector

72

5

Regional Planning

101

6

Housing

129

7

Health Care and the NHS

167

8

Conclusion: Governance, Choice and History

205

Notes

220

Bibliography

263

Index

285

v

List of Tables and Figures Note: All ﬁgures are for Great Britain unless otherwise stated.

Tables 3.1 3.2 5.1 6.1 7.1

National Plan percentage annual growth targets and actual outcome, 1964–70 Men and women’s nominal weekly earnings increases and inﬂation, United Kingdom, 1956–57 to 1963–64 Regional aid, expenditure on selected measures, 1960/61–69/70, £m at 1964 prices Improvement grants/General Improvement Areas, England and Wales, 1949–74 Local authority health and welfare services, 1967: projection and reality, England and Wales (staff whole-time equivalents)

68 69 126 163

196

Figures 2.1 4.1 4.2 5.1 6.1 6.2 6.3 7.1 7.2

Total growth in Gross National Product, 1951–64 Percentage annual increases in total public expenditure, 1959–1970 (1959 prices) Public expenditure ‘marksmanship’, 1959/60–1969/70 Government expenditure on regional assistance, 1951/51–1982/83, at 1983 prices House price rises (1951 prices) and the house price-personal disposable income ratio, 1951–74 An international comparison of housebuilding, 1959–64 averages per 1,000 population Public and private housebuilding completions, England and Wales, 1951–1974 The cost of the National Health Service, 1951–1970 (1970 prices) Health care expenditure as a percentage of GNP, various nations, early 1960s

vi

10 94 97 125 137 138 140 168 179

Acknowledgements First and foremost, thanks must go to my Ph.D. supervisor, Kathleen Burk, who gave kindly of her limited time whenever I was in need of it. Without her wise counsel – and incisive editing – this book would never have been ﬁnished. I must also single out the ﬁnancial and intellectual support of Professor Niall Ferguson of Harvard University, who has read – and reread – most of the text that follows without (much) complaint. My examiners, George Peden and John Ramsden, also made a number of very helpful suggestions. During my time at The Independent, the editorial staff at that newspaper had to endure a series of inaccuracies and mistakes while I thought about planning. I should therefore praise the patience of Ian Birrell, Sally Chatterton, Sean O’Grady, Adrian Hamilton and Matt Hoffman. A host of academic teachers, collaborators and friends have also played a vital role in bringing this project to completion. In alphabetical order, what follows owes a great deal to Lawrence Black, Andrew Blick, Martin Ceadal, the late Charles Feinstein, Ruth Harris, Felicity Heal, Rodney Lowe, Roger Middleton, Avner Offer, Helen Parr, David Parrott, Hugh Pemberton, Kate Quinn, Richard Sheldon, John Stevenson, John Stewart, James Thompson, Jim Tomlinson, Christopher Tyerman, James Vaughan, Andrew Vereker and John Welshman. Everyone who I lived with during the long gestation of this book must also be thanked for putting up with economic and social planning: Nick Atkins, Martin Booth, Caroline Crowther, Dan Girnary, Rebecca Girnary, Emma Gordon, Claire Young, Nicholas Sweeney, Eui-Sik Suh, Emma Taylor and Cathy Wilson. The ﬁnal drafts have been enlivened by the (sometimes contrary) views of Lyndsay Grant. A host of archivists and librarians have also helped, especially those at the National Archives in Kew, where most of the research was done. The staff of archives at Churchill College, Cambridge, and the Modern Records Centre at Warwick University have also done sterling work. I am especially indebted to the custodians of party political archives: Jill Spellman, at the Conservative Party Archive in the Bodleian (along with Colin Harris and the staff of Room 132), and Stephen Bird and Jill Martin at the Labour Party’s Archive in Manchester. vii

viii Acknowledgements

The Arts and Humanities Research Council and UCL funded the P.hD. on which this book is based; the University of Bristol, New College, Oxford, Oxford Brookes University and the Wellcome Trust for the History of Medicine provided funds for travel and accommodation. Its ﬁnal publication has been assisted by a grant from the Scouloudi Foundation in association with the Institute of Historical Research. All mistakes and inaccuracies are, of course, my own responsibility. Finally, this work is dedicated to my mother.

1 Introduction

The planning moment If there was one concept at the heart of the raised expectations and dashed hopes of British politics in the 1960s, it was ‘planning’. It is difﬁcult now to recall the hopes invested in such techniques, so vital in Labour leader Harold Wilson’s appeal to the ‘white heat of the technological revolution’: but such convictions were extremely widespread and deeply held. As Wilson wrote in 1961: ‘steady industrial expansion and a strong currency… can be achieved only by… purposive economic planning’.1 Such thinking was behind his 1963 Conference speech as leader: Because we are democrats, we reject the methods which communist countries are deploying in applying the results of scientiﬁc research to industrial life. But because we care deeply about the future of Britain, we must use all the resources of democratic planning, all the latent and undeveloped… skills of our people, to ensure Britain’s standing in the world.2 Conservatives were not without answers. For two years they had been pursuing their own planning experiment in the National Economic Development Council. Chancellor Selwyn Lloyd had grasped at the idea as a counterpoint and cushion to the deﬂation involved in his ‘little Budget’ of July 1961. Confronted by yet another of the many sterling crises of this period, Lloyd raised interest rates, announced a temporary moratorium on public investment, and called for a six month pause to wage rises. ‘The controversial matter of planning at once arises’, Lloyd accepted: ‘I am not frightened of the word… the time has come for a 1

2 From Dreams to Disillusionment

better co-ordination of… various [government] activities. I intend to discuss urgently with both sides of industry procedures for pulling together… consultation and forecasting with a view to better coordination of ideas and plans’.3 This led to the creation of the tripartite National Economic Development Council, regional plans beginning with White Papers on Scotland and the North East of England, ﬁve year surveys of public expenditure, and then on to Labour’s Department of Economic Affairs, charged with economic planning and the 1965 National Plan. The approach was not only obvious in economic policy, for the Hospital Plan of 1962, the Local Health and Welfare Plan of 1963, and the Housing Plan of 1965 were good examples of plans prepared for the welfare state. These projects were the product of a remarkable conﬁdence, for each was supposed to provide a comprehensive framework for Britain in the 1970s. Analysing the planning mood requires a deﬁnition of what ‘planning’ meant. That is actually very difﬁcult, since there is no necessarily clear dividing line between planning and free market capitalism. During the eighteenth and nineteenth centuries the word referred to designs for physical infrastructure such as roads and harbours. It took the collectivism and total wars of the twentieth century to change its meaning so that it referred to systems of economic and social governance. In that context, the political scientist Guy Beneviste thought that the word possessed at least four different connotations. Trivial plans are hopeful statements about the future that will probably take place whatever actions the planners take. Utopian plans usually involve overblown descriptions of very limited programmes that no one expects to achieve the objectives announced; imperative plans are Soviet-style instructions that the planning authorities have the power to enforce. Intentional planning involves the setting of ambitious but not impossible targets that are not entirely within the control of government, with the implicit promise that policies will be followed to help them become reality.4 A number of historians have also had to make the attempt to deﬁne what they are writing about. Richard Toye, for instance, has provided another deﬁnition, positing that really comprehensive ‘central economic planning’ involves the pursuit of structural change through a suspension of market mechanisms, the central direction of large parts of economic life, and the state ownership of the means of production.5 The plans under investigation here did contain many of these elements. However, the need for a clearer deﬁnition to narrow down our inquiry is pressing given the theoretical confusion as to what ‘plan-

Introduction 3

ning’ meant: as late as 1962 The Listener could refer to it only as ‘introducing more coherence, more purpose, into an economic system’.6 Happily for the author, 1960s plans did bear such unmistakably shared hallmarks that it is possible, for that decade at least, to arrive at an empirical rather than a theoretical deﬁnition. The ﬁrst thing these plans had in common was that they were supposed to look ahead over the ‘long term’, perhaps ﬁve, ten or ﬁfteen years; the second was that they were intended to be comprehensive, providing for the population’s needs in both the private and the public sector, rather than just state industries and services: in this they are rather different to the 1930s and 1940s plans analysed by Toye. The ﬁnal characteristic of British government plans in the 1960s was the conﬁdence with which their aims were pronounced. They were closer to Beneviste’s ‘intentional’ planning than any of the others, encompassing three main elements: a long time-span, universal coverage and a large degree of optimism concerning delivery. The last few years have witnessed a ﬂurry of activity in this ﬁeld, for the opening of political, personal and government archives has made possible a wave of new writing on planning in the 1950s and 1960s. This has allowed some of the hitherto obscure narrative to be carried into that period. The one really well-established work on 1960s planning – Jacques Leruez’s 1975 Economic Planning and Politics – has been supplemented and superseded by the work of Astrid Ringe, Neil Rollings, Stewart Wood and Hugh Pemberton. They have used state papers, and the archives of industrialists and trade unions, to explore the institutional failings of the new planning machinery.7 George Peden’s history of the Treasury includes a long section on the 1950s, and a vivid portrait of both the personalities and administrative machinery involved in economic planning.8 New studies of planning can now move the story forward to a time when the crucial idea of planning has often been underplayed, or forgotten, in the rush to analyse Britain’s mythical, but glamorous, ‘swinging’ moment of social change.9

A pre-history of planning Planning was not a new idea. Indeed, as James Cronin has put it, in some forms ‘the history of planning is nearly as long as the history of capitalism itself’.10 However, the twentieth century was the most important period in terms of the types of planning we are interested in here, marked as it was by total wars that would serve as their most

4 From Dreams to Disillusionment

effective practical example. The First World War, with its widespread controls over industry, seemed to offer a supreme example of how national planning could restructure an economy. Policymakers thereafter tried to react to the apparent ‘lesson’. A National Industrial Conference brought together industry, unions and government in February 1919 and proposed a standing Industrial Council that was supposed to help in running the economy.11 The Labour Party’s 1918 platform Labour and the New Social Order, mostly written by Sidney Webb, for the ﬁrst time appealed to ‘deliberately planned co-operation’, and had obviously been inﬂuenced by the war. Still, even writers who discern in that document a fully worked-out idea of planning have had to admit that its treatment of investment and manpower controls, to become two key areas of planning theory, was sketchy at best.12 Despite such efforts, and left wing enthusiasm, the wave of reform was shortlived. With no more than a rudimentary understanding of how taxation might be used to choke off demand in an inherently inﬂationary situation, and with Britain having accrued huge war debts that now had to be met, inﬂation inevitably took off between 1917 and 1920. Between 1920 and 1922, a succession of economic crises and Treasury-inspired spending cuts brought inﬂation down, but also curtailed the experiment with social provision and government intervention.13 Confusion reigned on the left as to what planning might actually mean, and was exacerbated by the political refugees Labour absorbed from the collapsing Liberal Party. J.A. Hobson brought with him the idea that the maldistribution of incomes meant that the rich hoarded savings while the rest of the economy suffered from working class ‘underconsumption’. His thought was less relevant to the issues of industrial structure and control that other Labour thinkers were interested in.14 The Independent Labour Party seized on some of Hobson’s ideas in their 1926 report, The Living Wage, and focussed on lifting working class wages as a way out of economic stagnation. The report did refer to ‘planning’ on several occasions. But the use of the word could not conceal that the document was based on the underconsumption thesis.15 It was rejected at Labour’s 1928 Conference, a ﬁnal defeat that showed the ascendancy of the Webbs’ view: that state economic control was necessary if a rise before a rise in wages could be forced through.16 Hugh Dalton and Herbert Morrison, both key ﬁgures in the Attlee government after 1945, would help remake Labour thought in the 1930s. They helped to found the XYZ club, which provided a forum within which Labour leaders could meet leading City ﬁgures. This

Introduction 5

immediately sharpened their economic thought, leading, for instance, to proposals for nationalisation of the Bank of England and the creation of a National Investment Board.17 They were also involved in the creation of the New Fabian Research Bureau in 1931, which involved Clement Attlee, Evan Durbin, Hugh Gaitskell and a host of other Labour ﬁgures.18 Such groups eventually provided a way for Dalton and other centrist Labour leaders to turn back the inﬂuence of the far left. Following the collapse of the second MacDonald government in 1931, this was in full ﬂood, and the party adopted a number of resolutions calling for the immediate nationalisation of most of British industry. For Socialism and Peace, the party’s 1934 policy statement, allowed the leadership somewhat more room for manoeuvre. It called for a ‘policy of full and rapid Socialist economic planning, under central direction… public ownership and control of the primary industries’. 19 Some Keynesian ideas helped here. G.D.H. Cole, in his 1939 Plan for Democratic Britain, condemned the National Government because it planned only ‘for dearness and the proﬁt of capitalists’; if a future Labour government had more resources to distribute because of faster growth, some of planning’s dilemmas might be eased.20 But the majority of the New Fabians remained sceptical about the rest of Keynes’ thought. Durbin, for instance, differed from Cole in that he wanted to use prices to govern the economy, but these would be managed and directed, rather than shaped indirectly through overall Keynesian policies.21 The levels of unemployment experienced in the 1920s and 1930s ﬁnally forced economics onto the national political agenda as a subject governments had to do something about. Quite apart from anything else, the costs of unemployment beneﬁt were mounting. The ongoing crises in Britain’s staple industries were also taken, in the absence of macroeconomic statistics, as a proxy measure of her national status.22 A pro-planning Tory group emerged. The social imperialist Lord Milner called for industry to be run by joint councils of labour and capital; self-labelled ‘young Tories’ such as Robert Boothby, Oliver Stanley and Harold Macmillan argued, in Boothby’s 1927 collection Industry and the State, that ‘laissez-faire never formed an integral part of Tory or Conservative policy’.23 Macmillan himself became something of an advocate of planning, arguing that a return to free trade, unfettered competition and unmanageable business cycles was ‘technically, politically and economically impossible’. Without a government lead, the ongoing depression might cause a continual spiral downwards. ‘Planning’, he argued in his 1933 book Reconstruction, ‘is forced upon us… because the old mechanism which served us when markets were expanding

6 From Dreams to Disillusionment

naturally… is no longer adequate when the tendency is in the opposite direction’.24 Many employers were thinking along similar lines. Professional managers such as Sir Alfred Mond and Sir Harry McGowan of ICI tried to reach a deal with the trade unions that would have swapped recognition and a corporate National Industrial Council for new working practices.25 The Second World War transformed these debates even more radically than the First. Rationing, civilian and military conscription and plans for industrial control were put in place more quickly than in 1914–18, due to Britain’s prior experience. There was also a change in popular mood to go along with the administrative revolution. Historians have in the last few years begun to question the cruder assertions of a united and harmonious people, and class feeling seems to have run just as high, if not higher, than it had in the 1930s. Evacuation, though it later came to typify British resourcefulness and fellow feeling, sometimes demonstrated just how much families from different classes disliked one another.26 Workplace confrontation continued, and as the war went on a wave of strikes took hold, especially in the coal industry.27 However, despite the emphasis that has recently been placed on these continuing conﬂicts, there is little doubt that many Britons, especially during the crisis of 1940, did think of the conﬂict as what J.B. Priestley termed a ‘citizen’s war’. Quite apart from anything else, ordinary people felt they had little alternative but to carry on as normal: even during the London Blitz of 1940, most workers did not leave their posts, even if their children or families had been evacuated.28 Most importantly in terms of planning, most citizens admired the war economy’s achievements. The journalist J.L. Hodson wrote down what one of this friends told him in 1944: ‘we’ve shown we can organise superbly – look at these invasions of the Continent which have gone like clockwork… no excuse any more for unemployment and slums and underfeeding’.29 Labour entered the 1945 General Election promising to build on this mood, and to ‘plan from the ground up, giving an appropriate place to constructive enterprise and private endeavour in the National Plan’.30 Morrison, Lord President and de facto head of such planning machinery as existed between 1945 and 1947, declared that ‘planning as it is now taking shape in this country… will be regarded in times to come as a contribution to civilisation as vital and distinctly British as Parliamentary democracy and the rule of law’.31 Still, divisions between the political parties, and between the Treasury and spending departments, meant that some of the methods for adjusting to peacetime

Introduction 7

were left rather vague. A.L. Lindsay, the Master of Balliol College in Oxford, tried to bring political parties, the trade unions and employers together at a series of conferences at that college during 1942 and 1943. The businessmen, including McGowan, pushed for the adoption of industrial self-government; Cole and Durbin for economic controls exercised through a National Development Board. The conferences’ signed proposals attempted, not entirely convincingly, to incorporate all these ideas.32 Government pronouncements were also affected by planning’s vagueness. The Conservative members of the Reconstruction Committee signiﬁcantly did not come out in favour of a governmentrun National Health Service. The coalition’s statements about the future of health care were uncertain at best.33 The May 1944 Employment White Paper was another compromise. It stipulated that governments should have ﬁve-year investment plans that could be varied as the situation demanded, but it still emphasised Britain’s parlous economic situation, her world role and the need to stimulate private industry.34 For a while, almost every periodical, pressure group and party had a ‘plan’ for the future of Britain. Picture Post, for instance, published a famous issue entitled simply ‘Plan for Britain’, which contained contributions from Lindsay, Aldous Huxley and Priestley.35 This was especially obvious in the ﬁeld of housing and town planning, where the Government announced a target of building four million new houses within a decade of the end of hostilities. The obsession with rebuilding was hardly surprising. Bombing destroyed 200,000 houses, and damaged another 3.5 million, while Britain’s population had grown by over one million since 1939.36 A Ministry of Town and Country Planning was established in 1943, followed by two Town and Country Planning Acts in 1944 and 1947. Labour’s 1947 measures subjected all building to local planning approval while nationalising all development rights, with a betterment fund providing the compensation that landowners got if their land was designated for building. A number of famous regional plans were drawn up at this time as well, most noticeably Patrick Abercrombie’s plan for London. Even this was not enough for some of the most radical experts, given Britain’s desperate need for urban rebuilding. Some wanted the ‘total land values of the city… to pass into public ownership’ to allow for ‘complete rebuilding plans’.37 Sir William Beveridge’s 1942 report on Social Insurance and Allied Services declared itself ‘a Plan for Social Security’. This involved comprehensive National Insurance paid at a ﬂat rate by all workers, in return for which they would be entitled to ﬂat-rate unemployment beneﬁt and, eventually, pensions. A long report by the Government

8 From Dreams to Disillusionment

Actuary was attached, projecting costs forward to 1964/65, when the full pension scheme was supposed to come into operation. Despite its complexity, the report proved popular among the public. Along with its scaled-down popular summary, it sold over 600,000 copies.38 Labour’s attempt to put these ideas into operation was hampered by administrative problems such as rationing and the fuel crisis experienced in the winter of 1946–47. There were also more systemic problems. In a Parliamentary democracy, popular assent would have to be sought and gained for planning’s survival. But economic controls might have to be used to reduce consumption, given Britain’s desperate economic situation after World War Two, and her need to sell goods abroad, recapture export markets and regain the general convertibility of her currency. Encouraging people to accept such measures would prove very difﬁcult. Levels of public support for ‘fair shares’, government controls and their most obvious manifestation, rationing, gradually faded after the war.39 By 1948, 55 per cent of opinion poll respondents thought they were not getting enough to eat; when voters were asked the most important topic they would discuss with the Prime Minister, the most popular answer at 17 per cent was food, whereas 13 per cent were concerned at the high cost of living. A further 10 per cent mentioned other rationing problems.40 The trade unions, moreover, opposed any direction of labour to reapportion workers, and it was not clear how it might be made to work in any case. The lack of operative manpower controls caused an increasing number of Labour ﬁgures to accept that they would have to reach an agreement with the trade unions to plan wages, to help control inﬂation and encourage productivity. Beveridge himself had suggested that this might be inevitable in a full employment and possibly inﬂationary economy, but Durbin was the crucial ﬁgure in bringing wage planning into the Labour mainstream.41 He had been a Lecturer in Economics at the LSE before becoming an economist in the Cabinet Ofﬁce and Attlee’s personal assistant. An agreed wage policy would be his riposte to those, such as his erstwhile LSE colleague Friedrich von Hayek, who opposed manpower planning as a threat to freedom. If workers concurred with Labour’s strategy, and took part in the formation of tactics, Durbin reckoned, there was no danger of dictatorship.42 It was a slender enough reed to lean on, given the unions’ own doubts: the tension between national objectives, and workers’ demands for personal economic progress, was one of planning’s toughest dilemmas, and one that would re-emerge when planning became fashionable again in the early 1960s.

2 The Planning Fervour of 1959–1964

The political economy of faster growth Planning’s popularity surged anew in the early 1960s, mainly because Britain appeared to be in need of concerted modernisation. The proliferation of international agencies to help manage the post-war capitalist economies meant that increasing amounts of economic and social information were available, and by 1960 comparisons with other countries made Britain’s record look less than encouraging. During the 1950s the UN and the Organisation for European Economic Co-operation, later to become the Organisation for Economic Co-operation and Development, started to produce data on national income, industrial production, productivity and each country’s share in world trade. Though this was not entirely novel, the fact that such data was now standardised made them more convincing. On almost every measure, Britain was lagging behind other comparable European countries such as West Germany and France. The gap between overall growth rates was particularly noticeable, and can be seen in Figure 2.1.1 From the moment at which Rab Butler as Chancellor announced that the nation’s wealth could be doubled within a generation in 1954, the idea grew that governments were elected to secure faster growth, and that they had not been doing so. The early 1960s was a period in which a wave of jeremiads on the ‘state of the nation’ were published, with titles such as Suicide of a Nation? and The Stagnant Society. They portrayed Britain as soft, ineffective and badly run.2 Britain’s economy came to be seen as suffering from a cycle of ‘stop and go’, which was itself holding back the growth rate. Every time Britain’s current account balance of payments went into deﬁcit, the brakes were applied; on each occasion unemployment approached 1 per cent of the workforce, a more 9

10 From Dreams to Disillusionment Figure 2.1

Total growth in Gross National Product, 1951–64

Percentage growth in total GNP, 1951-64

200.0

150.0

100.0

50.0

0.0

UK

USA Sweden

Finland

Italy

Netherlands France

Eastern Europe

USSR

Spain

West Germany

Japan

Source: A. Maddison, The World Economy: A Millennial Perspective (Paris, 2001), appendix C, table C1-b, pp. 272–4.

expansionary stance was adopted. Businesses cut back on investment during the ‘stop’ phases, thus lowering their growth potential in more expansionary parts of the cycle. The accumulated inefﬁciencies and restrictive practices associated with stagnation then stoked up inﬂation once again, leading to another ofﬁcially inspired ‘stop’. Solving this problem became almost an obsession, so much so that by 1961 the economist Colin Clark felt moved to condemn the fact that ‘some people in politics, in public life, in business and even in the universities would have growth at any cost’.3 Constant policy gyrations eventually caused a reaction against orthodox demand management. Politicians felt obliged to respond by promising ever-higher economic growth, while also securing low inﬂation and unemployment at one and the same time. J.C.R. Dow’s book The Management of the British Economy, which was published by the National Institute of Economic and Social Research, was extremely inﬂuential when it appeared in 1964. Dow, at this time assistant Secretary General of the OECD, attempted to show how governments policy had made economic booms ﬁercer, and troughs deeper. ‘The major ﬂuctuations in the rate of growth of demand in the years after 1952 were… chieﬂy due to government policy’, he argued: ‘budgetary and monetary policy… must… be regarded as having been positively destabilising’.4

The Planning Fervour of 1959–1964 11

Business leaders’ views were simultaneously undergoing rapid change. The ‘Next Five Years’ Conference of the Federation of British Industries, held in Brighton in November 1960, marked a fundamental re-evaluation of the role of government in industry. The contribution of Study Group III, on economic growth, was especially important. This group, chaired by the enthusiastic ‘planner’ Sir Hugh Beaver, highlighted the need ‘not [for] targets or plans but assessments of possibilities and expectations…. Government and industry together… might see whether it would be possible to agree on an assessment of expectations and intentions which should be before the country for the next ﬁve years’.5 Macmillan himself was won over by this case, as he wearied of constantly explaining changes of pace. In the run-up to the 1960 Budget, he told Heathcoat Amory that ‘it cannot be sensible to cheer the economy on vigorously one moment and then push it violently back the next’.6 All this was a gift to Labour in Opposition. Industrial production had risen by ‘barely a third’, Labour lamented in their 1963 booklet, Twelve Wasted Years: ‘in almost every industrial country in the world production has risen faster’.7 Ian Budge has shown just how often relative decline has been seized upon as a classic opposition issue, and Wilson did not shrink from using it ‘as a club to beat down a tired Conservative government’.8 He had made similar points for many years, writing in 1957 that the worst thing about ‘stop-go-stop’ was ‘the fact that essential investment suffers the most’. He lambasted the 1960 Budget as ‘lurching from a semi-depression to boom and back again’.9 Wilson actually berated the Conservatives for this during the 1964 election. ‘After barely a year of the “Go” phase’, he said, ‘the Tories are once more preparing to bring expansion shuddering to a halt. “Go” is giving way to “Stop”: the election green light is turning to the post-election red’.10 ‘Stop-go’ policies probably can lower economic growth in some circumstances. Recent econometric modelling using data from OECD nations has demonstrated a signiﬁcant negative correlation between macroeconomic volatility and growth over a period stretching from the early 1960s to the mid-1990s – though on the other hand, companies may use recessions to reorganise their activities in productivity-enhancing ways.11 Uncertainty might well have harmed the British variant of capitalism, since it involved cutting back on public and private investment and raising interest rates in every ‘stop’ phase, and quickly encouraging consumer expenditure with politically advantageous tax cuts and hire purchase relaxations during every ‘go’. It is possible that this asymmetrical approach may have unbalanced the structure of the

12 From Dreams to Disillusionment

economy. The area probably requires more research.12 The problem with the analysis was not with the general theory. It was with its evidential basis, for Britain was not experiencing particularly volatile economic growth. The standard deviation of net output was in fact lower in Britain than elsewhere in the developed world: her business cycles were of similar length to those experienced in other countries. The range of annual rises in Britain’s GDP was no higher than average.13 Still, there were other, more powerful electoral imperatives to this search for higher growth, and this fact made achieving faster progress seem all the more important for politicians. One hallmark of the late 1950s and early 1960s was the emergence of an economic analysis of politics, based around the idea that governments were responsible for the course of the national economy. ‘The standing of a government’, Wilson argued, ‘depends on the success of its economic policy’.14 The 1960s was a decade marked by the publication of several pioneering political science works that tested the extent of economic inﬂuences on the electorate, but few doubted they were more powerful than ever before. ‘The Government’s responsibility for the economy is a fundamental assumption of the contemporary dialogue between the parties and the electorate’, David Butler and Donald Stokes wrote in the ﬁrst edition of their Political Change in Britain, published in 1969. In the early to mid-1960s, two thirds of voters gave the Government some credit or blame for their changing economic fortunes, even including those who gave personal reasons for those changes.15 The fear of unpopularity was pervasive. When Peter Thorneycroft as Chancellor tried to force through large public expenditure cuts in 1957, Macmillan summed up the Cabinet’s dilemma: ‘if we can do it [deﬂate] in such a way as to make unemployment still negligible – 2 to 3 per cent – we shall lose no votes and injure nobody’.16 Between 1951 and 1964, simple statistical analysis has shown that a 1 per cent rise in unemployment was associated with a ﬁve per cent fall in the government’s lead over the main Opposition party; half a percentage point rise in inﬂation caused the governing party’s relative ranking to fall by a percentage point. The relationship thereafter became more problematical, but it was, and was perceived to be, particularly powerful during the 1950s and early 1960s.17 It was within this highly charged political situation that the ‘stop go’ analysis, positing faster growth if acceleration was agreed and planned, gained a hold. 45 per cent of the public wanted ‘more Government planning and control of industry’ in July 1961, as against only 14 per cent who wanted less. The Government clearly required a political response to this change of mood.18

The Planning Fervour of 1959–1964 13

Other reasons for encouraging growth and raising personal incomes soon occurred to Ministers. Many commentators predicted the creation of an endless middle class through the ‘embourgeoisement’ of the electorate, and according to some theorists mass afﬂuence would instil middle class norms of saving, investment, home ownership and consumption among working class communities. This would create a more homogeneous, and perhaps more Conservative, country. Mark Abrams, along with Richard Rose and Rita Hinden, conducted a survey for Socialist Commentary after Labour’s 1959 election defeat, and found that 35 per cent of skilled workers already deﬁned themselves as ‘middle class’. They thought that Labour’s support among such voters was already ebbing away.19 All the more reason, then, for Conservative politicians to place all their emphasis on growth as the paramount objective of policy, even though much of the argument was exaggerated, or rather ahead of its time. Some Conservative ofﬁcials had grave doubts about this case even in the early sixties. James Douglas reported in 1960 that he was ‘getting rather sceptical of the “determinist” view’, since any of the parties might try to attach the ‘prosperity’ label to their ideas, and win over signiﬁcant parts of the electorate.20 The sociologist John Goldthorpe and his team found working class attitudes little changed in factories that they studied in Luton during 1963.21 The real period of class ‘dealignment’, with voters declining to choose parties on the basis of class, appears to have come later in the 1960s and in the early 1970s. Even then, a bare majority of manual workers voted Labour, and professional and middle class Britons continued to choose the Conservatives at general elections.22 But doubts about ‘embourgeoisement’ did not mean that the objective of growth became less important. The only two broad categories of workers who declined in numbers in the 1950s and 1960s were small proprietors and employers, along with manual workers. The latter, in particular, fell from constituting 64 per cent of the workforce to making up 55 per cent of workers. Professional, managerial, administrative and technical workers were also rapidly increasing in numbers.23 In this situation, ‘the party programmes were expressed in professional terms’, with Labour emphasising equality of outcomes, and the Conservatives increasing opportunity.24 Both spoke the language of efﬁciency with slightly different accents, but almost all politicians realised the importance of economic growth if those goals were to be achieved. Middle class voters were thought to be particularly angry about inﬂation, which by reducing the value of their savings acted in concert with working class wage gains to eat away at their privileged economic status. Anger and frustration among rank-and-ﬁle middle class Conservatives, particularly

14 From Dreams to Disillusionment

noticeable during 1962 and 1963, had been the subject of a famous memorandum from Macmillan in 1957. ‘I am always hearing about the middle classes’, he wrote to Michael Fraser of the Conservative Research Department: ‘what is it that they really want? Can you put it on a sheet of notepaper, and I will see if I can give it to them’.25 The Conservatives lost the safe middle class commuter seat of Orpington to the Liberals in a March 1962 by-election. Labour took Middlesborough West in June, following this up with victories at Glasgow Woodside and South Dorset in November.26 Very large falls in the Conservative vote were recorded among middle class and professional residents, especially the young, and this reinforced Conservative worries about appearing out-of-date in a slowing, old-fashioned economy. Though there had been a previous ‘white collar revolt’ during the relative stagnation of 1957 and 1958, this seemed all the more threatening, due to its repetition as much as anything else.27 Maximising popularity would require non-inﬂationary growth that still maintained high and stable levels of employment. Unemployment obviously had to be avoided, for it would alienate working people more quickly than just about any other failing: the Conservatives had experimented with providing a ‘margin of safety’ through higher unemployment, but accepted that any rise above the range of two to three per cent of the workforce was politically too risky. Rising prices had to be combated at the same time. In Macmillan’s hands this became a question of balance, or as he had long liked to put it, ﬁnding a ‘middle way’. As he told his party’s Steering Committee in 1958: ‘we don’t want a socialist state, we don’t want a purely laissez-faire state… just as, how do you combine full employment and reasonable stability of prices, how do you combine necessary strategic control in hands of the Government leaving maximum amount of freedom for saving etc. Old problem?’28 It was ‘like four balls in one of those puzzles we had as children’, Macmillan commented on another occasion: ‘you can get three into the holes, and when you get the fourth in, out pops one of the others’.29 Faster growth through ‘planning’ might help to cut through this dilemma of choice between higher unemployment or inﬂation, providing the means by which the Government did not have to ‘choose between these two alternatives’.30 One means by which non-inﬂationary but faster growth could be pursued was an incomes policy that held down wages, promoted by some extremely inﬂuential civil servants such as Robert Hall, Chief Economic Adviser until 1961, and F.A. Bishop, Deputy Secretary to the Cabinet. The Treasury was in general convinced that the key to con-

The Planning Fervour of 1959–1964 15

taining inﬂation, and increasing competitiveness, lay in holding down labour costs. Selwyn Lloyd announced a pay pause in his July 1961 package, and the creation of NEDC was intended to bring the TUC into formalised bargaining about this. The growth rate forecasts contained in NEDO publications were accepted by the Treasury partly because it was thought that their high estimates of potential acceleration might make the unions more likely to agree to holding their demands within the forecast rate of productivity growth.31 The Conservative administration began, at ﬁrst in a confused manner, to offer a grand bargain to the unions. Action on higher severance pay, binding contracts of employment and consumer protection were all promised, if only a collaborative incomes policy could be made to work.32 By holding down inﬂation at the same time as the Government led the way towards an expansionary policy, all of the elements in Macmillan’s children’s puzzle could be kept in play at once: what he called the ‘intractable, obscure and bafﬂing problems’ of the ‘British economy and an incomes policy’ might be solved.33 Increasingly acute economic demands were bad enough, but they came at the same time as what has since become known as the ‘rediscovery of poverty’. This was the process by which researchers uncovered the extent of poverty that the welfare state had left in place. This was a trend that took a long time to become apparent, and a view that gained a hold very slowly prior to a sequence of celebrated campaigns in the mid-1960s. Peter Townsend, at that point a Research Ofﬁcer for the Institute of Community Studies, had criticised Beveridge’s subsistence measure of poverty in a 1954 article in the British Journal of Sociology. Successive surveys of the care of elderly people, for instance Dorothy Cole’s 1962 Economic Circumstances of Old People, began to alter attitudes in the late 1950s and early 1960s.34 This new generation of social scientists redeﬁned poverty as a relative condition, rather than the absolute lack of enough food and shelter to survive without actual physical hardship. This view, too, had only gradually become apparent. The Conservatives promised in their 1959 manifesto that the elderly and other beneﬁt claimants should have ‘share in the higher standards produced by an expanding economy’. At a meeting of the Cabinet Committee on the Social Services in 1960, Ministers had accepted that ‘there could be no absolute standard of need. It was a constantly changing concept and depended on what was generally accepted by the community at the time’.35 Far from abolishing poverty, as many politicians and civil servants had hoped in the 1950s, it might even be growing. Brian Abel-Smith and Townsend’s The Poor and the Poorest, published in 1965, deﬁned poverty as a family income

16 From Dreams to Disillusionment

below a line 40 per cent above the supplementary beneﬁt level, an economic level at which a family might not be able to take part in community life or leisure.36 Townsend and Abel-Smith thought that the number of people living in poverty might have risen from 600,000 in the early 1950s to two million by 1964.37 Increased economic growth might ease these problems without resort to much higher taxation, which seemed an attractive prospect to most politicians on both left and right. Even the revisionist Anthony Crosland, who in The Future of Socialism had not been prepared to give ‘overriding priority’ to economic growth at the exclusion of all else, believed that ‘the British public is at present in a very tight-ﬁsted mood’. Because of this, and due to the fact that ‘we still have some exceptionally urgent claims on our resources’, more rapid growth ‘must tend, on balance, to reduce social tension’.38 The emphasis on economic growth to some extent blotted out the fact that Britain’s performance was not as bad as many thought, for other economic indicators with more immediate relevance for economic management did not look so problematic. Britain’s unemployment and inﬂation rates, for instance, were very close to the European norm. George Bernstein has recently summed up Britain’s comparative performance outside manufacturing competitiveness as ‘quite good’.39 The climate of soul-searching inquiry and criticism stems from that focus on manufacturing, and was prompted by the focus on one measure of progress – GDP growth – that seems from a longer-term economic perspective rather overdone. As we shall see, it was true that Britain was spending much less than other countries on welfare services, and faster growth might have made putting that right much easier. On the other hand, there is only meagre evidence that faster economic progress, more ‘conﬁdence’ and a smoother growth path would have transformed Britain’s situation.

The Soviet and French examples Britain’s perceived sclerosis caused a search for foreign models to emulate. One such was Soviet Russia, a fact that shows just how far the Cold War penetrated every area of thought and action in this period. Few debates were at this time complete without at least a reference to what the journalist Michael Shanks called ‘the new Sparta of the East’, comparing it with the Western Athens, which might lose the cold war because of its ‘fratricide and frivolity’.40 Praising the USSR’s economic progress was hardly new, especially to many on the left. The Webbs, after an initial sceptical period, warmed to the Soviet example in the early 1930s, as did Cole. Dalton was impressed by the Soviet example

The Planning Fervour of 1959–1964 17

during a New Fabian Research Bureau visit there in 1932.41 This was to some extent understandable during the Depression, which appeared at the time to be capitalism’s ﬁnal crisis. The Marxist economist Maurice Dobb, for instance, thought that ‘the planning of production by a central body can assure a more even… expansion of industry… than can a system of laissez-faire, and… avoid the crises of over-production which recur so persistently in capitalist countries’.42 The Second World War accelerated this process, given that the USSR became Britain’s ally. The Webbs, for instance, now openly advocated Soviet methods.43 The late 1950s and early 1960s saw renewed interest in Russian methods. This was partly the result of a major Soviet propaganda drive, aimed at convincing the world that the Eastern bloc was nearly as strong as the West. In the early 1960s ofﬁcial Soviet forecasts showed that the USSR would overtake the USA in per capita output by the mid-1970s.44 Soviet economic reforms were also the subject of much discussion. A major decentralisation of the Soviet economic system was announced in 1957, abolishing most central ministries and giving wide powers to regional economic councils. The new seven year plan for the years 1959 to 1965 moved away from the earlier emphasis on basic industries, and envisaged a speeding up of progress in more technically advanced sectors. The Russian leader, Nikita Khrushchev, announced that these targets had been further upgraded at the twenty-second Party congress in 1961.45 The Sputnik launch in October 1957, as the ﬁrst man-made satellite to orbit the Earth, also enhanced Soviet prestige. Geoffrey Lloyd, Macmillan’s Education Minister, advised the Prime Minister that everything ‘had become charged with a new sense of urgency by the impact on opinion of the Sputnik… as the success symbol of a magniﬁcent technology deliberately created’.46 Many experts also thought that West and East would become more alike, an idea associated with J.K. Galbraith and which became known as the ‘convergence thesis’. According to Galbraith, the ‘technostructure’ of large corporations was giving power to advertisers, accountants and economists, all experts whose role made classical entrepreneurship and competition irrelevant.47 Aubrey Jones, an ex-Conservative Minister who later became the chairman of Labour’s Prices and Incomes Board, made a similar point in 1962: ‘it is a platitude that you cannot survive when engaged in a hot war unless at some stage you adopt the methods of your opponents… the same is true of a cold war’.48 Capitalist economies would become more regulated and cooperative; the Eastern bloc more liberal, competitive and consumerist. During the late 1950s and early 1960s, some parts of this prophecy seemed to be borne out:

18 From Dreams to Disillusionment

consumer durables began slowly to arrive in Russian shops in the late 1950s, a development that was widely publicised in the West.49 Despite some dissentients – Thomas Wilson of the University of Glasgow was one – decision makers could no longer tell themselves that Soviet growth was based purely on repression of consumers and workers.50 Soviet economic successes were a challenge to national security, as well as to orthodox economic ideas. The Treasury thought that economic growth was ‘in the end the indispensable defence against the Soviet threat’.51 Western economic practice, Galbraith wrote in 1958, ‘immobilizes all but a fraction of the product in private and, from the standpoint of national security, irrelevant production’.52 Right as well as left wing ﬁgures could thus be similarly worried. Harold Wilson, too, had a great deal of time for the Soviet example. A series of visits to that country during the 1950s had impressed him: in 1956 Wilson informed his party that ‘in the next generation Russia’s industrial challenge may well dominate the world economic scene’.53 This analysis has not exactly stood the test of time. Khrushchev’s decentralisation came to be seen as a disastrous error, as it reduced the power of central planners to apportion resources, and led to competitive scrambles between the new regions. Much of it was reversed in 1962, with the creation of state committees that would do the work of the old pre-1957 ministries.54 Soviet statistics overall were hardly reliable, however hard the planners tried. Gosplan could lever perhaps three billion pieces of data into their plans, but some estimates of the total number contained in the whole economy ran to between 120 and 170 billion.55 Ofﬁcial Russian growth ﬁgures were also based on the concept of net material product, which differed from GDP in that it focussed on physical work and production. Services were left out, for instance, and the use of resources – steel, for instance – could be counted more than once. This inevitably vastly exaggerated the ﬁgures that Soviet ofﬁcials quoted. More systemically, the sectoral transformation involved in Russian industrial advance could exaggerate the scale of progress. Abram Bergson worked on this problem in the 1950s for the RAND corporation.56 Using price weights from the start of a series, Bergson found, can make growth look extremely quick, for prices fall rapidly in fast growing sectors of the economy subject to economies of scale. If price weights are used from the beginning of a period of fast growth, this will exaggerate the importance of such sectors as opposed to using price weights from the end of a given period.57 The 1950s in fact witnessed the peak of Soviet economic performance, and the Soviet economy was slowing by the early 1960s, partly due to

The Planning Fervour of 1959–1964 19

the economic changes introduced between 1957 and 1965. British ofﬁcials were far from convinced by the seven-year plan or the 1961 amendments. The agricultural ﬁgures, for one thing, were ‘hardly credible’, bearing in mind previous failures on this front. Russian electrical engineering and industrial chemistry were years behind the West. The 1961 targets, in particular, forecast an advance on every front at the same time, so that ‘it becomes difﬁcult to take any part of it seriously’.58 Conservative Ministers knew that the Soviet challenge was not as formidable as it seemed, though this often had little effect on their public pronouncements. This shows just how concerned politicians in Washington and London were about appearances. Even if Russian growth was slowing, this view was a minority one, and any admission that the West had no economic answers beyond repeating that the Soviet experiment could not work might be disastrous in the ongoing Cold War.59 Even though Conservative MPs were told in 1960 that the Soviet record on industrial research and development was very uneven, they still thought ‘that from the political point of view one could not ignore appearance both from the point of view of the electorate at home and the uncommitted countries abroad’.60 The other popular exemplar to which the British looked was France. That was ‘the case everybody talks about now’, noted The Economist in August 1961.61 French growth was at this time particularly startling and newsworthy, because it represented a transformation of relative economic fortunes. ‘Not so long ago’, as Thomas Wilson noted, ‘France was regarded as the sick country of Western Europe’.62 Its most obvious cause, and the one French ofﬁcialdom emphasised most often, was ‘planning’. Even the relatively sceptical Robert Hall, at the end of his period as Economic Advisor, thought that the French might ‘have tackled the problem of how to reconcile freedom of choice for the consumer and the businessman with centralised direction’.63 If the Soviet Union and the West were, perhaps, converging, then they might well both be moving towards the French example. In this variant of the planning idea, a small Commissariat du Plan remained independent of government, while still playing a key advisory role. By the time such ideas were in vogue in Britain, it supervised the work of 32 modernisation commissions, both ‘vertical’, working on each industry, and ‘horizontal’, covering issues of concern to all, such as labour reallocation. These were staffed by civil servants, industrialists and trade unionists, and when they reported back on what was possible, that information was made internally consistent and formalised

20 From Dreams to Disillusionment

by the planners. Three national plans had been issued up to 1961, and the fourth was in preparation. They had all deepened and widened their coverage, until such ﬁgures covered almost the whole of the economy.64 One of its driving personalities, Pierre Massé, visited Britain in the spring of 1962, and in late April contributed to a conference on ‘economic planning in France’. This was organised by the National Institute of Economic and Social Research, which had been set up in 1938 explicitly to bring academic experts and civil servants together on secondment, and the thinktank Political and Economic Planning: it was attended by several key ﬁgures including Robert Shone from the Iron and Steel Board and Beaver from the FBI. In his speech, Massé emphasised how consultative his Commissariat was, its non-departmental nature, its advisory role, and its partnership, or ‘association’, with the Ministry of Finance.65 Not everyone lionised the French system, for as the Conservative politician Reginald Maudling pointed out to the TUC in his relatively free-market days at the Board of Trade: ‘Germany’s achievement was not the result of planning by the Government’.66 Treasury and Board of Trade civil servants were similarly sceptical while discussing their report on Economic Growth and National Efﬁciency in May 1961. They noted that ‘the French had used central planning, but the Germans had grown even faster by ﬁerce competition’.67 Even the left-leaning civil servant Richard ‘Otto’ Clarke, at that time Third Secretary to the Treasury and soon to be promoted to Second Secretary, did not want individual industrial councils along the lines of the French Modernisation Commissions. In his view this did not ‘ﬁt the British pattern. It is the negation of anti-monopoly policy’.68 Proponents of the French example continuously countered that since French plans relied on prices, they actually made capitalism run more smoothly: ‘the plan, far from removing the competitive mechanism, helps it to function properly’.69 Despite the continued existence of controls, it was thought at the time that there was ‘little dirigisme in the system’. The basic changes, on the contrary, were in mindset, ‘in people and attitudes’.70 In the jargon of the time, the plans were supposed to be ‘indicative’. A mixed team of civil servants, trade unionists, industrialists and academic economists visited the Commissariat du Plan in September 1961: those who were impressed, whose ranks signiﬁcantly included Clarke, took away the moral that ‘there are sanctions in the background, but there is no reason to suppose that they are exercised at all widely’.71 The economist Francois Perroux described the fourth plan as ‘essentially informed…. Firms and individuals are not simply acting in juxtaposition, each without any knowledge of the rest… the primary unit and the group each become aware of each other’.72 It might

The Planning Fervour of 1959–1964 21

also mean, since everyone concerned knew what was expected of them, that investment decisions and overall growth were more stable. In Massé’s words, ‘the Plan… carries itself out’.73 This made French-style planning very attractive to the representatives of organised business, concerned about some of the more radical ideas being aired. In discussions about what ‘planning’ meant following the Brighton Conference, many FBI ofﬁcials were impressed by the dismantling of price and production controls in France during the 1950s, and the lowering of tariff barriers involved in her entry to the EEC. The outline of a bargain between the state and employers, under which governments spent more on infrastructure while industrialists themselves looked after growth in their part of the economy, were just visible.74 Conservatives looking to appeal to the political middle ground were also rather impressed. Edward Boyle told Selwyn Lloyd that the French model might allow them to escape what he saw as a sterile and oldfashioned debate about controls and the free market. ‘It is’, he argued, ‘neither Wilsonite nor Maudlingite’.75 Much of this was based on a misconception, for the French state did continue to possess many ways of encouraging industry to follow its plans. Massé actually pointed this out at the time.76 Much of the language used by the French planners was suggestive and allusive, especially in translation, while the Commissariat itself occupied an ambiguous place in the French administration.77 Alec Cairncross, Chief Economic Adviser to the Government between 1961 and 1969, later came to think that this actually caused the fashion for ‘a French model which was completely misunderstood… if you went over [to France], you found that the plan was prepared in the French Treasury, not in some separate thing called a commissariat’.78 The French government was a major purchaser, with more powers over nationalised industries than Whitehall had. It was also able to steer investment through nationalised banks, credit controls and preferential tax remissions for companies that performed as they were meant to.79 This ambiguity made it much easier for British observers to see in the French example exactly what they wanted to. French planning probably did help to accelerate growth at the margins. It provided, as Charles Kindleberger wrote in 1963, ‘a burst of energy’, changing the attitudes of businessmen and bureaucrats alike who had got used to decades of economic stagnation.80 The plans’ record in forecasting most sectors’ economic growth was creditable. At least until the Fifth Plan of 1965, they were more accurate than simply relying on projections of past trends would have been.81 This helped establish exactly that conﬁdence and mood of inevitably that French

22 From Dreams to Disillusionment

planners aimed at. By the late 1960s, most large ﬁrms were aware of the growth rate expected in their part of the economy – though far fewer companies possessed the economists or forward plans really to take advantage of that better information.82 But there were much more important reasons for France’s impressive economic performance. Her economy was far behind Britain’s in the early 1950s, and indeed had been lagging in terms of growth since the 1870s: her GDP per head was 20 per cent below that of her neighbour in 1951. By this measure, France only ‘caught’ Britain in 1968, and GDP per head was never more than 10 per cent above Britain’s even in the 1970s and 1980s.83 This allowed France to catch up, as part of the process by which most of the developed world, in conditions of relatively free trade, converged on the US leader. The same circular mechanism that held Britain back helped to make economic growth in France easier ﬁrst to attain, and then to sustain.84 For the most part, the French economy had not grown more quickly because planning had released governments from choosing between growth, inﬂation and a world economic role: it had expanded because politicians had usually chosen the ﬁrst option over the other two. Inﬂation was higher than in Britain, and since 1948 the franc had been devalued not once, as had the pound, but ﬁve times.85 GDP growth was indeed smoother in France, but the index of industrial production signiﬁcantly was not less volatile: countercyclical budgetary policy was probably responsible for this, rather than a planning system that tried to even out industrial progress.86 If France was in these years able to reequip her industries, she was also beneﬁtting from cheap agricultural labour being released into industrial production. Between 1954 and 1960 alone, 5.5 per cent of her workers moved out of the agricultural sector; Britain, which had not retained a large farming sector, could manage less than one per cent.87

New approaches to the economics of government Politicians’ frustration with the seemingly endless policy shifts of the 1950s was not the only reason why structural growth remedies became the order of the day. Shifting economic theories, and the fact that interest rates came to seem outdated as an economic weapon, were also important. The Radcliffe Committee on the Working of the Monetary System, appointed in 1957 and with economists such as Cairncross and R.S. Sayers as members, helped to reinforce this disillusionment when it reported in 1959. ‘Monetary measures’, the committee concluded, ‘are incapable of having an effect sufﬁciently prompt and far-reaching for

The Planning Fervour of 1959–1964 23

their purpose, unless applied with a vigour that itself creates a major emergency’. The amount of international monetary ‘leakage’, and the availability of funds for investment and consumption outside the banking system, meant that bank rate might not an effective economic tool.88 As policy makers lost faith in monetary policy, they had to turn to other ideas about how to manage the economy. One such was the socalled Cambridge school, of which the Labour advisers and Cambridge economists Nicholas Kaldor and Joan Robinson were the most famous examples, the members of which fundamentally objected to the way in which neo-classical economists had interpreted Keynes. Their disequilibrium view of Keynes’ writings suggested a historical view of economic change, rather than a one-stage model that might tend towards stability In that case, the ‘state of conﬁdence’, ‘propensity to spend’, and especially the rate of investment, depended on subjective sentiments about the future. As such, the case for more conﬁdent and faster growth policies was all the more urgent.89 The foremost post-Keynesian growth theorists of the 1940s, Roy Harrod and Evsey Domar, had reinforced just how important investment was in keeping both demand and productive capacity growing.90 Kaldor went much further, theorising that, rather than the rate of proﬁt determining the amount of investment, investment levels, resting on the level of output, might themselves determine proﬁts.91 The emphasis on investment rather than proﬁts, coming at a time when ﬁscal and directly interventionist policies also had the upper hand over monetary policy, would transform the practical policy agenda. In terms coined by Peter Clarke, it would move progressively away from ‘steam Keynesianism’, which relied on the management of monetary aggregates, and towards command Keynesianism: the idea that the economy could be planned in detail through the direction of new investment.92 The imperative to raise investment was not limited to one particular theoretical school. Simple observation of government policies, which since 1945 had done little in Keynesian terms to inﬂate the economy through budget deﬁcits on current account and higher borrowing, led the Oxford economist R.C.O. Matthews to argue in similar vein. Rather than public spending, Matthews wrote in a famous 1968 article in the Economic Journal, it was the vast worldwide investment boom that had buoyed up advanced capitalism.93 The American Edward Denison had also found that, during the period 1950–62, capital inputs had increased faster than had the labour force. In ﬁve out of the nine countries he studied, ‘the difference was so large that the increase in capital input contributed more than the labour input to the… growth rate’, despite the

24 From Dreams to Disillusionment

fact that labour inputs were a much larger part of the productive process.94 Cutting public investment, which was one of the ﬁrst responses to overheating in the economy’s ‘go’ phases, came to be seen as especially ‘misguided’, since in Dow’s view it reduced ‘particularly severely some sorts of investment which happened to be easily amenable to control, for instance road building and railway modernization’.95 The stress on investment had political sources too, partly because uncertainty about the afﬂuent society’s gains ran very deep. Shanks, for one, condemned ‘the Janus face of the semi-afﬂuent society, with its cars and washing machines on the “never never”’, and ‘its feverish pursuit of a prosperity it can never bring itself to believe in’.96 Traditionally puritan Labour activists hated the ‘apathy and complacency’ of the 1950s, and yearned for a return to the ‘self-sacriﬁce’ of the war years.97 Raising the rate of ‘productive’ investment was seen politically as a more moral, digniﬁed and ordered alternative to merely paying for frivolous enjoyment. In this situation, investment, as opposed to consumption, was not only an economic, but a social, imperative. It might help to reduce voters’ susceptibility to the ‘illusions’ of afﬂuence, and make them pay attention to the future growth of the economy, rather than simply the fashionable goods of the moment. For the Labour MP Francis Noel-Baker, one of ‘the attractions of a planned economy’ was ‘that it can liberate society from high-pressure salesmanship and the need to “create demand”’ through advertising.98 Wilson himself thought that ‘frivolous and unproductive’ spending could undermine ﬁxed investment and competitiveness.99 The apparently increasing speed of information analysis fostered a growing sense that the economy could be understood and controlled. Only a quarter of a century before, the idea of a ‘macroeconomic’ description of a whole economy would have seemed far-fetched. That, however, was before Richard Stone and James Meade constructed the ﬁrst comprehensive estimate of national income and expenditure in 1940, and the 1941 Budget utilised their work to determine the amount of taxation that might control spending and inﬂation.100 There had been ofﬁcial statistics before, of course, especially as concerned trade and employment. Colin Clark, the Cambridge economist who had taught Stone as an undergraduate, had produced ﬁgures for the size of the national economy in the 1930s. But where Meade and Stone were really innovative was in the application of accounting techniques that allowed the framework of the whole economy to be delineated. Different variables could thus be measured numerically, and research conducted on their impact upon one another.101

The Planning Fervour of 1959–1964 25

This vision of macroeconomic reality had, though, been current and accepted for at least a decade. Sampling methods that allowed the collection of statistics claiming to represent the whole nation went back to the eighteenth century.102 What made the early 1960s so different? One explanation must be the simple passage of time. Jose Harris has pointed out that sometimes, institutional changes precede and indeed lead to the collection of new statistics, rather than new data always leading to calls for administrative reform.103 In this case, it may well be that the expansion of government into wholly new areas of the national economy and of social welfare allowed the collection of new information, causing ofﬁcials and politicians to think that they could grasp the inner workings of economy and society. By the 1950s the ﬂow of National Insurance cards through the Ministries of Labour and Pensions and National Insurance had reached 150,000 even in a normal week, and formed the basis for much better employment and unemployment records than had previously been available. By the early 1970s 10,500 people were involved in sorting those cards.104 The second reason for experts’ increasing conﬁdence was the pace of statistical reform. Whitehall’s frustration with economic statistics mounted in the 1950s, as a series of ﬁscal and monetary judgements were made based on what turned out to be faulty predictions. The expansionary policy pursued in 1954–55, adding to the upturn, was mainly due to this gap between forecast and reality. The reverse occurred in 1955–56, since growth was much lower than expected. Cuts that had been aimed at slowing the expansion made the economic situation worse.105 Throughout the late 1950s and early 1960s, economists argued about which statistics could best be used to guide policy. Debate continued, for instance, on whether output or expenditure was the best way to measure levels of output. They gave different results as to the rate of economic growth, and their apparent reliability oscillated from year to year. Such uncertainty had in 1956 led to Macmillan’s famous call for statistical reform during his Budget speech, with its reference to railway timetables and the need to update the ‘last year’s Bradshaw’ that politicians always seemed to be working with.106 A number of useful reforms were thereafter put in place. Quarterly national income and expenditure ﬁgures were ﬁrst published in 1957; factor income and price statistics were made available from 1959, and a national income time series from 1960. For the ﬁrst time, a reliable picture of macroeconomic trends, and some of the relationships between them, was emerging.107 Technological changes were a third reason that helps to explain rising ambitions as to what might and should be known, for during this period

26 From Dreams to Disillusionment

economists’ and sociologists’ conﬁdence was boosted by their ability to conduct complex quantitative work on newly available data. In the early 1960s electronic computers looked set to usher in an administrative revolution. Computer experts were conﬁdent that machines would get more powerful, and smaller. Every private household would own one, allowing access to huge databases of information; data processing would allow bureaucracies to banish paperwork.108 Academics were enthusiastic about the scope for multiple regression techniques, which might reveal the relationship between different variables. When Stone reported on his modelling work to the European Scientiﬁc Association for Medium and Long Term Forecasting, signiﬁcantly founded in 1961, he emphasised that he could use the Cambridge ESDAC computer. His six-category matrix of economic change could thus be used to test out the implications of six different rates of economic growth using ‘only a few minutes computing time’.109 The new National Economic Development Ofﬁce and the DEA would both draw on Stone’s expertise, and Cambridge’s computer power, to check whether their survey evidence of what was economically possible made sense overall.110 The Treasury became interested in the use of computers from the mid1950s onwards. Its Organisation and Methods unit had previously been sceptical, and had preferred to use tried and tested punch cards. But by late 1954 it was clear that the weight of statistics required to manage the economy meant, in the words of one Treasury ofﬁcial, that ‘different departments are queuing up to have cards run through the machine in different ways – and even the rapidest ones take too long’. In 1957 a steering committee was established to encourage the use of computers within Whitehall, and by 1965 the number of computers being used within central government had increased from seven to 45.111 One of the justiﬁcations for the reorganisation of the Central Statistical Ofﬁce in 1968 was the creation of a computer and data systems unit, which would work on extending the use of computers in government work.112 All of this contributed to ‘futurology’, a vein of writing that was extremely popular at the 1960s. There had been a ﬁrst wave of this in the 1950s, associated with American structural sociology and the idea that all peoples were converging on one ‘logical’ form of industrial economic society. What gave it new life in the 1960s was the idea that a new science of ‘conjectures’ might be possible. Some theorists who had speculated about an end of ideology in the 1950s, such as Daniel Bell, had their interest in the future reawakened by the possibilities involved in a new post-industrial society based on ‘theoretical knowledge… and the codiﬁcation of knowledge into abstract systems’. The emphasis on information, so obvious in the appeal of computers at this time, ﬁtted into

The Planning Fervour of 1959–1964 27

the whole attempt to know and plan for the future.113 In the introduction to one study conducted by the American Academy of Arts and Sciences – characteristically entitled The Year 2000 – this was summed up as sketching ‘alternative futures’, and weighing up the likely ‘costs and consequences’ of different actions. In practice these studies often lapsed back into a technological view of the future that could narrow societies’ options in a manner very similar to the functionalist approaches of the 1950s, the ambition to look far ahead fed obviously into the planning movement.114 The French Planning Commission appointed a ‘1985 committee’ on the very long term future; Britain had its own Buchanan Report on Trafﬁc in Towns, which speculated about congestion levels and the shape of cities by the end of the century.115 If governments were to look so far into the future, they would obviously need well-trained and able administrators to help them. This was yet another theme in the ‘condition of Britain’ literature of the time. Anthony Sampson, in his 1962 Anatomy of Britain, condemned the fact that the Ministry of Aviation, employing 3,000 scientists, was ‘run by Latin and History scholars, headed by an unskilled Minister’. In fact, the whole of Whitehall was apparently dominated ‘by a dialogue of “mmms” and “wells” and “up-to-a-points”, and feelings and agitations’.116 The Oxford economist and Labour thinker Thomas Balogh wrote a famous attack on the untrained, unprofessional, generalist amateurs who he thought ran Whitehall, with their ‘jejune meditations based on a set of simple theology and beliefs, if not on some long-since exploded fallacy’.117 Along with Crosland, Robert Neild and Shirley Williams, he also served on an inﬂuential Fabian Society inquiry into the civil service during 1962 and 1963. This led to their report The Administrators, which also stressed the need to abolish the privileges of the general administrative class, take establishments work away from the Treasury and give it to a reformed Civil Service Commission, and set up a more formal training structure.118 The emphasis on speciﬁc, expert research techniques was further encouraged by the advent of the Kennedy administration in the United States. The President himself was straightforward about the skills required in government. ‘Most of the problems… that we now face’, he argued, ‘are administrative problems. They are very sophisticated judgements, which do not lend themselves to the great sort of passionate movements which have stirred this country so often in the past. [They] deal with questions which are now beyond the comprehension of most men’.119 The choices before states would now become technical, and Kennedy surrounded himself with the ‘best and the brightest’ to meet them, including McGeorge Bundy from Harvard to head the

28 From Dreams to Disillusionment

National Security Council, Walt Rostow as Bundy’s deputy, and Robert McNamara as Secretary of Defense.120 Within a year, the defence budget had been split into a programme budget on the basis, not of the service responsible for each unit, but by the capabilities they could deliver, the roles they could fulﬁl, and crucially, how much they cost. All of this work was to be projected ﬁve years into the future.121 Such techniques began to penetrate Whitehall in 1963 with a Ministry of Defence visit to Washington to look at how Britain’s new single defence department could be managed. In 1964 long-term costings were assembled and translated in a functional budgeting system.122 Not everyone was impressed – Otto Clarke labelled it ‘the Treasury equivalent of space ﬁction’ – but the technical, technocratic mode of thinking seemed to be carrying all before it in the early 1960s.123

Science, technology and large-scale industry Scientiﬁc planning was yet another unspoken assumption behind the planning fervour, since the late 1950s and early 1960s witnessed a renewed sense of heroic scientiﬁc endeavour. Despite wartime and postwar science reforms, the Lord President’s Ofﬁce had been left in rather diffuse ‘charge’ of the Department of Scientiﬁc and Industrial Research which had been set up in during the First World War, and sponsored Research Associations that allowed companies to pool their efforts. By the early 1960s frustration with a perceived lack of organisation and energy ran across the political spectrum, just as it did in more general economic policy. The Economist complained about the priority given to defence work, and asked: ‘what is wrong in the 1960s with having one Ministry of Science that would be basically responsible for seeing that the Government’s £450 million or so annually was spent in the right places?’124 In the mid-1960s government conducted 54 per cent of Britain’s research and development effort. If there was to be a technological breakthrough, it was natural to think that it would be marshalled from that sector.125 The emphasis placed on new industries was especially congenial to Wilson as Labour’s new leader in 1963–64. Labour had spent years with its left and right wings divided over nationalisation. Now the creation of new, high technology industries within public control might serve as the guiding ideal for governments’ relationships with the private sector. It might at the same time provide a way for Wilson and his coterie of ‘centre-left technocrats’ to combat the inﬂuence of the centreright revisionists typiﬁed by Crosland.126 This trend was ﬁrst notable in

The Planning Fervour of 1959–1964 29

Labour’s policy statement Industry and Society, published in 1957. It was for the most part written by Peter Shore, at that time head of the Labour Research Department, who drew on Galbraith’s ideas about the need to control very large companies. It argued that ‘there is no one form which public ownership must take’, and instead of traditional nationalisation proposed the use of a National Superannuation Scheme to invest in industry on behalf of the public.127 When Wilson gave his ‘white heat’ Conference and speech in 1963, Benn noted that this ‘was Peter Shore’s day too, for he is the one who thought of the idea of making public enterprise the agency for bringing growth to our lagging economy, instead of just nationalising dying industries’.128 It therefore seems rational to see Industry and Society and Signposts for the Sixties as within the tradition of technocratic leftism than, as some authors posit, Croslandite revisionism.129 Science and technology’s renewed popularity as a way of solving economic problems forced the Conservative government into action. Lord Hailsham was appointed Britain’s ﬁrst Minister of Science in 1959, though this did little more than formalise government controls over the Department of Scientiﬁc and Industrial Research.130 Conservative backbench MPs became increasingly restless about this situation. David Price, Conservative MP for Eastleigh, had worked for ICI before becoming an MP, and was an inﬂuential ﬁgure in the party’s Science and Industry policy committee. He argued that the Lord President’s powers and resources were ‘far too small to be effective’, and that ‘there was a lack of purpose and direction from the centre’.131 A number of the committee’s eventual recommendations foresaw a smaller state, for instance by handing over some Research Association work to the private sector. But the rest of the report bore the characteristic hallmarks of the time. More consistent use should be made of civil research contracts, MPs argued. The Ministry of Science should be made more powerful, speaking for all state science and technology; there should be one Cabinet Committee overseeing both defence and civil research, so priorities would be more easily established; NEDC’s powers of ‘technical foresight’ should be developed, so that the science drive might be ‘pre-concerted’; each department, including NEDO, should have ‘a forward planning staff with a technical bias… drawing up… long-term surveys of expenditure and resources’.132 Responding to this climate, Macmillan commissioned Burke Trend of the Cabinet Ofﬁce to write a report on civil science in 1962. This recommended the replacement of the Department of Scientiﬁc and Industrial Research with more Research Councils and more use of

30 From Dreams to Disillusionment

civil development contracts overseen by an Industrial Research and Development Authority that would be managed like another Research Council. Trend also envisaged new powers for the Minister of Science to allocate funds across the Research Councils, advised by a larger technical staff and a new and more independent advisory body. This would hopefully bring together the different strands of science and technology policy, though it went nowhere near as far as Labour and even some Conservative MPs were demanding.133 Such ideas were ubiquitous. Labour had already mounted a ‘campaign for science’, meeting groups of scientists and technologists across the country, and coordinating their efforts with a similar Fabian Society project. At a series of meetings in London’s Bonnington Hotel during 1963 Wilson’s personal science adviser Patrick Blackett gave a paper on scientiﬁc manpower, and Richard Crossman, Labour’s Shadow Education spokesman, one on ‘science and government’. The Conservatives were, it is true, more concerned to maintain Research Councils’ and scientists’ independence than Labour, given the latter party’s call for an integrated Ministry of Science, a ‘science plan’, and for an expanded National Research and Development Corporation to take the lead in commissioning research. Hailsham, in his 1963 book Science and Politics, summed up this case with the words ‘science is intrinsically something which cannot be bought or ordered about’.134 But the rhetoric, at least, of scientiﬁc planning had penetrated Conservative thinking. One reason why Hailsham opposed Labour’s ‘grandiose schemes’ for one science department and science ‘plan’ was that ‘there cannot be a scientiﬁc plan which differs from the economic plan or even be isolated from it’.135 The Conservatives wanted science and technology considered alongside other issues at the NEDC, to help bolster their supply-side agenda. A ‘national policy for technological advance’ was discussed in that body on a number of occasions.136 A merger boom was in full swing at this time, triggered off by tighter competition laws, the perceived merits of the American multi-divisional corporation, changing norms in a City of London that was beginning to accept hostile takeover bids and, vitally, companies’ need to conduct expensive research and development. In 1957 the largest ﬁve ﬁrms in each sector of manufacturing had an average market share of 60 per cent; by 1969 this ﬁgure was 75 per cent.137 Their research and development role was obviously crucial to the economy: Hailsham accepted in his book Science and Politics that 90 per cent of research was concentrated in ﬁrms that employed more than 2,000 people.138 Labour’s proposed new Industrial Reorganisation Corporation was supposed to

The Planning Fervour of 1959–1964 31

encourage this trend, and it had as one of its criteria that industrial combinations must encourage research and development.139 Labour politicians furthermore believed that as Britain’s world defence role shrank, resources could be released for more productive economic use. Wilson himself told the New York Times in September 1963 that he would extend the Ministry of Defence’s contracting methods to civil industry: ‘we shall need to do so if measures of world disarmament… are not to produce widespread redundancy among scientists and technical workers’.140 The great weight placed on science policy in these years was not just a matter of rhetoric, for the Wilson governments did live up to many of their promises. By the time they came to power, Labour envisaged the creation of a Ministry of Technology (Mintech) rather than a Ministry of Science. The latter functions were to remain in the new, federal Department of Education and Science, so as to concentrate minds about links with academic and school science. But the Ministry of Technology was to prove a more powerful body than Trend ever envisaged, taking over as it did the Department of Scientiﬁc and Industrial Research, the Atomic Energy Authority, and the military research stations. This obviously assisted in the shift from military to civilian spending.141 In some years during the late 1960s civil science spending increased by between 12 and 14 per cent, and during Wilson’s ﬁrst period in ofﬁce it leapt at 1964 prices from £192m to £290m in just ﬁve years. Defence research fell by one quarter in the same period.142 At the same time, defence research institutions were encouraged to do more civil work. The Atomic Energy Authority was allowed to conduct non-nuclear work, and Harwell expanded its private sector contacts.143 The basic analysis upon which all this effort rested may have been faulty, for there was little in Britain’s overall research and development effort to suggest that she was lagging behind other developed countries. In the early 1960s she spent more than France and Germany on such activities as a proportion of GNP. Scientists and engineers in the British workforce outnumbered those in France, and approached the numbers working in the Federal Republic of Germany.144 In 1967 the American Brookings Institution analysed the real difference between Britain and other advanced nations in terms of manpower. Although she had just as many scientists and engineers as other countries, she deployed less of that technical manpower in industry. The emphasis on research as opposed to industrial application, and on defence rather than civil science, does seem to have been the critical difference.145 Benn, who eventually became Minister of Technology, as well as Blackett, publicly accepted and indeed pressed this case throughout their time involved

32 From Dreams to Disillusionment

with Mintech. Politicians’ rhetoric did not always make this vital distinction, however, and the problem remained how this gap could be closed without more controls over the private sector. By the late 1960s, and with the government lacking such powers, British research and development spending was actually falling as a proportion of GDP.146 Nonetheless, it remains vital to note the prevailing ideological background, the faith in ‘experts’, in disinterested, technocratic ‘progress’, and in planned, large-scale and state-led experimentation.

The demographic challenge Some of the more objective challenges before policymakers were also changing rapidly. In particular, welfare state planners were confronted with a potentially very large rise in Britain’s population, as well as changes in its structure that would mean many more young and old people to educate and care for. Enoch Powell and Michael Noble, Secretaries of State for Health and Scotland respectively, brought this to the attention of the Cabinet in January 1963. Their memorandum showed that the previous consensus, that the population would remain stable or fall in the medium term, had evaporated. ‘We must now change substantially our assumptions about the future’, they argued: ‘many of our policies, economic, social and political’, would have to be changed.147 Following a brief post-war rise, the birth rate had fallen in the early 1950s, leading to the expectation that its long-term decline visible since the nineteenth century would continue. However, from 1956 onwards, this trend was reversed, and there was a very sharp increase in the number of births. The age at ﬁrst marriage fell throughout the period, meaning that young couples had longer in which to have children within wedlock; the fertility rate for each woman of childbearing age rose as well. From a trough of 705,000 live births in Britain in 1955, the ﬁgure rose inexorably to 969,000 in 1964.148 So startling was this development that it was explained away for a number of years. Though people might be marrying earlier in life and having more children in their early twenties, so the argument went, they might then regulate their fertility and in the end have no more children than their parents’ generation. Even in 1959, when the birth rate had been rising for some years, the Registrar General envisaged an 8 per cent rise in the population of England and Wales by 1980. This would mean 3.7 million more people in that part of Britain, a large but not overwhelming rise.149 The 1961 census results disabused Whitehall of many of these comforting notions, for it became clear that young couples were having

The Planning Fervour of 1959–1964 33

more children overall, and even more rapidly than had hitherto been thought. Thereafter, population estimates for the early 1980s rose exponentially. Ofﬁcial projections for the increase in Britain’s population in 1981 were six million by the summer of 1962, and 7 million by spring 1963.150 In April 1963 The Economist made clear just how important this might be: ‘nobody concerned with planning, whether for education, social services, transport or the economic health of the country, can ignore the possibility that for every three people in Britain today, there may be four at the close of the century’.151 Joined to this were two other and more long-standing demographic problems, namely that of the supposed ‘drift to the south’, and the gradually ageing population. The second development had been understood for many years, as people enjoyed slowly rising living standards and tended to live longer. Yet even though a higher birth rate would, in the long run, ease this problem by adding to the workforce, in the medium term, the continuing increase in the numbers of infants and children would mean an even lower proportion of workers in the country as a whole.152 As for population movements, the Midlands and South East of England were going to take much of the brunt of this increase given international migration into those areas, a naturally higher birth rate, and an inﬂux from elsewhere in the UK. The Ministry of Housing announced in 1964 that the South East alone might have to accommodate over three million more people than had previously been planned.153 In October 1962 Frederick Erroll, President of the Board of Trade, bemoaned the fact that ‘we are faced everywhere with a growing population’. He thought that more powers might have to be taken to prevent the South East being overwhelmed.154 Whatever the reason for the rise in the birth rate – and it remains a matter of controversy – it was to pose daunting problems for governments. The present author has elsewhere estimated the likely extent of the extra demands that these changes would have placed on the welfare state. Just as an illustration from two policy areas of acute contemporary concern, it is possible to take the 1964 level of council houses per family and old people’s homes per pensioner, and calculate the extra numbers of houses and beds that would have been required just to keep up with the forecast increase in and changed structure of the population. Such a calculation applies 1964 levels of provision to 1981 forecasts for a Great Britain population swollen by ten million to reach over 61 million, and it gives the following result. 940,000 more public housing units and 25,000 more places in old people’s homes would have been needed in just over a decade and a half. Just 51 per cent of the population would

34 From Dreams to Disillusionment

be of working age by the 1980s, down from the 54 per cent that in 1961 had been projected for 1981. Achieving that was not necessarily impossible in itself, for those numbers represented about three years public sector housebuilding and a 25 per cent rise in the number of places in old people’s homes. But coming on top of growing demands for better quality services, it was yet another burden to bear.155 The most alarming population projections were not borne out, as from the mid-1960s the birth rate fell just as quickly as it had risen. By the early 1970s fertility was almost back where it had started in the 1950s. Mainstream population projections for the 1980s had fallen back, from over sixty million at their peak, to 56.4 million.156 The ‘drift to the south’ slowed in the 1960s, partly because governments did indeed strengthen regional policy, and to some extent because people were increasingly moving out of large conurbations, including London and Birmingham. The South West and East Anglia therefore received most of the expanding population, rather than the more crowded South East and Midlands.157 Some of the justiﬁcations for the planning movement, therefore, were invalidated by the passage of time. Though the gradual ageing of the population continued, Britain did not become as young, as ‘dependent’, or as crowded as demographers predicted in the 1960s. Some part at least of the demographic challenge was a mirage, and such uncertainty ought to have been apparent to politicians and ofﬁcials familiar with just how ﬂawed projections made in the 1950s now appeared. Still, at the time, demographic changes made governments’ problems even more acute. Where were all the extra people to be housed? Who was to look after increasing numbers of old people? The need to build more houses and provide more residential care for the elderly and inﬁrm were to become two of the most vital themes of the decade. If politicians and civil servants were to answer them, they would ﬁrstly have to know the extent to which such services were already being provided, and take more control at the centre if the provision thus revealed was thought to be inadequate. Hitherto, elected local authorities had usually been trusted to provide such services: this might have to change if shock treatment was going to be necessary to cope with a population explosion. Stronger regional policies might also be necessary to prevent ‘overcrowding’ in the South East of England. The potential rise in the dependency ratio also meant that scarce resources, of labour even more urgently than capital, would have to be efﬁciently utilised. In the intellectual climate of the early 1960s, all this seemed to make increased ofﬁcial planning even more desirable.

The Planning Fervour of 1959–1964 35

Conclusion: the planning fervour Planning was an idea that had been around for a long time, though in rather inchoate form as regarded peacetime organisation. Politicians returned to it now because it seemed to offer a way of maintaining their popularity, as well as solving the riddle of how to keep inﬂation and unemployment low at the same time. It caught the wider mood, bound up with the aspiration to appear technically competent while utilising scientiﬁc and corporate management methods associated with the Kennedy administration in the United States. Governments were furthermore advised that planning might raise the growth rate, as it appeared to have done in France and the Soviet Union. Political and demographic demands for better housing and health care were mounting quickly at this time, and faster economic growth might provide more money for governments to spend on the welfare state. Many academics and ofﬁcials were of a similar mind. Economists were at this time emphasising the need for much higher investment, and for a steadier growth rate, both of which objectives might be met by innovations such as NEDC. Many of these research agendas were still in that early stage where new constellations of ideas contain both normative and positive aspects. They had often not been codiﬁed, tested or put into action elsewhere, and they seemed all the more attractive for being novel, untried and excitingly ambitious.158 Above all, planning held out the promise of a more modern Britain. Peter Goldman, the Conservative defeated by the Liberals at Orpington, worked for a while after that setback for the party bureaucracy, and summed up this more hopeful future in a draft policy statement: ‘it will be a go-ahead Britain, pioneering in many branches of science and technology, and translating its know-how into productive capacity with record rates of investment’.159 For a moment, the ﬂawed analysis behind experts’ prescriptions – most notably concerning Britain’s perceived stop-go economy and her overall scientiﬁc backwardness – was obscured. As the circle of those prepared once more to talk about ‘planning’ grew, it also became ever more impossible to deﬁne exactly what it meant. Planning remained what Peter Clarke has called ‘an essentially contested term, a Humpty-Dumpty word’.160 The problems remained. Should it rely on prices, or quantitative targets? What would happen, for instance, if the new managerial techniques, or the requirement to smooth out the growth rate, at some point dictated cuts to investment, the welfare state or science spending? Lastly and perhaps most importantly, how were the public to be involved? As Ellen Wilkinson, later

36 From Dreams to Disillusionment

Labour’s Minister of Education, wrote in 1934: ‘the real issue that has to be fought out in England… is the aim of… planning and in whose interests are the plans to be made’.161 Keynes, perhaps deliberately, had left the question of aims and objectives open when he advised that ‘planning should take place in a community in which as many people as possible, both leaders and followers, wholly share… [the planners’] moral position’.162 But what would happen if they did not? This question would haunt the planning experiment.

3 Macroeconomic Planning

National planning: policy and practice before 1959 Planning did not only have a history as an idea, but also a pedigree as an administrative macroeconomic practice. State intervention as such was certainly not beyond the pale before the Second World War, and governments were involved in a number of large-scale rationalisation projects in industry. They intervened to reorganise the railways and coalmining in the 1920s; the National Government took a close interest in the Bank of England’s reordering of the steel industry. The BBC, the Central Electricity Generating Board and the London Passenger Transport Board are other good examples.1 The economic crisis of 1929–31 cleared the way for increased intervention, freeing sterling from its pegged gold value while being managed through direct intervention in the ﬁnancial markets and tariffs. The domestic situation, and economic reorganisation, could therefore be given higher priority. The Tariff Duties Advisory Committee set up after the introduction of protection insisted on reorganisation and concentration in a number of industries, for instance iron and steel, before it would allow the adoption of effective tariff rates.2 However, these were discretionary interventions, not intended to add up to government-led plans for the entire economy. Only very small amounts of money were committed by Whitehall to public works, for instance, and long-term investment plans were only inaugurated during rearmament in the very late 1930s so as not to get in the way of military procurement.3 The Second World War transformed the practice of planning just as much as it changed the ideological mood. The overriding need to boost production broke through the remaining barriers that still constrained the British state. By the end of 1942 manpower planning systems were 37

38 From Dreams to Disillusionment

in place that formed the mainstay of resource allocation and planning for the rest of the war years. Both men and women could be conscripted for civilian labour; a Reserved Occupations list prevented skilled manpower from being wasted in the armed services; Essential Worker Orders allowed government to control the movement of workers. The Government was also empowered to order labour ‘dilution’ through the reform of working practices, and an end to strikes and restrictive practices. These powers were not widely used by Ernest Bevin, the trade unionist head of the Coalition Ministry of Labour, who preferred to proceed by agreement. However, examples were made of a number of left wing unions in particularly sensitive industries such as coalmining.4 From 1941 the Production Executive, a committee of the War Cabinet, became the leading arbiter of a new allocation process, which involved controlling access to most raw materials. Licenses were now required to invest in new plant, machinery and buildings.5 The increase of knowledge about the economy, with 1940 witnessing the ﬁrst systematic and ofﬁcial account of Britain’s national income and outlay so that the Budget could help to balance the wartime economy, led to renewed conﬁdence about what governments could achieve.6 The state emerged once more from a total war much larger than it had been on the eve of that conﬂict. Public expenditure was only just over 25 per cent at the outbreak of the war; by its end the ﬁgure was touching 60 per cent. Employment in central government administration doubled.7 Once the emergency of the war passed, however, many of the instruments of control were dismantled. Building and raw material controls were successively relaxed, as the easing of shortages undermined their justiﬁcation. Although government could inﬂuence about two-thirds of total investment, almost all the capital outlays of private manufacturing industry remained beyond its reach. The National Investment Board so popular among Labour thinkers at ﬁrst seemed to have been achieved with the creation of a National Investment Council in February 1946. However, the new investment ‘shelf’ seemed less useful in an expansionary economic phase than it had in the 1930s, and as Chancellor Stafford Cripps wound up Dalton’s Council in December 1948.8 Nationalised industries’ investment plans were not coordinated at the centre, but rather delegated to management boards responsible for the success of their individual industries.9 External constraints bedevilled the idea of planning the economy as a whole, for after the sterling convertibility crisis of 1947, the Government’s overriding aim was to boost exports. When Cripps at the Board of Trade set up tripartite working parties to examine the structure and competitiveness of British

Macroeconomic Planning 39

industry, they were concentrated in export industries.10 Labour’s ambivalent commitment to planning had been frustrated and then transformed by a system that has been characterised by Jim Tomlinson as an ‘iron quadrilateral’, its boundaries formed by the Morrisonian nationalised corporation, free collective bargaining, Parliamentary sovereignty, and consensual tripartism.11 One way in which demand and supply might be brought into line, as Durbin had theorised, would be by restraining wages. The idea of incomes planning was frustrated during 1947 by trade union opposition and a continuing faith in ﬁscal and structural policies. But when it did bring in an incomes policy between 1948 and 1950, the Attlee government had to try to solve the dilemma of securing both economic reform and popular support. Pay increases were allowed for productivity increases, for the low paid, and to preserve pay differentials. Partly because of this, and to some extent due to political loyalty to the labour movement as a whole, the TUC reluctantly acquiesced.12 The Government also announced that it would use wartime regulations to prevent price rises in those industries that were trying to pass on wage increases to their customers. Ministers appealed for voluntary dividend restraint, while increasing taxes on proﬁts, to further appease the unions. Wage increases did slow thereafter. However, the TUC refused to imperil free collective bargaining by accepting long-term wage planning machinery, and the Korean War inﬂation by raising prices brought the episode to an untidy close. The very emergency nature of the policy – it was more along the lines of a wage ‘freeze’ than any national plan for wages – had sealed its fate.13 None of this means that Labour had entirely recanted its previous commitment to planning. Traditional monetary policy was downplayed to begin with, since controls and intervention were supposed to stand in for them. Interest rates were reduced to levels below even their wartime trough; even when this policy was reversed in 1947, short term rates did not move.14 Controls were not gently and successively relaxed in favour of economic liberalism. Rationing through the allocation of ‘points’ for each family was only brought to an end in 1950 because Labour Ministers believed price controls could do the same job of holding down retail inﬂation.15 Wilson, as President of the Board of Trade, was in favour of permanent price controls, and indeed wanted their coverage widened.16 Only the intervention of the Korean War, and the renewed need for emergency wartime powers, prevented Labour from legislating to bring in permanent allocation and price controls.17

40 From Dreams to Disillusionment

Following their return to power in the 1950s, the Conservatives set out on a course of pragmatic neo-liberalism that bought popularity through the relaxation of economic controls and a rise in consumer spending. Labour’s planning experiment was widely perceived as meddling, dour and in any case rather ineffective, and despite his image as one half of the consensual ‘Mr Butskell’, Butler as Chancellor in the early 1950s lost no opportunity to remove controls.18 Allocation restrictions were successively lifted; most raw material controls were abolished or reduced in 1953; private building licensing was ended in November 1954; only one of the four Development Councils set up under Labour, that covering the furniture industry, was continued after its ﬁve year remit had run out.19 Direct controls over imports were cut back sharply after 1952, until they amounted to only 10 per cent of all imports in 1958.20 Allied to this retreat from intervention was a new emphasis on consumer goods, for the Conservatives also relaxed ﬁscal policy. Income tax and surtax, in particular, was cut back sharply in 1953, 1955 and 1957, though personal taxation overall did not return to its pre-war levels.21 Physical investment controls were replaced by indirect guidance through the Capital Issues Committee, though even indirect control over borrowing and share issues was removed in 1959. The indirect effects of government spending on the welfare state allied to Ministerial veto and moral suasion among the nationalised industries replaced what integrated investment planning Labour had managed.22 The Conservative Cabinet did reject the so-called Robot plan of 1952, which called for radical deﬂationary measures after a ﬂoating of the pound. However, though this has been seen as the triumph of domestic economic management and the maintenance of high levels of employment, it is more likely that the rush in which the plan was presented, the uncertainty it involved, and its inevitable electoral unpopularity for a government with a small Parliamentary majority were more important factors.23 On the other hand, Ministers had certainly not abdicated responsibility for overall economic direction, or ceased to think that there might be advantages to agreeing economic objectives with unions and employers. One good example of this was their attempt to secure a price and wages ‘plateau’ to increase competitiveness and efﬁciency during 1956–57.24 Planning’s administrative history from the end of the First World War forms a good guide to the problems that were encountered in the 1960s. Many of Labour’s planning instruments had been abandoned because they were in themselves contradictory, and a number of key questions

Macroeconomic Planning 41

had never been confronted. How could macroeconomic management based on budgetary changes and monetary policy be made to ﬁt together with physical controls? Who should administer a planned economy? How should agreement be reached on the aims of planning, especially if the means were unpopular? Could wage and price restraint be traded for faster economic progress and consultation? The problems were manifold. However, to Cairncross’ later dismay, in the enthusiasm of the 1960s many people with a great deal of experience in this ﬁeld had failed to learn some of the obvious lessons: ‘they had forgotten… it was just a jumble’.25 This lack of collective memory would make the challenge of macroeconomic planning an all the more complex, and in the end thankless, task.

Economic planning in an era of crises The planning efforts of the 1960s have to be seen against in their wider international context, for just as British governments tried to take more direct control over the British economy, the world scene became ever more confused and uncertain. Prime among the reasons for this was that given massive US external capital investment, military efforts and aid expenditure, the dollar shortage of the 1950s gradually began to give way to a chronic dollar glut. This weakened the US currency, which had become the de facto anchor of the Bretton Woods system of ﬁxed currencies, and put upwards pressure on the dollar’s peg of $35 to one ounce of gold. Though the US authorities attempted to right the problem by limiting capital outﬂows, encouraging central bank cooperation and pooling gold with other countries in London, this did not prevent a long sequence of destabilising world economic crises throughout the 1960s.26 The Conservative Governments of the 1950s had been lucky, since the situation before general currency convertibility was restored at the end of that decade was more stable, and therefore manageable, than it later became. Britain’s terms of trade moved in a positive direction, with the basic commodities that she imported, such as food, becoming cheaper. Manufactured goods, which Britain exported, rose in price throughout the 1950s. Although this trend slowed after the middle of that decade, it clearly helped Britain maintain balance of payments equilibrium.27 The 1950s also witnessed a propitious synchronicity in movements of Britain’s external balance, and the payments situation of the rest of the sterling area. When Britain was in deﬁcit during the 1950s, many other countries using sterling were in surplus, and thus

42 From Dreams to Disillusionment

paying in gold to London while Britain was divesting herself of assets. The opposite situation usually held.28 Currency convertibility was attended by increased instability linked to the easy availability of US dollars. The development of the ‘Eurodollar’ market, in which banks outside the US lent on dollars that they themselves held, made ofﬁcial supervision and management of the whole currency system much less practicable – and consequently added to volatility in the currency markets.29 Added to this unofﬁcial growth of liquidity was the inability of ofﬁcial reserves, mainly of gold and US dollars, to keep pace with the growth of world trade. Ofﬁcially provided liquidity was often totally out of line with the needs of different economies.30 This growing instability was exacerbated by continuous balance of payments problems, in part caused by non-economic factors. Britain was in current account surplus for most of this period, and indeed throughout the period on private transactions taken as a whole. Mirroring the US experience, it was the burden of her world defence role, and government spending abroad, that put the real strain on her balance of payments. Britain spent more on defence beyond her borders than any other developed state except the US. She was therefore subjected to a succession of exchange crises by speculators unconvinced she could meet her liabilities. These occurred, with depressing regularity, in July 1961, November 1964, July 1965, July 1966, November 1967, and March and November 1968.31 This fundamental instability overshadowed everything that British governments did throughout the 1960s. Even leaving aside the sharp deﬂation of late 1955 to 1957, and the ‘reﬂation’ exercise of 1958–59, the Government switched economic policy continuously during the course of the 1959–64 Parliament. First there was the deﬂation of 1959–60, followed by the crisis measures of July 1961, in which interest rates were dramatically increased, special deposits with the banks called for, and customs duties temporarily increased. The Government also declared a ‘pay pause’, requesting that all wage rises be frozen for six months. This was followed by the ‘growth solution’ of 1962 and 1963, with interest rates back below their pre-crisis levels by the start of 1963, and two reﬂationary Budgets. There was thereafter a return to some restraint in 1964, though of a very limited kind. Given the Government’s perceived role in ﬁne-tuning the economy, there seemed no alternative to a constant round of changes.32 Despite the promise of planning, Labour’s macro-economic management turned out to be no more stable as the new government attempted to bring the boom set off in 1963–64 under control. Successive sterling crises in November 1964, July 1965 and July 1966 forced the Government to apply the

Macroeconomic Planning 43

economic brakes: two and a half years of relatively high interest rates, an import surcharge and credit controls, along with the equivalent of £1bn worth of increases in taxes was hardly the expansion that Labour had promised. This was followed by some relaxation during 1967 as the economy did seem to slow.33 Devaluation was one alternative to the constant atmosphere of crisis, though it could not have been carried out without extreme short-term pain due to the need to reduce domestic demand and encourage exporters to take advantage. With hindsight, this probably was the best option, with both Keynesian and monetarist simulations of a moderate devaluation coupled with deﬂation concluding that, over the cycle, inﬂation would have been lower and growth higher than it actually was.34 This option, though, was famously ruled out on the Friday night after Wilson entered No. 10, at a meeting with James Callaghan as Chancellor, and George Brown as First Secretary in charge of the new Department of Economic Affairs. There were a number of reasons for this decision, which has to be seen in its proper context rather than through the lens of its later consequences. Unwillingness to make Labour the party of the ‘weak pound’, the American link, a desire to protect Commonwealth sterling holders, and a belief that devaluation was no panacea in any case given the need to deﬂate at the same time, were all important. So was the more justiﬁable view that making exports cheaper would do little to solve British industry’s supply-side productivity problems.35 By July 1965 all the Government’s Special Economic Advisers privately advised that devaluation was both desirable and inevitable, and they were joined in this by a vocal Cabinet minority, including Brown.36 Pro-devaluation Ministers mounted their strongest challenge in July 1966, taking advantage of Callaghan’s short-lived indecision on the issue, with one of Brown’s temporary resignations the result.37 The hopes invested in direct intervention, however, were decisive – along with the divisions among those in favour of devaluation – in allowing Wilson successfully to oppose this until it was forced upon him. By November 1967 the continuing current imbalance, the French insistence that Britain would have to devalue if it wished to join the EEC, and the stern conditions that would inevitably come with new international loans, became too much. Devaluation of sterling from $2.80 to $2.40 was announced.38 The existing loans were close to exhausted, without faster growth and a markedly better balance of payments having been achieved.39 Eventually, the overall balance of payments did move into the black, though this was only achieved through the harshest economic squeeze imposed since the war.

44 From Dreams to Disillusionment

The improvement in Britain’s current balance thereafter was just enough to prevent another devaluation, though she came extremely close in March 1968 when a general crisis of conﬁdence in the dollar, and rush to buy gold instead, put immense strain on the fragile pound.40 Britain’s huge credit lines with foreign banks and states were enough to ensure stability in the short term. Funds also began to ﬂow back to the US during 1968 and 1969, caused partly by very strict capital controls imposed by Washington and then by borrowing by American banks in Europe. This helped for the moment to ease the crisis of conﬁdence, but the fundamental disequilibrium in the ﬁxed exchange rate system had not gone away. In the early 1970s a renewed US balance of payments crisis bring the whole system down.41

Macroeconomic planning (I): Conservative version The planning machinery that remained from Labour’s experiments – for instance the Economic Planning Board, which met only seven times in 1959 – had fallen into neglect by 1960.42 But as the Government cast around for means to gain control over wages, prices and competitiveness and so boost the balance of payments, Ministers began to consider reversing some of their liberalising moves. The initiative came ﬁrst from the Ministry of Labour under Edward Heath, who suggested to Cabinet in May 1960 that the Government might launch a ‘review of the human and industrial problems for the next ﬁve years’, including industrial relations law and ‘the need for a steady expansion of our economy based on stable prices and increasing productivity’.43 Just as Labour had been in 1947–51, the Conservatives were preoccupied with relating wage rises more directly to productivity increases, and with restraining the general rise in incomes. The Government had set up a Council on Pay, Productivity and Incomes under Lord Cohen in 1957, but it had no powers, an extremely vague remit and no support among trade unions or employers. By the summer of 1960 it had been moribund for a year or more. The Government, Macmillan reasoned, needed to ﬁnd another and more powerful lever for controlling wage increases as a way of holding down costs and boosting competitiveness.44 The Prime Minister therefore tried to arrange for Alan Birch, General Secretary of USDAW, the shopworkers’ union, to meet with the Chancellor. The TUC General Council replied rather tersely that they wanted to meet the new Chancellor, Selwyn Lloyd, en masse.45 This meeting, which took place in September 1960, was hardly a great meeting of minds. The TUC representatives

Macroeconomic Planning 45

argued that only ‘planning’, hitherto anathema to the Conservatives, would achieve ‘a steady and constant rate of growth assured by a continuing prospect of high demand for increasing production’.46 However, Macmillan remained enthusiastic about tripartism, believing that ‘if the Government and the employers and the Trade Unions… could agree upon a common objective both for home and overseas trade, it would be something to spur interest and enthusiasm’.47 Despite these initial contacts, however, it was only as a counterpart to the deﬂation of 1961 that Selwyn Lloyd seized on the idea of planning. He reasoned that this might make deﬂation more politically acceptable, while convincing foreign creditors that Britain was doing something to hold down costs and boost exports. Here again was the emphasis on an embryonic incomes policy, as Lloyd told the Cabinet when they faced the economic crisis of summer 1961: ‘in the long run we must try to link consideration of wages with the problem of economic growth’.48 Just in case the link between planning and wage restraint had not been made clear enough, it was also at this point that Selwyn Lloyd persuaded the Cabinet to abolish the Council on Pay, Productivity and Incomes, in order to ﬁnd some better way of negotiating national wages policy.49 He thereupon wrote to both sides of industry, putting forward detailed plans for a ‘National Economic Development Committee’, which would secure ‘new and more effective procedures for the preparation and co-ordination of plans and forecasts for the main sectors of our economy’. This would be a two-tier body, with the TUC and employers sitting on a ‘top tier’ Council, and a National Economic Development Ofﬁce (NEDO) that would conduct research for the Council.50 Unfortunately for Lloyd’s design, a number of Ministers bitterly opposed this idea: not only the right-wing Peter Thorneycroft, whose ideological opposition was widely expected, but Maudling, Lord Mills and Charles Hill all feared ‘the creation of a new monster which would embarrass us in the future’. The opponents of ‘planning’ wanted to take out all reference to a second tier, which they feared could become too independent-minded.51 Treasury ofﬁcials, with the possible exception of those in the Economic Section, were also worried about the independence of the Ofﬁce.52 Lloyd therefore re-drafted his proposal so that it emphasised the role of the Council, but he and Macmillan resolved to push the proposal through the Cabinet without further concessions. They attacked their opponents’ ideas as ‘yet another talking shop’, hardly comparable with their own determination to ‘fashion effective instruments’.53 Even this did not still the doubts of many in the Cabinet.

46 From Dreams to Disillusionment

Maudling was an especially committed opponent of the idea, arguing that there was enough planning machinery in government as it was.54 After what Macmillan called this ‘little tussle’, which stretched over two Cabinet meetings in September 1961, a draft ﬁnally emerged which emphasised that whatever the new Council debated, government would make the ﬁnal decisions. The Ofﬁce was to have a subordinate role, simply conducting research and preparing discussion papers.55 What had been demonstrated beyond doubt was the ideological and practical objections of many Conservative politicians; if their experiment were to fail, Macmillan and Lloyd would pay a heavy political price. The interventionist modernisation agenda existed alongside another, which occasionally used the language of ‘planning’, but was in fact quite different. Most civil servants in the Treasury and Board of Trade believed that, although much more government intervention was required in both economic and social life, it should be aimed at securing freer and more liberal markets. The Treasury report on Economic Growth and National Efﬁciency, deliberately submitted to Ministers during the sterling crisis of July 1961 to help encourage them onto a different path, is a good example of this trend. The report put the case for lower growth in the short term, to make space for a series of supply side initiatives that would ‘call for “difﬁcult” battles with vested interests’ and shake up British businesses. Various supply side reforms were recommended. Tariff reductions, if necessary implemented unilaterally, would open Britain to more competition. Monopolies and mergers legislation should be strengthened. The abolition of Resale Price Maintenance, which allowed wholesalers to specify what their products would be sold for, would help bring prices down, especially in concert with longer shop opening hours and an attack on restrictive labour practices. Public investment decisions, the Treasury recommended, should hold out the promise of at least some cash returns.56 A Conservative Party inquiry into economic growth under Paul Chambers of ICI reached similar conclusions in 1962. During its deliberations Chambers made clear that he blamed ‘over-full employment’ for making the ‘lazy and incompetent worker… secure in his livelihood’. Lower taxes and government expenditure, not planning on its own, were seen as the answer.57 The Conservatives did preside over a number of liberalising economic initiatives, believing them to be the essential concomitant of cooperation through the new NEDC and growth targets. They continued to negotiate within the General Agreement on Tariffs and Trade for fewer trade restrictions, and of course one of their reasons for announcing an intention to enter the EEC was that it would open continental

Macroeconomic Planning 47

markets up to British trade.58 New monopolies and mergers measures were also announced. There would create a Registrar of Monopolies who would have the power to recommend investigations, while leaving the ﬁnal decision to the Government. Though a ‘neutral’ legal stance was to be maintained concerning economies of size, with no presumption against mergers, the roles of judge and jury would therefore be separated. A number of loopholes, such as price rings and buying and selling agreements, would be closed. The Government also announced that it was considering bringing service industries inside the scope of Monopolies and Mergers legislation. Though legislating on this fell to Labour after they won the 1964 election, this was a clear signal of intent.59 The Government also acted on Resale Price Maintenance. The Cabinet deferred decision on this in the summer of 1962, despite the powerful case for abolition made by both the Board of Trade and the Treasury. This decision was made on ‘political and social grounds’, for many Tory MPs’ seats depended on the votes of small shopkeepers who did not want to compete with large stores who could undercut their prices, or rural areas where local residents feared the loss of their local shop.60 Macleod as Party Chairman warned Macmillan that the Party as a whole would ‘bitterly resent’ any attack on price maintenance.61 It took yet another attempt by both economic departments, in early 1964, to force the change through Cabinet. The only concession to opposition was that the abolition of price maintenance could be challenged in the Courts in individual cases, if the ‘public interest’ was shown to be served by its retention.62 Ministers had to endure a wave of revolts and unpopularity among their usually loyal supporters, both in Parliament and in the country, as the price of their enthusiastic support for economic efﬁciency.63 The neo-liberal stream in Conservative thinking was evidently not quite exhausted. Securing co-operation from industry and unions therefore became all the more vital if the other, more proactive side of the Government’s modernisation agenda was to take hold. The FBI’s response was mildly positive, though its President, Cyril Harrison, expressed some disappointment at the fact that the Ofﬁce had been downgraded.64 The FBI secretly feared that the Ofﬁce would be ‘too much under the control of the Government’.65 Beaver and Hugh Weeks, FBI leaders at least open to the idea of more planning, had already had enough problems simply getting their Economic Committee to agree to negotiate, and as time went on individuals’ doubts multiplied. Maurice Laing, for one, pointed out the danger of a Labour Government using the Council ‘to impose on the country a full “planned economy” which could include full scale

48 From Dreams to Disillusionment

Socialism’.66 The unions’ response was even less forthcoming. After the TUC’s Economic Committee had met on 11 October, they made it clear that if they were to take part, the Council would have to consider not only wage restraint, but also price and dividend control by the other side of industry.67 The TUC were not concerned about hypothetical administrative machinery: they were interested only in inﬂuencing policy.68 Lloyd reassured TUC leaders, in a meeting on 25 October, that ‘no subjects, including taxation, direct controls and personal incomes, would be barred from discussion’. He explicitly promised that the Council would be able to discuss the distribution of personal incomes, as well as wage restraint, and that it would not simply be a ‘rubber stamp’ for the Government’s own decisions.69 Even though the Economic Committee did recommend that the TUC should join such a body, the wider General Council disagreed and voted to stay outside. The pay pause had destroyed the TUC’s ability to convince their more radical member unions of the advantages of planning: one member of the General Council summed up this feeling by saying ‘the pay pause must go’ before they could join any governmentsponsored body; another member feared being ‘hog tied by a Conservative Government’.70 Macmillan attempted to placate them with a re-afﬁrmation that the Government wanted to construct a longterm wage policy after the ‘pause’ had ended.71 This only allowed those hostile to co-operation, especially Frank Cousins of the Transport and General Workers Union, to delay a decision until it was clear what the Government’s policies were.72 Once again the Government manoeuvred to secure TUC co-operation, both the Minister of Labour, John Hare and Lloyd referring approvingly in the Commons to the Swedish and Dutch central wage bargaining systems, which included the consideration of the distribution of incomes, proﬁts and dividends.73 Even this failed to work, for when the Economic Committee met Lloyd again in January 1962 they told him they ‘hated’ the pay pause, and would only agree to talks once wage restraint ended.74 It was at this stage that Lloyd made two crucial changes to his incomes policy. The ﬁrst was to reveal to the TUC that his long-term plan was to relate incomes to productivity, which held out at least the possibility that if higher productivity gains and faster economic growth could be attained, wages could rise quickly too. The second pledge was that if proﬁts and dividends were shown to rise unfairly due to wage restraint, then the Government would act to correct this.75 It was only after this pledge was given – and partly because the TUC did not relish the public opprobrium that might attach to a refusal to serve

Macroeconomic Planning 49

‘the national interest’ – that the General Council voted 21 to 8 to join what became the National Economic Development Council, or NEDC.76 In fact, the ‘partners’ always had conﬂicting ambitions. As Clarke noted before NEDC even met, ‘there is a great gulf between the FBI position… and that of the Cabinet… [and] it is most unlikely that the TUC want “planning” in the FBI sense – or indeed anything more than an opportunity to get closer consultation with, and pressure on, the Government’.77 The overriding priority of the TUC was wages. They ﬁrmly, and probably correctly, believed that there was ‘no evidence’ for the Chancellor’s argument that high wage costs alone were reducing British productivity. They preferred, with less justiﬁcation, to place their hopes in boosting exports through stimulating growth and thereby reducing unit costs.78 In private they saw participation in the NEDC as ‘an instrument for modifying the Government’s economic policies’.79 Given their disagreements about macroeconomic policy, the participants turned to economic growth as an outcome everyone could agree on. The Council fell back on the FBI’s own 1961 strategy, that is, an industrial inquiry, this time aimed at discovering how large industries might cope with the four per cent growth rate that NEDC decided was desirable. This target was embodied in the so-called ‘green book’, The Growth of the UK Economy to 1966, published in February 1963.80 However, the intellectual foundations of this document were tenuous at best. Seventeen industries, covering two-ﬁfths of national employment, two-ﬁfths of visible exports and nearly half total ﬁxed investment, had been asked whether they could grow at four per cent per annum.81 Choosing large industries meant that NEDC was dealing directly with industries that could plan ahead; this begged the question of whether smaller concerns would be able to keep up. The document contained a number of assumptions about the future: that the terms of trade would not change, that world growth would not slow, and that Britain would enter the EEC.82 Furthermore, these industries were being asked to speculate about what might be achieved, given favourable conditions. Again, this was begging the question: no one could guarantee, for instance, an adequate supply of skilled labour, or investment in energy or transport. The task of explaining how these conditions would be created fell to the ‘orange book’, Conditions Favourable to Faster Growth. This argued that growth in wage incomes would have to slow, from the prevailing ﬁve to six per cent increases per annum to something much closer to the projected 3.25 per cent annual increase in productivity. If a balance of payments crisis threatened to de-stabilise the initial growth phase,

50 From Dreams to Disillusionment

government might have to consider import controls, short-term support of sterling from the world ﬁnancial community, and tax rebates for exporters. But, although various ways of increasing industrial productivity were discussed in the document, no mechanisms for abating the growth of wages were even mentioned.83 However, it was felt that most of the seventeen surveyed industries could keep up with four per cent growth. By now Chancellor, Maudling was obliged to concur with the target as an ‘ambitious ﬁgure but not an impossible one’.84 Having invested so much political capital in NEDC, the Government had very little choice. It is worth commenting at this point on one under-explored reason why the industrial inquiry was required. The lack of ofﬁcial statistics about the economy meant that governments knew little about the details of economic changes, and less about the interlinkages between them. Partly in reaction to Macmillan’s 1957 Budget speech, the ﬂow of data had increased, but its reliability and accuracy often had not. This was a problem for government management of the economy, not only because they had to grope in a statistical fog, but also because a concerted economy of large-scale companies was thought even by economic liberals to need better information. The problem was that this required a great deal of private and ofﬁcial manpower. Even before the 1957 Budget, ofﬁcials were concluding that reforms should slow down, given the ‘considerable pressure’ that had been put on industry to provide more ﬁgures that were consequently not always of the highest quality.85 Some vital series continued to be unreliable throughout this period. Balance of payments ﬁgures, so vital if the four per cent target was to be reached without external crises once again threatening the economy, remained highly indeterminate. Despite those improvements, economic life continued to defy the forecasters in a manner that should have been a warning against the more ambitious forms of planning. A £65m deﬁcit was projected for the current balance of payments account during 1963, which turned out to yield an actual surplus of £121m, and a £75m deﬁcit was expected in 1964, which ended up being a year in which the current account was £374m in the red.86 One reason for this was that the gap between current account data gathered from trade ﬁgures and monetary movements taken from banking system returns had to be bridged by a rather arbitrary ‘balancing item’, which showed little tendency to fall over the period.87 In this situation of profound lack of knowledge, four per cent seemed as good a target as any other. Economic growth was just about all the NEDC parties agreed to, in what Cairncross called their ‘mutual vagueness’.88 Many civil servants,

Macroeconomic Planning 51

especially Frank Lee of the Treasury, also remained deeply sceptical. In a long paper submitted in June 1962, he argued that there was ‘no reason’ to believe that the NEDC could answer the question as to how the growth target was to be achieved. Furthermore, he saw ‘great dangers in becoming committed to expectations of growth or targets for growth without appreciation of the magnitude of the task or of the radical changes of government policy which would be involved’.89 The constant attacks that were mounted on ‘Treasury doctrine’ in the Council can have done little to change ofﬁcials’ minds.90 Employers’ and unions’ attacks on government policy were partly motivated by fear that the Government might intervene in wage and price ﬁxing. Following the pay pause, and despite its extreme unpopularity, the Government searched for a way of bringing incomes policy together with the broader planning experiment. Two White Papers published in 1962 set a ‘guiding light’ of 2.5 per cent per annum for pay increases, and set up a National Incomes Commission to take references on special cases and advise on how better to relate wages to productivity.91 It was thought that setting wage restraint in its wider context, of productivity, competitiveness and Britain’s balance of payments situation, might help to convince the unions of the need for such a policy. If so, the hope was unfounded. The 1962 TUC Congress passed a motion calling for the rejection of all such policies; the movement’s leadership had stopped even commenting on the Government’s ideas, so as not to lend them legitimacy.92 Attempts to assemble a ‘package deal’, under which the TUC would be encouraged to participate by social and economic concessions, also failed. There were myriad reasons for this. The ﬁrst was some government departments’ opposition to more radical ideas. For instance, price controls remained a key TUC demand. Macmillan for one was willing to consider a price investigation authority that might report if employers simply increased their proﬁts during periods of wage restraint. However, the Board of Trade and its ofﬁcial Permanent Secretary Richard Wilson were implacably opposed to the idea. The November 1962 White Paper therefore referred only vaguely to the National Incomes Commission ‘reporting’ if it found prices and proﬁts inﬂated by incomes policy.93 Both sides of industry also remained sceptical about government action in the labour market. When Hare proposed bringing in a national redundancy pay scheme, he ran up against an unlikely alliance of the TUC and FBI, both concerned to limit detailed intervention and push the costs back onto government and National Insurance.94 Though useful reforms were enacted – notably a requirement that all employees should

52 From Dreams to Disillusionment

have written contracts of employment – such achievements were not sufﬁciently central to the concerns of either side of industry to make planning truly and centrally in their interests.95 These divergent interests were reﬂected in the work of the NEDC. Increasingly it became, not a locus for decision, but for discussion. Although a number of topics directly relevant to British competitiveness and growth were considered – science policy, the supply of skilled manpower, exports – actual policies were made elsewhere. The ﬁrst half of 1963 was spent deciding how far to extend the seventeen-industry survey, and monitoring the progress of those industries they had already studied.96 Only in October 1963 did Maudling propose the creation of Economic Development Committees for each industry that could actually pilot changes. Even so, these would only be established where there was full agreement from both employers and unions, and all reference to the ‘implementation’ of Council decisions was effaced from Maudling’s draft.97 Development Committees were now only to ‘to collect information about and to assess the prospects of their industry’, and ‘consider matters relevant to the efﬁciency of the industry’.98 Only ten Development Committees had been established by the time of the October 1964 General Election.99 It soon became clear that it would be very difﬁcult to meet any of the targets. Robert Shone, NEDO’s ﬁrst Director General, made this clear to the Council in January 1963. The ﬁve per cent annual increase in exports, he reported, was imperilled by Britain’s ongoing export problems, which in 1962 had increased not by the planned ﬁve per cent, but by between two and three per cent.100 By March 1964 most members of NEDC realised that the economy was growing too quickly, and the level of imports climbing.101 It was dawning on most involved that the ‘Maudling boom’ was another classic credit expansion, since, as Shone argued, ‘there is not yet any clear evidence that the rates of growth of production and productivity postulated in the current programme are being achieved’.102 By 1964, NEDC had become one more high-level consultative committee, with no power to direct events.

Macroeconomic planning (II): Labour version The Conservatives’ efforts foreshadowed the creation of a whole new department under Labour – the Department of Economic Affairs (DEA) headed by George Brown, effectively Deputy Prime Minister, and chair of the Cabinet Economic Development Committee. Although its central concern would be a ﬁve-year economic National Plan, it had a range of

Macroeconomic Planning 53

other responsibilities. The DEA was originally organised into ﬁve divisions: Internal Economic Co-Ordination, working on public expenditure and incomes policy; External Economic Co-Ordination, on long-term trade and the balance of payments; Industrial Policy, on productivity; Regional Policy, on the distribution of industry; and ﬁnally, Economic Planning, which worked on the National Plan.103 The DEA was designed to be a new type of department, free of traditional thinking. This would help secure industrial agreement to Labour’s ‘planned growth of incomes’, among other objectives. A number of industrialists were brought in as Industrial Advisers, as well as economists and outside experts: Fred Catherwood went to the DEA from Tube Investments as Chief Industrial Adviser, Michael Shanks was recruited, the Cambridge economist and Labour adviser Robert Neild was brought in, and the ﬁnancial journalist Samuel Brittan also joined the DEA. There was initially a period of tremendous excitement, even elation, at the entry of the ‘irregulars’ into government service.104 There were, however, a number of problems with the DEA blueprint. The department was simply being asked to do too much, especially for its unpredictable Secretary of State, who also took an ad hoc interest in, for instance, general European policy and Rhodesia.105 The new department also lacked executive power over many parts of its remit, for instance regional policy, since the Board of Trade remained responsible for investment grants and industrial investment, while the new Ministry of Technology took over research and technology.106 The DEA’s links with other departments – and their willingness to co-operate – therefore became of prime importance. Furthermore, having taken most of the NEDO staff into government service, the role of NEDC, and the cooperative work of employers and unions, seemed to have been downgraded, a development to which the CBI was opposed.107 Thus the DEA could not call on industry voluntarily to carry out reforms when all the emphasis was thrown on government policy. Nevertheless, there were a number of early breakthroughs that raised hopes about Labour’s ability to plan the economy. Chief among these was the joint statement on prices, productivity and incomes signed by the Government, the employers and the TUC in December 1964. This seemed to achieve exactly what the Conservatives had been aiming at in 1962–64: an overall deal that linked productivity, economic growth, social reform and pay restraint. All concerned promised ‘to raise productivity and efﬁciency so that real national output can increase, and to keep increases in wages, salaries and other forms of incomes in line with this increase’. Output and productivity were to rise rapidly and in step;

54 From Dreams to Disillusionment

faster growth was to meet ‘social need’ rather than increase proﬁts; stable prices were to be achieved through increased efﬁciency.108 One key reason for the unions’ new willingness to take part in such exercises – apart from the advent of a Labour Government – was the fact that a new National Board for Prices and Incomes was now charged with monitoring price increases, with the recommendations that they should be avoided as far as possible. The TUC insistence that their members should be protected from real wage falls through rising prices, and that employers should not be allowed to beneﬁt from their restraint, had been met. Wages were to increase only if new working practices were being adopted; if reallocation of manpower was ‘essential’; or if low wages meant that workers could not reach ‘a reasonable standard of living’. However, price increases were only to be allowed if input prices increased, more investment was needed, or if exceptional wholesale price increases could not be met from productivity gains.109 However, agreement had been won at the price of some delicate compromises. To gain agreement, Brown had promised the TUC that there was no chance of a freeze on 1961 lines; employers had been promised that faster growth would follow. If this turned out to be untrue, the compromise might fall apart very quickly. For their part, the employers wanted ‘a sustained attack on the obstacles to efﬁciency’, aimed especially at restrictive labour practices, a completely different idea of planning to that held by the TUC.110 Though congratulating Brown on the December 1964 joint statement, the Cabinet were very clear that only ‘during the next stage of more detailed negotiations’ would it become clear who was, and who was not, truly committed to the policy.111 There was at this point a brief window of opportunity, in which reformist business leaders such as Weeks, and progressive trade unionists such as TUC General Secretary George Woodcock, were extremely interested in reaching a long-term deal.112 However, union leaders were divided over incomes policy: reformers such as Woodcock had powerful opponents, Cousins among them. A new and more radical generation of trade unionists was emerging, who would be represented by less co-operative leaders from the late 1960s onwards. Of these, the best examples were Jack Jones, head of the Transport and General Workers Union from 1969, and Hugh Scanlon, chief of the amalgamated engineering unions from 1968.113 Added to this inherent ambiguity was the difﬁculty of deciding who was actually responsible for economic policy. This was never fully resolved, though in theory the DEA was responsible for the ‘real economy’, while the Treasury remained in charge of public expenditure,

Macroeconomic Planning 55

monetary policy and the short-run balance of payments. This ‘concordat’ was in fact virtually worthless, employing as it did the sophistry of ‘unity in diversity’.114 Eric Roll, the DEA’s ﬁrst Permanent Secretary, regarded it as a ‘hopeless mish-mash’, while Callaghan admitted that the Concordat represented ‘a verbal truce rather than a true meeting of minds’.115 It proved impossible to draw a clear line between long run planning and immediate economic necessity. As Donald MacDougall, director of the NEDO, commented, ‘the long run is a succession of short runs’.116 Given the extent to which new thinking had penetrated the Treasury between 1962 and 1964, it may have been that separating planningminded ofﬁcials from the centre of power, and placing them in the DEA, in fact limited the inﬂuence of such ideas. Callaghan certainly argued to this effect, and Brittan conﬁded similar thoughts to his diary at the time.117 It was these basic design faults that saw the DEA constantly down-graded, for instance losing day-to-day prices and incomes policy to the Ministry of Labour in April 1966, European policy when Brown left in August 1966, external co-ordination in 1967, and its remaining incomes policy responsibilities in April 1968.118 It was left only with a vague co-ordinating and information-gathering role in industrial policy. What was worse, the DEA’s National Plan progressed on the basis of deciding the four per cent growth rate ﬁrst (to reach an overall ﬁgure of 25 per cent growth by 1970) and only then deciding on measures to ﬁt around the target. As one of the Economic Advisers argued, ‘the provisional assumptions (especially the 25 per cent ﬁgure) were adopted at far too early a stage… It was merely a hypothetical skeleton with political connotations. But once this had been constructed it developed a force of its own in that it became extremely embarrassing to alter a provisional assumption’.119 Growth was at the heart of the Plan, to eliminate ‘the slow rate of growth associated with alternating periods of boom and stagnation’.120 But the chosen growth target – 4 per cent – was never accepted by the Treasury or the Board of Trade. They favoured a ‘range’ approach, perhaps of 3.25 per cent to 4 per cent, rather than a single target, with different scenarios laid out for each different growth rate.121 The politics of the time were against them: given the Conservatives’ commitment to four per cent, Ministerial pressure was for a higher rate, not a lower range.122 The structure of the Plan owed much to previous exercises, with a questionnaire sent to companies, asking them about their behaviour if the economy were to grow as desired. Trade associations, and those Development Councils already in existence, were also consulted.123

56 From Dreams to Disillusionment

They were asked for their projections for employment, use of raw materials, investment, training and the balance of imports and exports.124 But the crucial mistake was to imagine that this was actually what would happen, rather than a statistical exercise: most industries took the 25 per cent target at face value, as an increase in demand for their industry, as none could even begin to calculate how growth overall would affect them. Nor were companies always reassured by high growth targets: some large sectors such as the chemical industry refused to set investment targets until they could be assured that the country would actually meet the National Plan’s ambitious aims.125 Treasury opinion on the industrial inquiry was withering: ‘these forecasts are pretty worthless since they do not cover enough ﬁrms and, in any case, the ﬁrms themselves have based their replies on greatly varying assumptions’.126 Much of the statistical work extrapolating from the questionnaire was indeed inadequate. For instance, returns covered three quarters of the chocolate confectionary industry, but the DEA took this as a good enough indicator for the whole sector; the chalk, clay, sand and gravel extraction industry answered only on sand and gravel, but again this was extrapolated for the whole industry.127 Additionally, even on its own terms the inquiry proved that the growth target could not be achieved, for companies even on the growth basis provided predicted a 23.5 per cent rise in output, and 20 per cent in productivity.128 This inadequacy reﬂected the continuing scarcity of economic data. Wilson was himself an experienced statistician who had spent the war years working on such problems. Disappointed by initial reviews of the problem carried out by ofﬁcials in 1965 and 1966, he gave the reform movement further encouragement by appointing a Statistical Policy Committee of junior Ministers and civil servants in 1967. This served as a clearing-house for statistical innovation. However, there was an acute shortage of statistical staff to help planners see what was really happening. Out of the 224 designated statistical posts in government in 1967, 58 remained unﬁlled even by temporary or unqualiﬁed staff. In the higher ranks, the empty spaces were even more noticeable at a vacancy rate of 36 per cent.129 The use of computers was also proving problematic, despite the large rise in the numbers that the Government had bought. Despite all the rhetoric about the speed of analysis in the computerised societies, departments preparing for the National Plan had to book weekly slots for government computers to run specially written programmes.130 Constant tabulation delays due to the purchase of new systems meant that information from the 1958 Census of Production and the 1961 Census of Population was not available until

Macroeconomic Planning 57

1965. The National Plan relied on input-output relationships from the 1950s.131 As a form of import saving governments had usually bought British computers rather than the more ubiquitous IBM models, and they were often built to order for speciﬁc tasks. It was therefore ‘extremely difﬁcult’ to coordinate their use between departments.132 Nevertheless, progress continued on producing data that would help the government plan for future industrial trends. For instance, when the Board of Trade and the Ministry of Labour compared their business records, they found that many of their data sets were not compatible. From this revelation ﬂowed the radical proposal for a common register of businesses, which held out the hope of annual updates to the census of production, based on just as much detail as the quinquennial censuses themselves. It might also allow statisticians to bring together census of production ﬁgures with details from the census of distribution, and the surveys of retail and service industries that the Board of Trade was embarking upon. The Ministry of Technology was particularly keen on this, and its ministers complained loudly when it was decided to use only census of production information in the projected ‘second plan’ of 1967.133 Trade and payments ﬁgures continued to improve. In 1968 the annual balance of payments ‘pink book’ contained a new section that broke down the different sources of cash transactions in Britain’s invisible account, and its effects on sterling holdings, liabilities and reserves. For the ﬁrst time, information was publicly available delineating trends in earnings from shipping, insurance, brokerage, oil and gas, tourism and ﬁnancial and allied services.134 But ofﬁcials preparing the National Plan possessed none of these details on individual industrial establishments and the components of Britain’s trade. For an approach characterised as ‘quantitative’ by its most recent historian, Jim Tomlinson, focussing on the size, scale and scope of the industrial effort, these faults were crippling.135 The balance of payments assumptions behind the Plan were particularly suspect. MacDougall estimated that with a growth rate of four per cent in 1970, Britain would still be running a large current account deﬁcit in 1967–70. To offset this, he had to add up a deeply unconvincing list of savings on current account – £50m in tighter capital controls, £250m annually by 1970 through prices and incomes policy, and £50–100m through industrial policy. Even then, he could only conclude that ‘if all these measures [are] successful, [we shall be] in approximate balance by, say, 1969’.136 Other departments were incredulous, with export projections for instance attacked in the Plan Steering Group as ‘completely implausible’.137 The DEA found it very difﬁcult to respond,

58 From Dreams to Disillusionment

for its planners did not know the answers to critical questions, such as when the import surcharge would be removed, or the relative priorities the Cabinet gave to the balance of payments and growth.138 The Plan also assumed that world export growth would continue as it had in the early 1960s.139 However, although the trend rate of nine per cent through the decade was maintained in the late 1960s, trade expanded in ﬁts and starts. Developed market economies’ exports rose by 7.6 per cent in 1966 over 1965, but then by only 6.1 per cent in 1967, before increasing very quickly, by 13 per cent in 1968. For planners hoping to see a constant upwards movement of British exports, this was nearly as damaging as the inherent lack of realism in the ﬁgures.140 MacDougall’s calculations highlighted another problem: the ‘manpower gap’. Due to the fact that the growth of the working population was slowing, even maintaining growth in the late sixties would require higher labour productivity growth rates than hitherto.141 To plug the ‘gap’, the manpower sections of the Plan assumed that regional policies could bring the unemployment rates in those areas down to the national average. Even this heroic assumption did not seem likely to sufﬁce, despite massive releases of labour from agriculture and declining manufacturing industries and mining.142 Productivity would have to rise at over 3.5 per cent per annum, but even in the early 1960s, a period of relatively high productivity growth, it had been rising at about three per cent. As Peter Shore, the DEA’s last Secretary of State, admitted, the Plan was ‘an inadequate document which sank without trace within minutes of its being completed’.143 DEA ofﬁcials in private were just as candid, Grieve Smith, assistant Director of Planning, arguing that their targets ‘had… been falsiﬁed before the Plan was actually published’.144 Since the success of those policies was uncertain at best, it was no wonder that Shone told Roll that the Plan was ‘not very convincing in dealing with the problems of the next eighteen months or two years’.145 This was especially so given the 1965 July measures, and Brown warned the Cabinet that given those measures ‘it might prove to be impossible to ensure sufﬁcient acceleration in later years to achieve the full objective of a 25 per cent increase in national output’. Nevertheless, the Cabinet agreed to go ahead with publication in order ‘to encourage industry to aim at a higher level of output’.146 There was also a more understandable desire not to lose the ‘check list’. This was the menu of actions inserted at the start of the Plan that employers, trade unions and the Government should take to accelerate growth, such as import saving, help to exporters, lower foreign defence expenditure, increased investment, and wage and price restraint.147

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When those results were falsiﬁed, during the sterling crisis of summer 1966, Labour’s industrial relations compromise also collapsed. A new and notorious ‘part IV’ was added to Prices and Incomes legislation. This allowed the Secretary of State to order returns to July 1966 levels of prices and incomes, which, combined with the new and bleaker prospects for growth, destroyed the bargain of December 1964. If growth was not to accelerate, and a new freeze was indeed to be imposed, there seemed little point in the ‘social partners’ continuing to cooperate. Brown, who had expended so much effort in avoiding just this outcome, was only persuaded to stay in the Government by a circular letter signed by Labour MPs, and left the DEA as soon as the new Act was passed.148 The TUC only reluctantly ‘acquiesced’, and refused actually to endorse the Act. Even this followed a day of meeting with the Prime Minister, who threatened mass unemployment and cuts in social programmes if he was frustrated. Since the unions believed that their favoured alternative of devaluation was unlikely, they considered they had little choice.149 It was at this stage that the unions withdrew the last vestiges of cooperation from the process. They began to publish their own Economic Reviews, estimating that six per cent growth in 1968 would allow a wage ‘norm’ of ﬁve per cent, not the very low rises the Government was attempting to impose.150 Extremely tight statutory restraints remained, however, through a ‘period of severe restraint’ between January and June 1967, which allowed only a few conditions under which pay awards might occur at all. During 1968 and 1969, the Government’s announced ‘norm’ for wage increases continued at zero, and their powers to order standstills were lengthened from the ninety days agreed in 1965, ﬁrst to six and then to eight months.151 This situation clearly could not continue. Despite Ministers’ accumulation of extensive and far-reaching powers, the Prices and Incomes Board could not cope with even a fraction of the work that the policy implied. Most of the legislation remained a backstop and a threat, rather than an active planning mechanism. The policy had to be relaxed eventually, and the December 1969 White Paper on Prices and Incomes demonstrated the Government’s recognition that this was the case. The pay norm was raised to a range of between 2.5 and 4.5 per cent, and the extended standstill powers of 1967–69 were removed. This in many ways represented the abandonment of incomes policy, for it was also accepted that the government’s powers to delay pay rises would lapse within a year.152 The new and weaker targets, just like the overall planning objectives, were now a pale shadow of what they had once been intended to become.

60 From Dreams to Disillusionment

The results of Labour’s ﬁrst approach to planning were therefore extremely disappointing, and novel means of attaining planning goals were sought. Labour’s second planning phase therefore concentrated more on selective industrial intervention. The trend towards more discriminating industrial intervention was already established, for Michael Stewart as Brown’s replacement at the DEA had been holding direct talks with a number of large exporters on their medium-term plans since 1966.153 Following devaluation, the DEA was particularly keen on ‘a more considered and systematic approach’, with ‘selective intervention’ as an inexpensive counterpoint to general deﬂation.154 One single growth target for the whole economy having been discredited, the Government now adopted a range of growth ‘paths’. The DEA envisaged an ‘Industrial Flexible Budget’, testing the implications of at least three different rates of economic growth. The ‘low rate’ would be between 2.2 per cent and 2.9 per cent per annum, while the ‘high rate’ would be 3.7 per cent to 4.4 per cent, with an intermediate rate in between.155 This, as Stewart told his colleagues, would ‘examine the range of possibilities open to us rather than merely exploring the implications of one particular growth rate’.156 It was a more realistic, though less ambitious, approach. Woodcock and the TUC remained committed to changing macroeconomic realities through planning, which would ‘establish what this country was capable of’, and so help to avoid the dilemmas of incomes policy. The CBI, aghast at the Government’s new ideas about direct intervention, had turned decisively against the Government, and wanted merely a ‘realistic forecast’ of the growth in the economy, set by a wholly independent planning commission.157 Nevertheless, the Government pressed on with its new planning exercise. However, the resulting document was a serious disappointment to both the TUC and CBI when it was presented to the NEDC in December 1968. For two organisations that had hoped, however distantly, to change the trend rate of growth through consultation and coordination, the adoption of ‘realistic’ policies seemed against the whole point of the exercise.158 Both organisations opposed publication – though the TUC’s opposition to a document which did not guarantee productivity gains from government policies was the more bitter. Some committed planners were also dismayed at the document’s weakness: Andrew Graham in the Cabinet Ofﬁce commented, ‘Oh God, I have heard all this before’.159 In the event the Government did publish the ‘second plan’ as The Task Ahead: An Economic Assessment to 1972, though at CBI and TUC insistence it was divested even of much of the detail prepared for the NEDC.160 The ‘basic’ path, the medium level of expected growth, was

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3.25 per cent annually, and the implications for this in terms of sectoral growth were outlined. But there were few commitments. The document began with the promise that ‘this is a planning document, not a plan’, and emphasised that it was only a contribution to the ‘continuing process of consultation between Government and both sides of industry’. It aimed at a £500m balance of payments surplus by its terminal date of 1972, which was to be the ‘overriding goal’.161 The 3.25 per cent growth ﬁgure was based on the continuation of the previous growth of productivity. It would be hard to imagine an approach to planning further removed from the lofty hopes of 1965. Attention shifted to lower-level consultation, partly because of the failure to gain agreement at national level. This trend was most noticeable in the work of the Economic Development Committees. Their number was greatly expanded under Labour, to 21, covering about 80 per cent of private industry’s employees.162 This allowed ofﬁcials to ask industry about real projections, rather than supposed reactions to a previously determined growth rate. From mid-1967, the Development Committees were brought fully into macroeconomic planning for the ﬁrst time.163 They had conducted a great deal of unglamorous work in the interim, for instance on transport links with Europe, one area where it was clearly advantageous to bring different transport interests, such as British Rail and the docks, together with wholesalers and exporters.164 But they had few links to top-level planning machinery: their chairmen were often summarily treated at NEDC meetings, their business placed at the end of the agenda.165 Most Development Committees grew highly suspicious of government promises following the failure of the ﬁrst Plan. Many only reluctantly agreed to work on a new plan because the Government seemed intent on one, and would be better informed if they co-operated.166 A number of sectors that were particularly sensitive for the balance of payments – motor manufacturing, mechanical engineering, electronics and chemicals – were chosen for particular scrutiny. Development Committees in these sectors were asked to comment on the use government and NEDC had made of their ﬁgures.167 When the Councils reported, they were less optimistic than the ﬁgures in The Task Ahead, mainly because their import penetration projections were higher than government’s.168 Furthermore, some of the ﬁgures given even in these reports seemed over-optimistic. Supply constraints forecast by the Engineering Development Committee made ofﬁcials worry that the capital equipment requirements of their projections were unrealistic.169 Despite this pessimism, ofﬁcials were at least pleased that they had been able to gather useful statistics, and envisaged a repeat every two years.170

62 From Dreams to Disillusionment

Given The Task Ahead’s failure to capture the imagination, narrower, increasingly supply-side, issues inevitably came to the fore. The DEA had never been Labour’s only interventionist tool, as a separate Ministry of Technology was also created in October 1964. To begin with, the Ministry’s rather narrow remit covered only a third of government civil research and development. However, the new Ministry always had the potential to grow. Wilson took a personal interest in it as proof of the ‘white heat’ ideology, and appointed Cousins to be its ﬁrst head, allegedly because Cousins was no political threat to him as Prime Minister.171 Wilson certainly took much more interest in the Ministry of Technology than he did in the DEA.172 As early as 1965, he renewed the interest he had shown while in Opposition in creating a full-blown ‘Ministry of Industry and Technology’, taking over not only the industries for which the Board of Trade was sponsor (including shipbuilding), but also regional policy and investment incentives, as well as the Ministry of Power.173 Civil aviation responsibilities were moved in February 1967. The transformation of the Ministry of Technology through the absorption of the Ministry of Aviation’s large engineering research budget conﬁrmed Wilson’s desire, over the objections of the Ministry of Defence, to build up the department as ‘the instrument of progress in the engineering ﬁeld’.174 Wilson’s sponsorship of his pet Ministry continued right up to 1969, when he decided to break up the DEA. The Ministry of Technology became a ‘Department for Industry’, with its remit expanded to cover the execution of regional policy, all government research and development, the Development Committees, work on the new Plan, and sponsorship of engineering, steel and power.175 The new Ministry became an increasingly powerful advocate of selective intervention. Over the winter of 1966–67 the Ministry of Technology became frustrated by its limited powers over industry, since it had come to regard investment grants as too crude to focus adequately on priority sectors.176 The idea of an ‘Industrial Expansion Act’, which would give the Government interventionist enabling powers, began to gain favour within Whitehall. There were some prosaic reasons for this, since the Ministry of Technology, having absorbed the Ministry of Aviation, had to deal with subsidies for three different aircraft projects, including Concorde. Ofﬁcials thought that one Bill granting enabling powers would be simpler than three separate Bills. But the idea also originated with the desire for selective intervention as promoted by Tony Benn: the Government would gain permanent powers to help companies with stockpiling, technology leasing, and buying up shares in sub-

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sidised ﬁrms.177 When the CBI was informed of what was intended, they were furious that the Government was taking ‘blanket powers applying to all industry’. Employers argued that the proposals were ‘a permanent threat to private industry’, given the pressure for co-operation that the Government could bring to bear as a major purchaser.178 The Cabinet nevertheless approved the measure in September 1967.179 Benn and Shore were prepared to make some concessions: they agreed, after discussion in NEDC, that the powers would only be used after an Afﬁrmative Resolution of the House of Commons in each case. They also agreed to consider an overall ﬁnancial limit on intervention in each industry, for instance the aircraft sector.180 The January 1968 White Paper on this was couched in conciliatory terms, stressing the fact that government would only provide money when asked, and in the last resort.181 Speciﬁc spending limits were also set: £100m for Concorde, £24m for the Queen Elizabeth II liner, £75m for shipbuilding, and £100m for other projects.182 The actual amounts paid out outside the special projects listed in the Act amounted to only £21m to the computer industry, and £28m to the Government’s ill-fated aluminium smelters scheme.183 Even so, the Government had built up a major set of discretionary powers over the economy, and pressure for more direct intervention continued to mount. The Labour Party held two conferences on ‘ﬁnancial institutions’, in November 1967 and June 1968, which saw pressure for a State Holdings Company, focussing on providing funds for export industries and technological re-equipment. These also concluded that ‘what is required in place of the present broad and relatively indiscriminate channels… [is] a much greater measure of selectivity [and]… a more discriminating approach’. Considering that Barbara Castle, soon to be Secretary of State for Employment, was the chair of the study group that steered these conferences, these views carried obvious weight in government, as well as in the Party.184 The Industrial Reorganisation Corporation was another element in Labour’s interventionist policy. The mergers it was supposed to encourage, it was hoped, might boost international competitiveness as well as allow larger companies to conduct more research and development. A duty to save on imports, as well as allow Britain to be more technologically competitive, was written into the statute setting up the corporation.185 The Corporation was eventually instrumental in a series of very large mergers, often spending funds from its own capital of £150m to smooth the path towards rationalisation: it spent £17m in 1967 and 1968, £51m in 1969, £80m in 1970 and £103m in 1971. The mergers of English Electric with Elliott Automation, GEC with Associated Electrical

64 From Dreams to Disillusionment

Industries, and then GEC with English Electric, created a ‘national champion’ in electronics and computing. The creation of British Leyland from British Motor Holdings and Leyland Motors built another very large British corporation in the motor vehicle industry.186 Despite the turn to selective intervention, macroeconomic planning had clearly failed to deliver on its promise. The Government’s Revised Assessment of 1970, which was intended to update The Task Ahead, further lowered the medium-term growth forecast from 3.25 per cent to 3 per cent per year. However, Ministers insisted that revisions to The Task Ahead retain the ‘fan’ concept, and include at least the possibility of an optimistic rate of growth, eventually included as 3.5 per cent.187 Tripartite agreement having ﬁnally collapsed, this had to be published as a purely government document, with no NEDC backing at all. The ambivalent vagueness of the planning exercise, followed by the rushed and inadequate National Plan and the frustration of its aims, had hopelessly undermined the uneasy and contingent consensus on which Labour’s hopes had been built. The new realism of the Economic Assessment exercises could not heal the damage.

Public opinion and planning One requirement for the success of planning was that it should mobilise the public at large, about which governments were acutely aware of. From at least the time of the creation of a Treasury Information Division in 1961, it was clear that any government would have to monitor ‘how far current policies are making the desired impact on the public mind or how far they are being misunderstood’.188 From that point on, a Treasury group on Ministerial speeches met every month, and considered a monthly report on ‘public opinion’, though these more usually resembled a digest of press comment rather than actual surveys of voters.189 The Prime Minister sent a brief of the main presentational points on economic policy to all Ministers in May 1962, to make sure that they were all saying the same things.190 If incomes policies in particular were to work, the public would have to be convinced of the merits of restraint. A small group of Ministers, press ofﬁcers and ofﬁcials considered this topic with Edward Boyle as Financial Secretary and then under Charles Hill, in general charge of government presentation, during 1961 and 1962.191 The attempts to persuade the public of the merits of intervention continued under Labour. Economic Development Councils were seen as bodies that could use publicity and exhortation to encourage businesses

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to modernise, and the DEA issued a series of Progress Reports to disseminate news about their progress.192 The National Plan itself was supposed to engender a sea change in attitudes. A short version of the Plan was published under the title Working for Prosperity, with half the cost met by the Government to ensure a wide distribution, and the other half covered by the cover price.193 Working for Prosperity pronounced on the importance of public cooperation in no uncertain terms: ‘we must produce more. It is the output of each one of us – our productivity – that matters… we can do better. Now we must’.194 A liaison committee was set up with the TUC and CBI to work on presentation. At its ﬁrst meeting, it was concluded that the most important question was ‘how does it affect me – what will 1970 mean for me?’ Copies of the Plan were made available to shop stewards and businessmen through their respective representatives.195 When the Plan was published, Brown appeared on the BBC, national ITV news and regional television to talk about it. There was a Ministerial broadcast; DEA Ministers spoke to the regional press; and regional DEA staff organised press conferences in major cities.196 Industrial conferences for each sector of the economy were then held through the winter. The intention of the whole effort was to encourage optimism about the Plan’s chances of success, and thus cooperation with the ‘check list’ of actions needed to bring about higher growth. However, one profound consequence of promising a once-and-for-all economic breakthrough was the public disillusionment that followed its failure. The Plan itself garnered what at best can be described as a lukewarm response. The Economist was especially harsh: It is much easier to poke fun at the National Plan… than to echo Mr George Brown’s hosannas for it. Indeed, one’s ﬁrst temptation is to say that it ought to be taken back by this or some other government and done again, making use only of those nuggets of valuable information that do appear above the vast grey of its platitudes.197 The Economist’s leader-writer simply did not believe that government spending could be held down in the way the Plan envisaged, and took particular aim at the industrial inquiry as ﬂawed and unrealistic. Even the more sympathetic New Society agreed, arguing that the reasoning behind the industrial inquiry was ‘feeble’.198 Writing in the Lloyds Bank Review, Angus Maddison of the OECD was less rhetorical, but just as sceptical of the Government’s commitment to reduce foreign defence spending, increase liquidity and cut down on capital exports to reduce

66 From Dreams to Disillusionment

the strain on the balance of payments.199 More technically, Wilfred Beckerman’s work for the National Institute on the likely shape of the economy in the 1970s was much less optimistic about exports and the invisible balance than was the Plan.200 All this did nothing to increase the authority of the Plan. Despite Brown’s efforts, public interest in, and understanding of, planning was also rather limited. Only 38 per cent of voters told Gallup they had read the National Plan; only 16 per cent could single out industries that were supposed to expand or contract.201 Given this failure to communicate to a wider public what planning was for, support for the whole experiment necessarily rested on shallow foundations. It was not surprising in this context that the mounting unemployment that followed the July 1966 measures caused a rapid turnaround in Labour’s electoral fortunes. As unemployment rose gradually from 264,000 in July 1966 to over 600,000 in early 1968, Labour’s poll ratings fell spectacularly. Labour had enjoyed a 7 per cent lead over the Conservatives in mid-1966, but was 28 per cent behind in spring 1968.202 Incomes policies based only on restraint had inevitably eroded the popularity of economic controls, especially as voters became increasingly convinced that they would not work in any case. Only 26 per cent of those polled thought that prices and incomes policies would succeed in their aims, even at the high point of agreement in early 1966: hostility to the subsequent wage freezes meant that by 1970, 52 per cent of voters were ‘less likely’ to vote Labour than they had been in 1966. Only 16 per cent thought it made them more likely to support the Government.203 Planning being seen to have failed, there was a sharp shift of emphasis as to the objectives the voters wanted pursued. Private Conservative Party polling showed that attacking inﬂation and keeping taxes down had replaced the earlier obsession with expansion: this helps to explain some of their free market rhetoric in 1969–70. Many voters had begun to despair of the two main political parties. Even internal Conservative polls concluded that ‘there is no widespread enthusiasm for Conservative policies’.204 The long defence of sterling had undermined public conﬁdence in any government’s ability to run the economy: although the Conservatives had a 13 point lead over Labour on economic issues immediately following devaluation, 24 per cent of voters thought that the party in power made little difference to the economy. By 1970 only 29 per cent of voters cared ‘very much’ about who won the General Election, and at 72 per cent turnout in that election was the lowest since 1935.205 The problems this collapse of conﬁdence posed for planning were obvious. As the Political Quarterly noted in 1968, all governments are

Macroeconomic Planning 67

‘quite impotent… unless they can inﬂuence not just the opinions or ordinary people, but also their behaviour’.206 Austen Albu, Minister of State at the DEA between 1965 and 1967, was frank about the effect of the Government’s attempt ‘to promise more and more quickly than it could perform’: ‘legislation in a democracy can never work against lack of conﬁdence’.207 This realisation of the need for popular understanding and support helps to explain Labour’s burgeoning interest in ‘workers’ participation’ and industrial democracy during the second half of their period in government. It was to some extent implicit in the creation of the Parliamentary Commissioner for Administration or Ombudsman, to investigate administrative lapses on the part of central government, since the point of that reform was to ‘increase conﬁdence’ in the ‘integrity and impartiality’ of government.208 By the end of the decade, Labour was being much more explicit about the need to sustain public conﬁdence. Popular involvement in policy making was the subject of a National Executive Committee Working Party report in 1967, and a Party report to Labour’s Conference in 1968.209 In October 1968 Judith Hart was given a non-departmental brief as Postmaster General to look after ‘participation’, consultation, youth, decentralisation and devolution.210 But the distant prospect of ‘industrial democracy’ and ‘participation’ did little to still public doubts. The press, once so ready to forgive Wilson’s failings, became almost uniformly hostile once the National Plan was seen to have failed. Direct intervention, meant as a replacement for indicative planning, was lambasted and the Industrial Expansion Act attacked from both Left and Right. The Economist condemned it as ‘likely to build up countless follies and white elephants’.211 Even more sympathetic academics warned that the Act must not become ‘a new method of social insurance either for workers or for potentially bankrupt capitalists’.212 The perceived humiliation of devaluation accelerated this disillusionment. Politically, as New Society commented, Wilson began ‘to give one the feeling… that nothing would go right, that all compromises seemed not skilful but dishonest, that the political Midas touch was now turning all to lead’.213

Assessment: the results of macroeconomic planning The ﬁrst and most important conclusion must be that macroeconomic planning achieved almost none of its aims. The NEDC aim of 4 per cent growth per annum over the medium term was not met. Nor were the objectives laid out in the National Plan achieved: Table 3.1 makes clear the difference between National Plan targets and reality. Although

68 From Dreams to Disillusionment Table 3.1 National Plan percentage annual growth targets and actual outcome, 1964–70 Plan target

Actual

GNP GNP per employee

3.8 3.4

2.2 2.6

Capital formation: Manufacturing/construction Other private industry Nationalised industry Housing Public services Total capital formation

7.5 3.8 4.5 4.8 7.7 5.5

4.8 4.6 1.5 1.5 5.6 3.5

Defence spending Public sector current spending Personal consumption Imports of goods Exports of goods

1.0 4.0 3.2 4.0 5.3

–3.0 4.2 1.8 4.4 5.7

Source: R. Opie, ‘Economic Planning and Growth’, in W. Beckerman (ed.), The Labour Government’s Economic Policy (1972), pp. 174–5.

public spending rose as the government intended, as we shall see in the next chapter, and defence expenditure was cut back even more than the Government thought possible in 1965, the shortfall in industrial achievement was palpable. Growth was less than two-thirds that hoped for; investment, in particular in nationalised industries hit by lower than expected growth and government controls, was especially badly affected. Wage planning achieved little more than sporadic restraint. Periods of ‘freeze’ did achieve some reductions in wage demands, as can be seen in Table 3.2. The 1961–62 pause certainly lowered wage increases in both the manual and non-manual sectors: for instance, the October 1960 to October 1961 wage round for male non-manual workers, straddling the July 1961 deﬂation, saw rises of 4.4 per cent rather than the previous 5.6 to 6.2 per cent. But this effect was reduced as time went by. Wage rises did slow to a crawl in the immediate aftermath of the 1966 ‘freeze’.214 However, they then raced ahead again during 1967, before the ‘pay explosion’ of 1969–70 witnessed the virtual abandonment of incomes policy with pay increases in the range of 12 to 15 per cent. Incomes policy may have been focussing on the wrong side of the productivity equation, for British earnings in the 1960s were not noticeably higher than those of comparable European countries. In fact, labour

Macroeconomic Planning 69 Table 3.2 Men and women’s nominal weekly earnings increases and inﬂation, United Kingdom, 1956–57 to 1963–64 Nominal male manual earnings increase 1956–57 1957–58 1958–59 1959–60 1960–61 1961–62 1962–63 1963–64 1964–65 1965–66 1966–67 1967–68 1968–69 1969–70

3.3 4.3 3.1 7.1 6.3 3.9 3.5 8.5 8.2 3.6 5.3 7.6 7.9 13

Nominal female manual earnings increase 5.2 4.2 4.8 5.5 5.4 3.2 4.2 8.0 7.3 4.9 4.9 7 7.2 15.5

Nominal male non-manual earnings increase 5.7 2.8 6.5 6.2 4.4 6.6 6.0 4.6 8.6 4.4 4.6 6.7 7.7 12.6

Nominal female non-manual earnings increase

RPI yearly increase

6.7 0.9 9.8 5.6 4.4 6.7 5.7 4.1 8.9 3.9 4.5 5.8 8.2 15

3.7 3.8 1.1 0.7 3.2 4.9 2.3 4.1 4.8 3.8 2 5.6 5.4 7.4

Sources: British Labour Statistics: Historical Abstract 1886–1968 (1971), table 52, pp. 120–1, table 54, p. 124; Annual Abstract of Statistics 110 (1973), tables 158–9, p. 153; Retail Price Indices (1987), tables 21–3, p. 2. Note: changes to the way in which these ﬁgures were assembled mean that the ﬁgures for manual workers are for yearly changes to April until 1964–65, from which point they cover changes to October. The ﬁgures for salaried workers and the RPI are throughout given for October each year.

costs were higher in almost every other developed country once social insurance charges were taken into account. Wages were also increasing more quickly in the rest of Europe throughout this period.215 Wage increases have to be set against the backdrop of Britain’s problems with non-price competitiveness, and products’ lack of quality and market penetration, which only very late in the 1960s became the real focus of government energies. Problems with the level and type of output seem more relevant to Britain’s predicament than what employers had to pay for labour. As for direct intervention, the obsession with industrial scale and scope was clearly misguided, and the main thrust of government policy through the encouragement of industrial concentration had unfortunate effects. Some mergers – for instance the creation of British Leyland – were disastrous, with that company’s market share falling rapidly before being nationalised in 1975.216 The most comprehensive study of

70 From Dreams to Disillusionment

mergers concluded in this period found that proﬁtability overall declined in the years following mergers.217 The promised economies of scale that large-scale production would produce were also elusive. There was in fact a weak but persistent inverse relationship between the number of employees in any undertaking and its productivity, given Britain’s poor plant-level industrial relations and managers’ inability to adapt to the more sophisticated methods required for such large-scale production.218 Some of this effect can be explained by the jumbled nature of many of these mergers, in which companies were not properly integrated with one another, but simply left to run themselves as they had done before. Jaguar, for instance, only joined the new British Motor Corporation because BMC had bought Pressed Steel, the only remaining independent body manufacturer, and insisted on retaining its operational independence as a condition of the ‘merger’.219 However, recent estimates show that size could harm efﬁciency even at individual plant level, since manufacturing productivity was powerfully and negatively affected by plant size.220 A modern, capitalist economy was not tailored to simple solutions. For all the talk of the growth of large ﬁrms and the merger movement among trade unions, the economy had become much more complex since the 1940s. The market share of the largest companies may have grown; but the number of business establishments, whether owned by the same company or not, continued to grow very quickly. In manufacturing alone, there were 58,000 in 1949, but by the early 1970s there were nearly 93,000.221 Although business opinion was supposedly collected together under the umbrella of the CBI from the mid-1960s, that organisation was an extremely heterogeneous group. At its launch it was made up of 4,072 directly represented companies, 4,535 subsidiary companies represented by their parent bodies, and 280 trade associations. By 1974 the number of member organisations had grown from about 9,000 to nearly 11,000.222 Monitoring and then projecting changes across such a large number of companies and plants was clearly impossible: hence the need for the imperfect and often misleading industrial surveys. Economic success during the post-war ‘golden age’ depended on the development of wide-ranging agreements at elite level, under which workers deferred wage rises while employers invested rather than distributed proﬁts. This secured fast productivity growth through both labour efﬁciencies and higher returns to capital. It was exactly this mix of cooperation from Britain’s unorganised and fragmented business sector and trade union movement that planners sought, and precisely this mutual restraint that they failed to secure, relative to the experience

Macroeconomic Planning 71

in some other Western European countries such as West Germany.223 The ‘condition of Britain’ literature had of course focussed on this lack of organisation in British society. Numerous writers in fact still blame a tradition of confrontational and class-based politics on both sides of industry, and among politicians, for relatively slow growth.224 There was overall a failure to inaugurate a ‘developmental’ state, autonomous enough to act decisively against vested interests, but embedded enough in society to call upon enough loyalty constantly to renegotiate aims and objectives.225 Planners had not taken advantage of the opportunity that post-war reconstruction offered to build a permanent planning infrastructure. Political parties remained divided over industrial ownership and the tools for economic success; business and trade union leaders doubted that cooperation would get them anywhere, even if their rank and ﬁle members could be persuaded of the merits of agreement; governments only turned to ‘planning’ long after other countries had put it to good use, and arguably too late to entrench it in Britain. The wider public were never truly engaged in the process; planning was never popularised. Paradoxically, it was exactly the lack of concerted actions, cooperation and consultation that planning was designed to attack, but that in the end doomed it to failure.

4 Planning the Public Sector

Advocating public expenditure planning: the Plowden Report ‘The traditional system of decision making can no longer… be effective in containing the growth of expenditure within whatever limit the Government have set… decisions involving substantial future expenditure should always be taken in the light of surveys of public expenditure as a whole, over a period of years, and in relation to prospective resources’.1 This argument was contained in the Plowden Committee Report in 1961, and the declamatory, conﬁdent tone of progressive reform comes over very clearly. The gains that were envisaged for such a system were just as obvious, especially given the context of the planning fervour. From this new system might emerge a clear-cut set of national priorities, a long-term framework for state spending, and a more rational, stable and efﬁcient public sector. Concern that Whitehall might not be properly equipped for public expenditure planning had grown throughout the late 1950s, culminating in a Report from the House of Commons Select Committee on Estimates. ‘The Treasury are in danger of falling between two stools’, the Committee had argued: ‘the old theory of “candle ends” economy has not wholly been abandoned… [but] Departmental responsibility and partnership may not have been whole-heartedly accepted’. The Committee’s recommendations clearly foreshadowed Plowden’s three years later, for MPs recommended more long-term forecasting, so that spending could be judged in relation to economic and social requirements rather than short-term economic ﬂuctuations. Spending departments could then be freed from constant interference in their specialist work.2 72

Planning the Public Sector 73

Partly in reaction to the Estimates Committee report, the Chancellor, Heathcoat Amory, appointed Lord Plowden to look into how government worked out its expenditure priorities.3 In this way, the Chancellor and his Treasury ofﬁcials intended to keep control of the reform process and channel discontent with the existing system in the directions they desired, rather than have change imposed from outside. Plowden himself was a regular Whitehall advisor and keen long-term ‘planner’, having headed the Central Economic Planning Staff between 1947 and 1953.4 However, the ﬁnal Report owed most to the input of its ofﬁcial members, such as Clarke, Hall and Dame Evelyn Sharp from the Ministry of Housing. Clarke, despite his protests that he would not ‘cast myself in the role of stout Cortes’, was in fact the guiding mind behind the whole exercise.5 The dominance of Clarke and his Treasury colleagues became ever clearer as the Plowden Committee began privately to report to Ministers in the summer of 1960. The second such report, on public expenditure decisions, declared that ‘the ﬁrst and central problem… is to bring the growth of public expenditure under greater control and to contain it within such limits as the Government may think desirable’. Although the Report did not make any recommendations about what those limits should be, it did recommend a much greater degree of central direction over the overall level of public expenditure, perhaps under a small Cabinet Committee chaired by the Chancellor. It also took the opportunity to deprecate short-term management of the economy through ﬁscal means, and recommended a ‘smoother’ spending path.6 Selwyn Lloyd approvingly circulated this Report, which eventually became Part I of the published report, to the Cabinet.7 Long-term expenditure planning was in this manner supposed to form a vital supporting pillar of economic planning as a whole.

Public expenditure planning before Plowden The Plowden Committee was not the ﬁrst attempt to plan public spending against potential resources, or look at expenditure over a long time period. Hall, indeed, was ‘suspicious of the whole affair’ because Clarke proceeded to write ‘all the papers as if no one had ever thought of reviews of investment or expenditure before his time’.8 A number of programmes had been subject to ‘ﬁve year looks’ in the 1930s, in particular the rapidly growing roads budget as well as defence spending during rearmament in the late 1930s. As far back as 1931, Philip Snowden as Chancellor had used Treasury projections of the annual Estimates over a four-year period to try to shock his colleagues into

74 From Dreams to Disillusionment

making cuts.9 Five-year defence plans existed from 1934 onwards, which the Treasury attempted to judge in relation to their implications for taxation and savings.10 The Labour Government of 1945–51 thought itself able to plan public spending, among other economic variables, so as to secure full employment. National economic accounting, created under the pressure of the war, held out the prospect not only of macroeconomic management, but also of knowing the true relative share of public expenditure. James Meade as chief economic adviser envisaged national economic plans that contained projections of public expenditure, and particularly public investment, as a key ingredient. Departments were supposed to provide resource and manpower budgets for their programmes in the course of preparing the 1946 and 1947 Economic Surveys.11 The reality was rather different. As Chancellor, Dalton was less than enthusiastic about using the Budget to shape medium-term developments; for one thing, the Inland Revenue strongly objected to ﬁscal changes that might narrow the tax base. During Labour’s ﬁrst few years in power, taxes such as Purchase Tax were only varied to choke off shortterm inﬂationary pressures. They varied in quite the opposite direction to that which the Economic Section, looking beyond the ﬁnancial year ahead, recommended.12 When the ministerial committee on economic planning did attempt to bring together estimates of public spending and physical capacity in their report to the Cabinet of January 1947, the cuts they recommended in the housing and defence programmes were rejected. As Chancellor in 1948, Stafford Cripps considered bringing the Economic Survey and Budget forward for a single debate every spring, thus bringing government spending and wider economic planning together. He was dissuaded by the fact that the US ﬁnancial year was based on the calendar year. Given Britain’s need for Marshall Aid, it seemed ‘inconvenient’ to issue the Survey, which was at least partly prepared for the beneﬁt of the Americans, on the basis of a British ﬁnancial year that started every April.13 There was a wider problem, too. Any rational look at government spending against the backdrop of long-term resources would have immediately called Britain’s defence and foreign policy commitments into question, a dilemma Ministers were not prepared to face.14 The management of physical resources and manpower, in decline during the ﬁrst majority Labour Government despite central government retaining formidable powers, therefore remained separate from the short- to medium-term management of the Budget.15 Given this fact, spending priorities continued to be set against the exigencies of the

Planning the Public Sector 75

moment. There was little consideration of long-term priorities or matching spending against resources when the Cabinet had to decide whether Britain could meet the materiel costs of the Korean War rearmament of 1950–51.16 Budgeting was therefore left to a long-established partnership between the Treasury supply divisions, each of which dealt with a different category of expenditure, and the spending departments. The Treasury’s establishments division also exercised a greater measure of control over direct spending on staff and central administration, for which it had a special responsibility.17 This was a system characterised by Clarke as notable for its ‘diffuseness and decentralisation’: few explicit decisions were taken, and the system relied on the individual relationships between Treasury supply ofﬁcials and the Permanent Secretaries of individual departments. The system was rooted in past precedent and run by constant ‘soundings’.18 Decisions were not well co-ordinated, since they required poring over 2,000 sub-heads of expenditure before the annual Estimates could be presented to Parliament in the Budget. Ofﬁcials decided one by one whether each particular unit of spending was justiﬁed for the year ahead.19 The reforms of the early 1960s had been conceived as far back as Clarke’s time in the Social Services Division of the Treasury in the mid1950s. Butler at that time had asked the Treasury to prepare a ﬁve-year ‘forward look’ for the social services. This early survey was supposed to develop ‘areas of choice’, by which public expenditure could be more effectively directed at areas of most pressing need, exactly the emphasis Clarke and his colleagues insisted on in the early 1960s.20 There were other forerunners, for instance the long-term capital plans of the Atomic Energy Authority under Plowden, the strategic role of the Iron and Steel Board in controlling investment in the privatised steel industry, and the British Transport Commission’s Railway Plan of 1955. Most importantly in terms of central government investment, the roads programme had been planned on a ﬁve year, inter-departmental basis from the mid-1950s.21 Defence policy was also central to this re-evaluation. Derek Serpell, head of materiel procurement at the Treasury, was one highly inﬂuential witness during the 1958 Estimates Committee inquiry.22 Britain’s postSuez policy was to reduce her worldwide defence commitments, bringing them more into line with her economic power, and Macmillan had explicitly included this in his brief to Duncan Sandys when he appointed him Minister of Defence in 1957. Though most of Britain’s commitments in the Middle East and Far East were to remain, her armed manpower was to be cut in half, and reduced even on NATO’s German

76 From Dreams to Disillusionment

frontier. It was hoped that such long-term thinking about strategic priorities would substantially reduce total defence expenditure.23 By 1962 the planning rhetoric of the Ministry of Defence was at its height. ‘A long-term plan is essential’, argued the Defence White Paper of that year, ‘if the best use is to be made of manpower and resources. No settled weapons policy is possible in a short time-scale’.24 These limited forerunners did not evolve naturally and straightforwardly into the planning system recommended by Plowden; they took little notice of the overall economic environment, or the totality of government expenditure. But they were important examples of what could be done, and helped to change the intellectual atmosphere in Whitehall. On the other hand, the history of public expenditure planning revealed some outstanding problems that would defy solution for some time to come. The ﬁrst was the inherent conﬂict between long-term plans for public expenditure and short-term economic management, which helped to stall Labour’s attempts to plan the public sector in the 1940s. Second among the more noticeable problems was inherent in the early enthusiasm for planning in policy areas where it was obviously very useful, for instance defence. Could such techniques be applied in other spheres, where they had not been tested, and where strategic expertise was not well developed? The experience of the 1960s would demonstrate the tenacity of these problems, and how difﬁcult they would be to solve.

Renewed enthusiasm for public expenditure planning Public expenditure planning has to be seen in the context of contemporary anxieties about the effects of increasing government spending, and the need more efﬁciently to plan and direct where money was going. The Treasury spent the period 1959 to 1964, the years of greatest optimism about what long term planning could achieve, arguing for retrenchment just as much as reform. It is vital in this respect to recall that, at about the same time Plowden was reporting, Britain was in the grip of the major sterling crisis that forced the infamous ‘July measures’ of 1961. If it was to help, the IMF needed assurances that such restrictions would work. Clarke’s brief for the Treasury meeting with the IMF delegation made clear ‘the Government’s intention to take a grip on public expenditure. Long-term actions are more important than short, for the latter… would be discarded as soon as the immediate crisis is past’.25 Another reason for this interest in reducing expenditure was the burden of personal taxation, which was relatively high in the UK com-

Planning the Public Sector 77

pared to other advanced economies. Overall, taxes were lower in the UK than those in France and West Germany. However, indirect taxes were levied on a relatively narrow range of goods in Britain, and combined with the lack of a fully contributory social security system this forced the Exchequer to rely on direct taxes, which in 1964 were more than 50 per cent higher than in France.26 Hall identiﬁed these relatively high rates as injurious to both personal incentives and honesty, encouraging evasion and avoidance: reducing personal taxation was a key objective of the Treasury in its 1961 reappraisal.27 Long-term planning, some reasoned, might provide what governments had hitherto lacked: machinery for making Ministers consider ‘whether… expenditure programmes… are manageable in total and in particular whether they are compatible with lower taxes’.28 The iniquity of high taxes was a topic close to Conservatives’ hearts, a fact that helps to explain Ministers’ initial enthusiasm for public expenditure planning. When he received the ﬁrst public expenditure survey, Selwyn Lloyd admitted that he had hoped that the committee would recommend spending reductions, and subsequent tax cuts.29 The Conservative Party Taxation Policy Committee concluded in 1960 that income taxes ‘pinched’ just the voters that they saw it as their special duty to protect: ‘middle-class professional people who have not yet escaped from family responsibilities’. Treasury Ministers of this period tried a more political and ideological tack than their ofﬁcials felt able to, appealing to Conservative political principles. ‘Our supporters in Parliament wish to see us curbing expenditure’, wrote Henry Brooke in a memorandum to the Cabinet during 1962: ‘in fact it is rising rapidly’.30 Growing discontent about taxation gave politicians some incentive to make hard choices. The public often told opinion pollsters that they were in favour of more state spending: but by 1966 55 per cent of voters agreed with the proposition ‘taxation dampens initiative’.31 As early as November 1966, the proportion of voters willing to pay higher taxes even for better social services was dropping.32 There is statistical evidence that, as average income tax levels rose in the late 1960s and 1970s, tax resistance set in and slowed public sector growth.33 It was not just the relatively high burden of personal taxation that encouraged long-term planning. Between the 1930s and the late 1950s, economic investment rose strongly as a percentage of government spending, though this effect was exaggerated by the nationalisation of a ﬁfth of British industry. If the effect of nationalisation is stripped out, public sector investment was taking a lower share of total investment than it had in the 1930s, though the general investment boom the

78 From Dreams to Disillusionment

economy was experiencing explains this.34 Still, it was just those staterun industries that were to prove extremely voracious in their demands for more investment, since they had been neglected during the war, and formed the basic infrastructure for post-war economic growth. The large capital programmes carried out in the electricity and rail industries during the 1950s are good examples of this.35 The whole sector was marked by an emphasis on large-scale production, technological progress and vertical integration, all ingredients for high and mounting capital costs.36 The sheer scale of state activity put a high premium on making it more certain and reliable. ‘Stop and go’ would clearly be a less acute problem were government’s own expenditure to be on a smoother and more consistent path. Businesses and individuals could make more certain plans if they knew exactly how the government would act over the next few years. Dow was the most vociferous public advocate of this case. Government current expenditure formed a small share of ﬁnal demand, he argued, meaning that huge variations would be needed to affect the economy; reliable forecasts of the investment situation were seldom available; and ﬁscal and monetary policy were more likely to cause short-term economic changes than slow-acting cuts or boosts to the capital investment that was becoming such an important part of the public sector.37 The necessity of sustained investment programmes must therefore join the search for lower taxes and the need to reassure world ﬁnancial opinion in reawakening interest in long-term plans for public expenditure.

Politicians and choice in public expenditure Plowden had recommended the creation of a high-level Public Expenditure Committee ‘to receive… reviews… and develop… strategy’.38 Such a committee was appointed, in December 1960, as the ad hoc Ministerial Committee on Public Expenditure, and there would clearly have to be a similarly high-level ofﬁcial committee to do the detailed work to support Ministers. This necessitated the creation of the famous Public Expenditure Survey Committee in March 1961.39 Most departmental ﬁnance ofﬁcers sat on this committee, which it is crucial to note, was not designed to make policy, but only to advice on the future costs of existing and possible alternative policies. It would report every summer, initially looking four years ahead, and form the background to Ministerial public spending deliberations, taking into account decisions made in the year since their last report.40

Planning the Public Sector 79

This was a less far-reaching solution than that desired by some of the Treasury radicals, who wanted to begin by analysing individual policies and then estimating how much they would cost. But it was thought to be a practical beginning.41 It therefore acted as a clearing-house for the identiﬁcation of areas for negotiation, and consequently could easily be side-tracked: its ﬁrst review, for instance, was hampered by the dispute about Selwyn Lloyd’s proposed reductions to the 1962/63 Estimates.42 Unfortunately for Clarke and his allies, the ad hoc Cabinet committee declined to make explicit policy choices in the way Plowden recommended. As might have been predicted – and the Prime Minister and Chancellor were privately sceptical about the results that could be expected – most spending Ministers did not share the tax cutting views that had made the idea of public expenditure planning popular in the Treasury.43 Given that Macmillan deliberately included Macleod as Party Chairman on the committee, keenly aware of the political problems the Government was experiencing as it acted to check economic growth, it was no surprise that doubts were immediately expressed about reducing public spending. The minutes show this clearly, for instance recording the view that ‘it might be for consideration whether the country at large, if faced squarely with this dilemma [between higher taxes and lower expenditure], would wish taxation to be reduced if this meant a cutting of services’.44 The committee’s minutes show that more systematic doubts were also expressed: ‘in general individual Ministers were naturally jealous of their own programmes. An invitation to them to offer candidates for economy was unlikely to be particularly successful’.45 There was throughout an awareness of the fact that ‘expenditure decisions were taken on political grounds; and in the nature of things, this would always be the case’.46 The committee was allowed to lapse in November 1962: the idea had clearly proved a failure. Nor did new administrative structures resolve the inherent tension between long-term public expenditure planning, and short- to mediumterm economic management. If Ministers wanted to vary the rate of economic growth, the Treasury recommended only the use of smallscale maintenance work, and variations in house building.47 However, given the failure properly to integrate long-term expenditure planning into the Whitehall machine, those programmes were notoriously difﬁcult to control. The arbitrary investment ‘halt’ of 1961 and 1962, imposed for instance on all local authority building work, is only the best example of this.48 The Economist acidly commented that the July measures, coming just a week after the Plowden Report, were hardly in line with its recommendations. Selwyn Lloyd, the journal noted, ‘is

80 From Dreams to Disillusionment

going to seek to offset the increase in supply expenditure by planning downwards some of the items… which are least easily plannable’.49 Although Maudling as Chancellor spent the winter of 1963–64 trying to get the Cabinet to agree to rigid plans, with penalties for departments that did not stay within their limits, he failed.50 Alec Douglas Home, the new Prime Minister, summed up the case for ﬂexibility when the Cabinet chose not to implement this scheme in January 1964: ‘the Government could not easily acquiesce in a position in which their freedom to add new projects to their forward programmes would be conditioned by the need either to specify at the same time which existing projects would be eliminated or, alternatively, to foreshadow increases in taxation’.51 Furthermore, as part of their growth experiment, Ministers allowed their public expenditure projections to become entangled with the four per cent growth target. The effect of adopting the four per cent growth target, not just as an aspiration, but an assumed probability, meant that when it failed to materialise, public spending as a proportion of GNP would surge ahead. Clarke later pinpointed this as the moment when the whole process was ‘stood on its head’.52 There were also more political reasons for this change. Powell had warned of these in his reaction to the Plowden Report: Given the present preoccupation of politicians and the public with ‘growth’, the Government dare not… pitch their estimate of prospective resources low. As it is, they are liable to be told by their opponents that the rate of growth anticipated is miserable, and that all difﬁculties would be resolved by a policy to make it increase faster. Inevitably therefore the estimate of prospective income is on the high side.53 Even the Treasury began to envisage three per cent as a ‘minimum’ rate of growth, with four per cent as a ‘maximum’, for in November 1963 Maudling announced public spending plans to 1968 ‘compatible with’ four per cent growth.54 The burst of Conservative spending promises meant that Labour’s room for manoeuvre was extremely limited when the Wilson Government came to power in 1964. Callaghan, as Wilson’s ﬁrst Chancellor, immediately made clear to his colleagues that the resources available to the Government had been fully pre-empted by planned spending rises, and there would have to be tax increases even to meet existing pledges.55 Labour’s own spending plans, for instance to abolish NHS charges for prescriptions, spectacles and false teeth, and up-rate pension rates above

Planning the Public Sector 81

recent movements in earnings, exacerbated the problem. Callaghan therefore tried and failed to delay the abolition of NHS charges. His attempt to have the proposed 12s 6d increase in the basic pension scaled back to 10s was frustrated as well.56 The short-term rigidity and political vulnerability of spending plans thus demonstrated, Ministers determined on a ‘strict review’ of public expenditure that might break through such resistance, focussing especially on ‘prestige projects’ on the civil side. This was again carried out quite separately from the public expenditure planning mechanism, and handed over to a Task Group under Clarke. It was hoped that this review would free up at least some prospective resources for Labour’s own priorities in the medium term, as well as taking the pressure off the balance of payments in the short term. But it, too, failed to recommend many savings, which once again demonstrated the inﬂexible nature of budgets once set. The capital costs of most projects looked at by the ‘strict review’ group had already been incurred, for instance by the Atomic Energy Authority.57 Some projects were too prestigious, or too diplomatically useful, to consider cancelling. The French Government threatened to sue if Concorde was cancelled, for instance.58 Having disposed of short-term cuts, the Government turned to preparing the public expenditure parts of its promised National Plan. Here they made the same mistake as had the Conservatives, and tied public expenditure decisions directly to the overall rate of economic growth. Given the need for the ‘conﬁdence trick’ to convince everyone that growth would indeed occur at the rates promised, Ministers could hardly do otherwise. Even Callaghan was prepared tactically to accept this, for it meant that long-term targets could be used to set the very high February 1965 Estimates, running far beyond what economic growth and tax rises could provide for over ﬁve years, into context. The Treasury hoped to use the Plan targets to press for short-term savings and help smooth the public spending path to the Plan target year of 1970.59 The DEA was nonetheless able to secure 4.25 per cent yearly increases in public expenditure for the Plan from 1965/66, that is, after the eight to nine per cent increase of the ﬁnancial years 1963/64 and 1964/65. This obviously allowed even more leeway for public spending to expand over the whole period, and meant that neither short-term nor medium-term restraint had been secured.60 The decision remained a gamble, in Clarke’s words ‘a tremendous hostage to fortune’, and a clear breach of the attempt to weigh the Government’s spending plans against increases in total national wealth.61 It was a gamble that failed, a fact that might have

82 From Dreams to Disillusionment

been foreseen in 1965 given the fragility of some of the estimates involved. The contingency reserve out of which any unexpected spending would come was cut to £150m for 1969/70, a tiny fraction of public expenditure, and uncontrolled ‘miscellaneous’ expenditure was supposed to rise by only 10 per cent in real terms in four years.62 The National Plan exercise was run in concert with another attempt to put a Ministerial committee in charge of public expenditure planning. Callaghan chaired this new Public Expenditure Committee, which contained no Ministers with major spending briefs. Each department was to submit its ‘basic’ programme for approval over the next ﬁve years, listing prior commitments, and a series of ‘additional’ potential increases. The ‘natural’ increase in public expenditure, under the growth assumptions of the time, could then be divided up between the ‘additional’ programmes.63 Given some minor savings across the board, ofﬁcials thought that there might be £150m–£200m to reallocate between programmes without raising taxes.64 The committee eventually approved spending £240m more than previously planned for the target year of 1970, thus boosting even further the Conservatives’ forward plans; even so, they had bargained departments down from their original bids of £513m in all. The failure of the economy to grow as the Plan forecast called the whole priorities exercise into question. Expected growth after the July 1966 measures clearly could not accommodate 4.25 per cent increases every year without large tax rises.65 This time, Callaghan focussed on the medium term, looking forward to 1967/68. He provided for a range of options, including zero GNP growth in 1967/68, to prepare his colleagues for possible cuts. As the probable costs of spending commitments continued to rise, even to continue with no more new commitments looked likely to cost between £50m and £500m more than previously thought. This was the background to the most comprehensive attempt yet to force departments to set out their priorities, and then stick to them. Spending Ministers were asked to provide a list of programmes that they would add or subtract from their budgets if spending was to be reduced by ﬁve per cent, and if they were to be able to spend ﬁve per cent more.66 The futility of the idea of an ad hoc committee planning these decisions was again demonstrated when Callaghan managed to get £277m worth of savings through the Public Expenditure Committee, only to see these whittled down to £80m in full Cabinet when spending Ministers were once again able to line up against them.67 The committee was therefore discontinued, just as the Conservatives had abandoned the

Planning the Public Sector 83

idea in 1963. Instead, the Treasury conducted reviews ‘in depth’ with each department, before referring the menu of costed options to the Cabinet.68 This explains why some Ministers were prematurely jubilant that they had ‘crushed the PESC exercise – the idea of a group of Ministers sitting in judgement on other Ministers’.69 Despite that illusion, the Treasury made more headway than hitherto in these bilateral talks, partly due to the constant and unchanging nature of their demands. Even then, their call for cuts of £500m to the 1970/71 programme was reduced by the Cabinet to £300m of actual reductions.70 The Treasury did not get everything its own way, however. Just as they had under the Public Expenditure Committee, Ministers retained the right to appeal to the full Cabinet, a technique Judith Hart as Overseas Development Minister used to her advantage in 1969.71 To that extent the committee structure adopted made little difference, as Plowden had failed to foresee. Sir Samuel Goldman, Second Secretary to the Treasury, later concluded from this that ‘the Chancellor of the Exchequer’s responsibility for management of the public sector cannot be effectively shared or put into commission’.72 The elaborate machinery of the public expenditure surveys and Ministerial committees was less important than the straightforward power of external economic events. Devaluation therefore changed the whole context of public expenditure planning, and Callaghan announced an initial package of £400m in reductions soon after sterling’s new value was announced.73 Following this up, though not without a damaging and uncertain delay, Wilson and Roy Jenkins as the new Chancellor introduced £416m more savings in January 1968, and then reduced planned expenditure by a further £500m for 1969/70.74 There was a ﬁnal round of cuts, worth £290m, in store for the 1970/71 plans as well.75 Defence expenditure suffered the most throughout, since the January 1968 cuts exercise that followed devaluation decided to pull British forces out of the Far East by 1972/73. Overall, defence expenditure was planned to fall by 12 per cent in the following ﬁve years.76 It was the reality of the economic situation, rather than any administrative reform, that eventually forced a true judgement about priorities.

New techniques, novel specialities and organisational reform If the public expenditure surveys failed to provide any neutral basis upon which to plan public spending, that outcome was all the more likely given the rather undeveloped state of public expenditure theory at

84 From Dreams to Disillusionment

this time. There was a great deal of theoretical literature dealing with taxes, partly stimulated by the huge rises in all forms of taxation that had been evident since at least the late nineteenth century, but much less had been written about the appropriate scale and direction of government spending.77 The political and administrative impulses that governed its ebb and ﬂow had been increasingly examined by social scientists from at least the time of Anthony Downs’ Economic Theory of Democracy, published in 1957, but such studies gave little guidance as to how public spending should actually be governed or used.78 A.C Pigou’s classic Study in Public Finance, ﬁrst published in 1928 and mainly concerned with the principles behind taxation, contained only eight pages that bore on deciding how big the public sector should be.79 However, the public expenditure survey system did achieve one of its objectives: it stimulated the development of practical long-term thinking. The most obvious example of these exercises was the appropriatelynamed ‘very long term planning’ exercise, which began in 1962 and was then taken over to ﬁt into Labour’s National Plan. ‘Very long term planning’ was supposed to explore long-term priorities up to 1980.80 The ﬁrst attempts at this were not impressive, with most departments simply sending in their existing and often published projections. The Ministry of Transport’s report on the ‘transport needs of Great Britain in the next twenty years’, for instance, had been prepared for quite different purposes than public expenditure planning.81 However, in spring 1962, Cairncross recruited Alan Holmans, from Glasgow University, to prepare an ‘economic map of 1980’.82 This brought together projections for total and working population, fuel and energy consumption, numbers of cars and overall journeys, skilled manpower, and the implications of all of these for government spending.83 By its very nature, however, this remained academic, for there was no way of relating public expenditure decisions in 1962 to the needs of 1980. One ofﬁcial summed this up well: ‘we should not try to work out a centralised long-term pattern for the economy into which the planning of each segment would be made to ﬁt. It is impossible to make a sensible plan for the economy twenty years ahead. Too much is uncertain’.84 At Permanent Secretaries’ November 1962 Sunningdale conference, most participants objected to using the Holmans map for policy, fearing that all freedom of manoeuvre would be removed.85 The ‘map’ was left as a means of examining ‘relative orders of uncertainty’ among departmental plans, and as a means of checking the ‘internal consistency’ of government’s plans.86 Very long term planning did succeed in stimulating government thinking beyond the public expenditure survey horizon, and since it was taken up by the DEA, it prepared the way for

Planning the Public Sector 85

the social welfare and transport chapters in the National Plan. However, the preparation of the public sector parts of the National Plan showed that the idea had a tenuous grip on political reality. Wilfred Beckerman, drafted into the DEA from the National Institute for Economic and Social Research, later described his experience of drafting these parts of the Plan: ‘none of my work was of the slightest urgency, which meant that politically it was of no importance whatsoever… I was able to work away with very little interference’.87 Such innovations ran into other difﬁculties. The public expenditure planning process was extremely complicated, often confusing Ministers, or at worst driving them to distraction given the rest of their workload. Castle remarked at one Cabinet that ‘we were all getting completely confused about the make-up and relationship between the national accounts, PESC and the Departmental Votes’.88 Even Treasury civil servants could be daunted by the complexity of the ediﬁce: one later described the amount of work involved in PESC as ‘staggering’. Spending ﬁgures had to be provided for the Budget, on a yearly basis and broken down by department and authority; for the public expenditure survey, on a functional basis and over the next ﬁve years; and then adjusted to ﬁt into the national income and expenditure accounts provided by the CSO.89 The problem of converting all these series into the appropriate prices meant that, looking back, even Clarke admitted that ‘I cannot satisfy myself about what really happened’.90 The increasing complexity of the system meant that short cuts were needed to ﬁnd a way through the labyrinth. For a while, it was hoped that new accounting techniques, and organisational reform, would provide the solution. One example of this was enthusiasm, particularly marked in the late 1960s, for the fashionable technique of programme budgeting. This was promoted by a June 1966 circular from Sir Lawrence Helsby, Head of the Civil Service, to all Permanent Secretaries: When Governments took less of the country’s resources than now, the main question was whether they should do more. As they have taken more and more resources, that question has been changing into one of making choices, rejecting one thing in order to be able to do another… Departments have made great efforts… to ﬁnd ways of ensuring that they obtain the best value for money; for instance, by applying the techniques of cost effectiveness, cost beneﬁt analysis, investment appraisal, operational research, work measurement, and so on. All this is good… But are there areas of expenditure… where there is a need for more systematic analysis…?91

86 From Dreams to Disillusionment

Experiments with programme budgeting were greatly inﬂuenced by the American use of this technique in military affairs, and the Ministry of Defence’s own use of it in judging the relative merits of spending in different branches of the Forces. The inﬂuence of McNamara’s reforms at the Pentagon was not, therefore, only generally in the ﬁeld of greater ‘efﬁciency’. Individual techniques were also imported from across the Atlantic.92 The system was quickly deemed to be so successful that in 1965 President Johnson ordered it to be adopted across all Federal agencies and departments.93 Programme budgeting involved a number of reforms to the US defence programming system. By 1966, the key elements of the new system were familiar. Its ﬁrst requirement was that decisions were set against governments’ broad strategy. These were to be made explicit and continuously reviewed, rather than simply accepted from the past. That strategy was to be considered simultaneously with costs, to bring together discussion of ends and means rather than unrealistically continuing to treat both separately. In another parallel with the Plowden reforms, US defence budgets were from the early 1960s arranged in functional blocks – airlift capability, for instance – rather than on the basis of which service was responsible for the expenditure. Each possible way of delivering strategic ends was then considered, with the help of teams of technical experts and economists. Lastly, and in an encouraging echo of Britain’s public expenditure reforms, this exercise was projected forwards in a long-term plan for the following ﬁve years.94 This seemed a good precedent for defence planners in London. Some constituent exercises of programme budgeting were adopted in the early 1960s. In his time at Defence, Denis Healey encouraged the evolution of such thinking with his creation of a Programme Evaluation Group, responsible to the Chiefs of Staff and containing ofﬁcers from all three services, a scientist, a civil servant and an economist.95 Though the Group ran into deep trouble, and was opposed by the Chiefs of Staff as giving more power to the Secretary of State and threatening each of their own prized weapons programmes, that was partly a tribute to the Group’s admittedly uneven effectiveness. Before its replacement by a less controversial Defence Policy Staff, it had at least smoothed the way for the retreat from East of Suez.96 Programme budgeting was supposed to attack the ‘incrementalism’ of political and ofﬁcial inertia. This has been captured by the great American scholar of the budget process, Aaron Wildavsky, with the phrase ‘the largest determining factor of this year’s budget is last year’s’.97 Costed options were one way of lessening this ‘iceberg effect’,

Planning the Public Sector 87

since they forced departments to make their priorities clearer. Programme budgeting promised a more technical solution to this problem. If inputs and outputs could be measured, the huge number of programmes that had to be accepted at face value during the expenditure survey exercises, and were very difﬁcult to challenge, could now be analysed anew. This made the idea of programme budgeting extremely attractive to the Treasury, and it was this constant review of existing programmes that was supposed to lie at the heart of the ‘instrumental’ work of programme, analysis and review in the 1970s.98 The Conservatives applied pressure for such work from 1966, in which year Heath as the new Conservative leader called for the setting up of a ‘central cost effectiveness department’. A number of young Conservative MPs, for instance David Howell, had visited the US and been impressed by the potential of programme budgeting.99 It was this work, little noted outside specialist circles at the time, which would be picked up by the Heath Government in 1970, and reshaped into the programme, analysis and review system that was designed to ‘improve policy formation’ through ‘rigorous analysis of existing and suggested government policies’.100 Under this system, ‘objective’ reviews took place when large new individual projects such as new capital projects were put forwards, and ‘instrumental’ reviews would take place periodically and look at whole programmes. The review teams would report to a new Central Policy Review Staff of civil servants and outsiders, headed by Victor Rothschild, erstwhile head of research at Shell.101 However, once again, the reality was less impressive than the theory. The tradition of consultation and partnership between departments and the Treasury meant that ministries had to be consulted both before and after the review exercises. If they were so minded, they gained valuable insights into how to resist and frustrate reform. Nor did the long timeframes involved in programme, analysis and review appear to meet departments’ short- to medium-term concerns. Though some of the ‘objective’ reviews were inﬂuential, the idea of a rolling review of all programmes was also frustrated by distrust of Treasury motives, making departments all the more likely to obfuscate, stall and delay.102 Neither did these ideas lack for contemporary sceptics, who while accepting that programme budgeting might be useful in defence planning doubted its wider use. The combination of very large defence budgets with rapid technological change was forcing strategic procurement decisions all the time in that sector, they acknowledged. However, such critics pointed out the lack of outside expertise in other ﬁelds, and their much more slowly changing budgets combined with less well deﬁned objectives and

88 From Dreams to Disillusionment

less important procurement decisions. Extending the technique, they argued, would simply lead to ‘premature quantiﬁcation’, and a ‘ﬁxation with structure’.103 Many in Whitehall agreed with the sceptics. By the end of the 1960s, ofﬁcials were aware that disillusionment was already setting in with the system in the US, especially given its association with Washington’s military strategy in Vietnam. A number of visits to the US by senior Treasury staff demonstrated the fact beyond doubt.104 The problems were manifold. In the last analysis, how were the strategic choices recommended by the US planners to be assessed? They were so broad, and often so vague, that they meant very little that could be quantiﬁed. For example, what did the famous US example of such strategy, ‘an adequate nuclear capacity’, mean? The answer would clearly rely on who was seen to be the main potential adversary, and what their views of nuclear strategy were: on intelligence, not economics. Peter Self later attacked the whole concept as ‘econocracy’, based on value judgements surrounded by a comforting, but false, set of ﬁnancial assessments.105 American studies backed up the Treasury’s natural caution, demonstrating that the support of agency and departmental heads, and a perception among staff that programme budgeting was designed to bolster decision-making rather than slash spending, was vital to its success.106 It was hoped by many experts that the relatively new and exciting technique of cost beneﬁt analysis, whereby costs and beneﬁts were estimated before the decision to go ahead with a project was made, would come to the aid of programming, planning and budgeting. Though they did not necessarily always go together, cost beneﬁt analysis was yet another import from the US, where it had ﬁrst been used to judge whether river and dam schemes were feasible. It involved costing the ﬁnal payoffs to individual schemes so that they could be compared, with obvious beneﬁts for programme budgeting that tried to compare the effects of money spent on different initiatives.107 However, while such work did provide guidance about comparative costs and outcomes, it laid made very few actual recommendations concerning the ﬁnal social beneﬁts of different types of expenditure. As the foremost US authority on the subject, Richard Musgrave, put it when writing about collective social goods: ‘cost-beneﬁt analysis provides no substitute for the basic problem of evaluation… all it can to is to expedite efﬁcient decisionmaking after the basic problem of evaluation is solved’. Without prices to regulate marginal demand, it was extremely difﬁcult to work out which social goods individuals wanted, leading to the dubious use of ‘shadow prices’, essentially price proxies based on opinion surveys or estimates of the amount companies and individuals might save if the project went

Planning the Public Sector 89

ahead.108 Without being able to judge the utility of different spending choices for individuals, expenditure decisions rather became a matter of policy preference and individual choice – the ‘domain of sociology or welfare politics’, rather than judgements of economic utility.109 This problem was to be amply demonstrated by the work of the Roskill Commission on the Third London Airport in the 1970s. When the majority of the Commissioners recommended that the third London airport be sited at Cublington in Berkshire, one of the Commissioners, Colin Buchanan, violently dissented on the basis of the immutable and intangible beneﬁts of the green belt land that would be destroyed. The majority based their decision on a massive cost beneﬁt exercise which had recommended that site because travel costs to Cublington were low from both London and Birmingham; Buchanan’s arguments, and the Government’s later refusal to follow the majority report after another round of locals’ objections, showed just how inapplicable the technique could prove.110 Another obvious problem was the appropriate interest rate to use when calculating the future costs of capital projects. Some economists were prepared to argue that the public sector should beneﬁt from the application of a ‘social rate of discount’, a lower interest rate for its projects reﬂecting their high collective worth and long-term beneﬁts for the generations to come.111 Others, notably the Princeton economist William Baumol, objected to what they saw as an artiﬁcial instrument, believing that the future could ‘look after itself’.112 Public sector investment should therefore compete with other spending on the same basis. Given the disagreement among economists, Ministers were guided by the latter theory, since it seemed the safest and most piecemeal available. A range of interest rates were assumed for judging public sector capital projects, usually at about or slightly below the average for relatively safe private sector investment.113 In 1967 the system was made a little clearer when nationalised industries were similarly advised that the prevailing market rate of eight per cent should usually be adopted when making investment decisions.114 However, in practice this rule was extremely difﬁcult to abide by, partly because the returns to very large capital programmes depended on such a large range of variables, including government policy. Furthermore, the pricing conventions of nationalised industries – that prices should cover long-run marginal costs – meant that nationalised industries would usually make a loss, as the prices natural monopolies could charge would relatively decline over the long run. It was hard to see how this ﬁtted into an investment system that focussed on gaining an economic return.115

90 From Dreams to Disillusionment

Again, Whitehall was aware of these ﬂaws from the start, and displayed a scepticism and caution that signiﬁcantly slowed the adoption of the new techniques. Ofﬁcials concluded very early on that ‘investment in education, health and many other areas did not yield a readily calculable beneﬁt’, though there were probably gains to be made in thinking about such measurements ‘in principle’.116 ‘However profound and elaborate a cost-effectiveness study may be’, the Treasury told other departments, ‘it can only lead to a comparison between alternatives: it cannot produce a value judgement’.117 The claim of some experts, that programme budgeting and cost beneﬁt analysis together could form an overall set of economic social accounts, were dismissed. The ofﬁcial in charge of public expenditure in 1969 noted that using both systems together ‘boggles my imagination’.118 None of this meant that civil servants were not prepared to experiment, for they clearly recognised the usefulness of new techniques when it came to focussing managers’ minds within departments, or using cost beneﬁt analysis to work out the implications of large-scale public investment decisions. They recognised the applicability of new ideas when it came to judging programmes within a smaller analytical range, for within one ﬁeld of activity, judging between results was much easier.119 Delivery of so many tons of ordnance, operations, school places or the like were clearly comparable, which was one reason why the initial cost beneﬁt work conducted in the 1960s, and the programme analysis and review exercises of the 1970s, tended to be regarded as ‘in house’ departmental work.120 A number of programme budgeting pilot studies were approved in the late 1960s. The economist Alan Williams was recruited from the University of York to prepare a wide-ranging brief on applying programme budgeting techniques to Britain, though the ﬁrst attempt to do so, for the Home Ofﬁce budget, was rebuffed by that department. The Treasury had to be content with a narrower internal study of police manpower.121 Another pilot study was also completed in education, as well as a very tentative study of the possible applications of programme budgeting in foreign affairs and aid that led to very little practical and immediate change.122 The DHSS was persuaded to start experimenting with programme budgeting in 1970.123 These pilot studies were the limit of Treasury success, a disappointing record partly caused by the fact that the Treasury saw itself as facilitating and encouraging change, rather than driving it from the centre. As one argued, ‘the Treasury’s role is to prod and encourage departments’.124 This involved, for one thing, acting as a central clearing house for information about cost beneﬁt analysis, to encourage every department to

Planning the Public Sector 91

at least think about such appraisal methods. Most departments had at least one cost beneﬁt study under way by 1969, most of them at least attempting to emulate the Ministry of Transport’s use of the technique in its decisions on whether to extend the M1 motorway, and whether to build the Victoria Underground Line in London.125 There was, on the other hand, no systematic attempt to integrate them into the public expenditure survey system. The organisational habits of decades of consultation, discussion and committee work could not simply be ignored. The fact that organisational reform and programme budgeting had to go together was made explicit by the Fulton Committee on the Civil Service in 1968. It called for much greater measurement of outcomes, and more consequences if they did not improve: ‘the manager of each command should be given clear-cut responsibilities… and should be held accountable for performance against budgets, standards of achievement and other tests’. Fulton argued that the long-term synoptic formation of policy, and the monitoring of achievements, should be delegated to Planning Units, with an expert Senior Policy Advisor at their head. The whole process should be overseen by a new Civil Service Department, taking over the Treasury’s stafﬁng and management responsibilities.126 All of this was highly indebted to fashionable ideas about programme budgeting, as recommended by Fulton’s management consultant advisers.127 The headway made by these reforms is, however, highly questionable. A central Civil Service Department was established, with the Prime Minister as its titular head, despite resistance from those, including Clarke and Helsby, who thought that separating management and ﬁnance was misguided.128 Ten years after Fulton reported, fourteen departments had policy planning units, of varying size and effectiveness. But they were often sidelined from the main lines of policy, and there were no senior policy advisers to give them political weight or executive leadership. Expert academics were usually appointed on an ad hoc basis, because of a need for their speciﬁc skills or because they had contacts with a senior Minister.129 Given Ministers’ preoccupation with day-to-day crisis management, no Planning Units were established during Labour’s two remaining years in power. Wilson, for instance, had no specialist economics adviser after Andrew Graham left No. 10 in 1969.130 Neither is it clear that the lines of managerial responsibility became more clear-cut, at least until the greater emphasis on managerial accountability and delivery that characterised the 1980s.131 More practical achievements were within the grasp of governments. A public expenditure review committee was appointed to look at the

92 From Dreams to Disillusionment

whole system following the rushed and unsatisfactory cuts exercises of November 1967 to March 1968, and its deliberations led to signiﬁcant changes in the planning apparatus.132 Following a long-running campaign by Crossman and Balogh, the economic effects of public spending were to be included in the surveys. As Crossman noted, expenditure would now be shown ‘(1) according to the amount of resources it absorbs; (2) according to the amount of borrowing we have to do to pay for it; (3) according to the amount of taxation that has to be raised’.133 The survey horizon was shifted to year three, rather than year ﬁve; much more information was provided on years one and two, a much more realistic way of focussing departments’ minds.134 Figures after year three were to be given on a provisional and tentative basis.135 A parallel innovation was that from 1967 onwards public expenditure calculations were brought more closely together with medium-term economic assessments. The vehicle for this was the Medium-Term Assessment Committee set up in early 1967 to work on the new National Plan.136 Although its work had not progressed far enough to contribute much to work conducted on the ﬁgures for 1967, the 1968 public expenditure survey stated clearly that public expenditure ‘will depend mainly on the manner in which the economy as a whole develops… on this the latest assessment is given in the Medium Term Assessment Committee report’.137 In accordance with the new philosophy of giving a broad ‘fan’ of possible outcomes, using different models built on high and low productivity assumptions, the Medium Term Assessment Committee gave ﬁgures for different economic outcomes on just this basis, along with estimates of the effects of both planned, and lower, public spending. This provided a range of options, rather than just the most hopeful, therefore ﬁtting in with the philosophy of costed options and programme budgeting.138 It therefore dovetailed with the publication in 1969 of The Task Ahead, giving realistic public expenditure ﬁgures truly related to future growth paths, rather than a hypothetical and contingent growth rate that might never materialise. Theoretical change and organisational reform had appeared to hold out the promise of making public expenditure planning more rational, orderly and efﬁcient. Through the reforms of 1967–70 progress had been made in building up a realistic picture of future spending against the backdrop of available resources. However, by 1970 new techniques were only in the ﬁrst stages of development, and in any case many of the more ambitious technical reforms were found wanting by the pressure of events. In the absence of strong guidance, public spending would continue to be based on intuitive, incremental and collective decisions.

Planning the Public Sector 93

Assessment: the results of public expenditure planning If we look at the actual results of public expenditure planning, they were highly disappointing. Public spending rose very quickly in both real terms and as a percentage of GDP, but the failings were not solely an inability to contain such increases. Governments were committed to those rises, and had their path matched previous plans, the system would have achieved its ends. The real problem was that levels of public expenditure were extremely volatile, marked not by the smooth path hoped for by the pioneers of expenditure surveys, but by a jerky sequence of large spending increases and cutbacks: in the jargon, ‘punctuated equilibrium’.139 Each subsequent round of demand management was another proof of the uneven progress of public expenditure, and looking at the outcome of successive negotiations demonstrates the scale of the problem. At 1970 prices, the July 1961 economic measures cut a total of £290m from public sector expenditure in the following ﬁnancial year; the relative expansion of 1962 reversed £21m of those cuts, while adding £115m more expenditure for the next year. Thereafter, Labour’s successive reductions in planned spending reduced future outlays by £159m in July 1965, £305m in July 1966, £322m in November 1967, and £533m in January 1968. The public expenditure path to which these reductions were often a reaction was extremely unpredictable. Central government expenditure, for instance, rose strongly during 1961 and then fell back during 1962, before surging upwards during 1963 and reaching a plateau in 1964 and 1965. It then increased more quickly than ever between 1966 and 1968, before stabilising again, ﬁnally returning to the 1966–68 speed of increase during 1970.140 Government had intended none of those peaks and troughs. On a rather different measure of volatility, the differences in yearly increases in public expenditure overall, there was little more stability, as Figure 4.1 demonstrates. Massive increases, of over 16 per cent in 1963 and more than 11 per cent in 1967, were still usually followed by retrenchment. In the two years following those two spending booms, public spending rose by a yearly average of just over 1.5 per cent. Despite the public expenditure survey apparatus, government spending had certainly not been made more predictable. Lest it be thought that it was only constraining, rather than actually planning, public expenditure, that interested Whitehall in this period, another problem of control was actually short-term underspending, which was for instance evident in the ﬁnancial years 1963/64 and

94 From Dreams to Disillusionment Figure 4.1 Percentage annual increases in total public expenditure, 1959–1970 (1959 prices)

% annual increase in overall public expenditure

20

15

10

5

0 1959

1960

1961

1962

1963

1964

1965

1966

1967

1968

196 9

1970

–5

Sources: National Income and Expenditure (1965), table 43, p. 53; National Income and Expenditure 1965–1975 (1976), table 10.2, p. 68.

1964/65 (see Figure 4.2). This emerged when a department was encouraged to be more ‘realistic’ about the future through the short-term Treasury promise that some generosity would be allowed in year one of the survey period. The technique was again supposed to smooth the growth path, and make spending increases more even over the medium term. In fact, departments often found themselves unable to spend the money, causing a shortfall in spending in the current year.141 The Treasury was aware of this tendency as soon as it emerged, though its attempts to investigate further were often frustrated.142 The public expenditure planning system had some more basic ﬂaws, primarily because it did not allow sufﬁciently for what became known as the relative price effect, or the tendency of public sector prices to rise faster than those in the rest of the economy. Spending projections were couched in real or volume terms, that is, adjusted for ‘the most likely expectation of changes’ in ‘prices, wages and GNP’ and thus indicating the ‘real’ level of service provided. By this means ofﬁcials hoped to avoid the ‘risk of Ministers being subsequently unpleasantly surprised… that a policy which someone had told them would cost some £Xm rising to £Ym in three years’ time’.143 The social service costs projection made in 1955 had been based on wages and prices prevailing in that year, and had therefore ‘disastrously’ underestimated spending in 1959–60.

Planning the Public Sector 95

Clarke believed that this lesson had been learned, and that the Government could thereafter plan with more precision. However, there were others, notably the Treasury Second Secretary Sir Thomas Padmore, who were much more sceptical.144 The sceptics had a good case, for government cost increases were highly unpredictable. The ﬁrst reason for this was that public sector wage and salary increases, making up two-ﬁfths of total government spending, showed a small but persistent tendency to rise more quickly than those in the private sector. They were also highly volatile, determined as they were by national settlements covering very large numbers of employees, for instance civil servants, nurses, doctors and teachers. This effect was exacerbated by incomes policy, given that governments had greater direct control over their own employees’ pay than that of other workers, and periodically squeezed it accordingly.145 Secondly, the quality of public sector output was usually and necessarily measured in terms of inputs. The number of teachers, for instance, was measured as a good in itself, rather than for some intangible increase in the quality of education provided. As analysed by Baumol, this carried echoes of Kaldor’s argument that most of the service sector will not provide the productivity gains that can be easily seen and measured in manufacturing.146 However, much of this phenomenon was due to an unavoidable principle of national accounting rather than differences in actual productivity. Given that government spending was not marketed for cash, it was impossible to measure labour productivity against ﬁnal output costs, and to incorporate this in price analyses. This exaggerated relative cost increases in the public sector, for productivity gains measured in the private sector acted to deﬂate calculations of ﬁnal output cost increases there. Those direct comparisons that did exist between public and private sector activities did not show a vast difference in productivity.147 Even more fundamentally, if future cost trends were to be utilised in forecasting expenditure, these projections could only be based on past experience, which given the previous unstable behaviour of the indicator, was little indication of how prices in the public sector might behave in the future.148 The unpredictability of cost trends put further pressure on the Treasury in negotiations, for departments repeatedly demanded that their programmes be revalued on the basis of ‘present wages and prices’. Spending departments continuously came back to this theme, arguing on a number of occasions that the cost limits had become unrealistic. Ofﬁcials struggled, without much success, to ﬁnd a convincing formula to integrate these ‘relative price effects’ within public expenditure decisions.

96 From Dreams to Disillusionment

Though they had made public their awareness of the issue in the 1963 Public Expenditure White Paper, their commentary was reduced to a footnote. The relative price effect was not brought into their actual calculations.149 During 1964, they settled on ‘Clarke’s law’, based on extrapolations of past relationships. This stated that prices in the public sector, at three per cent levels of economic growth, would rise by 3.7 per cent a year, as against 2.6 per cent in the whole economy.150 ‘Clarke’s law’ turned out to be an under-estimate of inﬂation as a whole, with general prices rising into 1967 at 3.9 per cent annually, while government current prices were going up 4.5 per cent a year. This meant that the relative share that government spending took of national resources did not therefore rise as fast as Clarke predicted, as background inﬂation kept up with public sector price rises to a greater extent than expected. But it also meant that in cash terms, the Government continued to face large demands for ‘pay and prices’ spending increases, just to keep up with their pledges on spending in constant terms.151 The Government did become more open about this effect, and after 1969 public plans did contain estimates for relative price changes.152 By 1970 the issue of differential productivity (and hence implied cost inﬂation) across different parts of government spending was still unresolved, partly because of Jenkins’ success in bringing down public expenditure without major reforms. Following the debacle of economic management in 1967 and 1968, different price indices were constructed for individual programmes.153 However, direct data still did not exist to show the different levels of price changes across different types of spending.154 As the Cambridge economist Wynne Godley made clear in testimony to the Select Committee on Public Expenditure: ‘the system of information relating to prices which would enable programmes… to be expressed in real terms according to national income deﬁnitions does not yet exist’. The national accounts used blanket ﬁgures for public sector cost changes. To construct individual indices the Government’s planning system therefore ignored them, and fell back on ‘traditional procedures’. Even these were a mixture of estimates made at different points in the year which made comparisons within each year’s ‘survey prices’ extremely hazardous, let alone across a sequence of years.155 Estimates are available of the successes and failures of this attempt to measure the relative price effect for each programme. To begin with, it can be demonstrated that even governments’ short-term public expenditure ‘marksmanship’ was not hugely impressive, and did not demonstrate a tendency to improve over time. Figure 4.2 demonstrates that in only two ﬁnancial years – 1965/66 and 1968/69 – did actual public

Planning the Public Sector 97 Figure 4.2

Public expenditure ‘marksmanship’, 1959/60–1969/70

Outturn undershoot or overshoot of Budget expenditure estimate, % of actual expenditure

5

4

3

2

1

0 1959/60

1960/61

1961/62

1962/63

1963/64

1964/65

1965/66

1966/67

1967/68

1968/69

1969/70

–1

–2

Source: P. Mosley, The Making of Economic Policy: Theory and Evidence from Britain and the US since 1945 (New York, 1984), table A.1, pp. 219–21.

expenditure get within one per cent of the Budget forecast. In 1967/68, spending ran 4.5 per cent ahead what the Chancellor had expected, a fact that helps to explain the loss of conﬁdence that ended in devaluation. In any case, the average difference between Budget ﬁgures and real public spending in this period was 1.2 per cent. It is possible to be a little more speciﬁc about this problem as it related to the longer-term public expenditure surveys. If we take public expenditure survey projections in the 1970s, and compare projections with eventual reality, we ﬁnd a disheartening picture. Taking public expenditure plans for the target year 1974/75, the public expenditure survey of ﬁve years before had underestimated expenditure by 23.4 per cent; that of three years before, by 17.3 per cent; even that of two years before, by 15 per cent. Both the effects of policy changes and price effects contributed to the inaccuracy of public sector plans. Inevitably, policy changes formed much of the difference between projection and reality: the 1970 Public Expenditure White Paper underestimated public spending in 1974/75 by £8.4bn at 1974/75 prices, and policy changes made up £2.9bn of that change. However, much more worrying from the point of view of planning, relative price effects that no Minister or ofﬁcial could predict added just over £2bn to the overshoot. In each of the next four annual White Papers that included estimates for 1974/75, the relative

98 From Dreams to Disillusionment

price effect was actually the single biggest contributor to forecasting error.156 Some Labour observers had already been disabused of earlier enthusiasms by their experience of the public expenditure planning system. Jeremy Bray, a junior Minister at the Ministries of Power and then Technology, made clear his views in his book Decision in Government. ‘The hard lesson of experience’, he wrote, ‘is that cost-effectiveness and ﬂexibility rather than ever longer planning horizons are the key to better public expenditure control and the attainment of social objectives’.157 As an enthusiastic technocrat and leading critic of civil service amateurism Bray was an unlikely source of such sentiments, and his view was all the more inﬂuential because of this.158 The dilemma that Plowden has sought to resolve – between short-term economic management and long-term needs – was alive and well, and many insiders were beginning to doubt whether Plowden’s planning solution was more effective than the more realistic short-term alternative. Given the inﬂationary crisis of the mid-1970s, Labour Ministers would have to give up on planning in real or volume terms as the new sectoral estimates of price changes were constantly disproved by the very high and volatile inﬂation of that period.159 Cash limits were therefore introduced to replace plans based on real terms spending. This was ﬁrst pioneered in purchases of land and buildings, the price of which experienced huge inﬂation in the mid-1970s. However, given the ballooning costs of the public sector Healey as Chancellor decided that real terms planning, a ﬂaw and an irritant even in times of mild inﬂation, must be halted for most public expenditure.160 Cash limits were imposed on three quarters of all public spending in 1976, though only for the year immediately ahead.161 The link between the expenditure surveys and the medium-term economic assessment was broken at the same time.162 All this was obviously a devastating setback for the long-term prescriptions of Plowden and the advocates of public sector planning. Serious consequences ﬂowed from the failure to plan spending and resources together. The relatively high levels of taxation bearing directly on individuals were not lowered, as some of the architects of public expenditure planning had desired. By the mid-1970s average UK income tax rates were nearly double those in West Germany and the USA, and quadruple those prevailing in Italy and Japan.163 Given all these problems, it is important to note that the record is not entirely negative. By 1970, Ministers knew much more than they had in 1959 about public expenditure, and about its costs, economic implications and chances of delivering real changes on the ground. Spending had been classiﬁed

Planning the Public Sector 99

into categories that showed what it was for, rather than which departments were administering it; Ministers could make collective decisions, at least attempt to look forward into the future, and relate spending to potential economic changes.164 The huge wave of investment in nationalised industries and Britain’s social infrastructure was smoothed out a little, and capital expenditure was less subject to the depredations of immediate need than it had been in the 1950s.165 However, sheer circumstance proved stronger than deliberate reform, for economic crises were rather more effective in focussing minds than was the yearly rhythm of the public expenditure survey. It was only the need to reach a balance of payments surplus after devaluation, and the IMF’s insistence on an overall target for credit expansion, which provided the Treasury with enough leverage to impose targets that stuck after 1968. Given the setting of a credit expansion target for the economy as a whole, government borrowing could not be allowed to rise relative to private credit; this at least reduced the Government’s ability to make room for pay and price increases in a way that the public expenditure survey could not, and indeed was not designed to. There was even a small reduction in overall public expenditure in 1969 (see Figure 4.1), demonstrating just how ﬁerce retrenchment had become. It was no substitute for a smoothly planned path for public expenditure, but it at least established clear limits that had not been there before. Not only economic realities, but political and social circumstances too, forestalled the success of the planning experiment. It was, as Powell argued at the time, partly the will of public, Ministers and Parliament purposefully to control public expenditure, not the number and scope of government committees, that was paramount in the ongoing struggle for control. ‘There is only one key to the control of expenditure’, he argued. ‘That is for the government to wish it, and to wish it more than they wish anything inconsistent with it’.166 It hardly helped in this respect that the creation of a more transparent system had to wait until the late 1960s. Plowden had made a point of recommending increased Parliamentary accountability. However, it was only in 1969 that the Government began to publish an annual series of White Papers on public spending, and to allow Parliamentary debates on them.167 Even then, the Government was in part reacting to yet another Select Committee report that harshly criticised the legislature’s limited ability to scrutinise public spending.168 Even then, House of Commons debates on the public expenditure White Papers tended to be rambling, and most MPs lacked the technical ability or support to make any real

100 From Dreams to Disillusionment

impact in such discussions. Parliamentary committee work was not of a high quality either.169 Given the perceived need to react to increasing economic complexity and an expanding population, and the failure to properly involve Parliament and public in public expenditure decisions, a sea change in attitudes of the type Powell believed necessary remained unlikely. Actual results from the new machinery were hardly impressive, and exhibited some of the same ﬂaws for which the pre-Plowden system had been excoriated. Most types of public expenditure did not experience smooth, stately progress, but endured the same peaks and troughs that they had before; different types of expenditure remained hard to investigate and understand, let alone to control. New techniques and specialisms had turned out to be more useful in some areas than others, as Whitehall had foreseen all along. Above all, before the succession of economic crises that marked the end of the decade, the idea of making actual choices between different ends and means had remained an illusion.

5 Regional Planning

Regional planning: a history of dilemmas If both industry and the public sector itself were perceived to require re-organisation, Britain’s ‘depressed areas’ were seen as another and central part of Britain’s economic problems. These regions – particularly South Wales, Central Scotland, North East England and Merseyside – had long suffered from a number of economic handicaps. They were hundreds of miles from the new industrial heartlands and markets of the Midlands and South East England. All suffered from specialising in the manufacturing industries of the industrial revolution, for instance coal and shipbuilding.1 Between the two World Wars, they experienced chronically high levels of unemployment, which rose to between 19 and 25 per cent in the early 1930s. Some small areas endured catastrophically high levels of joblessness of up to 90 per cent in the worst cases.2 Measures to right this imbalance had a long history, going back to the 1928 Industrial Transfer Act and 1934 Special Areas Act.3 But by the end of the 1930s, there was a general acceptance that these problems would have to be tackled in a synoptic fashion, rather than left to what were perceived to be piecemeal initiatives. A Royal Commission was set up under Sir Montague Barlow to examine the issue. When the Barlow report was published in 1940 it did make some very radical proposals, including direct controls over industrial building in prosperous areas, and inducements for companies to move to the less prosperous parts of Britain. A minority report, mainly written by Patrick Abercrombie, Professor of Town Planning at London University, was even more forthright. It called for a Ministry that would tackle the problems of housing, transport and land at the same time as having powers over the distribution of industry.4 101

102 From Dreams to Disillusionment

The Second World War inevitably increased the appeal of such interventionist ideas within government, given the overriding need to increase industrial production and move factories away from areas subject to enemy bombardment. Building licensing, industrial direction and more indirect persuasion were adopted under the wartime Defence Regulations.5 Public pronouncements on future policy made clear that there would be no return to the pre-war situation. The 1944 Employment Policy White Paper clearly committed the Coalition to securing a ‘balanced distribution of industry and labour’.6 The post-war Labour Government then initially pursued regional regeneration with vigour. The 1945 Distribution of Industry Act, one of the last acts of the wartime coalition, was at the outset used with enthusiasm. This Act granted the Board of Trade the powers to issue both loans and grants for the reclamation of derelict land, provide ‘advance factories’ for industrial use, and build industrial estates. The Treasury was empowered to issue further grants and loans for investment in plant and equipment, under advice from a Treasury Advisory Committee.7 Labour also instituted more direct controls, for instance introducing Industrial Development Certiﬁcates in the Town and Country Planning Act of 1947. These certiﬁcates were required by industrialists wishing to establish or expand factories in the ‘congested areas’ of the West Midlands and South East. Refusing such certiﬁcates was intended to add a policy ‘stick’ to the ‘carrot’ of ﬁnancial inducements.8 However, none of these measures went as far as the most radical wartime plans. For instance, the Distribution of Industry Act did not create one authority to oversee the whole process of planning Britain’s rural, urban and economic geography. Responsibility for industry was still divided between the Treasury and the Board of Trade; the Ministry of Health maintained its housing remit; and the Ministry of Town and Country Planning was responsible for land use. The great pioneering blueprints for Britain’s cities, for instance Abercrombie’s plan for London, had therefore to be made in virtual isolation from decisions as to where industry should go in the wider national context. They concentrated on land use, housing and communications within each region, rather than building up a picture of how the whole country might look. This was hardly what the Barlow Royal Commissioners had intended.9 The external economic situation exacerbated the problems. After the sterling crisis of 1947, the Government focussed on the overriding need for exports, and regional incentives were cut back.10 Controls were used to help exporters who could earn vital dollars, rather

Regional Planning 103

than the movement of companies to the scheduled areas.11 The failure to build an integrated regional planning structure, and the intensiﬁcation of some of the older lines of regional policy, was stark. For a time in the 1950s, the need for regional planning seemed less pressing, for the overall high employment of that decade disguised the problems of less successful regional economies. By 1958, the amount of money given in loans and grants to industry moving to the Development Areas had been nearly halved since Labour left ofﬁce.12 However, the post-war boom in the traditional industries did not last, and the world recession of 1958 caused production to fall in several of these, including textiles, mining and shipbuilding. Unemployment in areas disproportionately reliant on these industries rose once again.13 Conservative ofﬁcials, and Macmillan himself, were anxious about this development in the run-up to a General Election.14 Given the political imperative of reducing unemployment, the Government’s interest in regional policy revived, as shown by the 1958 Distribution of Industry Act. This widened the Development Areas to bring in some contiguous areas for discretionary aid, though it did not extend the full beneﬁts of ‘scheduling’ under the 1945 Act. However, the 1958 Act also introduced for the ﬁrst time the concept of a ‘high and sustained level of unemployment’ as the qualifying test for central government aid.15 The resurgence of regional unemployment had caused a further shift away from overall regional plans and towards the amelioration of local unemployment. Far from providing solutions, regional policy in action raised a number of very difﬁcult questions. The ﬁrst problem was that of deciding how government should be organised to deal with the administration of these difﬁcult issues. Could inter-regional economic planning be reconciled with town and country planning? The second difﬁculty was deciding which areas of the country to help. Where should the line be drawn between aided and unaided regions? Should those regions be small, concentrating help where it was most needed, or large, to encourage overall regional development? The third question was exactly how to help Britain’s less prosperous regions. Was the focus on increasing employment, inevitable given the inter-war experience of these regions, justiﬁed – or were there longer-term structural considerations that should be considered more important?16 These difﬁcult choices might again be characterised as a choice between short-term management and long-term planning; and once again, economists seemed to have few answers as to how to resolve these problems.

104 From Dreams to Disillusionment

The new economics of regional planning While the government moved away from planning solutions, theorists were coming to rather different conclusions, since expert academic groups were showing a renewed interest in regional planning. The early 1960s was a period of particular ferment for regional theory as a new research agenda emerged, the most important representative of which was the French economist Francois Perroux. Perroux wrote, in a vague but evocative way, of ‘economic space’ as a set of ‘centres’, ‘poles’ or ‘foci’, all of which exercised an almost gravitational inﬂuence on economic growth. For Perroux, costs were lowered through the success of dynamic or ‘propulsive’ ﬁrms: other industries and trades clustered around these would beneﬁt, lowering their own costs, innovating and creating a virtuous circle of growth.17 Though Perroux was not writing speciﬁcally about geographical space, such ideas were to be adopted with great enthusiasm by experts interested in the processes of regional economic growth. These new ideas became known as ‘growth point’ analysis, which seemed to offer a way to reach self-sustaining regional growth. Focus on one particular dynamic town or area within a region, this theory seemed to imply, and the natural processes of concentration and agglomeration would do the rest.18 An implicit distinction was also made between ‘basic’ industries, that would create jobs and demand in a given area, and ‘secondary’ or service occupations that would only cluster around those successful basic industries. It was inevitable, given the stress on manufacturing in the overall policy environment, that manufacturing should be the growth point that planners focussed upon.19 Kaldor, as the Chancellor’s special adviser until 1968, was in a good position to inﬂuence policy. He popularised the so-called ‘Verdoorn Law’ that productivity rose more quickly in manufacturing than in services. Kaldor turned his attention to the performance of different sectors and geographical regions, identifying Britain’s ‘premature maturity’ and manufacturing decline as at the heart of the country’s economic malaise. He therefore prescribed an emphasis on stimulating industrial development in lagging regions.20 The idea relied for its impact, not just on Kaldor’s forceful advocacy, but also on the fact that it had other, more distant, roots in economic theory. Just as development economists prescribed export-led growth for the developing world, so the salvation of backward regions in the rich world was thought to lie in exporting industrial goods, not in service industries that collected around the ‘real’ sources of growth.21 For all these reasons, growth point economics could help to remove some of the stigma associated with subsidising ‘failure’ generally.

Regional Planning 105

Nevertheless, applying these ideas to the real world was riddled with difﬁculties familiar from the previous history of regional planning. The main problem with the new ideas was that they were extremely vague. They were attacked as such by Mark Blaug, at this time working at the Institute of Education and interested in the economic returns to education in the developing world. Blaug argued that Perroux’s work was ‘facile’, both allusive and impossible to test.22 The vague and indeed crude quality of the new approach became a critical commonplace.23 The whole agenda was in fact a strange mixture of old and new ideas, often bundled together in an intuitive fashion. Most of the individual theses within it were of rather long standing. Given the severity of the inter-war Depression, a large number of political and theoretical tracts had focussed on the needs of the unemployment blackspots, and the prescriptions had foreshadowed the growth point analysis. The economist S.R. Dennison had in 1939 recommended evacuating the really derelict areas and building up those nearby areas ‘which are depressed, but not derelict’.24 Indeed, the whole approach to transferring population in the 1930s implicitly accepted this agenda. The special value given to innovation and technical change, and its explicit relation to conglomeration, went back to Joseph Schumpeter’s work in the 1930s.25 An inquiry Cairncross chaired for the Scottish Council in the early 1950s reached the conclusion that ‘new centres of industry’ which created ‘technological advances and new materials’ should go hand-in-hand with a concentration on growing areas.26 There were also inherent conﬂicts within economists’ prescriptions. Were the industries that needed regional encouragement the small high technology examples of innovation that the idea of clustering seemed to imply, or were they to be rooted in more traditional manufacturing, delivering a quick boost to jobs, demand and local service industries?27 Kaldor’s emphasis on manufacturing productivity was in part an attempt to answer this question, by emphasising both the efﬁciency and demand gains to boosting this sector.28 However, this enthusiasm for large-scale industry was at odds with the emphasis on innovation and new industries favoured by some other theorists. Even more importantly, higher demand might not result if more capital-intensive methods actually raised unemployment. Some economists were highly suspicious of incentives that encouraged industrialists to invest in new machinery, not where labour was scarce and expensive, but where it was plentiful and cheap.29 This contradiction was to become a running theme in regional planning. One reason these contradictions were allowed to continue for so long was the lack of regional statistics to prove or disprove different arguments.

106 From Dreams to Disillusionment

How regions are represented and imagined critically affects how their problems are perceived, and the remedies that are thought appropriate.30 The difﬁculty during the 1960s was that the data on which views of the regions was constructed was extremely scarce, and this problem meant that regionalism would remain ‘one of the unsolved questions of economics’.31 Estimates of regional GDP, crucial if the shape and structure of any part of the British economy was to be investigated, only started to emerge in the mid-1960s.32 National Institute work on the extent of structural unemployment, as against joblessness that resulted from deﬁcient demand, was ﬁrst published a little later.33 Regional ﬁgures for the average amount of time different categories of workers could expect to spend when unemployed were only available from 1968.34 Nor were truly reliable ﬁgures available for inter-regional migration until the 1961 census was tabulated, and the 1966 sample census followed up the question.35 As for the effects of policy, ﬁscal incentives to investment were only tested using econometric techniques in the late 1960s – and then, in the leading study, only for one year.36 Encouraged by the general mood of statistical experimentation, Board of Trade Regional Controllers decided to look into the quality of this data in early 1963: they found that Development Certiﬁcate data covered only about 10 per cent of manufacturing industry, let alone other sectors of the economy.37 Right up to the 1964 Election, ofﬁcials admitted privately that they had ‘no comprehensive information’ about what happened when a ﬁrm was refused a Development Certiﬁcate.38 The Wilson Government’s reforms achieved a good deal of progress on this front: part of the reason Wilson set up the Statistical Policy Committee in the ﬁrst place was that he thought ofﬁcials had made no progress in regionalising statistics in their 1965 review.39 Notable among this progress was the creation of Standard Regions that had the same boundaries for all departments, and the creation of the Abstract of Regional Statistics, published yearly and containing a wealth of material relevant to regional planning. The Abstract grew in ambition as more data became available. Its ﬁrst issue, in 1965, contained 44 tables; its sixth, in 1970, contained 76. The ﬁrst gave ﬁgures for inter-regional migration, but only for one year, and only in total; for public spending, though limited to investment; and for earnings, though only giving average ﬁgures for men in manufacturing.40 By 1970 the Abstract could offer migration ﬁgures broken down by age and gender, and earnings ﬁgures were given for services as well as manufacturing – though regional public spending data was still limited only to investment.41 However, the pressures of economic management made some reforms

Regional Planning 107

politically impossible: no price indices were to be published because Ministers feared the implications for their prices and incomes policy.42 Details on facts absolutely vital to resolving some of the inherent dilemmas of regional planning – on regional productivity, output, overall investment and labour use – were still lacking. As a normative guide, the new regional economics was acutely wanting. It was based on interesting but untested propositions, and riddled with contradictions. The information that would have helped in testing its hypotheses was often missing. These new ideas were, in short, an immature research programme that had captured the imagination of experts exactly because it was new, innovative and suggestive. This was to have profound consequences. Politicians, at ﬁrst attracted by these ideas as a way out of the dilemmas of regional planning, would ﬁnd them an unreliable guide to reality.

The machinery of regional planning The Conservatives had in the 1950s taken much of the administrative machinery of regional policy to pieces. The Treasury’s Regional Organisation Committee, which scrutinised departments’ spending plans from this perspective, was wound up. So were the English regional ofﬁces of the Ministry of Housing and Local Government, successor to the Ministry of Town and Country Planning in environmental planning matters. These were ﬁrst replaced by small liaison teams and then, in 1958, ﬁnally abolished.43 As regions were amalgamated and the wartime rationing machinery dismantled, other departments’ regional staffs were closed, or drastically reduced. Overall, the numbers of regional staff fell by 30 per cent between 1954 and 1959.44 The re-assessment of 1962 and 1963 did entail a new structure for regional planning, though it remained on an inter-departmental and consultative basis, rather than being brought under one department. The problems of North East England, and Macmillan’s intimate association with these as MP for Stockton-on-Tees before the war, was vital here. In January 1963, he decided that, given its interlocking problems, the North East needed one single authority to guide its development. But the North East would receive help, not from a new or established Ministry, but a non-departmental Minister. Since inter-departmental jealousies were aroused by the possibility that the Board of Trade would take overall responsibility, Macmillan decided to give the job of handling this problem to Hailsham, who as Lord President was relatively untouched by such rivalries.45

108 From Dreams to Disillusionment

Hailsham’s appointment was only the most noticeable of an ongoing programme of organisational change. A Ministerial Committee on Regional Development was created in late 1963, with a brief to bring together the strands of regional planning.46 A new division of the Board of Trade – Regional Development – was set up alongside the Distribution of Industry Division, to aid the work of the Secretary of State, who from late 1963 also had speciﬁc responsibility for regional development.47 Ministers’ work was shadowed and supported by an ofﬁcial committee, and a technical working group. The new Regional Development Division also provided most of the staff for working parties that began to develop planning priorities for all regions.48 This was a more coherent structure than simply leaving policy to negotiations between the Ministry of Housing and the Board of Trade. But it was often less revolutionary than Ministers argued in public. The regional teams relied heavily on the expertise of the Board of Trade’s Regional Controllers, drawing on their local links to local authorities and employers, and their experience of operating the Development Certiﬁcate system.49 Hailsham’s role in the North East was also an ad hoc and strictly short-term response to political pressure, as he himself recognised.50 The Conservatives’ approach to regional organisation was pragmatic and cautious, based on piecemeal improvements rather than radical reform. Many departments kept their previous responsibilities: the Ministry of Housing was to stay in the lead on environmental planning, and the Board of Trade on the distribution of industry. The Ministry of Housing re-opened its Newcastle, Manchester and Cardiff ofﬁces, but at least for the immediate future these were not to be joined by a planning ofﬁce for every region.51 On coming to power in 1964, Labour had much more radical ideas about organisational reform. These had been worked out in Opposition, and often consisted of more integrated versions of the Conservatives’ reforms. Douglas Jay, Wilson’s ﬁrst President of the Board of Trade, for one argued that there should be ‘regional controllers’ at the head of inter-departmental Regional Boards, charged with both economic and environmental planning. These would not be ofﬁcial bodies, like the Conservative version, but contain representatives of industry, trade unions, local authorities and academic experts.52 In this Labour thinkers once again reﬂected French ideas, since March 1964 saw the creation of that nation’s Regional Economic Development Commissions, with a civil service executive and a wider membership drawn from local government, industry and the trade unions.53 Labour’s wish for increased central direction was to the fore immediately on returning to power. Economic Planning Councils under the

Regional Planning 109

control of the DEA were set up to advise Ministers on the ‘broad strategy on regional development and the best use of the regions’ resources’.54 Two layers of regional planning machinery were established. Firstly, the Planning Councils were to be made up of local businessmen, trade unionists, academics, and local government representatives. Economic Planning Boards were set up alongside them, constituted of the regional ofﬁcials of each Ministry, who would provide the statistical raw material, for instance on land use planning or transport priorities.55 One out of the four divisions of the DEA was to work with these Planning Councils and Boards on the regional plans that would eventually cover the entire country.56 However, since the Government made it clear from the start that neither of these new tiers would have executive powers, their input would remain limited only to advice. The role of the regional machinery remained frustratingly elusive for its members, especially civil servants serving on the Planning Boards. They certainly did not make any signiﬁcant contribution to the National Plan; the South Eastern Board was not even established until 1966. Departments such as the Ministry of Labour continually complained that there was no uniform structure, list of responsibilities, or central direction on procedure.57 The regional machinery was supposed to come into its own during the Plan review, providing advice on very long term environmental issues over a twenty-year time span.58 On this time-scale, there was no way these regional bodies could decide to ‘dabble in 5 year planning’.59 They were excluded from the Government’s preferred time-horizon for economic planning. Regional planning machinery was also handicapped by departmental rivalry. While the Conservatives had hoped to yoke the Ministry of Housing and the Board of Trade together, the DEA’s attempts to lead prompted long arguments. The Ministry of Housing and Local Government, as its name implied, was still responsible for co-ordinating the physical planning responsibilities of local government, and tended to regard the Planning Councils as a nuisance.60 The DEA wanted a role in planning long-term population and industry distribution: for instance, it was the joint head of their Regional Division, Jack Beddoe, who chaired the inter-departmental Long-Term Population Distribution Committee in 1965–66.61 Beddoe and the other DEA members of this committee used their position to press for a ‘wholly new’ regional policy, developing virgin areas of the country for industry and population. They particularly favoured the relocation of millions of people into Humberside, Dumfries and Galloway, and Flintshire in North Wales.62

110 From Dreams to Disillusionment

However, other departments were totally opposed to this idea. Ministry of Housing ofﬁcials were aghast at the Population Distribution Committee’s interim report, written inside the DEA, and insisted that work on housing needs should be carried out in the ofﬁcial committee on environmental planning, where their ideas would take precedence. This was in fact a fundamental clash between post-war urban planning policy, with its emphasis on reducing urban overcrowding through moving jobs and people to satellite towns, and a more radical movement of people and employment to whole new regions. The Ministry of Housing remained committed to the more traditional ideas.63 This conﬂict was brought out very clearly when the DEA attempted to set up a Central Unit for Environmental Planning. The idea of a central unit, bringing together the work of all regional bodies and attempting to give them central direction, came originally from Roll and the DEA. But when Brown and his junior Minister Bill Rodgers discussed this with Anthony Greenwood, Minister of State at Housing, they had to plead that ‘the intention was not to take away functions from other Departments but to get away from the piecemeal planning of the past’.64 What the DEA hoped would become the nucleus of a national environmental planning agency was diverted to study the problems of Humberside, relying for the physical planning aspects on a joint local authority team led by the Ministry of Housing.65 The DEA had hoped to accommodate perhaps 500,000–750,000 more people in Humberside by 1981. Ministry of Housing members of the team made sure that the Humberside study was much less ambitious, recommending the medium-term move of only 75,000 people, and delaying the major decisions on redevelopment until the mid-1970s.66 Nor was the DEA able to bring the Planning Councils into the heart of government decision-making, for instance on public expenditure. The DEA tried very hard to force regional expenditure considerations into the public expenditure survey, and managed in early 1965 to have public expenditure on new construction work decomposed by region.67 By autumn 1965, the next step envisaged by the DEA’s Regional Division was to bring the actual Planning Council reports into the structure of public expenditure decisions, to help guide expenditure decisions through regional priorities.68 However, even the DEA was not united in this desire, with senior members of Economic Planning and Public Expenditure Divisions arguing that the idea was too complicated, and premature.69 Other Departments told the Treasury that ‘regional budgeting’ under advice from Planning Councils was impracticable, with for instance education and health only possessing regional ﬁgures

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for two years ahead, not the ﬁve years covered by medium- to long-term public spending decisions.70 There was a more fundamental problem here than departmental rivalry, for allowing the Planning Councils input into spending policy ran counter to the administrative realities. As one Treasury ofﬁcial put it privately: While DEA are anxious to give the councils some sense of performing a role in relation to public expenditure, our whole system of allocation and control is operated through Departments which work on a national scale. There is no machinery whereby a regional council could bring about a reduction in the road programme in their region in order to provide more schools, because if they could persuade the Minister of Transport that their region needs less roads, that Minister would … wish to use the available resources elsewhere in the roads block, and not make a present of it to the Secretary of State for Education.71 More widely, the Treasury was quite correct in its basic argument that the regional bodies would always have quite different priorities, which had to be reconciled at the centre. Because of this, Planning Councils continually complained about the lack of consultation on policies that directly affected their individual interests. The South East Planning Council, for instance, wanted a looser Development Certiﬁcate control to allow small ﬁrms to expand on site, quite contrary to the interests of other regions.72 Even the DEA’s own regional planning division realised that Planning Councils tended ‘to be regional pressure groups without the limitations imposed by powers and ﬁnancial responsibilities’.73 The Government was forced to reject outright a number of Planning Council reports. One good example of this was the report from the West Midlands, which called for a massive overspill housing operation and the lifting of ofﬁce and industrial building restrictions. Given the priority Labour gave to areas with economic problems, Ministers felt unable to aid Britain’s industrial heartland in this way.74 The whole point of receiving reports from every area of Britain was to ﬁt them together in a national framework – meaning that the answer to would sometimes have to be ‘no’. By 1967, the head of the DEA’s Regional Division, Arthur Peterson, doubted the worth of having representative councils at all.75 The hope that Planning Councils and Boards could form a potent source of advice was therefore thwarted by both departmental rivalry, as

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well as the sheer pressure of choosing between regional priorities at the centre. Stewart noted the Economic Planning Councils’ ‘restiveness and dissatisfaction’ in February 1967, and it is easy to see how this defeat of administrative regionalism had given rise to such frustration.76 There was a critical weakness of central direction here, paradoxically expressed in Whitehall’s refusal to delegate or even to reach inter-departmental agreement, that hampered regional planning throughout.

Spreading the ‘butter’: the dilemma of which areas to help Theoretical and organisational weakness thus beset governments that were faced with very hard choices. However, for a while, as the economy recovered from the problems of 1957–58, these problems once again seemed less acute. A joint Board of Trade and Treasury inquiry into the Development Areas, submitted to Ministers in July 1959, demonstrated the conﬁdence of the time. ‘With the exception of Glasgow and Liverpool’, this report concluded, ‘the large towns in the blighted areas whose problems gave rise to the pre-war legislation now have or are in sight of attaining unemployment rates not greatly higher than the national average’. Thus help should be concentrated on those ‘pockets’ that remained.77 Rather than a re-invigoration of regional planning, the early 1960s were therefore marked by an extension of that alleviation of local unemployment that had characterised the late 1950s. The focus was on ‘black spots’, those ‘smaller towns dependent on one industry or even one ﬁrm’, or localities marked out by ‘remoteness … [a] poor transport system, or geographical location’.78 Smaller development districts, based on Employment Exchange areas, replaced development areas.79 That move towards a more local approach raised the next of regional planning’s dilemmas: which areas should be helped, and what size should they be? The 1960 Local Employment Act allowed Ministers to ‘list’ or ‘de-list’ areas by administrative ﬁat, rather than having to pass legislation to declare parts of the country as within Development Areas.80 However, while the ﬁnal Act gave the Board of Trade more discretion on how to use its powers, and added some new regional policy instruments, the 1950s policy of concentration was still being followed, since the Act’s practical effect would be reduce the workforce covered by regional assistance from 19 per cent to 14 per cent. Maudling, as President of the Board, considered this a virtue of the measure: ‘if we spread the “butter” in the form of the assistance available too far, there will not be enough to help where help is really needed’.81

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The disadvantages of concentrating too much on the most depressed areas soon became apparent. Areas could be listed and de-listed speedily, by Ministerial decree, a fact unlikely to recommend investment by companies looking for long-term guarantees.82 This uncertainty was exacerbated by constant review. In July and October 1960, ﬁfteen areas were either taken off the list of those eligible for help altogether, or placed on the ‘stop list’, meaning that no further applications for ﬁnancial aid would be taken from industries in these places. Plymouth, the Isle of Wight and Merseyside were on this list, along with a number of other districts where unemployment had been on the decline: Thanet, the Isle of Sheppy, Skegness, and Llanelly, for instance.83 Ministers’ views therefore swiftly turned against the 1960 policy, partly because the small areas they had chosen completely contradicted the new fashion for growth areas, and to some extent because of the wearisome uncertainty of having constantly to review the list. The ﬁrst point was the most acute, for spending money on areas of very high unemployment was hardly designed to aid fast and dynamic growth. The operation of local measures, based on Employment Exchange areas, attracted industry to areas of older housing and poor infrastructure, which could not be expected to cope with the inﬂux of trafﬁc and workers. Pressure therefore built up within the Government to recognise that ‘in some places … it would be sensible from the long-term planning point of view to introduce new industries not directly into the areas of unemployment themselves but to overspill areas to which the population could be moved’.84 This view was reinforced by the complaints of a number of Board of Trade Regional Controllers, that they were not allowed to help projects in areas just a few miles away from areas of high unemployment because the projects would not actually be sited in development districts.85 As Ministerial views began to shift, the unemployment situation in these areas once again deteriorated during the relative deﬂation of 1961–63. The situation on Merseyside, for instance, attracted a great deal of Ministerial attention.86 It was eventually placed back on the list of areas to receive help in January 1963, despite Treasury resistance.87 Unemployment in the Development Districts, at a low of 3.2 per cent of the labour force in the summer of 1961, rose remorselessly after the deﬂationary package of that summer. It reached its peak in March 1963 following a very harsh winter, at a non-seasonally adjusted rate of 8 per cent as opposed to the British average of 3.1 per cent.88 This put a great deal of pressure on the Government, and called its competence and effectiveness into question. By March 1963, although 61 per cent of voters

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thought that the Government meant to take action on regional unemployment, more thought it would fail than believed it could succeed.89 This political situation was one of the mainsprings behind Macmillan’s ‘new approach’, arguing as he did that ‘politically the country may be able to tolerate … 2 per cent, or even 3 per cent, unemployment overall; it will not accept this if the ﬁgure is an average between 5 per cent in one place and 1 per cent in another’.90 The Prime Minister’s fear of high regional unemployment was to be justiﬁed by events. Extremely high swings were recorded against the Conservatives in the 1964 General Election, for instance in South Wales, on the Clyde, and in the Scottish Highlands.91 The Conservatives lost more than a quarter of their seats in Scotland, Wales and Northern England in 1964, as against only 11.6 per cent in the rest of the country. Had they lost only that number of seats across the whole country, they would have won their fourth election in a row.92 For the Conservatives in 1961–64, the added political advantage of adopting the growth point idea was it seemed modern, progressive, and practical, thus burnishing further the new technocratic image that they were striving to project.93 It would help to answer some of the journalistic and expert clamour for regional solutions, characterised by a rash of journals’ own plans to solve individual areas’ woes. New Society, for instance, published its own outline ideas for East Anglia and Yorkshire.94 The growth point agenda would also provide a rationale for accommodating local authorities’ calls for more New Towns that would help arrest industrial decline and housing pressure. Newcastle’s plans for Cramlington, and Glasgow’s for Livingston, were both good examples of this, and showed how widespread and popular the growth point idea had become.95 This twin need to seem modern, and to meet local demands for new development, lay behind the fact that Macmillan’s ‘modernisation of Britain’ memoranda speciﬁcally mentioned ‘growing points’ as one of the initiatives that might deliver that balance.96 Pressure to retreat from the localism of the 1960 Act continued to mount, whatever rhetoric the Conservatives adopted. The Toothill Report of the non-partisan Scottish Council, published in late 1961, indicated the depth of Scottish anger at the prevailing level of unemployment, as well as enthusiasm for growth point policies. This Report wove together the themes of the depressed areas’ need for economic help, and the perceived opportunity for faster economic progress stimulated by ‘the build up of industrial complexes and centres which offer prospects of becoming zones of growth’. Standardised grants should replace the percentage scale of the 1960 Act, the Report recommended;

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discretionary Advisory Council help should be speeded up; infrastructure spending and advance factory building should be concentrated on sites that could achieve fast growth.97 Lord Polwarth, Chairman of the Scottish Council, thereafter became an outspoken and public critic of the Local Employment Act.98 The place given to economic progress in this analysis was again vital: it allowed John Maclay, the Scottish Secretary, to argue that this was ‘not just another report moaning about Scotland’s industrial prospects and seeking various special forms of Exchequer subsidy … Its emphasis is on the stimulation of growth and economic progress’.99 The political and economic situation in the North East of England was similar. Following his visits to the region, Hailsham also attacked the 1960 Local Employment Act, arguing that it that was suitable ‘only for a context of full employment marred by localised pockets of recession … a precision tool for an operation which needs a blunt instrument’.100 He thus pressed throughout spring 1963 for mechanisms by which central government could help ‘relatively prosperous and promising areas’, such as Durham and Newcastle, in his view crucial to developing the whole of the North East. He met strong opposition from Frederick Erroll as the new President of the Board of Trade, worried that any extensions of the 1960 Act would cause a ﬂood of applications from other areas that wanted more help.101 However, the Lord President won his ﬁght, and sections of the North East with relatively low unemployment (for instance Durham) were indeed scheduled. By June 1963 the Lord President’s Ofﬁce and the new Scottish Development Department had also identiﬁed the speciﬁc ‘growth places’ on which they believed government policy should focus. The Scottish Report focussed on eight growth areas perceived by consultants to have potential: East Kilbride, the Vale of Leven, Cumbernauld New Town, Livingston New Town, North Lanarkshire, Falkirk and Grangemouth, Central Fife, and another New Town at Irvine.102 It envisaged £300m additional capital spending on infrastructure projects such as roads, docks, airports and railways by 1971.103 Peterlee and Aycliffe were chosen as the areas for greatest effort in the North East: another new town, at Washington, was to be designated.104 This plan was endorsed by the Cabinet in July 1963.105 Despite Erroll’s initial defeat, the Government’s plans still bore traces of the Board of Trade’s opposition to spreading help throughout large regions. Although some promising areas were newly scheduled for help, the Lord President and the Scottish Ofﬁce would have liked the whole of Central Scotland and the North East of England listed. This idea was defeated by what Erroll

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referred to in the Economic Policy Committee as a ‘compromise formula’. Under this, the Board of Trade would not insist that districts with falling unemployment be immediately taken off the list of scheduled areas, but would not on the other hand accept any overall spread of development district status.106 On coming to power in 1964, Labour decisively extended the geographical extent of regional aid to industry, and thereby attempted to reduce the confusion of 1961–64. Labour’s primary regional policy legislation, the Industrial Development Act of 1966, was presented as just such a break with the past. As Jay told the Commons, they had ‘swept away entirely the misguided notion of small isolated development districts’.107 Instead of making regional incentives dependent on the employment situation, the Government simply scheduled all of northern England, all of Scotland except Edinburgh, most of Wales and the South West. The percentage of the British population covered by incentives under the Local Employment Acts was once again raised, from 16 per cent to nearly 21 per cent.108 But despite this radicalism, it was to prove impossible in practice to make a completely clean break with the past. Reports from consultants on the feasibility of many new growing points around the country, commissioned by the Conservatives, encouraged this shift when they began to come in during 1966. They continued to advocate the building up of whole new cities, often based on smaller towns, to create a focus for growth in Britain’s regions. Swindon, the Leyland-Chorley area in Lancashire, and Livingston in Scotland were all examples of areas that were thought to have such dynamic potential.109 Large expansions were indeed announced at Swindon and Livingston, and although the Leyland-Chorley project was held up for years, the Government’s intention to site a New Town there was announced in 1965.110 However, the National Plan was in its turn extremely vague about growth areas, although the equivalent document for Scotland was more speciﬁc. This reﬂected the large amount of work put in there by both independent consultants and the Scottish Development Department itself.111 There were two main reasons for the increasing ambivalence. Firstly, increasing aid to Development Areas was increasingly being seen to harm the interests of other parts of the country. The debate about how far to make way for the needs of more economically vigorous locales than the Development Areas, especially the South East and Midlands, was becoming more acute. The Ministry of Housing, for instance, lobbied very hard for all New Towns to get government help, so that they could attract new industry.112 Ministry of Housing ofﬁcials

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also argued that Industrial Development Certiﬁcate policy should be loosened outside the Development Areas, though judging by the moderate fall in refusals this was an argument they failed to press decisively home.113 The political problem of rising unemployment in 1966–68 was on a similar scale to that which had faced Macmillan in 1961–64. In October 1967 73 per cent of voters thought unemployment ‘too high’. Once again, more people thought that the Government’s policies to right this situation would fail than thought they would work.114 This seemed for a while to threaten the very existence of Labour’s electoral base. A series of spectacular by-election successes for Welsh and Scottish Nationalist parties, for instance in November 1967 at Hamilton in Lanarkshire, caused grave concern in the Labour Party hierarchy.115 Pressure built up within the Party for Scotland and Wales to get more preferential treatment, and perhaps increased administrative or even legislative devolution, since nationalism was proving such a ‘force to be reckoned with’ for sitting Labour MPs.116 This political situation set off another round of soul-searching about the geographical extent of aid. The most pressing calls for action came from the so-called ‘grey areas’, most notably North East Lancashire, Plymouth, Cardiff, and South East Wales, which were lagging the national average for growth and employment creation, but had not been designated as Development Areas. Academic experts such as David Eversley argued that help should be ‘shaded’, that is, gradually reduced around a Development Area, rather than simply cut off at an arbitrary boundary.117 The pressure for some extension of government aid was only increased by the enhanced strength of regional policy, though this made Ministers even more wary of announcing geographical extensions. Ofﬁcials warned that there would be calls for Bridlington, Fylde and the North Wales coast, North Norfolk and South Devon to be scheduled if the ‘grey areas’ were helped.118 The planned run-down of mining in localities outside Development Areas, for instance in Leicestershire and Yorkshire, was yet another concern. Here the Government was offering more spending on roads and special supplements to employment beneﬁts for unemployed miners, to attempt to forestall criticism.119 The extremely complex nature of this problem meant that Ministers felt unable to decide where to draw any new boundaries without calling in outside help. A ‘mixed’ inquiry, composed of both civil servants and independent experts, was appointed in summer 1967 under Sir Joseph Hunt, to look at the problems of what became known as the ‘intermediate areas’.120

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However, it might take two years for the Report to be completed. As the employment situation worsened through 1967 and 1968, pressure built up for interim measures that could be taken within existing powers. But without the perceived authority of a Report Ministers themselves had commissioned, Ministers proved unable to decide on extensive measures of help to these areas. The Government did take interim action in the coal-mining areas. A number of colliery closures were deferred: eight out of 36 were put back by between three and six months during the winter of 1967–68.121 Some extension of grants for travel to work, more retraining grants, and £6m extra for minor road works, were also allocated in the areas listed for closures, though such action was conﬁned to those very small areas where unemployment might go above 8 per cent.122 Government grants were to be made available for plant and machinery, at lower levels than in the Development Areas but above the normal national rate.123 Though the cost was only £10m over the ﬁrst two years, the creation of these Special Development Areas was a crucial pointer to the future, for bespoke regional aid had been designed to ﬁt a particular group of towns troubled by their dependence on declining industries. This was a radical change of emphasis from the emphasis on large areas and dynamic growth centres so prevalent in the years between 1963 and 1966. The rejuvenation of old attitudes was also shown in the reaction to the Hunt report. This was in the end deeply unpopular within government, on grounds of cost as well as the geographical extent of the proposed intermediate areas. Hunt recommended that Merseyside be de-listed, while the whole of the North West and Yorkshire and Humberside economic planning regions should be designated as ‘intermediate areas’ with building grants available for new industry, and a 15-year plan for the clearance of derelict industrial land to allow redevelopment.124 But ofﬁcials had already decided that such proposals ‘would involve spreading resources too thinly’, as well as being ‘expensive … and the effects … long term and uncertain’.125 Ofﬁcials preferred a much more tightly drawn list of areas to help, with help tied to the creation of employment, a criterion that Hunt wanted to abandon.126 Many Ministers were bitterly opposed to Hunt’s recommendations. Even before the report was published, Gwyneth Dunwoody, Crosland’s junior Minister at the Board of Trade, had already concluded that the rumoured inclusion of all of Lancashire and Yorkshire within intermediate areas would be unacceptable, diluting government help to truly needy regions.127 Furthermore, most Cabinet Ministers disagreed with downgrading Merseyside, since as Shore argued, this ‘would undoubt-

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edly dishearten our supporters and give gratuitous encouragement to the Opposition’.128 Most Ministers agreed, those broadly on the Right worried that intermediate areas would be just another step towards nearuniversal expenditure on support for industry, and those on the Left resisting an apparent attempt to cut aid to Development Areas. Wilson came up with a typically ingenious compromise: the whole of the ‘Hunt regions’ would be designated Intermediate Areas, but this would mean only the adoption of a liberal Development Certiﬁcate policy. Special zones within the grey areas would then be selected for further aid.129 Eventually, a two-tier solution was adopted for the intermediate areas, meaning that there were now to be six tiers of regional policy in all. Twenty-ﬁve per cent building grants and the full range of Board of Trade discretionary assistance would be available in the Yorkshire coalﬁeld, South East Wales, Plymouth, parts of North Eastern Lancashire, Northern Humberside, part of the Nottinghamshire and Derbyshire coalﬁeld area, and Leith. The rest of the Hunt ‘intermediate areas’ were to be eligible, as were those priority zones, for 75 per cent derelict land grants and liberal Industrial Development Certiﬁcate policies.130 Aid was therefore now available for an extremely heterogeneous range of areas, ranging from small pockets of mining unemployment to cities that on the other hand formed potential growth points. One of the basic problems had been that, at a time of public expenditure constraint, Ministers only had been able to allocate about £20m to the new policy. This caused a bitter debate on where the money was to come from, which Crossman excoriated as ‘[getting out] the pork barrel, sorting it out and sweating it round’.131 But the intermediate areas could not now be ignored, despite Benn and Jenkins being against Hunt in its entirety. Crossman wrote of the crucial meeting of SEP that ‘so many promises have been made in Blackburn … Humberside … Yorkshire … Derbyshire and … Plymouth that all kinds of expectations have been built up’.132 Intermediate Areas would simply have to be helped: given the political expectations they had allowed to build up, Ministers had little option. The retreat from a clear and unambiguous growth point policy was caused by some explicitly political choices. Under pressure from shifting economic and political realities, and given the poverty of economic theory, both Conservative and Labour Ministers opted for an uneasy and shifting compromise between identifying large regions for aid and targeting help on small local areas, and between helping Britain’s ‘peripheral’ regions or the Midlands and the South. After a brief period of focussing only on small pockets of local unemployment, the Conservatives had returned to a wider regional

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agenda, which was then carried further during Labour’s ﬁrst two years in power. However, as local unemployment re-emerged as a serious problem, and Labour’s more ambitious plans faltered, the Wilson Government rediscovered the local alleviation approach, and retreated somewhat from its earlier emphasis on developing regions as a whole. They also began to cast regional aid around almost indiscriminately, wherever an economic problem seemed to be emerging. The clarity of the growth point agenda was lost, and the dilemmas of regional policy were never more obvious.

Jobs, machines or infrastructure? The dilemma of how to help Theoretical and practical problems were just as important in framing the debate about how to aid lagging regions as they were in deciding which regions should be helped. The ﬁrst of these disagreements, reﬂecting arguments among economists, was whether to subsidise investment or employment. The 1960 Local Employment Act gave the Board of Trade novel powers in this area, and moved towards encouraging investment: for instance, grants were to be available speciﬁcally for industrial building for the ﬁrst time. These grants were tied to the condition that the company could show reasonable prospects for success, which also aided the emphasis on investment and re-equipment.133 Encouraging capital expenditure in the regions formed part of the general emphasis on investment, as the Conservatives in the early 1960s returned to subsidising both new and replacement capital equipment through the tax system. Ministers had abandoned this course in the mid-1950s, but returning to it now appeared to offer a way to encourage economic efﬁciency while cutting taxes in an ideologically attractive manner.134 Investment incentives, which allowed companies to claim back a percentage of their capital expenditure from their tax liabilities, were increased in November 1962, and in the 1963 Budget.135 These reforms, limited as they were, also had a regional element. Under the 1963 dispensation, companies in Development Districts could choose to write off their investments against tax at any speed they chose, taking all the beneﬁts in the ﬁrst year, or spreading them over a longer period. It was hoped this would speed up capital re-equipment in the depressed areas.136 However, the follow-up 1963 Local Employment Act also showed just how pragmatic and cautious the Conservative policy was. The new Act created truly uniform rates of grant for new plant and machinery, of

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10 per cent, and for new buildings, of 25 per cent; but it also tied these to the creation of new employment.137 The compromise between subsidising investment and employment was obvious, and growth point theories had confused the issue by emphasising both technological progress and the demand multiplier. It hardly made for a clear message, and added to the sense of confusion and prevarication. That new set of theories placed an even more positive weight upon increased public infrastructure expenditure to facilitate economic growth. Ministers were therefore able to respond to this idea with some vigour. When Hailsham returned from his ﬁrst mission to the North East in February 1963, he stressed ‘the improvement of communications, town planning, culture and … amenities’.138 Encouraged by Macmillan, relatively large public expenditure increases were authorised for the North East and Scotland in both 1963 and 1964.139 By December 1962 the Committee on Population and Employment had indeed resolved to concentrate government infrastructure projects on the growth areas.140 The two regional development White Papers of November 1963 carried these plans into effect. Investment in the North East was to be concerted on a similar basis to that in Scotland, with the planned road programme for 1964–69 increasing from £50m to £108m.141 The reasons for the conversion to the new ideas in this ﬁeld were also rooted in worries about the cost of redeveloping the South East and Midlands. It was thought that if the population’s perceived ‘drift to the south’ was not slowed, a huge and uncontrollable future demand for public service demand might build up, especially around London. One example of this was the alarming cost of accommodating road trafﬁc growth in those areas. Anxiety about such congestion was exacerbated by the highly inﬂuential report Trafﬁc in Towns, written by the urban planner Colin Buchanan.142 Ernest Marples as Minister of Transport had already admitted to Macmillan that ‘whole towns need redevelopment’ to make way for more roads.143 Huge building programmes in the South East might intensify inﬂationary pressures there. Clarke summed up this view when he argued that an ‘even level’ of employment would ‘enable … us to run the economy at a lower level of pressure without being pressed to inﬂate’.144 Despite the emphasis on infrastructure and re-equipment, more traditional remedies were not abandoned. Government also intervened through procurement orders, which were speeded up in the North East, especially, and defence contracts were brought forward. £2m of orders for the Royal Navy, for example, were put out to tender, rather than given to the Royal Dockyards, in order to help Glasgow, Newcastle, and

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Liverpool.145 Special discretionary loans were made to projects such as the £10m granted to the pulp mill project at Fort William, in the Scottish Highlands.146 Industrial Development Certiﬁcate policy was tightened again; a Location of Ofﬁces Bureau was set up to encourage employers to move ofﬁce jobs out of London.147 The Conservatives’ approach had been modestly to expand the range of help, but in every direction: to encourage investment and employment through subsidising both. The only new and distinctive element had been the effort to boost the physical infrastructure of poorer regions. Labour’s chosen tool to rejuvenate its new Development Areas was Investment Grants, replacing investment tax incentives that, since they were paid out as a proportion of a company’s tax bill, were seriously advantageous only to large and highly proﬁtable ﬁrms. Grants, it was hoped, would make re-equipment attractive to all ﬁrms in areas with economic problems, while chiming in with the national emphasis on technology, regeneration and faster growth. The Conservatives’ 30 per cent investment allowances, and 10 per cent initial allowances, were replaced by 40 per cent investment grants in the Development Areas, paid immediately in cash. It was hoped that this would simplify and speed up the process, and further encourage investment in those regions.148 However, familiar theoretical divisions remained. There was for instance the recurrent problem of paying for more investment, or more employment. Building grants under Labour continued to be conditional on the provision of employment, but as plans for Investment Grants were worked out during 1965, a number of senior advisers went further and advocated implementing payroll subsidies as opposed to investment subsidies. Kaldor was obviously one of these, though he was joined by Neild and others.149 MacDougall appears to have agreed with them, arguing that the effects of such subsidies would be more immediate and dramatic than other methods.150 These ‘outsiders’ were overruled, since the majority of specialist members of the Fiscal Incentives Committee, most notably those from the DEA’s Industrial Division, objected to subsiding wages. Most the staff of this new division, including its head, Ronald McIntosh, had previously served in the Board of Trade, and they were reluctant to abandon their more tried and tested methods. They believed that such a policy would simply encourage declining labour-intensive industries to move to the Development Areas, while subsiding employment might simply be passed on in wages and prices.151 The methods of regional intervention raised other problems. The whole basis of Labour’s 1966 Selective Employment Tax, for instance,

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was discrimination against services. This could hardly form part of a planned regional policy, for many geographically isolated and economically marginal areas of Britain relied on tourism. By aiding manufacturing in the Midlands, this tax directly contradicted the Government’s regional plans. The DEA estimated that only £18m was taken out of the economy of the Midlands annually by Selective Employment Tax, £21m from the North West, and £23m from Scotland.152 Those within government who had always preferred a regional payroll subsidy to investment grants, especially Kaldor, seized their chance to argue that Selective Employment Tax should be amended to allow its use it as a regional payroll subsidy as well as a sectoral economic implement.153 Callaghan, under the inﬂuence of his Special Adviser, ordered a review of this in October 1966.154 This review recommended that the Selective Employment Tax indeed be altered, but in the most conservative way possible, to cover only areas where tourism was vital for the economy – the South West, West Wales, and the Scottish Highlands.155 The idea of a payroll subsidy to less economically successful regions clearly remained controversial. The Board of Trade continued to oppose this idea, arguing that the more direct measures for which it was responsible would have more impact.156 However, Callaghan, prompted by Kaldor, was keen to maintain Treasury leadership on this issue, given his Department’s responsibility for the tax system.157 He therefore proposed a £1–2 per man, per week, rebate on manufacturing employment in the Development Areas, brushing aside others’ arguments that this would do nothing for tourism and services in these areas, which would have to be helped in other ways, at further cost.158 The emphasis on manufacturing, employment and demand were all pure Kaldor. Such ideas were at the root of the June 1967 Green Paper that proposed a Development Area rebate from the Selective Employment Tax, additional to the manufacturing premium and applicable to all types of job, of 30s per week for every full time male employee, 15s for women, 15s for boys, and 9s 6d for girls. This Regional Employment Premium was a product of the ‘selective reﬂation’ of 1967, since it might help the planned economic upswing ‘to be achieved without adding effectively to inﬂationary pressures or leading to any worsening in the balance of payments’.159 The potential inﬂationary effects of congestion in the South East and Midlands were still clearly foremost among Ministers’ and ofﬁcials’ worries. However, there was little co-ordination of this initiative with other parts of the planning process – with physical, environmental, or location of industry issues. Kaldor’s access to the

124 From Dreams to Disillusionment

secretive Budget process had proved decisive, since conﬁdential taxation advice could not be watered down or defeated in the same way that other departments could attack proposals for new legislation. The ad hoc nature of policy was clear in other ﬁelds. Labour also relied on traditional policy tools, perhaps intensifying their scale and scope, but less often reconsidering their fundamental nature. Development Certiﬁcate policy, for instance, was reinvigorated. Refusals ran higher than the Conservative years, at least in the expansionary earlier phase of Labour government. In the later phase, the lower pressure of demand for new industrial premises, the Hunt Report’s recommendation of a more liberal policy, and greater scepticism about the extent of mobile industry all led to a small relative easing – though never back to the laissez faire attitude that prevailed in the 1950s. The lower exemption for factory building expansion, below which development control did not apply, was lowered from 5,000 square feet to only 1,000 in 1965. Labour also extended such controls to cover ofﬁce building in London, a measure the Conservatives had considered and rejected in 1962–63. From 1965, Ofﬁce Development Permits, on the same lines as Industrial Development Certiﬁcates, were required for new or expanded ofﬁce space: by 1966 this control covered the South East, Midlands and East Anglia.160 Many of the policy instruments that Labour did in fact rely on – factory building, for instance – had been available since the 1930s. Pressure therefore grew, for instance on Labour’s National Executive Committee, for more co-ordinated, rational and ‘selective’ measures. The Party Study Group on Regional Strategy in 1969 recommended more central direction in regional policy and increased discretion and selectivity in the payment of Investment Grants. They were particularly unhappy about the failure to utilise the Planning Councils, and the obvious fading of hopes for regional regeneration through infrastructure improvements.161 Crosland as Secretary of State for the Environment thereafter launched a wide-ranging internal review into ‘more industrial selectivity’ in November 1969.162 By the time Labour left ofﬁce, this had reached only preliminary conclusions, partly due to the paucity of available statistics, and the tensions about the best methods to help economically lagging regions were still unresolved. Labour in power had, as promised, embarked on a regional planning experiment that utilised a number of new policy tools. But their aim had been fundamental re-orientation, away from the relief of local unemployment and towards regional redevelopment as a whole. Despite a range of innovations, success in this ﬁeld had been limited. The confu-

Regional Planning 125

sion about whether to pay for new investment, or whether to subsidise employment, had been one of the causes of a catalogue of indecision. The co-ordination and direction of policy began to break down, especially after the DEA had begun its long decline, a process that was especially evident in the seemingly intractable debates over the Selective Employment Tax and the Regional Employment Premium. ‘Industrial selectivity’ seemed a fruitful source of new thinking, but had not progressed beyond inchoate ideas by the time of the 1970 General Election. It was no wonder that some Ministers, and others within the wider Labour Party, were questioning whether there was any overarching plan left.

Assessment: the scale, scope and effects of regional planning None of that evident confusion prevented regional intervention was from having any effects, for this was the period of the greatest expansion of regional policy expenditure since 1945. Figure 5.1 makes clear Figure 5.1 Government expenditure on regional assistance, 1951/51–1982/83, at 1983 prices

Government regional assistance, £m (1983 prices)

1600.0 1400.0 1200.0 1000.0 800.0 600.0 400.0 200.0

19 5 19 1/52 52 19 /53 53 19 /54 54 19 /55 55 19 /56 56 19 /57 5 19 7/58 58 19 /59 59 19 /60 60 19 /61 6 19 1/62 62 19 /63 63 19 /64 64 19 /65 65 19 /66 66 19 /67 6 19 7/68 68 19 /69 6 19 9/ 70 70 19 /71 7 19 1/72 72 19 /73 73 19 /74 74 19 /75 75 19 /76 76 19 / 77 77 19 /78 78 19 /79 79 19 /80 80 19 /81 8 19 1/82 82 /8 3

0.0

Sources: Board of Trade Memorandum, 1 March 1955, H. of C. Select Committee on Estimates, Second Report (1955); H.M. Begg et al., ‘Annual Expenditure on Special Regional Assistance to Industry in Great Britain 1960/61–1972/73’, Economic Journal 85 (1975), table 1, 885; C. Wren, ‘Grant Equivalent Expenditure on Industrial Subsidies in the Post-War United Kingdom’, Oxford Bulletin of Economics and Statistics 58 (1996), table 2, p. 328.

126 From Dreams to Disillusionment

the scale of this transformation. In 1983 prices the Conservative government of 1951–64 had spent between £21m and £150m on regional assistance, though by the time they left ofﬁce their initial allowance and accelerated depreciation system had not come fully into operation. Under Labour, total aid rose nearly tenfold, to £1.35bn. Apart from the period of economic crisis in the mid-1970s, regional policy expenditure was never to rise to such heights again. By 1970, investment grants disbursed in Development Areas were hugely disproportionate to their population and economic importance. Forty per cent of all Investment Grant expenditure, given the higher rates offered to companies in the depressed regions, was in the Development Areas.163 Help given under the older Local Employment Acts was also vastly expanded. Overall expenditure approved under those Acts, and the shares of derelict land payments and advance factory building within this spending, can be followed in Table 5.1. Labour’s battery of novel policies was also important in this respect, adding another £100m to regional expenditure in 1964 prices by the ﬁnancial year 1969/70. This massive boost to spending had inevitable effects on employment, especially since the Selective Employment Tax and Regional Employment Premium subsidised jobs in an entirely new way. In the ‘policy off’ period of the 1950s, unemployment in regions where it was relatively high had oscillated more than it had in better off areas: in any slowdown, unemployment increased more in the Development Areas than Table 5.1 Regional aid, expenditure on selected measures, 1960/61–69/70, £m at 1964 prices Total DA investment grants 1960/61 1961/62 1962/63 1963/64 1964/65 1965/66 1966/67 1967/68 1968/69 1969/70

152.1 184.3 188.2

Local Employment Act, Building Grants, discretionary grants and loans expenditure 13.4 34.4 23.8 15.0 62.3 59.4 75.9 67.1 80.5 103.1

Advance factory building expenditure 8.0 12.0 7.5 6.6 6.0 7.2 11.0 11.2 11.1 12.9

REP

31.7 90.4 88.3

Source: Ministry of Technology, Local Employment Acts: Report for 1969/70 (1970), appendix VII, table 1, p. 31.

SET premium

22.4 22.0

Regional Planning 127

elsewhere. The new period of regional activism reversed this trend. Between the summer of 1966, when successive deﬂationary packages really began to bite, and the summer of 1968, unemployment in all of the Development Areas rose far less than it did in Britain as a whole.164 A number of writers have attempted to estimate the impact of this period of policy activism, employing multiple regression techniques and attempting to adjust for industrial structure and the alternative option of no policies being operated at all. The highest estimates, for instance those of the Cambridge economists Rhodes and Moore, have suggested that such measures created between 250,000 and 320,000 jobs in the Development Districts and Areas in the decade as a whole.165 However, adjusting for the shift of jobs to suburban and semi-rural areas that was occurring whichever policy was followed, and for the impact of overall economic conditions, other authors put this ﬁgure rather lower, at somewhere between 100,000 and 200,000.166 Rhodes and Moore have subsequently slightly lowered their estimate of job creation to between 161,000 and 168,000.167 All the same, more spending, and better employment performance on the economic periphery, did not mean that this period was one of unalloyed success. Regional redevelopment was undermined by the economy’s failure to develop in the way that both experts and laymen were expecting. For instance, the growth point emphasis on concentration was soon cast into doubt. There had long been evidence that national economic growth was becoming more homogeneous across the whole country, which should have acted as a warning to policy makers increasingly obsessed by the local cliquishness of growth.168 Instead of becoming more concentrated, growth was in fact spreading out, especially noticeable in suburban areas around big cities.169 Quantitative studies failed to note any real beneﬁts to local clustering, with most of the most dynamic and ‘propulsive’ new developments going on in the suburbs, and not in tightly drawn centres at all.170 As population pressures abated, the costs of crowding in the South East and Midlands were seen as less menacing – and the need for new growth areas on the Humber, Tyne or Severn far less pressing.171 From the mid-1960s, cities that had once seemed reliable sources of jobs that could be encouraged to move to poorer locales began to experience acute economic and social problems of their own. This made encouraging industrial moves all the more difﬁcult – and called into question the wisdom of encouraging such ‘spread effects’.172 In this context, and given some success in creating employment in the Development Areas, economic problems ceased to be ‘regional’, and

128 From Dreams to Disillusionment

become national – thus paradoxically undermining regional plans’ future popularity and validity.173 The reliance on mobile industry, so central to British regional policy since the 1930s, was also unfortunate for two reasons. The ﬁrst was that ﬁrms’ higher ranked staff and more important functions tended not to move, leaving their branches in the Development Areas exposed to cutbacks or closure in recessions. The second was that the more sophisticated analyses of the 1970s began to show that ﬁrms in the economy’s fast growing ﬁrms were housed in crowded regions precisely because productivity was higher in those areas.174 The focus on manufacturing also came to seem outdated, for by the end of the 1960s the service jobs that were to be the mainstay of employment creation to the end of the century were being created less quickly in the lagging regions than in the economy’s more prosperous areas.175 It also became clear that manufacturing industry was spreading out and becoming less concentrated even more quickly than the economy as a whole, which cast doubt on the emphasis on building up manufacturing centres.176 In the 1970s and 1980s, this would eventually lead to more emphasis being placed on giving aid to service industries.177 Whatever the undeniable success in creating jobs, the selfsustaining growth that the new regional economists had promised proved elusive. Even though regional unemployment trends continued to move closer together well into the 1970s, relative incomes remained relatively low in the traditionally poorer regions.178 The main dilemmas of regional planning had remained stubbornly resistant to solutions. They remained what they always had been: how to organise government for regional needs; the way in which physical environmental and economic planning should ﬁt together; how to meet the requirements of the dynamic economics of the South East and Midlands; exactly where the boundaries of areas that deserved subsidy should be drawn; and whether the emphasis should be placed on creating employment or subsidising investment. The fragile state of regional theory and statistics was little help in answering these questions. The constantly varying and confused answers to regional planning dilemmas were also caused by the changing nature of the economy itself, and the failure of regional economies to develop in the way forecast. No amount of regional policy spending could disguise the ﬂaws in the machinery, ideas and even in the information available. Still less did it mean that individual, piecemeal and reactive initiatives had been transformed into planning.

6 Housing

Towards a planned solution to housing needs? During the 1960s Britain’s housing stock was the subject of a search for comprehensive solutions, scientiﬁc answers and long-term programmes: in a word, ‘planning’ was yet again the hope of all concerned. Keith Joseph’s speech as Minister of Housing to the 1963 Conservative Party Conference well encapsulated this. ‘We shall overtake the shortages, eliminate the slums and accelerate modernisation’, he promised, ‘until within ten years a modern or a decently modernised home is within reach of every person in the land’.1 Labour’s 1965 White Paper on its housing programme similarly declared that ‘a comprehensive plan covering all facets of housing policy can be evolved’.2 The scale of the ambition was staggering: if Labour’s plans had come to fruition, 1,400 families would have moved into new accommodation every single day. The idea of a planned solution to housing problems was not wholly novel, for they had been subject to government intervention of all sorts for many years. The state became progressively more involved in housing in the late nineteenth century, and the extent of intervention greatly increased in the inter-war period.3 Labour’s post-war housing programme was much more ambitious, aiming to provide general needs housing for the whole population through a massive increase in council house building. This was also meant to make up for the 200,000 houses that had been destroyed by enemy action, and the 31⁄2 million that had been damaged.4 A wave of planned New Towns was designated in the 1940s to take the population overspill decanted from major cities under rebuilding programmes. Around London, eight were designated, including Stevenage, Hemel Hempstead, Crawley, Bracknell and Basildon. Six more were planned for the rest of Britain.5 Although these plans were 129

130 From Dreams to Disillusionment

bedevilled by economic crisis and supply constraints, Labour did manage to push public sector building up towards the 200,000 a year mark, while private sector construction was held back as a small part of the total programme.6 Macmillan, the Conservative Minister of Housing who inherited this drive, was quite happy to continue and even accelerate its progress. Labour had become hugely unpopular given its failure to build the number of houses it had pledged; there seemed, for the moment, few other tools to hand if progress was to be made in this ﬁeld. As the terms of trade shifted in Britain’s favour and supply constraints eased, the Conservatives were able to accelerate the housing drive. By 1953 Macmillan had reached and was even exceeding his publicly announced target of 300,000 housing starts every year. 200,000 of these dwellings were built for the public sector.7 Still, the Conservatives were under pressure from a restive membership to move back in a more free market direction, and they did have a ‘grand design’ to gradually build up the level of private sector provision. From 1954 local authorities were required to try to raise money privately before they could apply for lowinterest loans from the Government’s Public Works Loan Board.8 General needs subsidies for council housing were withdrawn in December 1956. Local authorities were also relieved of the obligation to subsidise their renting accounts from the rates, meaning that rents would now begin to rise to more economic levels. Councils now received large subsidies only for slum clearance: public sector building halved between 1953 and 1959. To encourage the private rental sector, rent levels that in many cases had remained frozen since the First World War were partially decontrolled in 1957. As a further token of ideological faith, a scheme was announced in 1959 to provide £100m in 95 to 100 per cent mortgages for new homebuyers.9 The Conservatives had never been entirely happy with Labour’s New Towns, and wanted much more building for private owner occupation. Once the initial crisis was overcome in the early 1950s, they followed a path of cautious experiment in this regard. In Crawley, the New Town most notable in the drive towards private building, 15 per cent of the houses built by 1960 were for private owner occupation.10 An even more signiﬁcant change of emphasis was in the sheer number of houses built overall in New Towns. Although those already announced were expanded, only Cumbernauld in Dumbartonshire was designated during the 1950s, and that was partly because Conservative Ministers were keen to attack the economic and political power of Glasgow’s Labour council.11 Overall, New Town house completions fell well below

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Labour’s targets.12 In short, the Conservatives had implemented a much more free market programme than Labour had aimed at during 1945–51.

Increasing knowledge and growing demands In the late 1950s, some assessments of the housing situation were relatively optimistic. Galbraith argued in The Afﬂuent Society that, in contrast to the United States, English slums had been ‘largely eliminated’.13 But within four years a Penguin Special on the subject came to a quite different conclusion, commenting on the champagne cork on the front cover of the Penguin edition of Galbraith’s Afﬂuent Society: ‘it is hideously apt. The typical British worker can get champagne… but he cannot get decent housing… there is hardly any decent rented housing available [while] he has difﬁculty in getting a mortgage’.14 What had happened to cause this reaction, placing housing right at the centre of the renewed ‘condition of Britain’ debate? The ﬁrst answer was the increasingly worrying demographic situation, combined with a growing demand for better housing. The beginnings of changes in family structure, along with population growth overall, threatened to overwhelm housing supply. In the late 1950s and early 1960s experts’ best guess had been that household size would not pose a problem. Since headship rates (the number of people treated as heads of households) were already high as marriage rates went up and the average age of marriage went down, it was not thought that a large reservoir of potential households remained.15 If things were worse than expected – if household formation proceeded more quickly than projected, for example to average continental levels – future housing demand might be higher than estimated. By the end of the 1960s, the very worst speculations were that over nine million more houses might be needed by the turn of the century for just this reason.16 This development might even have been made worse by stepping up housebuilding. Bernard Benjamin, GLC Director of Intelligence, argued to this effect at a conference of civil servants, local government ofﬁcers and social service experts in 1967: ‘if the provision of small dwellings improves, then many small households concealed within larger households (for example old people living with younger married couples) will be separated as distinct households’.17 Such factors did indeed play a central role in the demand for housing. Even though the birth rate projected during the 1960s baby boom turned out to be too high, the creation of new households progressed

132 From Dreams to Disillusionment

at a rate that outstripped ofﬁcial forecasts. Contemporary academic estimates of future yearly household formation ranged from 111,000 to 145,000: in fact, during the 1970s and 1980s that ﬁgure reached 154,000. There may have been only 49.6 million people in England and Wales in 1981, rather than the feared 54 or 55 million, but there were nearly 18.7 million households, a ﬁgure actually quite close to the trends predicted in the National Plan.18 Governments were reacting to realistic demand projections, though it was almost by accident that they stumbled across the right orders of magnitude. The second reason for the change in mood was the growth of housing statistics, for the 1960s saw an explosion of the amount of information available about the housing market. Some statistics had, of course, been available for decades, and they had been especially noticeable during the general wave of social surveys in the 1930s. But these had been produced on an ad hoc and episodic basis, a situation that no longer seemed adequate. The growing importance of specialist advisers such as David Donnison of the LSE was again vital here. According to Donnison, governments still did not know enough about the housing stock to be able to improve it.19 There was general acceptance within Whitehall that such experts had an irrefutable case: the 1957 Rent Act, for instance, had been based on totally inadequate information. The Ministry of Housing’s research section had been abolished in 1955, and in the absence of original data ofﬁcials had not even known how many properties were rent controlled to begin with.20 Up until 1960 the Ministry had been relying only on local government ﬁgures for houses that Medical Ofﬁcers of Health regarded as ‘unﬁt’. But in late 1959, chastened by the paucity of information revealed in their work on the Rent Act, the Ministry commissioned the Government Social Survey to ﬁnd out more about housing conditions.21 This was something of a volte face, for during the 1950s the Social Survey had been little used by the Ministry.22 The Government’s Building Research Station had employed the Survey for ﬁeld tests: for instance, in 1958 a survey was conducted to discover tenants’ attitudes to different forms of access to high ﬂats. But even though such studies often touched on matters of wider relevance – the access survey asked housewives when and how they formed friendships – the focus was usually technical and rather narrow. In no sense did it constitute an integrated research agenda.23 The Ministry’s turn to the Social Survey showed just how pressing and urgent was the perceived need to know much more about Britain’s dwellings.

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The inquiry revealed the true extent of housing stress by looking beyond simple physical decay, and by early 1962 it was clear to Ministry ofﬁcials that housing problems were much more serious than they had thought. ‘The evidence that is available’, two of the research ofﬁcers involved argued in an academic article, ‘indicate[s] that the problem of obsolescent housing extends well beyond the 850,000 dwellings recorded as unﬁt’. In ten ‘blackspot’ survey areas, between 38 per cent and 66 per cent of households had no ﬁxed bath or shower; the same ﬁgures for the exclusive use of a WC were 10 and 27 per cent. In total, 4.85 million homes might lack the former, and 2.8 million the latter amenity.24 The ofﬁcial published version of the survey, released in 1964, conﬁrmed these initial ﬁndings.25 Many problems had clearly been vastly underestimated because of underreporting, residents’ reticence, and the Ministry’s reliance on local authorities. The 1960 survey was therefore followed up by a second, conducted in 1964 and published in 1967. Progress was demonstrably and now publicly slow. 21.8 per cent of all households in England and Wales still lacked the exclusive use of a bath or shower, and 17.3 per cent sole access to a WC. In London the ﬁgures were 31.4 per cent and 20.8 per cent.26 The Glasgow University expert J.B. Cullingworth conducted analogous work for the Social Survey in Scotland, and discovered similar conditions there.27 The new wave of housing inquiries stretched the administrative ability of the Ministry of Housing to its limits, for most of the work in the early 1960s was done by an Under Secretary and the Assistant Secretary in charge of housing policy. In 1963 a housing statistician was belatedly appointed, but only in 1964 were the number of ofﬁcials involved signiﬁcantly increased, and a fully-ﬂedged Statistics Branch and technical staff set up to provide information and intelligence for both the housing and planning sides of the Ministry.28 Difﬁculties in recruiting the right staff remained acute throughout the 1960s. Ministers were told in November 1964 ‘that statisticians of quality are desperately hard to come by’: ‘we have been trying all means of ﬁnding suitable people, including personal approaches… so far without success’.29 Systematic action was clearly necessary to rectify this, and Crossman set up a Research Advisory Group during his time as Minister of Housing. This helped to advise on the creation of an independent Centre for Environmental Studies under Donnison, himself one of the Advisory Group’s members. Crossman encouraged this, and helped to gain a Ford Foundation grant to pay for it. The Centre became an important meeting point for civil servants and planners, and the Ministry was

134 From Dreams to Disillusionment

relieved to see it begin to ﬁll in some of the holes in its knowledge.30 A Housing Intelligence and Research Committee was also set up under the Under-Secretary in charge of Housing, Ronald Brain. This acted as a clearing-house for information, bringing together and helping to avoid duplication in the work of the Research Advisory Group, the Ministry’s own research and development efforts, and academic projects.31 The situation was also improved by the publication from June 1966 of national Housing Statistics for Great Britain, and Local Housing Statistics for England and Wales. These contained projections for local authority housing completions two quarters ahead, information from private enterprise housing enquiries, and survey ﬁgures on new public and private lending, as well as house prices. The intervals between surveys were lessened, their size and coverage increased.32 Yet another survey was undertaken during 1965 and 1966, this time of 6,000 dwellings undertaken by local authority ofﬁcers seconded to the Ministry of Housing. Worried about the seemingly incompatible and confused results it was getting from local councils, the Ministry decided this time on direct management, and inspectors were not allowed to work in their local areas. Eventually published in 1967, this project painted an even worse picture than the others. Local government returns in 1965 had seemed to show 5.5 per cent of the housing stock as ‘unﬁt’; the new survey estimated that 11 per cent, or 1.8 million out of 15.7 million dwellings, were in that category. There was worse to come. 700,000 out of the 1.8m unﬁt houses were not in slum clearance zones, which cast doubt on the whole policy of redeveloping such areas. One quarter of the houses in England and Wales lacked one of the four basic amenities of ﬁxed bath, washbasin, hot and cold water, and an internal toilet.33 This new information was clearly very helpful in understanding both the geography and nature of housing stress, but the housing situation in many individual localities remained opaque. There was no register of which local authorities had surplus housing, and those that might need more dwellings to keep up with demand. London’s boroughs proved to be a particular problem in this respect. If they could not or would not cooperate with one another, social provision and labour mobility might both suffer. The boroughs managed to thwart the Ministry’s plans for centralised waiting lists, to the obvious concern of GLC and Whitehall ofﬁcials, who met regularly to discuss the problem. The best that central government could secure was a more homogenous set of records, and a census of unmet need every two to three years on which boroughs would consult. Data on families’ housing needs was still unreliable, for

Housing 135

many did not appear on council waiting lists; available ﬁgures made no allowance for the size of households or of dwellings. It was thus very difﬁcult to work out whether the available stock could be adapted to meet families’ needs.34 By the late 1960s London councils were still only in the very early stages of pooling information about rent policy, areas of acute need, and cross-border transfers.35 Local authorities’ resources were stretched very thin in this period. The GLC, as well as overseeing a building programme of tens of thousands of houses, already had 110,000 dwellings under its direct management in 1964, as well as having to make 21,000 allocation decisions in that year.36 Sir John Maud’s 1967 report on local government stafﬁng made clear the consequences of this overstretch, for there were chronic shortages of town planners, surveyors and architects across the whole sector. Between 10 and 20 per cent of all council housing posts were either vacant, or ﬁlled by people with inadequate qualiﬁcations.37 It was therefore no wonder that precision was at a premium. The sociologist Norman Dennis’ work on Sunderland showed that although the city council there had carried out a limited door to door survey of areas it thought were ripe for clearance, this had not involved looking at interiors. Furthermore, only very limited parts of the clearance areas had been surveyed before the decision to demolish. More detailed studies were made only after that decision, and even then the weights put on different inadequacies, for instance structural integrity or lack of amenities, seemed arbitrary.38 The stream of revelations about Britain’s housing stock was made all the more problematic by rising expectations, the third reason for the change of mood in the early 1960s. The Government’s Central Housing Advisory Committee was at the beginning of that decade reviewing housing standards, and the results were published in the Parker Morris Report of August 1961. More space for ‘circulation’, central heating, increased privacy for children, and more electricity points for the new household appliances were all recommended in the Report. It also laid down minimum standards, such as two double bedrooms for a family of four, WCs inside the dwelling, kitchens large enough to accommodate a dining table, and separate lounge-style living rooms, that millions of Britain’s houses did not have.39 Building would have to accelerate rapidly if these standards were to become the norm: their great cost delayed full implementation in the local authority sphere to 1969.40 Political pressure for governments to ‘do something’ about housing were very strong in this period, a fourth and often compelling reason for intervention. An increasingly noticeable homelessness problem

136 From Dreams to Disillusionment

emerged in the early 1960s, especially in London, and between 1961 and 1964 another LSE lecturer, John Greve, carried out a study of this problem for the LCC. He demonstrated that the majority of homeless people had been evicted from short-stay rented accommodation, left their families due to ‘domestic friction’, or were new to London and seeking work. The emphasis was therefore placed on the inadequacies of the welfare system, and it became increasingly difﬁcult to dismiss the homeless as ‘down and outs’.41 The cause was popularised and made fashionable by Jeremy Sandford’s Wednesday Play for BBC 1, Cathy Come Home, a graphic portrayal of a young couple’s ﬁght to win a home for themselves and their young children. The play, shown in November 1966 and repeated in January 1967, attracted an audience of twelve million for both the premiere and the repeat. Surveys showed it stuck in viewers’ minds.42 In reaction to the new wave of academic studies and media exposés, new pressure groups emerged to ﬁght for better housing. Founded in 1966, Shelter emerged out of the voluntary housing association movement and the churches. The group initially focussed on fundraising for its own housing projects. However, the group’s publicity campaigns were plotted by Des Wilson, a skilful young director with a background in the media and public relations. Adopting an impressionistic, emotional style, Shelter was able to tap into public concerns about the plight of homeless or ill-housed children.43 Previously, charities had been anxious to keep out of issues that were perceived to be ‘contentious’ or ‘party political’: Shelter revelled in breaking with that convention, attracting press plaudits, controversy and publicity in equal measure. Its autumn 1969 campaign, entitled ‘face the facts’ and contesting ofﬁcial statistics on homelessness, made a particular impact.44 Political self-interest could fuse with this new breed of public campaign. By 1962 Conservative Ministers knew that ‘housing had become ‘a lively political issue again, particularly among our own supporters’. The discontent of many among the salaried middle class was put down by Hill to the fact that ‘there is growing up a considerable section of the community which cannot afford to buy… and which does not want to look to the local council’.45 House price rises were the main reason for this, as Figure 6.1 demonstrates. In the early 1960s the long post-war fall in house prices relative to average earnings ceased, and housing began to become more expensive. From a trough in 1960, average house prices rose from 7.5 times individual disposable income to about 8.2 times personal disposable income in 1965. Multiples in the Conservative heartland of South East England were of course much higher. The very people

Housing 137 Figure 6.1 House price rises (1951 prices) and the house price-personal disposable income ratio, 1951–74 11.5 House price rises Ratio of house proces to personal disposable income

20.0

11.0 10.5 10.0

15.0 9.5 10.0 9.0 5.0 8.5 0.0

19 51 19 52 19 53 19 54 19 55 19 56 19 57 19 58 19 59 19 60 19 61 19 62 19 63 19 64 19 65 19 66 19 67 19 68 19 69 19 70 19 71 19 72 19 73 19 74

Percentage annual rise in house prices

25.0

8.0

–5.0

7.5

–10.0

7.0

Ratio of house prices to personal disposal income

30.0

Source: A.E. Holmans, ‘House Prices: Changes Through Time at National and SubNational Level’, Government Economic Service Working Paper 110 (1990), table F2, pp. 239–40, and ODPM ﬁgures.

that political parties were at that time so eager to woo, the ‘young marrieds’ setting up home for the ﬁrst time, were feeling the impact of pay restraint and relatively high interest rates as well. All this was making it difﬁcult for young people to get on the housing ladder at all, let alone improve their housing lot, a real problem for governments as expectations rose. Brieﬁng papers submitted to Keith Joseph when he became Minister of Housing show that Conservative Party ofﬁcials were acutely aware of this problem: not only was there ‘a general feeling that there is not enough house building to meet present and prospective requirements’, but also ‘a widespread feeling of annoyance, not conﬁned to the young marrieds, at rising mortgage rates’.46 Opinion polls before the 1964 election showed housing in second or third place in lists of voters’ concerns, behind only the economy and the cost of living. Ninety per cent of Labour candidates mentioned housing and land in their election addresses, along with 85 per cent of Conservatives, making it the second and third most-mentioned topic, respectively. Housing policy had been much further down all those lists in the 1959 election.47 Labour was thought to have the best policies on housing, and the electorate had moved some way to the Left on most related issues. A majority were in favour of controlling land prices, and of quickly redeveloping slum areas.48

138 From Dreams to Disillusionment

12

10

8

6

4

2

m an y

ain st

Ge r

Sp Ea

y ar ng Hu

ite

d

Ki

ng

do

m

ce Fr an Un

r la th e

Ita ly

s nd

nd

A Fi

US

en Sw ed

nla Ne

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tG er

m an y

SR

0 US

Dwellings completed per 1,000 inhabitants, 1959-64 average

Figure 6.2 An international comparison of housebuilding, 1959–64 averages per 1,000 population

Source: UN, Housing and Building Statistics for Europe (1966), pp. 12–19.

There was a ﬁfth aspect to the pressure for a renewed housing drive, which reﬂects once again just how deep-seated were the fears about relative British ‘decline’. The UN’s Annual Bulletin of Housing and Building Statistics, ﬁrst published in 1958, seemed to show Britain lagging behind in just the same way as did the international economic league tables.49 As Figure 6.2 illustrates, in the early 1960s Britain was building fewer houses per head of population than any other Western nation except Spain. Expert journals carried a number of stories about nations experimenting with national targets and plans for housebuilding: in 1965 Planning recommended the German approach. West Germany was thought to have a more concentrated and efﬁcient construction industry, controls over commercial and industrial building, longer-term targets, and a healthy and diverse private rented sector. It was building nearly twice as many houses as Britain.50 There was also the usual fascination with the performance of the Eastern Bloc. To be fair, most commentators saw at the time that these achievements had been bought only at the price of political and economic controls quite unacceptable in the West. They also pointed out that a private market in housing was tolerated in large parts of the Communist world, which smoothed the system’s functioning.51 But

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there was still some feeling that the West might learn lessons from the East. One writer from The Economist visited Russia in 1963. Although he found that most houses ‘still fell very far short of… Western standards’, there were some advantages to Soviet rule, and ‘real signs that in the vast new prefabricated blocks of apartments springing up on the edge of very big towns the Russians have transformed nearly half of their previous appalling urban housing problem within the last six or seven years – and may thereby be achieving something of a world breakthrough in speed of construction’.52 The effectiveness and results of the housebuilding drives of the 1920s to 1950s were being called into question on at least ﬁve fronts. Firstly, the combination of high population projections and possible household ﬁssion meant that many more dwellings would have to be built. Secondly, the quality and life expectancy of the housing stock was successively downgraded as academics and governments discovered more about it. Rising expectations of the housing stock combined with the fourth challenge, rising house prices, to put political pressure on governments to build even more houses. Fifth and last, other countries also seemed to be building more houses than Britain, more quickly. Politicians would have to do something to solve these problems: what they chose to do showed how desperate was their search for solutions, and just how deeply the idea of planning had penetrated their thinking.

The importance of ownership and the failure of programming What, then, could governments do to meet these multiple demands? Given the perceived urgency of the problem and central government’s distance from the levers of control, the problem here became one of delivery. Long-term programmes would take a long time to decide upon and get underway; comprehensive solutions, taking in the private sector as well as the public, might take even longer. Short of legislation, if the overwhelming need was simply to build more houses, all Ministers could do immediately was to give renewed impetus to the public housing programme. In tandem with ongoing help to private owneroccupation, this would indeed constitute Whitehall’s main effort in these years. Local councils and owner-occupiers would prove deeply entrenched interests: plans would have to be made with them, and not imposed upon them. One driving force was Macmillan himself, nostalgic for the methods of his days at the Ministry of Housing. His appointment of Charles Hill

140 From Dreams to Disillusionment

to that portfolio in October 1961 was partly due to his frustration with the conservatism of Hill’s predecessor, Henry Brooke. As soon as he had made the appointment, the Prime Minister was pressing for action, arguing that ‘a lot of the Housing difﬁculties would be got over if we had more houses’. Macmillan encouraged Hill to take ‘immediate action whenever the economic situation allows – or requires – a measure of reﬂation’.53 The Prime Minister hectored Joseph in much the same vein. ‘Think big. £500m for a start’, he instructed Joseph in his ‘modernisation of Britain’ memorandum. In December 1962 he wrote even more directly to Joseph, ordering that ‘you must (and will) recreate the spirit of 1951–54’.54 The direction of policy did then change, as public housing starts moved upwards over the next three years. The government reintroduced a limited general needs subsidy for local authorities in 1961.55 Increases approved during 1962 and 1963 were expected to build up to 125,000 public sector approvals for 1964/65, which represented a large increase over the previous programme.56 The progress of actual building can be followed in Figure 6.3: from a low of 98,000 in 1961, local authority housing starts increased steadily to 126,000 in 1964, and then to 141,000 in 1965. These increases did not pass uncontested. The late summer of 1963 witnessed another change in emphasis, with the Treasury pressing hard for cuts in the housing budget. As part of the expected 3 per cent cut Figure 6.3 Public and private housebuilding completions, England and Wales, 1951–1974 400 350

Private sector Public sector

Dwellings completed per year

300 250 200 150 100 50 0 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974

Source: A.E. Holmans, Housing Policy in Britain (1987), table A, p. 157.

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in the public investment programme considered during January 1964, a slowdown of local authority building approvals was proposed, since it appeared that the private sector could meet the Conservatives’ 400,000 target.57 Such a period of restraint was duly imposed during 1964, by a government still uneasy about the expansion of public sector provision. Though the Treasury did not achieve its aim of cutting the Housing budget, the expansion had been checked. Just how the 400,000 target was to be reached, by a department with limited powers and less knowledge, remained unclear. Owner-occupiers were also helped by the new policies. Schedule A income tax, which taxed them on the estimated rent of the property they owned, was abolished in the 1962 Budget after a long-running campaign by builders, property owners and some Conservative MPs. This seemed like an easy way to buy off some of the discontent caused by rising house prices.58 The Conservatives were also quite happy to see the continuation of mortgage income tax relief, which dated back to the 1920s. As property prices rose, the extent to which tax relief helped owner-occupiers inevitably increased. By the end of the 1970s, the absence of Schedule A and the increasing importance of mortgage interest tax relief amounted to a £2.75bn annual loss to the Exchequer, most of which constituted a subsidy to those who were already relatively wealthy. This could not fail to have an effect, and during the 1960s and 1970s, net annual increases in house purchase loans quadrupled as a percentage of GDP.59 Increasing housebuilding of all types was similarly a centrepiece of Labour’s popularity during Wilson’s electoral honeymoon. He argued that planning could dissolve the dilemmas inherent in policy-making, and that private renters, prospective owner-occupiers and local authority tenants could all be helped by one great national effort. Interest rates, Labour promised, would be brought down by relying on physical controls over the economy. Similarly, mortgages could be subsidised, rent controls reimposed, and local authority building accelerated.60 It was a beguiling mix of promises, and showed just how important the Opposition believed housing to be. Once in power, Wilson’s mix of genuine idealism and sense of political advantage were most evident in housing policy, as a letter he wrote to Brown in June 1965 demonstrated: I am anxious to avoid the impression that all our measures – essential though they are to protect the £ – add up to a pretty dismal and gloomy set of squeezes… There would be a very big difference all round if there were one big growth sector of a popular and

142 From Dreams to Disillusionment

heart-warming character, and from every point of view – not least our pre-Election emphasis – this would seem to be housing. Moreover, I think this would have an enlivening effect on industrial morale and productivity. Just as in the War the idea of a common purpose… had a dynamizing effect, so possibly the launching of a great housing plan could have a similar effect today. We could then present a real sense of housing purpose, including the 500,000 target (if possible), a big increase in houses built to let… help for owner-occupiers… [and] an attack on… landlordism.61 Such enthusiasm was behind Labour’s 1965 housing plan, which attempted to ﬁx three-year programmes building up to 500,000 houses per annum in 1970. This plan represented a change of emphasis and pace, rather than a transformation of policy, for it recognised that private owner occupation would continue to grow in popularity, and argued only that ‘it would be criminal, at the present time, not to allow for an even faster growth of [public sector] building to let’.62 The new government would continue to rely on local authority building and private purchase, though in the short term placing a new emphasis on the former over the latter. However, there remained the problem that the Conservatives’ early ideas had foundered on, namely lack of control at the centre. Donnison commented at the time that ‘under present arrangements… there isn’t a hope of achieving the 500,000 programme’. Many of the extra houses would have to make up for slum clearance, he argued. Given residents’ low incomes there was no way that the private sector would take up much of the slack in that sector. Local authorities would once again be asked to boost their building programmes, at a time when ‘government does not have the town planners, architects, housing managers, valuers and other staff to do that’.63 While the Government could at least inﬂuence the number of public sector housing starts, any national plan also had to tackle the private sector, which was even more difﬁcult to control. To begin with, there was no question of Labour constraining private sector starts, especially after the comments made in the housing plan about owner occupation. ‘The taxpayer’s only or principal residence’ was, for instance, exempted from Labour’s Capital Gains Tax. No serious thought was given to subjecting housing to this tax, which might potentially have constituted an important control mechanism for the housing market. The idea was thought politically impossible. The Inland Revenue’s very ﬁrst memorandum on the matter argued that taxing the main source of retired

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people’s savings when they attempted to realise some of their assets by trading down in the property market would be thought ‘particularly onerous… on people whose incomes have in many cases already dropped by half or more’. Revealingly, the Revenue commented that exempting residential property ‘would produce beneﬁts by making the tax more readily acceptable’.64 The new government also extended mortgage tax relief by extending it to owner-occupiers on low incomes, despite ofﬁcial reservations about the whole validity of mortgage income tax relief.65 These ‘option mortgages’ were a casualty of the July 1965 freeze, but although the Cabinet again postponed their introduction of in November 1966, the scheme did go ahead in April 1968.66 They subsidised non-taxpayers’ payments to the same extent as taxpayers were already being helped, and were to exercise a small but growing inﬂuence by the late 1970s. At that point they amounted to an annual subsidy of £140–150m, or between 12 and 14 per cent of housing tax relief overall.67 Labour had intended to reach agreement with the building societies on a physical plan, by which they could control the actual number of private houses built. Ministers initially offered talks on relief from proﬁts tax, in return for discussions relating to cheap money for mortgages.68 Crossman subsequently used the possibility of a ‘national building plan’ to wind up an April 1965 debate in the House of Commons, and put some ﬂesh on the bones of the Government’s programme.69 He then obtained permission to proceed with negotiations, since the Building Societies gave a moderately encouraging response to Ministry pleas that ‘they should voluntarily regulate the amount of capital they make available for the purchase of new houses to match a level of building for sale settled under the plan’.70 Building Society leaders welcomed the idea – which was not surprising, since Crossman was offering them a guarantee of the 1965 level of private sector housing starts as a minimum starting point for negotiations.71 Unfortunately for him, the full Council of the Building Societies Association was not so impressed with his plan when it assembled in August. The Council rejected the scheme, arguing that other institutions would offer lower market rates and undercut them if they voluntarily constrained their lending. In the background was their fear of being coopted by government. Lord Cohen, Chairman of the Alliance Building Society, admitted that ‘the large Societies were very nervous that this might be a ﬁrst step towards a greater Government control of Building Societies and they shied away from it like a frightened horse’.72 Crossman was forced to tell Wilson that ‘it is now clear that… we shall

144 From Dreams to Disillusionment

not be able to rely on co-operation in controlling the volume of private house building’.73 In this situation what consultation there was with the industry relapsed into the mere exchange of information and platitudes. Even though a Working Party was formed to look into the possibility of cooperation, the Building Societies wanted to know beforehand that they would retain the power to set their own interest rates, and that the public sector programme was not considered ‘sacrosanct’. In subsequent meetings they offered ‘the good sense of societies’ as a guarantee on mortgages, a promise ofﬁcials well knew was worth nothing in practice. They also insisted on including the National Federation of Building Trade Employers, notoriously unsympathetic to government interference, in negotiations. As soon as negotiations began with the building trade employers present, companies such as Laing’s, Costain and Wimpey began to insist on much larger shares of total resources for the private sector than the Government was willing to allow: the atmosphere soured.74 One of the main physical planning devices the Government hoped to rely on simply fell away. Given the limits on private sector planning, the Government’s targets could only be met through building more council houses. By mid-1965, Crossman knew that ‘the private sector will not achieve its 250,000 in 1967 even if it is to go all out’. The implication for the public sector programme was that ‘we can… safely lay our plans for expanding the public sector knowing that the danger of over-taxing the construction industry during the period of squeeze is likely to be remote’.75 This sector nearly met its 1965 National Plan targets, while private housing starts fell. Initial planning was for many more public housing starts, building up to give at least 220–230,000 starts by 1969/70 for the whole United Kingdom.76 Crossman got this target accepted by insisting that he could build more houses through new and more efﬁcient building techniques – a common refrain in these years, as we shall see.77 By now the Ministry of Housing had settled on a mechanism to deliver Labour’s election promise of cheap money for housing – a new subsidy for local authorities, to hold their borrowing rates at 4 per cent whatever happened to market rates. This would effectively double Exchequer subsidy to councils at prevailing rates of interest, and as such enormously increase the pressure on the Ministry for more approvals. Central government help to local authority housebuilding therefore moved ahead very rapidly in these years. Worth about £73m when Labour came to power, by the time they left ofﬁce the subsidy bill was approaching £110m at constant prices.78 The Ministry returned to the

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attack in June 1966, citing once again the threat of not meeting its publicised targets. Crossman told the Cabinet that ‘the only assured means of maintaining a better rate of completions in 1967 and 1968 is to step up the local authority programme now’.79 As private sector starts continued to fall, the pressure mounted throughout the winter of 1966–67 to fund more public sector provision.80 Early 1967 therefore constituted the peak of the public housing boom. By now Anthony Greenwood, who had replaced Crossman at Housing, was able to secure agreement to get very close to the public sector target of 250,000 contained in the ailing housing plan.81 But by the autumn, Callaghan had seized on signs of revival in private housebuilding to limit permitted public sector starts to 237,000 in 1970. Even as the largest public sector ﬁgure ever realistically discussed in Whitehall, this was still 5 per cent below the housing plan target.82 Devaluation changed all these estimates, and the 500,000 target evaporated immediately. In January 1968 the Cabinet reluctantly agreed to cuts amounting to 22,000 public sector starts in 1970, while the 1968 public expenditure exercises implied about another 20,000 reduction in starts.83 The cuts were further reinforced by the Conservatives’ victory in the 1968 and 1969 local elections, for councils were now ideologically less well disposed towards new council house building.84 In the next spending round spending limits were even tighter. As Figure 6.3 makes clear, total house completions in 1970 fell to about 300,000, from their peak at 373,000 in 1968. Council house building had fallen to 145,000, just a shade over the number that had been in the pipeline for 1965 when Labour came to power. Given the failure to construct a national housing plan, the economic crisis had destroyed the more general attempt to sustain a massive housebuilding drive.

From Rachmanism to housing associations: attempts to revive private renting Clutching at local authority building and private provision for owneroccupation meant that private renting was often ignored. The incentives available to build those two types of dwelling discouraged private landlords, especially as rent controls in one form or another continued throughout the 1950s and 1960s. In the late 1950s three million properties were being let at 10s a week, and nearly one million at between 4s and 5s. This was far below what council tenants paid.85 The £12 extra annual rent landlords were allowed to charge for every £100 of repairs under the 1954 Housing Act could not possibly cover landlords’ costs.

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Neither could they claim tax relief on such expenditure, even though it was clearly a business expense, a fact that tipped the balance further against them.86 Conservative Ministers hoped that their 1957 Rent Act would remedy the situation. By making larger properties more expensive, it would encourage single or elderly people to move to smaller dwellings, and free up space for families with children. This might allow a more rational apportionment of costs with ability to pay, aiding in a move back towards market levels of rent. But as part of their attempts to buy off opposition to the 1957 Act, the Government kept some controls over cheaper dwellings, while decontrolling en masse the more expensive lettings that were rated at more than £40. This gave low-income households no incentive at all to move: indeed, it trapped them in overcrowded properties, for larger ﬂats and houses were now even further out of their reach.87 When the Rowntree Trust came to look at the effects of the new Rent Act, they found that it had indeed made tenants in crowded accommodation less likely to move. Hopes of achieving to a more rational use of housing space were dashed.88 Unfortunately for the Conservatives, the Rent Act was extremely unpopular with voters, and many of the most aggrieved were older Conservative voters in urban areas who had rented their ﬂats and houses at the same rate for many years. Letters of complaint poured into Conservative Central Ofﬁce, and although Brooke and Joseph as his junior Minister remained committed to decontrol on ideological grounds, they were forced to admit the ‘desperate and frightening shock’ they had administered to many households.89 Labour had been handed a priceless electoral asset, and throughout the early 1960s, their own poll rating on housing questions ran ahead of the Conservatives. Although the public still saw the need ‘to build more houses’ as the prime issue in this debate, the need to reimpose rent control rose to third on tenants’ list of concerns.90 Nor did the Rent Act reverse the decline in the stock available for private letting. At the time of that Act, there had been 51⁄4 million dwellings available for private rent: by 1964 there were only 31⁄2 million.91 The situation was made worse by the fact that local authority housing policies were sometimes based on conscious and unconscious class discrimination. Families were usually graded subjectively on their rentpaying ability and housekeeping standards by housing ofﬁcers. Cullingworth conducted an investigation into council housing for the Ministry during the late 1960s, and revealed that housing authorities still took a ‘moralistic’ attitude towards ‘undesirables’, the ‘dirty’, and

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single mothers.92 This inevitably forced many of the poorest and most desperate families into the private rented sector, while council housing was inevitably reserved for ‘respectable’ skilled working class families.93 The situation in the private rental sector thus became all the more acute. The furore over housing policy that so characterised the early 1960s was partly stoked up by the so-called ‘Rachman scandal’. Perec Rachman, a post-war Polish immigrant, practised intimidation to force people out of properties he had bought at prices reﬂecting the tenants’ controlled rents: then he rack-rented or sold the properties once the existing tenants had left. His death in 1962 lifted the protection of the libel laws, and Ben Parkin, Labour MP for Paddington, seized the opportunity to attack his methods. The media inquisition, made all the more feverish given Rachman’s proximity to the Profumo scandal through his mistress Mandy Rice-Davies, was extraordinary. The fact that the 1957 Rent Act allowed de-control of rents at change of tenancy was at the centre of a ferocious Labour attack; the Government had to promise an ofﬁcial inquiry.94 When the report of the inquiry under Sir Milner Holland was published in March 1965, its conclusions were extremely worrying, for they showed just how far the private rented sector – which housed up to a third of the population – had fallen into dilapidation. Thirty-nine per cent of privately renting tenants in Greater London, and 49 per cent outside, had no ﬁxed bath. The same ﬁgures for owner-occupiers were 6 per cent and 16 per cent, while in the public sector they were 5 per cent and 4 per cent. Ofﬁcial opinion within the Ministry of Housing, so keen on decontrol in 1957, was beginning decisively to shift against private letting. Evelyn Sharp, the Ministry’s Permanent Secretary, complained publicly about the ‘inertia’ of this ‘incompetent’ sector in 1961.95 A situation in which Ministers knew that ‘since the war private enterprise has done almost no building to let’ was yet another spur to intervention.96 Attempts to revive the private rented sector were one focus for policy throughout the 1960s. For Conservatives, this required a cheap, easy to understand and popular new idea that could right the fact ‘that the rented housing ﬁeld had been left to the Socialist threat’.97 Not-for-proﬁt housing associations had been growing in number and importance since the Second World War, helped by the churches and employers who could not wait for new employees to get to the top of council housing lists. Between 1945 and 1960 the number of such associations increased rapidly, and the houses they managed doubled to around 100,000.98 The Conservatives therefore seized on this sector, which seemed the most likely alternative to Labour-dominated council housing.

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Legislation on housing associations and ‘new style’ housing societies was passed in 1961 and 1964, subsidising the initial capital borrowing costs of this ‘third arm’ of the housing sector.99 The 1961 Housing Act was an attempt to test whether there was a market among middle-income households for non-municipal renting closer to market costs. This was a pump-priming measure, far removed from earlier and more radical plans Brooke had advocated as Minister of Housing. But it still ran up against the economic hurdles of mortgage income tax relief and local authority subsidies. Building societies were also extremely sceptical about the proﬁtability of such a venture: Brooke told the Cabinet that they were ‘just not interested’ in the idea. The Government would lend only up to £25m to existing Housing Associations at the same interest rates as local authorities enjoyed. They could then see whether rented housing could feasibly be provided at cost price.100 It took less than a year for the Ministry of Housing to return to the idea, which the Cabinet considered in revealing terms as ‘meet[ing] the needs of this literally middle class’ who were struggling to buy, but disdained council housing. The description was exact; rents under any new scheme were expected to be much higher than local authority charges.101 Joseph was particularly enthusiastic about such ideas, arguing that their new project might become in time an ‘alternative to endless municipalisation’. A new type of housing might prevent middle class tenants being sucked into council housing while allowing families with only moderate incomes a foot on the housing ladder. But the drive would need more encouragement, and new powers. The centrepiece of the measures Joseph pressed for was the creation of a national agency to co-ordinate the activities of cost-rent ‘Housing Societies’.102 Previous Treasury opposition had by this point moderated, given their opposition to more council house building, which the Ministry of Housing was able to threaten as the only alternative should their housing association schemes fall through.103 The Cabinet therefore hurriedly decided to commit the Government to these ideas.104 This was duly signalled in yet another Housing White Paper, published in 1963. The new Housing Societies would be supported by a state Housing Corporation, with £200m to lend in matching funds to accompany the £100m that the Building Societies Association had been persuaded to pledge. There would be a special 40-year period of repayment, to lower the initial interest payments on Societies’ debts. The payment would be made by the Housing Corporation to make up the difference between what they could borrow in the market and the total amount of capital they needed to begin work.105

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Taxation problems again wrecked this scheme, for it proved impossible to ﬁnd an economic formula to which the Treasury and Inland Revenue would agree. Preliminary contacts with the building societies revealed that they were not prepared to sponsor a large-scale Housing Society movement without tax relief on their reserves, which could serve a similar purpose to the tax relief on mortgages to owner-occupiers. They could not otherwise hope even to cover their costs relative to other property investments. The Treasury, concerned at the ‘hidden subsidy’, and the Revenue, worried about the implications of another new tax concession, stalled Joseph’s attempt to grant tax relief. Housing Associations, as charities, and co-ownership schemes as a form of owner-occupation, could be subsidised, but the new Housing Societies could not. Given continuing rent controls on low-rent dwellings, the absence of the help that was available to owner occupiers and local authority tenants could have only one outcome: ‘a driblet of high-cost and thus almost entirely middle-class new houses, often rather arty… not a great impetus of new and cheaper houses for the working classes’.106 Joseph complained bitterly about this. ‘You cannot want to contemplate an endless vista of extending municipal ownership any more than I’, he told Maudling: ‘but that is what we do contemplate if we cannot set up an alternative’.107 The prophecy was borne out by experience. Though in 1965 Crossman forced Callaghan to allow some subsidies for cost rent housing societies, the Treasury again refused to grant taxation concessions.108 This was to prove fatal to their success. Co-ownership schemes lingered on, given that they attracted tax relief as a type of owner-occupation, and 36,000 dwellings were constructed under that scheme. However, even this idea was slowly killed off by the house price rises of the early 1970s, which made sole ownership a much more attractive investment option. Despite 5,540 dwellings having been built for cost renting under the 1961 Act, only just under 1,600 houses remained under Housing Society management by 1970.109 As for rent control, Labour’s 1965 Rent Act was at least more ﬂexible than the system the Conservatives had attempted to reform. Crossman and his expert advisers, notably C.D. Pilcher, an ex-President of the Royal Institution of Chartered Surveyors, did not want to check rent increases, but rather to regulate them. The new Act provided for a form of re-control related to the income of the tenants, and judged in each case by local authority Rent Ofﬁcers. As Pilcher recommended, the yardstick for rent increases was that rents should ignore scarcity: that is, they should rise or fall to a level that assumed that supply and demand were roughly in balance. This would allow landlords to make a return, while

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sheltering tenants from the effects of more general housing shortages. Rent Ofﬁcers would hear appeals from landlords and tenants before ﬁxing rents: during this process there was to be security from eviction. This constituted an attempt to meet Labour’s electoral commitments without freezing rents for all time. They certainly succeeded in this, for as the gross shortage of houses overall receded into memory, the fair rents formula necessarily meant setting higher rents. By the end of the decade two thirds of rent determinations were leading to rent increases, some of them very large. More than 10 per cent of these settlements resulted in increases above 100 per cent.110 However, as the number of subsidised owner-occupiers and council tenants maintained previous growth, the rented sector’s share of the market continued to fall, from about 31 per cent in 1961 to 16.5 per cent in 1971 and 13.5 per cent in 1979.111 The Housing Association sector remained relatively stagnant, housing just 5 per cent of households in that year.112 Without tax breaks, subsidies or more comprehensive decontrol measures, the sector was unattractive to everyone except the very poor and very rich. The failure properly to integrate the private rented market into planning for housing provision was a particularly noticeable failing of a system that could be uniform and monolithic. A commitment to the politics of ownership across the political spectrum, along with a lack of imagination and creativity at the centre, left a hole where a ‘third arm’ of housing policy might have been. The constant reliance on two entrenched sectors, essential if houses were to be built quickly, meant that individual areas could become housing monocultures. In some London boroughs, 90 per cent of homes were council ﬂats or houses by 1981.113

Industrial methods and ‘rationalisation’ The need for a large increase in housebuilding seemed obvious at the time. Less clear is why the building boom followed the course that it did, and especially why many of Britain’s local authorities opted for blocks of ﬂats, often of the system built and high-rise variety. The need for high-density building to make space for an expanded population does not itself explain this phenomenon. Flats in high blocks tended to be smaller than dwellings in other types of building, and because of the need for a great deal of space around the tower to allow light into each ﬂat, one set of high ﬂats might take up as much land as four rows of terraced housing. Some ﬂatted estates took up much more land than houses providing the same amount of accommodation.114

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One solution to this puzzle can be found within the construction industry itself. When previous governments had attempted quickly to accelerate construction plans, they had often run into production constraints, labour shortages and price inﬂation, and had thus been forced to rein back. This had happened to the Labour administration of 1945–51, though the problem eased for the Conservatives in the early 1950s. Eager to avoid this fate, Joseph eventually turned to the prevailing idea of technical efﬁciency. ‘We are going to need greatly to increase productivity to achieve the 400,000 housing programme’, he wrote to Douglas-Home early in 1964.115 Overloading therefore helps to explain one more feature of the period, the prevalent enthusiasm for industrialised building techniques. Such methods might save on the commodity in shortest supply, namely skilled building labour – though since in 1964 the Ministry of Works admitted that it would be at least two to three years until they could make a large impact, there was an element of wishful thinking about this.116 Even by the time Labour took power, ofﬁcial briefs admitted that ‘industrialised methods of building may help in the longer run: but so far their contribution has been small and expensive’.117 Some Ministers were more susceptible than others to the ideas of the building industry. Joseph, for instance, was a director of the construction company Bovis.118 Though there was usually no suggestion of impropriety in such relationships, they at least opened the Government to intellectual inﬂuence from this quarter. Large companies such as Bovis were extremely important in the building industry. Only just over 2 per cent of ﬁrms involved in construction employed more than one hundred people, and they accounted for the great majority of Britain’s housing output. Since they were the most efﬁcient part of the industry, they argued that their quantitative and technological dominance should be extended even further to reform a small-scale and inefﬁcient sector of the economy. Over the medium term, new building methods did hold out some economic promise, but they made even more sense when linked to a boom in high building that had been set off by changes to the local authority housing subsidy system in 1956. Given their doubts about decanting the urban population into New Towns, the Conservatives had decided to pay more subsidies per storey built. This was partly designed to ‘save’ land through building at higher densities, as well as answering a political desire to be seen to have an active policy at the same time as withdrawing general help. But the decision was to have momentous consequences, for it triggered the boom in tall ﬂat building.119 The growth of high-rise was also inextricably linked to the new methods.

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Off-site prefabrication and factory assembly meant that much craft labour on site could be dispensed with. The cost beneﬁts achieved by using industrialised building methods in tall ﬂats were indeed large compared to what it would have cost to build such ﬂats using traditional methods. Hence the hopes that had circulated in the Treasury and elsewhere, that ‘the relative costs in this ﬁeld might very well be substantially changed by further technical progress’.120 During 1963, the Ministry of Works, which saw itself as an engine of efﬁciency in both the public and private sector, secured the creation of a National Building Agency to expedite this process. It was hoped that this would lower prices through larger orders, longer runs and more standardisation. The new agency would undertake research, and take commissions on design and planning.121 But the Ministry of Works could not know that there would be an overshoot of 24,000 dwellings in the overall housing programme for 1964. Output thereafter ran 7 per cent even above its projected levels.122 Very soon housing targets were clearly running into trouble due to the strain on the construction industry. Cairncross was forthright in his assessment as early as January 1964, writing that ‘the housing programme seems to me to be very largely out of control’.123 By the middle of the year building was up 48 per cent on 1961, an increase that seemed beyond the means of many suppliers. The construction industry had only three days’ supplies of bricks to work with in mid-1964.124 The 1963 Housing White Paper represented a triumph for the proponents of industrialised building, as it was hoped that this type of construction would break through the bottlenecks. The public building programme was explicitly linked to more system building: a Research and Development Director was to be appointed in the Ministry of Works, while the government was to develop its own proprietary systems. Local councils, often organised in units too small to have a fulltime planning staff, were now directed to consult with the National Building Agency.125 This triumph was at least partly due to a concerted propaganda campaign by the larger building companies. 1962 alone witnessed Concrete Ltd., Taylor Woodrow and John Laing announce new, or adapted foreign, industrialised building systems.126 The granting of a Cabinet seat to the Ministry of Public Building and Works under Geoffrey Rippon in 1962 was a sign of political support for industrialised building. Douglas-Home, for instance, was ‘greatly impressed with… the new capital intensive building techniques’.127 This worked itself out in other ways. The Ministry of Housing was keen on the type of consortia that was thought to have speeded up school build-

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ing during the 1950s. Several local authorities, for instance Coventry and Shefﬁeld, forced the pace by banding together with other councils for housing work.128 Joseph’s inauguration of a Manchester Ofﬁce for the Ministry was also designed to foster consortia.129 The encouragement had its effects. Although only a small minority of local authorities had joined such groups by July 1964, most of the large conurbations were members. And at its peak in 1970, industrial building accounted for just over 40 per cent of all local authority and New Town housebuilding.130 The analytical basis for the boom was highly questionable. There was just the possibility that the extra construction work associated with the housing drive could be borne if new techniques succeeded in accelerating productivity improvements. However, Ministers were told in 1962 that such an assumption would be ‘unwise’: even the post-1945 rate of productivity increase rises only reﬂected a recovery from a very low postwar base.131 Moreover, some research suggested that those gains were now slackening off.132 Productivity increases during 1962 were small or non-existent, due mainly to a chronic shortage of skilled workers.133 The effect of making very large orders for standardised components remained uncertain, for there was little independent academic research on this. It was very difﬁcult to attribute individual companies’ productivity gains to mechanisation, for companies constantly mixed traditional and industrialised production methods together.134 The small amount of data that was available seemed to show that rationalisation could accelerate construction: the Building Research Station reported that even reformed traditional methods could save nearly 50 per cent in the number of man-hours required to build a small terraced house.135 However, other studies suggested that although there were efﬁciency gains to be made by moving from very small to medium-sized contracts in conventional building, very large contracts used more labour than any other type.136 However, the incoming Labour administration failed to heed some of these warning signs. Consortia continued to be encouraged, seeking to foster ‘efﬁciency’ throughout the building industry. Systems building methods continued to be encouraged. For instance, the North Tyne Development Group, under the guidance of the Ministry’s regional ofﬁce, considered only seven industrial building schemes when the councils involved began their systems building drive in 1965.137 Labour’s 1965 housing plan was equally enthusiastic, and Crossman followed this up with a promise to the 165 housing authorities most active in the industrialised building ﬁeld that, subject to quality control, they could build all they liked.138 This drive had the Prime Minister’s support:

154 From Dreams to Disillusionment

for instance, the autumn of 1966 saw him institute a review of whether ‘we are still making adequate use of industrialised housing’. He had seen school building and house construction going on at a rapid pace during his regular Scilly Isles holiday: on his return he wanted to encourage the technique’s use on the mainland.139 However, despite the spread of industrialised construction methods, the pressure on the building industry in every sphere forced Labour back onto the expedient of building licensing, a tool from his Board of Trade days that Wilson was keen to re-establish and which might let the Government give priority to housing. The Ministry of Works under Charles Pannell bitterly opposed this, believing that this ‘version of the old “stop-go” policy’ would endanger its relationship with the building industry.140 Nevertheless, the measure was included in Callaghan’s cuts package in July 1965. Commercial projects worth more than £100,000 were to be subject to government licensing; the Ministry of Housing estimated that, if these were all delayed for six months, this would reduce construction by £60m.141 But in an industry that was worth £2.4bn in gross output, such controls amounted to a marginal 2.5 per cent reduction, and the Prime Minister would ﬁnd that his belief in physical controls would not be borne out by experience.142 Despite the adoption of licensing, the overstretch experienced by the building industry would not go away simply because a small slice of it had been stopped in its tracks. The building industry’s Economic Development Committee complained about the extremely tight labour situation in December 1966.143 The strain was even more noticeable in early 1967, as a burst of starts associated with returning market conﬁdence was exaggerated by builders’ desire to avoid Labour’s betterment levy on land development, which was scheduled to begin in March. Even taking account of the effects of the levy, the increase in housing starts failed to be reﬂected in increased house completions for nearly a year, a familiar sign that the construction industry was overheating. The gap between starting and ﬁnishing each dwelling yawned alarmingly, just as it had in 1947. Only the higher interest rates and increased costs associated with devaluation in November 1967 brought the two series back together.144 The industrial building bubble did eventually burst, no longer necessary now that the construction industry was not stretched to its limits, and high-rise ﬂat building was also wound down. This was hastened by the public outcry following the disaster at Ronan Point in Newham, East London, on 16 May 1968. Five people were killed in a gas explosion that led to the ‘progressive collapse’ of one corner of the block: the over-

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whelming reaction was to blame the high-rise form itself.145 The subsequent ofﬁcial report was extremely scathing about the resources and competence of the National Building Agency, which was under-staffed with architects or engineers, and had failed to coordinate work with outside experts.146 Whitehall ofﬁcials had harboured doubts about high-rise for years. As early as 1952 the Ministry of Housing had recommended maisonettes rather than ﬂats, because of the ‘noise, less assurance of privacy, and lack of a garden or yard’ inherent in ﬂats.147 The Ministry’s researchers in its Development Group had been especially virulent in their opposition to very high buildings. Not only could ﬂats take up as much land as low-rise developments, but the technical difﬁculties involved – for instance, the need to build underground car parks – could be very expensive.148 But they worked at the top of a system in which controls were weak. Many councils avoided control by zoning an area at relatively low densities overall, but including one or two tall blocks in one corner. The Ministry of Housing lacked the resources, and often the ideological commitment in an arena supposed to be the responsibility of local government, to prevent this.149 These latent doubts, and the public outcry over Ronan Point, explain why the Ministry moved into action on this issue with alacrity. A team of surveyors and architects was immediately dispatched to Newham, and quickly recommended studies of tall blocks’ corner joints.150 Three Circulars were issued in August and November 1968, following the interim and ﬁnal reports of the Ronan Point inquiry. A new panel on technical standards was to be set up, and all buildings over six storeys in height appraised. A review of the building regulations came up with a host of new standards. The National Building Agency, which had not hitherto certiﬁcated whole building systems but rather individual parts, would now offer continuous advice on all types of construction.151 All this might cost £30m, amounting to 2.5 per cent of state housing expenditure in 1969/70, half of which would fall on central government.152 An attempt to save money had ended in yet another tranche of unexpected costs. Whitehall was by now moving towards taking more responsibility for state housing across the whole ﬁeld. Centralised yardsticks had laid down costs limits since 1963 and had made it much more difﬁcult for local authorities to carry on with large-scale high building. These had been under review for at least two years before the Ronan Point explosion, though action had been delayed by the 1966 Election. Nevertheless, the intended bias was eventually formalised in the 1967 Housing Subsidies Act. The yardstick was used as a way of limiting

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building overall, but everyone involved knew quite well that ‘the cost yardstick discriminates against the multi-storey block’, since it gave less subsidy at higher densities.153 After Ronan Point, ofﬁcials saw the opportunity to go further, and informed local authorities of their views in no uncertain terms. As a Ministry Circular argued: ‘the general discontent with high ﬂats show that there can be no justiﬁcation for encouraging building which is not only very expensive but which produced unpopular, and for many families inferior, homes’.154 The yardstick was further slanted against tall ﬂats, and very high-rise building began immediately to abate. The trend was anyway well established, especially among those local authorities that could afford well-staffed planning departments. Low-rise, high-density developments such as St James the Less in the City became the fashion, though they were not without their problems of noise and privacy as well.155 Architects were also in the forefront of the reaction against high ﬂats and industrial building. Many had never been committed to the monumental point and slab blocks favoured by many city councils: they were quick to declare that this was ‘not architects’ architecture’.156 The mood changed further once it became clear that the British climate would not be kind to the appearance of concrete slabs, and that the rough surfaces looked crude against some of the more successful Scandinavian examples of modern architecture. In 1967, the Architectural Review blamed local authorities for polluting and perverting architects’ ideas: even more damning was the ‘hatred of the tenants for the roughshuttered concrete that is thrust upon them’.157 Ministry researchers had long known that most high rise systems would never be more efﬁcient than traditional methods, whatever the density of development. Tall ﬂats, Ministry publications had been making clear for more than a decade, were very expensive.158 In the late 1960s, Ministry prototypes revealed that the same was true of industrialised building. A low-rise industrial housing system showed that systems building, at £2,557 per house, cost over £400 per dwelling more than traditional methods. This undermined the whole logic of industrialisation.159 The National Building Agency found that industrialised ‘efﬁciency gains’ were in fact due to the fact that large companies using such methods were ﬁrms with relatively good training, incentives and programming, along with greater experience and bigger orders.160 That did not make a case for industrialised building per se. The recognition of this fact led to a collapse in the demand for systems building, and many of the justiﬁcations and hopes formulated in the language of science and technology had once again proved to be unfounded.

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The turn towards renovation and consultation Public expenditure cuts and collapsing conﬁdence in new technology served only to encourage a more general move away from treating housing policy as a simple numbers game. New slogans were at the same time coming to the fore, especially ‘renovation’ and ‘consultation’. In a Fabian Tract published in 1971, Crosland declared that ‘we have had too much of the bulldozer, and have destroyed too many old houses and… communities’.161 This was, once again, not an entirely idea. Peter Wilmott and Michael Young, in their 1950s study of East London, had argued that keeping ‘as many as possible of the existing houses’ would be more sensitive than relying on comprehensive redevelopment alone. Such a policy would not dislocate communities and break up families in the same way as decanting them to the suburbs.162 The late 1960s and early 1970s saw increasing numbers of experts agreeing with Wilmott and Young. Working class communities came to be seen as the victims of technocracy, as the planning expert Peter Hall argued in 1968: ‘the new generation are devoted to preparing megastructures… for the unsuspecting future council tenants of places like Walsall… Their designers, of course, will live in the few remaining Victorian bits of London’.163 A 1972 article by the architect and planner Alan Stones famously accused Liverpool City Council of leaving great tracts of the inner city empty. Many of the cleared areas were earmarked for future hospitals, parks and schools, which other council ofﬁces or central government were responsible for but could not yet afford. They thus became wasteland: ‘as the old slums are pulled down, other previously satisfactory dwellings deteriorate…whilst new housing estates, though possessing the basic amenities, begin to exhibit otherwise precisely the same characteristics as slums’.164 Another important study was Robert McKie’s Housing and the Whitehall Bulldozer, which drew on his work in Peterborough. Many of the respondents living in Peterborough’s older ‘twilight’ housing were ‘well satisﬁed’ with their dwellings, or found them ‘all right’. McKie therefore recommended a gradual approach, waiting for incomes to rise and for gross shortages to be overcome so that poorer families could take advantage of rehousing. Otherwise, low rent areas would be destroyed, and the people for whom it had catered would have nowhere to go. In urban areas themselves, ‘cellular renewal’, mixing small-scale redevelopment with renovation, should replace ‘stagnation… or comprehensive redevelopment’.165 The problem with the emphasis on slum clearance and rebuilding, placing as it did all the

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emphasis on the physical state of housing, was that it could be indiscriminate. The Ministry’s own local housing surveys revealed that, in the ﬁrst ﬁve cities surveyed, up to 47,000 houses that were ‘not unﬁt’ had been included in comprehensive clearance areas.166 Unofﬁcial estimates of needless destruction were much higher. Some GLC studies suggested that 69 per cent of houses demolished in the late 1960s were at least structurally sound.167 Urban renewal policies had a long history. Help had been available to local authorities wanting to upgrade small areas since 1885. Rural landlords had been able to claim individual grants for renovation since the early 1920s, though the idea was only extended to urban areas in 1949.168 The 1960s saw a renewed wave of interest in the idea: as the estimates of housing need grew exponentially, so did the need for some other policy instrument apart from simple demolition. The 1964 Housing Act gave local authorities the power to declare ‘improvement areas’, promising help with environmental work in those areas, such as making up unmade roads and blocking through roads to form cul de sacs, as well as providing new powers to force landlords within them to conduct improvements.169 However, a number of ﬂaws prevented these early forays from taking hold. Councils’ new improvement area powers were cumbersome, complicated, and little used. As one Ministry ofﬁcial noted, revealing just as much about his own attitude as he did the Act, ‘authorities are easily deterred if the subject is made to look too complex’. Even though the Ministry organised a team to visit councils and organise pilot projects, only a handful were underway even two years after the Act was passed.170 Individual house improvement grants made under the 1949 Housing Act were also problematic. Almost all local authorities made grants under these powers, but a survey conducted for the Ministry in the winter of 1966–67 showed that nearly a ﬁfth of owner-occupiers and landlords who had gained approval for grant-aided work in England and Wales were not taking up the money. The grants were not enough to cover costs giving the rising expense of building works.171 Economists were also taking an interest in this question, and Lionel Needleman’s 1965 Economics of Housing was to become extremely inﬂuential. His application of cost-beneﬁt analysis to the question of renovation as against clearance ﬁlled a general gap in the literature: the Government’s Housing Intelligence and Research Committee admitted in 1968 that ‘Dr Needleman’s formula, though crude, has not yet been improved upon’.172 Needleman provided a table to show the implications of different interest rates and houses’ life expectancies for how

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much should be spent on renovation: his formula had the advantage of being simple and easy to grasp. The longer a house might last if it was repaired, and the higher the interest rates a council or private developer would have to pay if it borrowed to build a new house, the more it was worth spending on repairing the dwelling in the short term.173 This case was helped by more prosaic developments. As property prices rose, the attitude of owner-occupiers towards slum clearance was hardening, and forcing councils to pay much more for the site value of the land if they wanted to redevelop.174 Though Needleman’s arguments did not go uncontested in academic circles, his scepticism about the ideology of the clean sweep was backed up by public opinion, since the popular mood was shifting towards preserving older buildings. The Civic Trust, founded in 1957 as an umbrella organisation for hundreds of local conversion and heritage societies, was a good example of this, and its innovative improvement scheme in Magdalen Street, Norwich, attracted a good deal of attention. By the early 1960s 140 more such street architecture refurbishment schemes were underway.175 The Trust was instrumental in pressing for the 1967 Civic Amenities Act, which allowed areas and streets of historic or architectural interest to be declared off-limits for comprehensive redevelopment.176 Instead of listing individual buildings for conservation under the existing Town and Country Planning Acts, councils were now encouraged to declare conservation areas to prevent notable buildings from being blighted from general environmental neglect.177 Calls for renovation to replace clearance were not only based on the cost of the latter, but also on novel types of detailed sociological investigation. ‘Research-action’ was becoming the watchword of many social policy academics, replacing mechanistic, quantitative and necessarily generalising research with qualitative work conducted while living in different communities.178 Although not yet adopting such radical ideas, studies conducted from 1963 in the low-rise redevelopment of St Mary’s, Oldham, constituted the ﬁrst large-scale ofﬁcial sociological work on the results of comprehensive redevelopment. St Mary’s was to be a test bed for a new pre-moulded concrete system, the Ministry’s own 12M design. Laings were employed as the builders; architects and the engineering consultants Ove Arup were also asked to participate. The usual savings of time and manpower were hoped for.179 However, the St Mary’s study was not a simple assessment of building technology. From the start of the project in 1963–64, the teams involved asked new questions – how easy was it to understand the ‘bewilderingly complex’ terms for re-settlement and compensation? Did

160 From Dreams to Disillusionment

people actually like their new homes? Did they want to stay in the area? Did they want council accommodation, or to rent privately? Were the terms for compensation, crucial in an area with high levels of owneroccupation in old, cheap houses, seen to be fair?180 Though most of the new tenants seemed pleased with their new environment at this early stage, one recurring theme was familiar to social commentators at the time: the unhappiness of families with children who had to live in ﬂats. Only 11 per cent of such families had actually wanted ﬂats. Only just over half were ‘satisﬁed’ with them once they had moved in, though most were willing to put up with them as the price for staying in the area in a high-density development.181 Elsewhere, noise and privacy, as well as an emerging problem with damp, were perceived by tenants to be the ﬂaws of the new estates.182 The most famous example of this type of work was the Ministry’s work on Deeplish, in Rochdale.183 Greenwood’s introductory note condemned the ‘city planner, [who], ambitious for wholesale redevelopment, easily writes them off as the slums of tomorrow and decrees a clean sweep’. ‘Repairs and conversions’, ran the argument, ‘can work wonders’. The new investigative techniques were put to good effect in Deeplish by a mixed team of architects, designers, quantity surveyors and sociologists who demonstrated that most of the houses had years of useful life ahead of them. They calculated that only about one-quarter of the houses would be expensive to repair. Moreover, the popularity of the area was partly due to its low rents and proximity to the city centre, which might be destroyed by re-housing. The Study’s recommendations preﬁgured decades of trafﬁc calming, tree planting, grass seeding and interior renovation.184 The Central Housing Advisory Committee’s 1966 report, Old Houses into New Homes, also recommended a new policy. The sub-committee responsible for the report, chaired by Evelyn Denington, one of the Labour members of the GLC, recommended getting away from ‘the concept of… “unﬁt” houses, the “slum” and its link by deﬁnition with physical health’. The Report continued to accept that houses should ideally have a ﬁxed number of amenities – an inside toilet, a wash basin, a ﬁxed bath, and so on – but it also laid down less strict minimum standards for housing families in reasonable comfort.185 The published version of the report was therefore not as radical as that which had been privately submitted to the Ministry of Housing. Instead of recommending looser desirable housing standards for areas with really bad slum problems, the committee’s true preference, the ﬁnal report simply advocated their clearance over a longer period of time. It therefore diluted, rather than ended, the emphasis on the physical state of buildings.186

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Similar measures eventually emerged in the 1968 White Paper, Old Houses into New Homes, and the subsequent 1969 Housing Act. The Act provided more funding for, and streamlined, some of the ideas in the 1964 legislation. General Improvement Areas were established, for which matching funding up to £100 per house would be granted to councils for general environmental upgrading. More importantly, improvement grants to individual householders were increased: standard grants that councils were required to provide increased from £155 to £200, while discretionary awards could be made up to £1,000. These were available as long as the house was likely to last for another ﬁfteen years. Repairs, as opposed to renovation to install basic amenities, were now eligible for such help for the ﬁrst time. The Ministry estimated that there were up to 783,000 houses that could be repaired for less than £1,000, making this a major change of direction.187 The new agenda took ‘consultation’ more seriously than ever before. The Ministry of Housing commissioned a pilot study of Exeter, to see what the effect of General Improvement Areas might be on public participation; and in some isolated examples, for instance Coventry and Enﬁeld, councils did set up residents’ committees to engage local people with the process of environmental improvement.188 This idea originated in the US, where citizen participation had been growing in importance since the 1949 Housing Act had made consultation a statutory requirement for federal aid. It was slowly adopted by cities such as Dallas, which formalised the process in 1964 as an inclusive and small-scale alternative to constant clashes over how and when to bring racial segregation to an end.189 The work of American theorists such as Herbert Gans on the social content of planning popularised the idea of community decision-making.190 The 1965 report of the Ministry’s Planning Advisory Group was crucial in bringing some of these ideas to the notice of Whitehall. It recommended that tactical planning decisions should be devolved to the local level. Only ‘structure plans’, laying down land use by area, would be submitted to the Minister. Local authorities’ own Development Plans would ﬁll in the detail, while ‘local plans’ on an even smaller scale would complete the picture. It was hoped that this would allow people to actually envisage the effect on their environment, rather than just looking at a land-use map.191 Most of the Planning Advisory Group’s recommendations were enacted in the 1969 Town and Country Planning Act.192 This sensitivity ﬁtted in with a new emphasis on small-scale intervention. This was exhibited, for instance, in the Home Ofﬁce’s Urban Programme, which among other measures sponsored Community

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Development Projects intended to help local authorities cope with the needs of concentrated groups of migrants, and to blunt Powellite antiimmigrant agitation. The important point in terms of participation is that they were also designed to ﬁll the gaps left by other types of welfare provision, and ‘action teams’ were sent into each area to see how help could be knitted together. Community involvement and interest were stressed throughout, and one of the teams’ aims was to publicise welfare entitlements that residents could claim.193 Twelve areas for the Community Development Project were chosen during 1969 and 1970: Birmingham, Oldham, Tynemouth, Newcastle, Cumberland, Paisley, Yorkshire’s West Riding, Southwark and Newham in London, Liverpool, Glamorgan and Coventry. Most of them deliberately encouraged the development of residents’ associations as a conduit for discussion of planning and rehousing.194 The Home Ofﬁce supported such programmes to the tune of £4m in 1968/69 and £17.5m in 1969/70, a modest start that pointed the way to the next thirty years of British urban policy.195 The Urban Programme was not to begin with supposed to provide money for housing. However, many of the projects did eventually get to work on housing problems in the 1970s, as the data collected by the development teams showed once again just how bad some of the housing stock had become. The Birmingham project, for instance, helped to set up a special housing association that bought up private landlords’ stock and renovated it.196 It was a very small beginning, but it indicated a signiﬁcant philosophical shift. This trend was further accelerated by People and Planning, the report of a committee under Arthur Skefﬁngton, the Ministry of Housing’s Parliamentary Secretary. Skefﬁngton recommended a range of measures to involve the public, including co-option, community forums and advisory panels. The employment of ‘community development ofﬁcers’ to reach those people who usually would not take part in consultation exercises, was recommended.197 Such ‘partnerships’ were in places framed in terms of public relations. But government had taken its ﬁrst faltering steps towards more popular and ﬂexible housing policies. Most of these measures were indeed popular, and many had immediate effects. Though held back for a while by the high interest rates and economic uncertainty of 1968 and 1969, improvement grants under the 1969 Housing Act soon surged ahead. As Table 6.1 shows, such grants had been made at a rate of just over 100,000 a year in the mid to late 1960s; in the property boom of the early 1970s, they hit a peak of 361,000. Nearly 90,000 dwellings were contained within General Improvement Areas by 1972, although thereafter the Heath government

Housing 163 Table 6.1 Improvement grants/General Improvement Areas, England and Wales, 1949–74 Total improvement Dwellings Improvement grants Improvement grants (000s) within GIAs Made in GIAs grants in GIAs as % of total 1949–54 av. 1955–59 av. 1960–64 av. 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974

3.3 43.8 122.1 123.0 107.7 113.1 114.2 108.9 156.6 197.5 319.2 361.0 231.9

8,235 33,982 57,648 89,028 60,174 30,152

27 1,119 2,300 7,271 15,143 12,960

0.3 0.9 2.1 3.0 5.0 4.3

Sources: S. Merrett, State Housing in Britain (1979), table 5.2, p. 115, table 5.5, p. 142; Holmans, Housing Policy, table C, p. 160; A.D. Thomas, Housing and Urban Renewal (1986), table 4.2, p. 68; M.S. Gibson and M.J. Langstaff, An Introduction to Urban Renewal (1982), table 4, p. 117.

lessened its reliance on such measures. All the same, renovation and repair was no panacea. Although general improvement areas and improvement grants were linked in the publicity surrounding the 1969 Act, improvement grants were available everywhere. As Table 6.1 again demonstrates, only a small percentage of improvement grants were made within General Improvement Areas in the early 1970s.198 The policy could also be as indiscriminate as those they replaced. Studies carried out on General Improvement Areas in the 1970s showed that they contained a high proportion of middle class families with children, forced out of more upmarket areas by soaring property costs.199 Gentriﬁcation was going on apace in these years – the term was coined in 1964 – and was often accelerated by these measures.200 Subsidising area improvement – tackling what became known as the ‘social pathology’ of a district – also missed much of the acute need that existed outside disadvantaged urban areas. As the House Condition Surveys had shown, the problem was much more widespread than a few blackspots. Since help with renovation depended on the dwelling being likely to survive for another ﬁfteen years, the very worst housing would be little touched by grant-aided improvements. Two more Housing Acts had to

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be passed to put this right: that of 1971, allowing higher rates of grant in Development Areas, and the 1974 Act, which created a new category of Housing Action Areas which would cover the truly worst pockets of housing stress, and where higher rates of grant would be paid for individual house improvements than were available in General Improvement Areas.201 Given these problems, there was as yet little sign of an end to comprehensive redevelopment. Slum clearance did not end with the 1969 Act, and a Ministry of Housing Circular of that year called for the slum clearance rate actually to be stepped up by 50 per cent.202 Although 1968 was the peak year for demolition, it did not fall away dramatically until the economic crisis of 1973–74. Indeed, the whole period from the 1965 Housing Plan to the 1974 Act has been characterised as the ‘peak’ of slum clearance, when both the numbers of houses demolished and the concentration on Britain’s Midlands and Northern conurbations was at its height. In Northern cities, more houses continued to be cleared than improved throughout the 1970s.203 There were problems with the idea of ‘consultation’ as well. For one thing, just as the slum clearance drive was supposed to continue and even intensify, the new Town and Country Planning Act was intended to speed up planning decisions, not encumber them with endless objections. By passing the detailed local plans down to individual councils, the Ministry hoped to reduce appeals.204 Consultation was often undertaken after the crucial decisions had been made. The process was also organised by local authorities, and their private views often ranged from bewilderment at tenant associations’ demands to contempt for their lack of sophistication. What consultation was to mean – what was to be at stake, who was to participate, where the physical boundaries of consultation were to be drawn – remained contentious.205 When in 1967 and 1970 Nottingham City Council produced two pamphlets on the redevelopment of the St Ann’s district of that city, they read like propaganda pieces outlining the lack of amenities in local housing. They did not outline the comparative costs of comprehensive redevelopment as against adding bathrooms and toilets to existing houses.206 It took little time for a postgraduate team at the University of Liverpool to compile a list of more theoretical problems. Given that the public seemed ‘loath to participate’, it could prove impossible to keep the process out of the hands of self-interested pressure groups. It might also prove difﬁcult to draw geographical boundaries around those areas to be included in consultation, for many groups who used cities only for shopping, transit or entertainment might be affected by redevelopment.207

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The new emphasis on renovation and consultation had undermined old certainties, without putting a new system in their place. ‘Whereas once a plan was seen as a ﬁnite goal’, the journal Town and Country Planning noted, it was now seen ‘as a process in which discourse takes the place of any ﬁnal commitment – to the point that one sometimes wonders whether any decisions are intended to be taken at all!’208 The growing awareness of the long haul to come was highly prescient, for the change of emphasis heralded a long-term shift from constructing housing plans to the area-based urban policies based on small-scale community partnerships fashionable in the 1970s and 1980s. These might clearly take many years to have an effect, and debate still continues as to how far they have been successful in stimulating local awareness and action.209 Ministers had begun to move away from comprehensive planning and redevelopment, and were promoting more sensitive policies, but they found themselves faced only with a new and even more complex set of problems.

Assessment: plan or muddle? Plans for a massive housing drive had fallen short of their objectives. They had been drawn up in an atmosphere of crisis, amid demographic, economic, political and international pressures that seemed to demand an immediate answer. Governments were thus forced into an attempt to do in just a few years what a century of housing improvement policies had not yet managed: to end once and for all the problem of housing shortages, urban decay and slum conditions. The strain was inevitably too great, as councils, private housebuilders and central government lacked the capacity to manage such a monumental programme. Statistics were often rudimentary; hoped-for technological breakthroughs failed to materialise; after Ronan Point, public support and sympathy drained away. No coordinated approach had proved feasible, for building societies, builders and rival political parties refused to cooperate whenever their own interests or beliefs were threatened. The whole idea of planning the human environment was being called into question by the end of the decade. The Royal Institute of British Architects was acknowledging the ‘massive waves of public protest’ against planning as it then existed.210 Peter Hall and his collaborators instead proposed a ‘non-plan’, picking parts of the country in which to experiment with doing away with government intervention. The planned alternative, they argued, had usually failed: it was ‘doctrinaire, and if something good emerges, it remains a bit of a bonus. Not to be

166 From Dreams to Disillusionment

expected, but nice if you can get it’.211 The hopes and ambitions of the early 1960s seemed dead. Public opinion was also shifting away from further massive council housing drives, inﬂuenced by their concentration in urban areas that were seen as unattractive by middle-class swing voters, and by the constant air of crisis and readjustment that hung over public sector provision. As early as 1966, the Government’s Social Survey noted a weakening of the public’s desire to pay higher taxes to provide better housing. Private Conservative Party polling in the mid-1960s suggested that more people wanted local authority housing to be built than private housing; by 1969, and for the ﬁrst time, a majority of voters wanted private building for owner-occupation to take priority.212 The quality of housing did rise. The number of houses thought to be unﬁt for human habitation fell by half between 1967 and 1975, from 1.8 million to 0.9 million.213 However, the crude emphasis on numbers, and the reliance on council housing and owner-occupation that followed from it, had profound consequences. As the private rented sector declined, tenure remained deeply divided between council housing, increasingly perceived by the public to be unattractive, and private owner occupation, growing in importance throughout the 1960s. Once local authority housing programmes were cut back in the 1970s and 1980s, only owner-occupation would be left as a viable housing model. House price volatility would then have grave consequences for equity, labour mobility and economic stability.214 The whole experience also called into question the efﬁcacy of increased housebuilding. The new and welcome sensitivity of the late 1960s eventually ended in an overreaction, and a failure to build as many houses as Britain needed. The country was left with a very old housing stock: by the turn of the century 41 per cent of dwellings dated from before the Second World War, and along with Denmark, Britain had the oldest houses in Europe.215 ‘Planning’ ended up facilitating the destruction of private renting, fostering suspicions about new building techniques, and nurturing public disillusionment with government housing policy and housebuilding in and of itself: precisely the opposite of what had been intended in every way.

7 Health Care and the NHS

The National Health Service: history, nature, expenditure In January 1962 the Health Secretary, Enoch Powell, announced details of the most ambitious project hitherto mounted by the National Health Service: hospital plans for ten to ﬁfteen years ahead. In an extraordinary example of planning’s appeal across the political spectrum, the otherwise free-market Powell lauded ‘the opportunity to plan the hospital service on a scale not possible anywhere else, certainly on this side of the Iron Curtain’.1 This was a remarkable about-face, for the 1950s had seen the NHS relatively starved of resources as a share of national income. In relation to other social services, the NHS lost out to the Conservatives’ initial housing drive and the rising costs of social security: by 1959 health spending was scarcely higher than it had been in 1951, as can be seen from Figure 7.1. Most of Britain’s welfare state in this period has justiﬁably been characterised as ‘austere’: in that case, health spending was even more austere than were government outlays in other sectors.2 As the ﬁgure also shows, however, money ﬂowed much more freely after 1959, and a decade of generally very large rises in NHS spending lay ahead. What was behind this reversal? To answer this question it is important to note that the problem facing governments after 1945 was not whether they should intervene in health services, but rather what shape they should take. For its part, the National Government’s 1933 Local Government Act had already allowed councils, if they wished, to band together in Joint Hospital Planning Councils.3 Labour, at least in the run up to their election victory in 1945, envisaged a more radical outcome: a salaried General Practitioner service working in health centres, bringing them together with local authority employees such as nurses and health visitors. The 167

168 From Dreams to Disillusionment Figure 7.1

The cost of the National Health Service, 1951–1970 (1970 prices) 2500

8.0 2000

6.0 4.0 2.0

1500

0.0 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970

1000

–2.0 –4.0 –6.0 –8.0

–10.0

Increase or decrease over previous year’s expenditure, %, left hand scale Total NHS expenditure, £m, right hand scale

Total NHS expenditure, £m

Increase or decrease over previous year’s expenditure, %

10.0

500

0

Source: C. Webster, The Health Services Since the War, vol. II. The NHS 1958–1979 (1996), appendices 3.3–3.4, pp. 802–3.

wartime coalition’s 1944 White Paper on health also suggested local government control.4 But as the post-war Labour government struggled to construct a truly ‘national’ health system, free at the point of use, many of these objectives had to be jettisoned. Mainly owing to pressure from general practitioners fearful of losing their independence and becoming salaried State employees, local authorities were excluded from the management of the hospitals, despite an attempt by Herbert Morrison to prevent this outcome.5 Aneurin Bevan, so often lionised as the ‘father’ of the NHS, showed little interest in health centres, and their numbers languished.6 Instead, Regional Hospital Boards oversaw individual Hospital Management Committees and sub-regional Executive Councils employed General Practitioners. Local authorities were left with health and welfare services such as home helps, hostels for the mentally ill, and homes for the elderly. Teaching hospitals retained a specialist independence under their Boards of Governors; consultants’ worries about the NHS were silenced by a system of peer-reviewed ‘merit awards’ and permission to carry on their private practice. This tripartism and lack of control would have serious consequences, both for planning and growth: for one thing, the failure both to integrate and to expand community medicine meant that the NHS would remain a national hospital service for some time to come. 53 per cent of Health Service spending went on hospitals in 1951;

Health Care and the NHS 169

57 per cent in 1961; and 59 per cent in 1971.7 These problems were made all the more acute given the Ministry’s own loss of initiative and drive, having yielded many of its functions to the Ministry of Housing and Local Government when Bevan left for the Ministry of Labour in 1951. With seven Ministers of Health between 1951 and 1962, and none in the Cabinet, relegation to low priority was only too easy.8 Worries about the cost of the NHS also weakened the Ministry of Health’s hand. In the ﬁrst two years of the new Service, it outstripped spending plans by a total of over £150m, as pent-up demand was released, medical costs mounted and the Ministry’s lack of control was revealed. Though it had been hoped that the NHS might ‘dry up’ a ﬁxed pool of illness, this optimism was frustrated. Health care costs ran at 1.3 per cent of GDP in 1938/39; by 1951/52 this had nearly tripled to 3.3 per cent.9 The expedients for dealing with this rise in spending were to become familiar. In 1949 Labour created the machinery for prescription charging; in 1951 charges were announced for spectacles and false teeth. The Conservatives implemented prescription charges of one shilling per item, and in 1957 and 1958 raised the amounts workers and employers had to contribute through the National Insurance system.10 By the 1960s, it was clear that this combination of administrative complexity, cost increases and obsolescence would require a new and more rational look at the NHS, which therefore became caught up with the general movement towards planning. The NHS was a compromise between many different views of health – between socialist egalitarians, hospital professionals intimately associated with technological medical intervention, managerialists who stressed the ‘efﬁciency’ of the service, and advocates of community medicine and general practice. This left many questions unanswered. How much should be spent on the service, and on what basis? What role should the Ministry, doctors, managers and local government play in the policy process? Should hospitals remain the only part of the system that was really under government control? Bevan’s initial view – that the NHS should ‘universalise the best’ – seemed a poor guide to action in an era that demanded the management of competing means and ends inside limited budgets.

Increasing demands, growing scandal and the new economics of health The NHS was, in general, popular, since most of the public agreed with its principles. Even by 1969, nearly 80 per cent of voters thought they got ‘good value’ from hospitals, a ﬁgure much higher than the proportion

170 From Dreams to Disillusionment

thinking that schools and housing services provided an efﬁcient service.11 But though the principle of health care free at the point of use was extremely popular, from about the time of the service’s tenth anniversary in 1958, a rising tide of comment and protest was notable among a press and public less willing to take the beneﬁts of the NHS at face value. Certain features came in for increasing criticism: it was in this period, for instance, that journalists ﬁrst began to refer to the ‘National Health lottery’, under which care ‘ranges from the best to the worst’.12 Another problem was the changing structure of the population. Not only was it thought that many more people were going to be living in Britain: the projection was that many more of them would be children and old people. The best available estimates in the mid-1960s projected that by 1975 the population would contain a third more children under the age of four, and a quarter more older people over 65. Applied to the levels of provision per head of population implicit in the Hospital Plan, this might mean more than 10,000 new maternity beds were needed, a 50 per cent increase over the numbers available in 1962. 70,000 beds for geriatric medicine in hospitals and residential places for the elderly might also be required, an increase of 30 per cent over early 1960s numbers.13 These population projections were not, in the end, borne out, but they formed one critical part of policymakers’ perception of future needs. Revelations about the standards of care for the most vulnerable patients, of whom there would be many more if population projections were anywhere near the mark, further raised public concerns. These began in earnest on 10 November 1965, when a group of clergymen, peers, academics and social workers wrote to The Times. ‘We, the undersigned, have been shocked by the treatment of geriatric patients in certain mental hospitals’, they wrote.14 This letter, from the group which became known as AEGIS – Aid for the Elderly in Government Institutions – called for action to end the ill-treatment of the old. The book Sans Everything, edited by Barbara Robb of AEGIS, uncovered a grim world of ‘rage and misery’, ‘inadequate buildings, bad organisation, over-crowding, shortage of money and shortage of staff’. Robb produced evidence from doctors and voluntary bodies that, due to a shortage of beds, the elderly were living out their days in inappropriate mental hospitals.15 The Ministry was forced to announce an internal inquiry.16 Hospital Boards were each asked to set up a committee to look into these allegations, most of which they disputed. But one problem with the whole process was that most of AEGIS’s witnesses preferred to

Health Care and the NHS 171

remain anonymous, making it very difﬁcult for them to be substantiated. On the allegations concerning abuse of elderly residents in an Oxford geriatric unit, for instance, the Government’s White Paper summarising boards’ ﬁndings evinced ‘no doubt… that they have been disproved’. Although there was evidence of ‘occasional misconduct’, due to staff shortages and the testing nature of the job, there was no evidence that any systematic abuse had occurred. Conclusions on other cases were similar.17 However, publication of the White Paper was followed by clumsy references in the Commons by the Labour Health Minister, Kenneth Robinson, to ‘totally unfounded or grossly exaggerated’ allegations.18 This was unfortunate, for it was to become clear in the coming months that the NHS was indeed failing long-stay patients: New Society found Robinson’s statement ‘shockingly complacent’.19 Another scandal quickly erupted, centring on a hospital for the mentally ill at Ely, near Cardiff. The News of the World published serious allegations about Ely in August 1967.20 The Ministry immediately set up a ‘Sans Everything type of inquiry’, and this new investigation was more effective than the last. This time the main witness, a Greek Cypriot nurse who had been forced out of the hospital, was not anonymous. It was therefore much easier to establish the truth.21 Robinson appointed a young Conservative lawyer, Geoffrey Howe, to head the inquiry. His report condemned almost every aspect of the hospital. Management control was under-developed, with no-one taking responsibility for general policy or for putting government guidelines into effect; the buildings were cut off and isolated from one another; the hospital was overcrowded and under-nursed, and facilities for children’s play were ‘seriously deﬁcient’. ‘Lack of skill and some lack of sympathy’ had been routinely exhibited towards the patients, including locking them in solitary conﬁnement.22 Crossman realised that this was ‘devastating… far more disturbing’ than Sans Everything: most of the allegations made by the News of the World were substantiated.23 Overruling his civil servants, he published the Report in full, ensuring the maximum impact for the story. Crossman’s mother had recently died in squalid conditions in a nursing home, and he had discovered that his second wife, Zia, would never have been admitted to hospital (even though suffering from a terminal illness) had the consultant not thought that Crossman would pay for a private bed.24 Crossman’s anger was therefore personal, and it grew when he discovered that a quarter of a million patients were housed in old Public Assistance buildings, quite unsuited to modern medicine. The worst point was that departmental policy, which was to move patients out into

172 From Dreams to Disillusionment

the community as quickly as possible, might have contributed to the situation. Those patients with the most acute problems, and who could not be moved, were often ignored given this policy. They were frequently relegated to ‘back wards’ in which maltreatment was widespread.25 Investigation and complaint also seemed to be positively discouraged. At a dramatic meeting with his Chief Nursing Ofﬁcer, medical advisors and political aides at the DHSS, Crossman discovered that there had been a series of reports from the Nursing Ofﬁcer’s regional staff, stretching back to 1953, condemning Ely. It had recently been partially rebuilt, making some of the criticisms out of date, but the reports revealed the management’s attitude. ‘There is only a sordid little yard for the children to play in’, one recorded; none of the patients had their own lockers or clothes; one nurse used dirty water to wash the children’s hands, for there were not enough washbasins.26 ‘Appalling’ practices had still been in evidence in 1967.27 To work out the Department’s reaction to these ﬁndings, Crossman set up what he termed his Post-Ely Policy Working Party. This contained both ‘outsiders and insiders’, including England’s Chief Medical Ofﬁcer George Godber, the LSE social scientist Peter Townsend, and Howe himself, along with Eileen Skellern, Superintendent of Nursing at the Royal Bethlem and Maudsley Hospital and Dr Gerald O’Gormon from Borocourt Hospital, both at Crossman’s suggestion.28 A series of new ideas ﬂowed from this working party, especially on the inspection of hospitals. For instance, it contemplated the establishment of a new ‘professional consultative group’, along with a ‘Hospital Advisory Committee’, which would advise hospitals on best practice and planning services for long-stay and incapacitated patients. New systems for making complaints were also considered. This would be no new thing, the Chief Nursing Ofﬁcer, Dame Kathleen Raven wrote, but could now be backed by political will. ‘Where we have failed all along’, she argued, ‘is that we have not brought pressure to bear on the Boards… [resulting in]… isolation, frustration and ﬁnally complete lethargy’.29 The need for new ideas was highlighted by fresh information on the extent of problems in long stay care: in Wales, for instance, 57 hospitals were found to require ‘high priority action’ on bed spacing, 68 on patient privacy, 82 on toilets, and 61 on day space.30 Given this, one innovation the working party eventually secured were minimum national standards, for instance on stafﬁng levels per patient and space per bed. Other ideas, however, ran into trouble. Consultants were deeply worried at the idea of an inspectorate that might contain laymen such as management experts and consumer representatives, and there-

Health Care and the NHS 173

fore in their view constitute a threat to professional freedom. Regional Hospital Boards jibbed at the idea of an independent inspectorate, since its reports might contain lists of expensive demands. The new body therefore remained advisory, separating policy from consultation. Crossman’s championing of the idea of an Advisory Service did eventually overcome opposition, and inspections began in February 1970. All of the hospitals for the mentally ill had been inspected by the end of the following year.31 Nevertheless, some new ideas did attract widespread support: a ‘health ombudsman’ or commissioner was proposed, an independent ﬁgure with powers to investigate cases that were not solved satisfactorily at local level.32 Pressure for the appointment of an ombudsman grew throughout the Ely controversy, though the proposal was still outstanding when the Wilson government fell. To the anger of Howe and many members of the Post-Ely Working Party, Whitehall ofﬁcials had insisted that this report be put out to further consultation on a code of conduct to make any grounds for complaint clearer. The idea had to be implemented by the Heath administration.33 The ‘evil spirits’ Crossman divined within the NHS continued to be unleashed in scandals such as the South Ockenden case, where conditions at another hospital for the mentally ill were revealed as brutal and degrading.34 But central government had at least started to set and monitor standards in such institutions. A surge of interest in medical economics added to the pressure. American economists, in particular, began to consider why spending on health care was rising throughout the developed world, and found a number of answers quickly to hand. Government agencies were replacing extended families in this role; public and expert tastes were shifting towards increased medical intervention; new technology was extremely expensive, meaning that the relative price effect operated with a vengeance in health care.35 The strain on budgets meant that some way had to be found to work out whether all this was good value for money. Tests were proposed to analyse why US states differed in health insurance coverage, hospital admission rates, bed use and length of stay per case. A massive health care survey carried out by the University of Michigan in the late 1950s attempted to quantify, not only family insurance levels, but also hospital utilisation, admission rates, length of stay, and costs per family, individual and institution.36 Economists hoped that work might provide the groundwork for prediction and planning, and a huge literature has indeed accumulated around the question of how to measure and evaluate health care.

174 From Dreams to Disillusionment

In the early 1960s, however, such formalisations were still some way off, and acute theoretical and practical problems confronted the early pioneers in this ﬁeld. Concepts of supply and demand were particularly difﬁcult to deﬁne in health care as opposed to other areas of the welfare state, for consumers usually knew very little about what they should be asking for; and any concept of clinical ‘need’ was very indistinct. Academics attempted at the time to work out the need for hospital beds on the basis of referrals and waiting lists. In 1960, the Nufﬁeld Trust published a study of Barrow and Furness that developed the concept of the ‘critical number’ of acute care beds. This assembled information on general practice referrals, waiting lists and the average stay in hospital to theorise about the number of beds that might be needed if queues were to be run down. Signiﬁcantly for policymakers seeking to rationalise provision, the Barrow study showed that the ‘critical number’, at 2 1/2 beds per 1,000 people, might be much lower than hitherto thought.37 The problem with this approach is that it did little to measure objective ‘need’. Work done by the Harvard economist Martin Feldstein appeared to show that, when hospitals provided more beds, general practitioners simply ﬁlled them with more patients. British measures of ‘manifest demand’ were ‘meaningless’, Feldstein concluded, for the number of referrals to hospital, and the time patients spent there, went up as more beds were provided. Rather than a more in-depth ‘investigation, for various conditions, of the relative beneﬁts of hospitalisation and out-patient or domestic care’, the Nufﬁeld studies took ‘doctors’ requests for hospital admissions and the average length of stay’ as their measure of adequacy.38 The lack of connection with costs and beneﬁts was noted by other economists: even the massive Michigan study was criticised for its lack of relative cost analysis as between hospital medicine and other types of treatment, or between health and other types of welfare spending.39 Data that would show the links between medical practice and actual health, for example by mapping doctors’ referrals in small geographical areas against the age, sex and economic status of the residents, only began in the 1970s.40 Such studies reinforced pleas for more spending, since investigations seemed to reveal a huge clinical ‘iceberg’ of non-reported health problems. These included stress-related disorders that potential patients refused to discuss with doctors. Health requirements thus became a ‘quasi-supply concept’ under which demand was created by the availability of medicines that were thought to work, or alternatively deﬁned by the expressed wishes of patients, normative judgements made by

Health Care and the NHS 175

doctors and nurses, and the priorities set by lay policy-makers.41 The requirements of health services, economists theorised, were ‘subject to deﬁnition only by a third party’ as an arbiter ‘between rival needs’.42 More dramatically, Powell himself argued that ‘there is virtually no limit to the amount of medical care an individual is capable of absorbing’.43 The worrying feeling that there was a huge unmet demand for health care, and that some attempt at least must be made to meet it, began to grow among policy-makers. The need for more information also became a key problem in Britain, since central government was not as well informed as it might have been. When Bevan asked the civil servant Sir Cyril Jones to look into NHS ﬁnancial management in 1950, he reported that ‘the fact is that the Ministry possesses very limited information regarding the ﬁnancial administration of the hospitals… [and] has no costing yardsticks at its disposal by which to judge… relative efﬁciency or extravagance’.44 Civil servants’ doubts were actually part of a long tradition of worries about the Ministry’s technical abilities. These dated back to the 1920s, when the new Ministry was thought by many to have been held back by the ‘insipid’ traditions of local autonomy it had inherited from the old Local Government Board.45 Even so, the Treasury thought that the Ministry of Health’s lack of expertise was now becoming an ever more acute problem given that it had to manage the entire NHS: senior ofﬁcials believed it to be ‘an old fashioned regulatory Department who have suddenly got landed with a senior managerial job’.46 During the 1950s and 1960s, the Ministry of Health tried to learn more. The Ministry’s ﬁrst full-time statistician was taken on in 1955, and a Statistical Branch created to accommodate him in the same year. An Organisation and Methods Unit was set up in 1954, which was made permanent in 1958, and which contained 35 full time staff in the early 1960s. The Ministry’s expenditure on research and development leapt from £18,000 in 1963/64 to £250,000 in 1966/67 alone.47 The Nufﬁeld Foundation assisted the Ministry in such work, and during the 1950s and early 1960s mounted a number of studies on hospital costing, job analysis, ancillary supply services, and the application of operational research.48 Since 1949 the annual Hospital In-Patient Enquiries had assisted in the process of assembling spending priorities, since it showed workload by department.49 From 1959, these investigations were reformed to cover all hospitals, and to reveal exactly which illnesses patients were suffering from, rather than just which type of medicine was thought best for their treatment.50 A new Hospital Practice Branch was created within the Ministry in 1962 to work on ‘the detailed study,

176 From Dreams to Disillusionment

measurement and evaluation of established good practice’, and to present their results in a way that would be useful to Hospital Management Committees.51 This reinforced the work of the Organisation and Methods Unit, which, for instance, conducted sixteen studies of nurses’ work between 1960 and 1968. These eventually recommended that nonnursing work that had nothing to do with patient care should be provided by external agencies or central housekeeping staff.52 Although very important in encouraging government spending on health, the new data had signiﬁcant limitations. Until the 1960s, successive governments’ interest in information about the NHS was usually aimed ‘at quickly realisable savings for which there was no doubt scope in the National Health Service (e.g. drugs)’.53 Hence the Ministry did know how many patients general practitioners had, since payment to family doctors was based on exactly that indicator. The emphasis on saving money was to some extent understandable. The new Statistics Branch contained only seven staff members in 1961, and only one statistician was available to work on the whole hospital service.54 In private, the Ministry was extremely worried: civil servants commented in 1963 on ‘an appalling state of ignorance about the hospital service. Differences exist in hospitalisation which defy explanation, there is no real measure of need, nor any direct attempt to measure efﬁciency’.55 Central government was left without comprehensive information about vital parts of the NHS: only in the late 1960s, ﬁrst with the creation of a full Statistical Division and then with the creation of four different statistical branches working on the health ﬁeld, was Whitehall really able to bring together investigations that looked into the links between problems of manpower, remuneration, local health services and hospitals.56 From 1957 the Ministry of Health built up a Main Costing Scheme that outlined how much was spent per week and per patient in each department. However, a much simpler ‘alternative scheme’ continued for smaller hospitals that felt that they could not comply: by 1964 the latter still covered 550 hospitals in an NHS that contained more than 2,400. This inevitably meant that comparisons between hospitals were more difﬁcult. The Main Costing Scheme also did not reveal why different departments spent different amounts, and contained little about the performance of different specialisms, for in this context ‘departments’ usually only distinguished between out-patients and inpatients.57 The ﬁrst comprehensive academic attempt to compare the cost of NHS hospital treatment on a case-adjusted and therefore comparable basis was mounted by Feldstein in 1967, and his data related to

Health Care and the NHS 177

the early 1960s. Only then could judgements about differential productivity be made.58 Most of the studies at this time could not distinguish between long or short-term costs, disentangle cost effectiveness and technical efﬁciency, comment about the basis on which hospitals collected their data, or provide certain estimates of demand in each catchment area. Even population ﬁgures, relatively reliable for the whole country over at least the short term, were necessarily unreliable for each locale because they relied on general practitioners’ lists. Since not everyone was registered with a doctor, or not at least one close to their home, estimates of local population and internal migration were problematic.59 The Deputy Chief Medical Ofﬁcer summed up the situation in 1968: although Whitehall could consult with over one hundred interested bodies over any change of policy, ‘the full value cannot be obtained… because of the absence of important appropriate data’.60 The health planning movement of the 1960s was partly aimed at correcting these inadequacies, for as we shall, one of its central aims was to help central government understand and know more, so as to be able to ‘map’ and then reform the NHS. Computerisation was also supposed to help rectify these shortcomings, and the need for more computers became a recurrent theme of Ministerial propaganda. A Computer Policy Branch was set up in 1966, to encourage such methods, as ‘the potential use of computers in all parts of the NHS was vast’.61 ‘The use of computers in the health service’, David Ennals argued as Minister of Health in 1969, ‘would bring improvements in direct patient care, increases in clinical and administrative efﬁciency and better facilities for management and research’.62 The reality could be more prosaic than the rhetoric. A Ministry study group recommended in 1964 that NHS authorities should only buy computers if they fully justiﬁed their cost: more precisely, if they saved ten per cent or more in staff costs every year.63 A Ministry attempt to establish a large four-year computer programme for the NHS was also frustrated by the Treasury in 1968, at a time of very tight public expenditure restraint. Health ofﬁcials were left with a larger pool of pilot projects, for instance at King’s College Hospital and St Thomas’ in London, which worked on storing patient records and payroll details. Computers’ potential may have been vast, but their use was still very limited.64 The application of rational thought to choice in health administration, and the collation of new statistical series, had important effects. Worries about geographical and class inequalities came back to the fore in the 1960s, as it became clear that the NHS was not as egalitarian in

178 From Dreams to Disillusionment

its effects as its founders had hoped. Studies of individual indicators of health, for instance infant mortality, seemed to demonstrate that there had been little improvement in class inequalities since 1948. Professional mothers were still less than half as likely than unskilled manual workers to experience neonatal infant mortality. Although the 1960s was to see a narrowing of health inequalities, they had widened so quickly in the 1950s that even by 1970 the gap between the highest and lowest occupational groups had still not returned to the levels reported in the 1949–53 period.65 Other countries’ practices were as inﬂuential here as they were in economic policy. The World Health Organisation began to construct comparable indicators in 1953, and a pilot project covering six nations was published a decade later: another group of expert academics, including Brian Abel-Smith as the author of many of the World Health Organisation’s studies, was making its inﬂuence felt. The range and complexity of this data made it hard to make quite the extreme ‘declinist’ case that was often made in some of the economic jeremiads of the time. Britain was a country with rather average death and infant mortality rates, and was also relatively small, with a densely packed urban population, meaning that the area each physician had to cover was rather low by international standards.66 There was, however, one crucial problematic element: Britain spent less on health care than most other European nations.67 Britain came near the bottom of the spending ‘league’ when it was expressed as total spending on health services as a share of GNP, as Figure 7.2 demonstrates vividly. Not only this, but its investment in new capital was even lower than many developing countries such as Senegal or Cyprus. This revelation inevitably added to the pressure to bring the retrenchment of the 1950s to an end.68 Public demands, scandals, new economic ideas, better statistics and foreign models thus combined to open a new era of higher NHS expenditure and greater central planning. A new climate of command and control was coming to the fore, stimulated by a desire to control that extra spending, direct it to localities and specialties where it might best be spent, and build up new statistics and administrative machinery that might allow policy makers to do just that. That desire better to plan the NHS was, at the same time, being boosted by new management techniques that hoped to shape ‘the context of the pattern planned for health services many years ahead’.69 Such objectives, however, were easier to recommend than to achieve. As we shall see, control was still uncertain, information scarce, and the very direction and nature of the NHS controversial.

Health Care and the NHS 179 Figure 7.2 Health care expenditure as a percentage of GNP, various nations, early 1960s 6

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slo va k

ia

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Po la Cz ec

UK

e Fr an c

lan er

nla Fi

ds

nd th Ne

ia lav os

tra

lia Yu g

Au s

en Sw ed

ile Ch

Sa d ite Un

Ca

na

te

s

da

1

Source: B. Abel-Smith, An International Study of Health Expenditure and Its Relevance for Health Planning (Geneva, 1967), table 24, p. 73.

‘Provocation of Nemesis’: the 1962 hospital plan The 1962 Hospital Plan conformed to the ‘modernising’ pattern familiar from the early 1960s. It brought to an end the period of adjusting old buildings and laid down a new blueprint for large and more ‘scientiﬁc’ hospitals, perfect for the era of heroic, technological medicine that was later to come under sustained attack. It contained estimates, deﬁnite for the ﬁrst ﬁve years and provisional up to ﬁfteen years ahead, for most aspects of the hospital service: bed totals, numbers of new hospitals or redeveloped old sites that would be necessary to meet needs, and the staff required. 1,250 hospitals were to be closed, and 90 District General Hospitals built, each containing between 600 and 800 beds and at an overall cost of £500m.70 The main elements of planning, including the time-horizon, the scale of the ambition, and the conﬁdence with which objectives were announced, were all in place. This project at ﬁrst seems at odds with the whole thrust of policy since 1951. It also seems strange that the Treasury would agree to a programme that from the outset implied increased public expenditure: one Treasury ofﬁcial indeed argued that ‘if the idea is to be speciﬁc about

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building ﬁfteen years in the future, it is a provocation of Nemesis’.71 To some extent this paradox can be resolved by noting the propitious appointment to key posts of three highly able and dynamic administrators: Powell himself, Bruce Fraser, the new Permanent Secretary recruited from the Treasury, and Godber as Chief Medical Ofﬁcer. Powell in particular seems to have utilised his wartime experience helping to reorganise the Indian Army, relishing the prospect of reordering an organisation that employed 400,000 people. These men were also able to persuade the Treasury of their case, Fraser being especially valuable in this respect, and Powell’s recent resignation from the Treasury over ‘excessive’ public spending helping as well. However, that cannot explain why these men latched onto ‘planning’ in the ﬁrst place. The decision had more deep-seated roots.72 One driving force behind the Plan was the large scale of investment the NHS required. The 1950s were not a total loss, for the merger of local authority and voluntary hospitals allowed a more logical use of resources, and the reapportioning of specialists under a state system meant that doctors were more rationally spread around the country. The small amounts of money that were available were spent on making existing hospitals more effective, for instance through the addition of new operating theatres. Even so, nearly half the hospitals inherited by the health service dated back to before 1890, and a third were even built before 1860. Many of these had been laid out at a time when the main reason for going to hospital was to die. Capital spending since 1948 had done little to change the picture.73 The need for new hospitals was becoming obvious by the time the Plan was published. ‘Fifteen years of makeshift and dither’, wrote one commentator, meant that ‘no country in Europe can rival our ﬁnely embalmed collection of antiques, some suitable for an eighteenth century folk museum and others a monument to skinﬂint pauper relief’.74 Doctors’ representatives were becoming impatient with this state of affairs, even arguing for a ‘return to planning’: ‘after the war this country had its ﬁll of planning… but this reaction has gone too far, and the time has come… when we should consider how the lessons of the ﬁrst decade of the NHS can be applied to the second’.75 By 1959 the British Medical Association’s Consultants and Specialists Committee commissioned a report on the need for new hospital building. This found that ‘the accommodation and facilities offered, although acceptable 50 years ago, are no longer so today’, and recommended a ten-year building plan, at a cost of £750m. This would mean a tripling of annual hospital capital expenditure.76

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Hospital capital spending had been increasing since 1955, though the rise was slow at ﬁrst. By the time the Ministry issued its Plan, they had brought yearly spending at 1951 prices up from £11.3m in 1954/55 to £28.6m. This was in part a reaction to political pressure over the state of hospital buildings: it was partly because of remarks made in an ofﬁcial report by the Cambridge academic Claude Guillebaud that the Treasury was persuaded to undertake its ﬁrst limited ‘forward look’ to 1959.77 Powell was promising to push ahead faster with a programme that was already getting underway. The Plan also reﬂected the fact that capital expenditure was one of the few points of control upon which government could rely. This had rebounded on the hospital service during the years of expenditure restraint, for it was always easier to postpone building projects than to refuse to sanction current spending on wages and clinical treatment.78 This drive towards centralised planning was again inﬂuenced by trends across the Atlantic. The US Hill-Burton Act of 1946 had made it a condition of federal grants that voluntary and state institutions survey their clinical facilities and develop coherent statewide plans. Area-based hospital planning then became increasingly popular throughout the 1950s, as both private and public bodies tried to apportion patients and specialist units in a rational way. The Health Planning Act of 1966 reinforced this process, since it backed up President Johnson’s Medicare for the elderly with 100 per cent federal grants for statewide planning agencies.79 The British Ministry of Health sent a high-level team to look at US practice in the run-up to the Hospital Plan. That country had managed a very large hospital construction programme since the 1940s, and its experiences were thus thought to be instructive now that the NHS was moving into an expansionary phase. A group of sixteen administrators, architects and Regional Hospital Board ofﬁcials went on a three-week tour of American hospitals in October 1960.80 Godber, at this point Deputy Chief Medical Ofﬁcer, had been on a preliminary visit in April 1960. He was impressed by the planning of individual hospitals under the watchful eye of the Public Health Service’s architects, and by the ‘the impressive part’ that their publications and advice had played in American hospital building. That service’s architects had recently completed a large-scale survey of hospitals, and were assembling ‘task forces’ to look into their efﬁciency, as well as preparing a series of notes on how to build different types of hospital department. Godber discovered that the Americans could build a hospital in just four years, only six months longer than it took the British just to

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plan the new buildings. It was no accident that all these technical themes became key parts of British hospital planning.81 If the large capital sums involved in the new forward programme were to be spent wisely, the Ministry recognised regional boards’ need for more stability. Long-term forecasting work done by the Oxford and Wessex Regional Hospital Boards, in which the Ministry took a close interest, had been the ﬁrst example of what could be achieved with this type of planning. Oxford had been the centre of a number of early experiments in information pooling, which helped to stimulate interest in future clinical needs. But by 1961 the Regional Hospital Boards were the only organisations that possessed the data and experience to undertake large capital projects, and their initial moves towards longer-term planning therefore fed back into the Ministry’s own adoption of such techniques. Central administrators continued to rely on information from Regional Hospital Boards when compiling the Plan: boards were asked in January 1961 to send in returns of how they thought their services would look after ten years. Signiﬁcantly for the quality of the eventual Plan, however, they were given only until the end of May to reply.82 This breakneck speed of compilation meant that Regional Hospital Boards’ submissions were of such a variable quality that some ofﬁcials thought them unusable. The variation in bed numbers, Fraser admitted, were a ‘good deal greater than can be justiﬁed by known local differences’: ‘it is not clear how far we are justiﬁed in going in saying they are wrong’.83 The more the Ministry asked questions about service provision, the more geographical inequalities were uncovered, and the Hospital Plan was therefore also aimed at equalising standards of health care across the country. There was a total range of variation of four beds per thousand population across England and Wales in 1960; the Plan hoped to bring this down to 1.3.84 Ofﬁcials’ frustration was rooted in their annoyance, not so much about those variations, but about shortcomings in Regional Boards’ raw data. As another civil servant noted: The quality of [analytical] work and presentation varies enormously. At the one end, the Oxford Regional Hospital Board have presented a reasonably compact document from which it is possible to see their present resources, need, the reason for the need, the proposals for satisfying it and the result of what is proposed. At the other, the East Anglian Board have produced a largely unargued list of schemes and made no allowance for other than major schemes in the second part of the programme.85

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Problems of knowledge were evidently acute, as elsewhere in the planning effort. It is true that the Ministry and Boards were not exactly working on a tabula rasa. There had been a clutch of wartime surveys, cosponsored by the Nufﬁeld Trust and the Government and showing how ill assorted and backward some healthcare was, which helped to prepare the way for the NHS. ‘The surveyors are quick to point out that the many harsh things they have to say are directed chieﬂy at the lack of a system’, noted Nufﬁeld’s short summary of its massive ten-volume study published in 1946.86 More topically for the authors of the new Hospital Plan, the Acton Society Trust had recently undertaken a study of the new NHS with the ﬁnancial assistance of Nufﬁeld and the Joseph Rowntree Foundation. Under this scheme T.E. Chester, Professor of Social Administration at Manchester, uncovered a great deal of useful information, especially on the administrative side. But in terms of hospitals on the ground, time and money conﬁned him to looking at three representative cases.87 The limits of this work, as well as the hurried request to the Regional Boards for information in drawing up the plan, speak for themselves. The situation in Scotland was a little better, and the Treasury in London noted with envy how ‘close a grip’ the Department of Health in Edinburgh had. They had far fewer facilities to oversee, and therefore ‘a much closer knowledge… than one can expect from the Ministry [of Health]’. Almost all the Scottish plans were in a much more advanced stage than those in England and Wales.88 Even so, the art of relating bed needs to regional populations was still in its infancy: even the Scottish Plan admitted that ‘assessments of bed need cannot be made in the abstract, and they are difﬁcult to deﬁne with accuracy… very little accurate information has as yet been taken out and analysed’.89 This work was by its very nature permissive. It did not direct change, but rather set limits based on hospitals’ prior experience. This meant that ofﬁcials in Whitehall were at the mercy of events beyond their analytical conception, and were relying on information produced by Hospital Management Committees and Regional Hospital Boards that the Ministry was coming to distrust. Following up their work on the Hospital Plan in 1961 and 1962, ofﬁcials looked into bed use and patient turnover management. They found that ‘statistical statements [were] of varying quality’, with some hospitals only collecting medical data that was far too complex for lay managers to understand or analyse. At least in those hospitals there were statistics: out of six hospitals investigated in detail, two only had ﬁgures on how many beds were occupied, the total discharges, and the number of patients on waiting

184 From Dreams to Disillusionment

lists. This failure of organisation was related to serious policy gaps, for many of the hospitals studied had done little to follow up the Ministry’s urgings, sent round by Circular in 1954, that they should reorganise their activities around the coherent use of bed space by, for instance, moving elderly patients with chronic conditions to long-stay nursing homes. Without knowing how many patients they had treated by specialty, it was often difﬁcult for management committees to know how to comply with these requests.90 They would certainly ﬁnd it difﬁcult to manage the more efﬁcient use of resources in the new district general hospitals. Abel-Smith was an astute observer of this trend, which as he wrote in 1962, meant that planners simply took the number of patients of each type who were directed to hospitals by general practitioners, and multiplied that number by the average amount of bed-days that they took up.91 They then added a ‘margin of safety’, which explains why the Hospital Plan recommended 3.3 acute care beds per thousand population rather than the two to 2.5 revealed in the Nufﬁeld studies of the 1950s.92 This could not be an adequate estimate of regional hospital needs, for as Feldstein made clear in 1964, these should involve choices about the best future use of resources, rather than general practitioners’ habits of referral and hospitals’ clinical traditions: ‘choice of this sort requires information not currently available. What types of patients are affected by regional differences…? What other factors affect the intensity of use of available beds? What is the marginal cost of treating additional patients with the current supply of hospital beds?’93 The Hospital Plan provided few answers to these questions. Throughout the 1960s, the number of hospital beds bore little relation either to death rates or social conditions in each area.94 Whitehall ofﬁcials did not conceive hospital planning primarily as a mechanism of increasing equality. On the contrary: it was seen as an opportunity to restrain expenditure. The BMA’s 1959 call for more hospitals was partly justiﬁed in this manner: ‘much more efﬁcient work and at less cost could be done in more adequate and more modern hospital buildings’, its authors argued. New hospital building would avoid uneconomical ‘patching and mending’, under which for instance expensive single surgery units were stuck on the end of existing hospitals.95 The Plan was not necessarily as expansionist as it appeared, for behind the increases in the capital programme lay a bargain with the Treasury to restrain overall expenditure. Powell was extremely assiduous in seeking savings during 1960 and 1961. When the search for cuts took on a new urgency in the economic crisis of 1961, he was quite willing to accept a cap of 21/2 per cent on

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annual increases in NHS spending. Capital development, that instrument of ‘true economy’, would continue, but current spending would have to be controlled.96 He also increased health charges and National Insurance contributions, which raised £65m for the NHS budget over a full year and took the share covered by those payments to 20 per cent, a long-term Treasury aim.97 Powell’s willingness to cut spending explains why Treasury ofﬁcials thought him ‘more austere than anyone else… a shining example of the policy of control’, even as he presided over a large rise in the capital budget.98 It also explains why they were prepared to allow the Hospital Plan to go through. Selwyn Lloyd was left free to include health in his limit on current public expenditure rises, announced on 25 July 1961.99 The idea behind this deal was a familiar one: that investment would help to save money in the medium to long term. Although of course a larger hospital service would raise total running costs, current expenditure per patient or per operation might be reduced. Having originally been very sceptical about publishing yet another detailed ‘plan’, Clarke outlined this deal to Fraser in November 1960. ‘It will be very important if we ﬁnd that capital expenditure… is reasonably “economic”, i.e. if it makes possible savings of running costs’, he wrote: ‘If on the other hand, we ﬁnd that the capital expenditure involves increases in running costs, this will act as a brake’.100 Powell originally sold the idea of a longterm plan to Butler with the hope they could establish ‘real ﬁnancial control over both current and capital spending’.101 The Ministry had also been working for years to systemise and encourage hospitals’ approach to costing their work, though even after such efforts the Hospital Costing Returns could show one hospital spending just over £2 per bed, while a similar one elsewhere in the country spent more than twice that, at £5 16s.102 There was also a large gap between knowing how much services cost, and judging whether they ought to cost that much. The Plowden Report had recognised this, concluding that ‘an improvement in the method of… making purposeful “forward looks” depends on whether it is possible to measure the services provided by different units and to express both the services and the cost of providing them in quantitative terms’.103 Without such knowledge, the bargain made with the Treasury was hazardous, and Plowden had in fact cautioned against any immediate large-scale expansion of the hospital programme.104 Whitehall’s economic reappraisal released the Ministry from long-resented constraints, but it certainly did not provide a rational basis upon which to spend the new money. One reason behind the Ministry’s bargain with the Treasury was that the Hospital Plan placed great faith in the ‘scientiﬁc’ technique of

186 From Dreams to Disillusionment

industrialised building, though not quite at the pitch reached at Housing. The Ministry established its own Architects Branch in 1958: its civil servants worked with the Building Research Station of the Department of Scientiﬁc and Industrial Research on cost norms, hospital design and engineering systems.105 The whole thrust of the Hospital Plans was ‘reduction in variety’, so as to save money on building as well as running costs. The Ministry co-operated closely with regional boards’ own efforts in this ﬁeld, and used successive volumes of its Compendium of Hospital Building to publicise its efforts.106 The Research Station circulated hospitals, conducting a survey as to how capital investment affected running costs, clearly implying that more modern plant should allow more efﬁcient use of resources. This might be achieved, for instance, through assembling all the wards inside the outer wall of the hospital. This would permit them to be broken up and reassembled as necessary rather than building and rebuilding the hospital, vital as perceived needs changed and the layout had to be shifted.107 This type of thinking was common at the time, disseminated for instance by the Nufﬁeld Trust and by professional medical journals. Hospital ward design was thought to be outdated, appropriate for the days when most patients needed constant nursing care and had to be kept together to prevent infecting other people. Now there should be a ‘residential section’, in which patients could live as they would in a hotel, overseen only by a small number of staff. This would be joined by a sequence of recovery rooms grouped around surgery and diagnostic centres. The new layout might allow doctors to move patients through the system quickly, save on staff as most of the time they would not be needed to supervise old-fashioned ‘wards’, and make patients more comfortable.108 The most potent expression of this ideology of rationalisation was the Ministry’s Building Notes, issued on the US model as work on the Plan progressed.109 The Ministry also commenced work on cost targets for different buildings, comparing hospitals with schools and housing.110 The beneﬁts of building massive hospitals using systems techniques were far from clear, however, and progress remained slow: only ﬁve of the new district general hospitals were ﬁnished between 1962 and 1968, though 72 more were in progress and already partly in use.111 There were a number of reasons for the slow progress made by the building programme. Some Regional Boards, such as Shefﬁeld, simply decided that their most acute need was to upgrade existing facilities. They spent about half their allocation improving wards on existing sites, rather than building new hospitals.112 Some schemes ran into long-running

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local debates. In Newcastle, there was a prolonged wrangle over whether to put the hospital in the middle of the city, or on its outskirts. In Reading, the Regional Board wanted two sites developed, while the Hospital Management Committee wanted to build round the old Royal Berkshire Hospital.113 Regional Boards’ existing bias towards spending money on their prestigious teaching hospitals, often on expensive sites and demanding high-speciﬁcation building to make room for new technology, sucked in more and more money that might have been used to bolster the community welfare services that were supposed to form the other half of these plans. Many Boards kept on adding new departments to the proposed hospitals until they met resistance from their sponsoring Ministry or the Treasury.114 For all these reasons, to say nothing of the increasing strain on the building industry that was supposed to deliver the programme, very few savings could be achieved in the short to medium term. This became increasingly clear in the winter of 1960–61. At this point, the Ministry was persuaded by regional boards to bid for a year on year increase of nine per cent in its building cost estimates. Clarke fulminated against the techniques used in reaching this ﬁgure, asking whether some of the individual Hospital Management Committees had ‘any really positive ﬁnancial management and control.’115 His anger was understandable. The Ministry was appealing to rising building costs and wages simply to raise the spending limits contained in its draft Building Notes, which was hardly the ‘control of public expenditure’ either Plowden or Clarke had in mind. Calculating how new building would affect running costs was only at a theoretical stage in 1961: the promises made about savings thus seem rash, at the very least.116 This had consequences for the whole programme, since the current cost savings that had been hoped for were not achieved. Fraser had to inform Clarke of this in the summer of 1963, fearful of the ‘arbitrary beastliness’ that would be involved in trying to get within the allocated total. The Ministry was also hamstrung when it searched for savings elsewhere in the programme, for it could not control local authorities’ health and welfare budgets, or directly inﬂuence running costs. Not surprisingly, Clarke was ‘not sympathetic’ to altering their public expenditure allocation.117 The Treasury offered £4m more (nearly all the Ministry had wanted) for hospital running costs in that year, but only provided hospital capital projects were reined back.118 This was only the ﬁrst of many delays to the Plan, which began to look hopelessly optimistic. As a means of gaining more resources for hospital building, and stimulating the ﬁrst profound thoughts about the future of the hospitals

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since 1948, the Hospital Plan was a remarkable document. Unfortunately, as it stood it was deeply ﬂawed. One internal Ministry memorandum was quite frank about the ‘absence of yardsticks for measuring either what standard of service is reasonable or what quantity of resources can reasonably be employed to provide any particular standard’.119 The Plan, although it contained a number of highly educated guesses, was still guesswork, relying on incomplete technical work, and on incomplete and inadequate information. The Ministry did, however, continue to experiment with new building techniques to help circumvent ﬁnancial limits. From 1966 onwards ofﬁcials promoted the idea of a standard and relatively small ‘Best Buy’ hospital that could be cheaply built in a single stage. Prototypes were built at Bury St Edmunds and at Frimley in Surrey, and were planned as one exercise that would provide ‘two [hospitals] for the price of one’.120 The savings involved in joint planning, along with the purchase of standard building materials, allowed up to 40 per cent savings in the original tenders.121 Best Buy hospitals carried the ‘medical management of beds to an extreme’. By planning them alongside an expansion of local community care provision and in consultation with other hospitals in the area that might in the future act as feeders for the new general hospital, it was hoped to provide far fewer beds per head of population. The project grew ‘into a concept of planning integrated health services for an area in close liaison with the hospital and local authorities’.122 Running costs, it was hoped, would also be held down through the systematic application of activity analysis – though a central database of such information was only made available to administrators in 1976. The attempts to get patients through the system more quickly does seem to have succeeded, with the number of acute beds needed to deal with admissions falling below two per 1,000 population, far below the targets in the Hospital Plans.123 Some of the other elements in the Best Buy plans were, however, less successful. Regional Hospital Boards proved unwilling to buy the Department’s designs, worried about losing their independence, shackling their architects and narrowing down their ambitions. ‘Time/cost overruns’ also became ‘a matter of growing concern’.124 Despite some savings, it became obvious very quickly that Whitehall was not going to realise its ambition to get ‘two for the price of one’: the £5.5m joint budget had been overshot by about £1m within a year, and was to go nearly £1m higher before the hospitals were actually completed.125 Money was saved as against traditional building methods, though Best Buy hospitals were a third cheaper rather than the 50 per cent that had

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been hoped for. But architects working at Frimley and Bury St Edmunds had to make more than 3,000 changes in the original drawings as technological demands and project teams’ views changed during the building process. The narrow design briefs, supposed to save money, meant that these changes were very expensive and time consuming. By 1975, Best Buy was eighteen months behind schedule, and ofﬁcials were forced to admit to the Public Accounts Committee that this and other projects had gone ‘sadly wrong’.126 When the department commissioned the construction expert Henry Cruickshank to look at this, he argued that ‘any system of standardisation, particularly on the national scale envisaged, will produce hospital buildings whose… construction costs will be higher than those for traditionally designed buildings’. It would therefore be ‘slightly more expensive’ in capital terms, though saving on design and consultancy, as well as being more open to change of use in the long term.127 But the cost was still much higher than hoped for in the 1960s. There was certainly little evidence that rises in current spending had been restrained by increasing investment. The new hospitals were usually equipped with much more expensive medical equipment from the start, and the savings from quicker patient treatment only just offset the more general rise in costs. Although bed occupancy might often be higher in some of the large new hospitals, this might be because patients, undergoing very complex procedures, were staying longer than they would have done in smaller hospitals using simpler methods. Bed ‘blocking’ might therefore be even more of a problem in the new hospitals.128 Ofﬁcials preparing the Hospital Plan had been clear that it would be per capita costs, rather than spending overall, that might be held down: even that hope proved optimistic. The idea of the ‘big’ district general hospital was being seriously questioned by the late 1960s. The relatively small Best Buy hospitals began this process, but more philosophical objections were also being raised. Commenting on large hospitals’ reputation for ‘efﬁciency’ in 1972, Crossman asked himself ‘about the social cost… nurses were often available for the small local hospital. But if you build a large hospital in the wrong place you won’t draw the ladies from the six local small hospitals because they went there part-time from their villages’.129 Planners also seem to have exaggerated the efﬁciency of expensive hospital treatment as against community medicine. By the late 1960s surveys of hospital patients demonstrated the prevalence of minor ailments in outpatient medicine, and the rather small percentage of hospital work accounted for by surgery and intensive care. In that situation, the whole

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justiﬁcation for the large hospitals recommended in the Plan began to break down, for admitting patients to hospital in such circumstances was much more expensive than being treated by their general practitioners in cottage hospitals.130 When in 1969 the Central Health Services Council recommended that district general hospitals might usually be even larger than the 600 to 800 recommended in the Hospital Plan, perhaps even containing up to double that number of beds, the Ministry ignored its recommendations.131 During the 1970s, the fashion shifted back to using smaller District General Hospitals with about 600 beds as a maximum, along with Community Hospitals that might provide frontline services.132

Planning the local health and welfare services If the hospital plans were to work, they would require a very fast and coordinated build-up of local health and welfare services to absorb the patients released from in-patient care. However, the 1944 White Paper’s preferred gateways to health care, health centres in which all NHS professionals would work, had been a casualty of tripartism. Since relationships between hospitals, local authorities and general practitioners were never made entirely clear, no one group was responsible for them, and health centres lacked an institutional champion to cut through the complicated planning process. Indeed, general practitioners, suspicious of local councils and worried about any suggestion of becoming salaried state employees, were openly hostile to health centres in the 1940s and early 1950s.133 The Conservative Government was ideologically indisposed to experimenting with universal health centres, preferring a more laissez faire approach. Ministry ofﬁcials privately accepted that ‘the credit squeeze was more to blame for the failure of local health authorities to establish Health Centres than opposition from the doctors’.134 By 1958 only twelve new centres had been approved for England and Wales, most of them in redeveloped areas such as Thurrock, or the ‘laboratory’ of new housing estates.135 The relative reduction in health spending that characterised the 1950s also had deleterious consequences. The number of general practitioners, for instance, increased only at a very slow rate, with a small fall in 1964. The number of patients per doctor, which had fallen until 1958, began to creep up again.136 The NHS had achieved some rationalisation in the distribution of general practitioners, with the semi-independent Medical Practices Committee exercising a measure of control over where doctors were able to set up practices. The country was divided into three

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categories: ‘restricted’ areas, where a ratio of less than 1,500 persons to each general practitioner meant that this committee would only allow new doctor to enter in exceptional circumstances; ‘intermediate’ locales, within which each case would be judged on its individual merits, and ‘designated’ zones, which all doctors could automatically enter. This control brought the length of the average general practice list down. The relative deprivation of restricted areas, however, persisted much as it had since the 1930s.137 At the same time, enthusiasm for integrating general practice with social work, health visiting and other welfare services was mounting. It was stimulated for instance by preparations for the Hospital Plan, which forced the Government to consider how hospital and local authority services might interlock. Local authorities’ comments on the plan revealed that they would like to build more health centres to help care for those people released from long-stay hospitals. Another example of this trend was The Field of Work of the Family Doctor, a report to the Central Health Services Council written by Dr Annis Gillie, a year later to be elected the ﬁrst woman President of the Royal College of General Practitioners. This report not only emphasised the importance of group practice, but also ‘adequately staffed and well planned premises, daily course-load conferences between general practitioners and local authority staff, and shared premises’. Though Gillie still favoured group practices as more popular among the profession, the implications were obvious. Health centres could provide this too, perhaps taking the ﬁnancial burden off doctors, and Gillie accepted that further study of the subject was required.138 Health centre building – and equalisation of doctors’ lists – only really accelerated under Labour. The second half of the 1960s saw a great deal of interest in general practitioner centres, stimulated once again by the US example. An American National Commission on Community Health Services reported in 1966, and argued that community health provision should be substantially increased. Neighbourhood health centres were funded through the American Ofﬁce of Economic Opportunity.139 Experiments such as Livingstone House in Edinburgh, set up by Edinburgh University to look into the possibility of general practitioners running diagnostic centres, were very inﬂuential. Guy’s Hospital worked with the Nufﬁeld Trust on a community health care scheme for the new Woolwich and Erith ‘Thamesmead’ housing project. This was based around four medical teams mixing doctors’ work with nurses, midwives and other staff.140 Robinson signalled a reversal of health centre policy when he wrote to general practitioners introducing himself as Health Minister; the

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building of such centres was exempted from the 1965 moratorium on capital expenditure.141 The main breakthrough, though, came after the standstill. Executive Councils were instructed to start paying local authorities for accommodation and rates, lifting this burden from the doctors themselves. This was in addition to the help that Robinson had promised doctors on ancillary staff, and was followed by a circular exhorting all concerned to build more such centres.142 This, along with more spending, achieved a major expansion. By May 1970, even though only 131 were fully operational, 79 more were being built, and a further 74 had been approved. They did not provide all the services their protagonists desired. Most of them did not contain a dentist, or a dispensing chemist; very few could conduct even simple outpatient operations; only four per cent of family doctors worked in such centres. Even so, they were at last making progress. The early 1960s also witnessed governments’ ﬁrst advocacy of ‘care in the community’, and this added to the political pressure to increase spending on local health and welfare services. The main element of this, of course, was to assist in the modernisation of hospitals. Indeed, Health Ministers were not slow to recommend local health and welfare spending ‘on economic as well as social grounds… the best – and indeed, in the long run – the only method of containing hospital costs’.143 This was publicly clear at the time, with The Economist noting that it was ‘the running down of the mental hospitals, which at present contain about a third of all hospital beds… [that might] enable Mr Powell to balance his books’.144 Expert opinion outside government had much more explicitly expansionist aims for community care. The Younghusband Report, named after Eileen Younghusband as the chair of the ofﬁcial Working Party that issued it, was crucial here, since it recommended a large expansion in the number of social workers. Younghusband had played a major role in lobbying for this, both in establishing the ﬁrst undergraduate social work course at the LSE and through the Family Welfare Association. Younghusband and her allies were increasingly set on creating an expert social work profession, able to draw on psychological theory and conduct casework with ‘problem’ families rather than focussing just on individuals’ problems.145 But to achieve Younghusband’s target, and train 5,500 general purpose social workers given that the existing workforce numbered only 257, might cost £4m a year, a large part of a relatively small budget.146 However, given that this might in Powell’s words be both ‘popular and useful’, the Government agreed the expansion.147 Neither was the increased expenditure on community facilities for the mentally ill just intended to save money on hospitals. The Royal

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Commission on the Law Relating to Mental Illness, which reported in May 1957, recommended ‘no more restriction of liberty or legal formality than is applied to people who need care because of other types of illness’. New drugs and psychological counselling techniques fostered conﬁdence in treatment outside residential institutions, and the process of running down the resident population of the mentally ill in NHS institutions had been going on since the mid-ﬁfties. This, however, presented a problem for the Government, for the ‘residential hostels and homes… training, occupational and social centres’ which the Royal Commission thought should be provided by local authorities as a statutory duty would again be expensive. Many of the buildings in which the mentally ill were treated were the most dilapidated in the whole system, councils having inherited them from the old Poor Law in 1929: fulﬁlling the Royal Commission’s vision would require a great deal of effort.148 Some progress had already been made under the NHS. Expenditure on such services had already risen from £2.3m in 1954/55 to £4.1m in 1958/59.149 This caused great strain on local authority ﬁnances, with spending on these services outstripping the growth of other sectors.150 But once again, these ideas carried the day. Circular 9/59, issued in May 1959, outlined the range of new provision that was expected of councils.151 The Government was, of course, also confronted with the relative ageing of the population. Community care services for old people, previously relatively neglected, became at this time a commonplace of political rhetoric, as studies by welfare academics such as Townsend suggested that most pensioners wanted to go on living at home if they possibly could. Medical evidence increasingly pointed to poverty and poor diet, rather than illness per se, as the main problems facing old people, which meant they did not have to be hospitalised.152 Demographic shifts might also imply a need for increasing amounts of residential care. This entailed a rise in the small percentage of bed provision in welfare homes for the old, especially because by 1961 the queues of people waiting to get into such homes, and of local authority capital projects vetoed by central government, were already growing. When the Ministry realised the savings that might be made through more residential care in terms of hospital beds vacated, the programme was allowed to grow.153 The new emphasis on community care caused tensions at the highest level of government in 1959 and 1960, as the Ministry took submissions from councils for building plans from September 1959. The extent of need, after years of restrictions, was shown by the scale of local authority

194 From Dreams to Disillusionment

bids, which totaled £23m. The Ministry was able to approve only about two-thirds of these, and even then, most of the money would actually be spent in 1961/62.154 The argument with the Treasury that led to this increase had two important consequences for local authority planning. The ﬁrst was that the Treasury and the Ministry agreed to look two years ahead. The second was that Treasury ofﬁcials, hoping to achieve more control over this sector of public spending, redeﬁned it as a ‘major’ programme, and thus brought it into the ﬁveyear structure of the new public expenditure planning system. The Ministry would necessarily have to ask councils at least for projections over that period.155 Local authority associations had been arguing for a longer planning horizon since the Royal Commission on Mental Health had reported, and consultation on this began with a Ministry circular issued at the same time as the Hospital Plan. This, it was hoped, would help ofﬁcials back up their assumptions about the extent of provision they would have to provide for in-patient care, welfare homes for the elderly, maternity beds, and mental healthcare. This circular called for two ﬁve-year plans, along the lines of the Hospital Plan, covering not only loan approvals for capital work but also staff numbers and running costs, along with building projects ranked in order of priority.156 The White Paper detailing the returns was, therefore, at least based on local plans and knowledge, dealing with replies asking for large increases in the numbers of health visitors, home helps, nurses and residential accommodation for the elderly, as well as psychiatric and other social workers. Places in homes for the elderly in England and Wales, councils hoped, might rise from 90,448 to 132,923 by 1972. They also proposed that the numbers of social workers be increased from 2,943 to 4,879, and home helps from 25,478 to 37,083. Given the fact that old buildings would need to be replaced, as well as new ones built, these plans might cost over £100m. Local authorities also wanted to build training centres and hostels costing nearly £46m.157 Although Ministry ofﬁcials were prepared to countenance large spending increases on these services, they once again found survey results unsatisfactory. Just as the Hospital Plan’s empirical basis was uncertain, the differences in the community care returns were inadequately explained by different numbers of elderly or sick in each area. Some councils provided more than ten times the numbers of home helps that others did relative to their resident numbers of old people, and the worst performers – Cornwall and East Sussex, for instance – proposed to do little about this even in the 10 year period covered by the

Health Care and the NHS 195

new returns. The Ministry had no means of understanding why this should be so.158 In Fraser’s words, the local authority ‘plan’ was an initial ‘signpost rather than a map’.159 But by placing moral pressure on councils to act, and by getting local authorities to prepare plans in the ﬁrst place, the Ministry had exposed itself to political responsibility without the ability to deliver the hoped-for improvements.160 The Ministry was conﬁdent that the actual numbers of training places for handicapped people could be predicted. It was much less sure of the need for ambulance stations, hostels for the mentally ill, and home care for the elderly: demand for these was dependent on the uncertain course of change in the hospital service.161 In the case of mental health provision, it was clear that there was really no way of judging the impact of new treatments that could help sufferers live longer. ‘It is doubtful’, one paper on this problem concluded, ‘whether even at the end of ten years’ experience of planning any standard pattern… will have emerged’. Staff numbers per head of population were again reached simply by taking the average provision over the whole country: ‘further research and study [was]… required on a large number of points’, which had not even begun by the time the White Paper was actually issued.162 Preparations for a ﬁve-year programme did stimulate interest in those services. In summer 1962 spending on local health and welfare was forecast to rise to £132.5m per annum by 1965/66. The ﬁgure did indeed rise to £112m by 1963/64. But that still left the Ministry short of its objectives: real current spending, increasing at four per cent per annum, was rising at only half the rate planned for England and Wales. A mixture of spending constraints, inertia and local authorities’ struggle to cope with the demands being placed on them at this time ensured that numbers of home helps, community nurses and specialist trainers all lagged behind the Ministry’s objectives. As for capital expenditure, the White Paper had projected over £30m per annum. In fact, even though notional spending went up to over £20m, local authorities tended to fall behind the theoretical allocation.163 The Ministry had clearly been over-optimistic about community care in 1962 and 1963, partly because the advance of psychiatric medicine was at its fastest when the plans were made, to some extent because they were too conﬁdent that money would be made available, and lastly due to the fact that local authorities’ difﬁculties were insufﬁciently understood. If we look at the level of provision ﬁve years after that point, almost all of it was lower than central government had accepted a need for. This is clear from Table 7.1, which shows that only the number of social workers had kept up with the 1963 White Paper’s projections.

196 From Dreams to Disillusionment Table 7.1 Local authority health and welfare services, 1967: projection and reality, England and Wales (staff whole-time equivalents) Service

Cmnd. 1973 plan

Reality

Difference from plan

6,698 32,250 8,854 6,232 4,295

5,549 31,989 8,572 5,118 4,909

–17.2% -0.8% –3.2% –17.9% +14.3%

117,621 21,828

118,194 18,545

+0.5% –15.0%

22,847

20,702

–9.4%

Health visitors Home nurses Home helps Midwives Social workers Residential places, 65+s ‘Mentally subnormal’, training places, <16s ‘Mentally subnormal’, training places, >16s

Sources: Cmnd. 1973, Health and Welfare, tables 1 (a)-(c), pp. 366–7; Cmnd. 3702, Ministry of Health Report for 1967 (July 1968), tables 39, 43–5, 48, pp. 124–5, 129, tables 47, 51, 53, pp. 129, 132, 137.

Every other category, and especially numbers of health visitors, midwives and training places for the mentally ill, were a long way behind the targets set in 1962 and 1963. This has consequences for plans made right across the NHS. Even by 1970 the reduction of hospital places for the mentally ill had only advanced one-third of the way to the targets set in 1962 and 1963; geographical variations in provision, though lessened, were even further from the target of achieving the national norm across all regions. The provision of day centre places for the mentally ill was 30 per cent behind target, while the number of places in homes and hostels was one quarter behind what was projected in the Health and Welfare White Paper.164 Local authorities found it very difﬁcult to strike the right balance between funding rehabilitation projects and helping with long-term care, and often lacked the trained psychiatrists and social workers if they did decide to emphasise the latter. Academic studies conducted in the late 1960s suggested that up to half the patients still in hospitals for the mentally ill did not require residential care. In this situation, community care sometimes became a ‘linguistic sleight of hand’, by which governments disclaimed responsibility for the vulnerable and allowed families to bear the burden.165 However, it is important to make clear once again that the Scottish Department of Health was able to launch a rather more coordinated policy, partly because the idea of social work in that country arose more clearly out of a concern with teenage delinquency and youth crime that added to the impetus for reform. As with

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the Hospital Plan, the Scots were also relatively more successful in achieving their planned targets because that country contained both a smaller health care sector and a more tightly knit policy-making community.166 Again, the comparison with the situation south of the border is illuminating. In England and Wales, local authority ‘planning’ had instilled a longer-term view of capital projects, and a better sense of priorities: but as for its actual scope and quality, including its relationship to the hospital service, the situation remained nearly as uncertain as it had been before 1963. The revision of community care plans the Government published in June 1966 was again more of a ‘rolling forward’ of existing plans than a full review. Even by the end of the plan period, projections made by the English and Welsh local authorities had altered little since 1963. Where there were changes from the April 1963 White Paper, demands for staff, especially for social workers, were still growing. The same problems of control also remained. Central standards could not be settled without much more experience of planning, and much more research. Ministry manpower could not cope with judging services in each and every local area.167 Most often, little was known about how many people actually required care, the needs unmet by particular services, and the reasons why some local authorities seemed to provide much better services (of up to ﬁve times more staff per head in social workers and home helps) than others.168 On the other hand, detailed monitoring and control was strengthened. Such exercises would be vital if the Hospital Plans and the community care White Papers were to have any effect, as one ofﬁcial argued: the ‘principle of the full use of the statistics obtained must… be accepted when viewed in relation to the new concept of planning’.169 New statistical work was already well underway in some areas of medicine, for the new Mental Health Act of 1959 made many of the previous statistical categories obsolete. In reaction to this, all statistical work on mental health was centralised in the Ministry of Health, whereas it had previously been conducted in concert with the General Register Ofﬁce. A national series on the use of compulsory medical conﬁnement was started, as well as data on admissions, discharges, readmissions and – crucial if community care was to work – linking records on the treatments given, and on aftercare following discharge.170 In this ﬁeld at least, a rather different vision of ‘planning’ had made real gains for some of the most disadvantaged members of society. The mentally ill, the old and inﬁrm, and children in foster care were better provided for than they had been before, and a sustained effort had been

198 From Dreams to Disillusionment

made to upgrade and publicise the services on which they relied. The hospital plans relied from the start on a new beginning in this sphere, and the more pragmatic and sensitive agenda of ‘social planning’ evident later in the decade in the Urban Programme therefore made faster gains in health than elsewhere. Even so, central government was only at the start of ﬁnding out what local health and welfare services provided, why they did so, and which models should be followed in the future. Frustration at this slow pace of progress was one reason behind the growing sense that administrative reform and rationalisation were required, and it is to this movement we now turn.

‘Chain of command’: a new structure for the NHS? The inadequacies of a fragmented and poorly organised health service were obvious by the 1960s, the last years of which were marked by a concerted attempt to unify and coordinate the service. The introduction of corporate management techniques was supposed to force management to think systematically about the future, provide criteria for assessing different spending bids, and lay the basis for long-term thinking about demand. This would achieve the ‘systematic planning, careful monitoring and critical evaluation’ recommended by the World Health Organisation.171 However, as we shall see, this attempt at managerial rationalisation was stalled by conﬂicts with other health service objectives, as well as its own inherent contradictions. The thinking behind ‘uniﬁcation’ was also inﬂuential in the creation of the new DHSS in 1968, for this was supposed to facilitate strategic thinking on all types of social welfare. Balogh, for one, thought it might contain ‘a statistical organ which will be effective and will effectively embrace the whole ﬁeld’.172 The new department also provided a Ministerial home for Crossman, who was not prepared ‘to play the cardboard role’ that Wilson had given to Douglas Houghton, Patrick Gordon Walker and Michael Stewart as social policy ‘overlords’.173 The problem with this system was that the new ‘Secretary of State for the Social Services’ remained a very remote overlord, powerful enough to shape policy but never involved enough to really push forward the agenda of one department – either health or social security. Crossman rather drifted in the role, despite his important intervention on the care of the mentally ill. The new DHSS was too big: even its Permanent Secretaries regretted its creation, noting that it was ‘elephantine’, and ‘extraordinarily difﬁcult to run’.174 The roots of administrative reform are relatively easy to trace. The BMA and Royal Colleges had been pressing for more central direction

Health Care and the NHS 199

to be given to the NHS since the early ‘sixties. Labour politicians in Opposition concurred, envisaging a single tier of administration to aid planning and control.175 From the Labour Party’s rank-and-ﬁle, there was continuing pressure for a more concerted but radically different ‘democratic’ service, that is, one run by local government.176 More importantly within Whitehall, the Treasury argued that ‘we were all agreed that the present organisation was not satisfactory… power and responsibility were divorced, the Ministry of Health was not fully in control and there was not a fully integrated chain of command’.177 It was clear that a thorough investigation was required, and in October 1967 an internal inquiry into the administration of the NHS was approved.178 The situation facing Whitehall investigators in 1967 was complex because the Government had already appointed an independent inquiry into the personal social services under the Quaker social reformer Frederick Seebohm. This had been stimulated by Labour Party and Scottish Ofﬁce investigations into ‘juvenile delinquency’ and the care of children whose parents could not look after them, and then by expert academics such as Richard Titmuss, who wanted a study of the potential of better planned and more integrated social services.179 Alongside the Seebohm inquiry, a Royal Commission was investigating the structure of local government in England under Lord RedcliffeMaud. These parallel inquiries slowed progress, for NHS reform had to wait upon their recommendations. However, each also bore the hallmarks of the theories of the time, displaying a desire to replace segmented and poorly integrated services with large ‘strategic’ organisations. This would hopefully see all the services united in working towards agreed goals while focussing on their allotted tasks, as well as constantly reassessing their performance.180 Not that waiting for these reports made the situation much clearer. When Redcliffe-Maud reported in June 1969, he argued that reformed local government might itself ‘be able to ensure co-ordination of the health service with the personal social services’, and he was supported by many Labour MPs and Ministers.181 However, most ofﬁcials within Whitehall were completely set against local authority control. DHSS Ministers such as Bea Serota, the Minister of State for Health, ruled it out immediately as difﬁcult to organise and impossible to sell to doctors, though the department was willing to see councillors involved in the new machinery. The Treasury was even more bitterly opposed on the grounds of local councils’ perceived lack of expertise. Some ofﬁcials in that department had hoped to push forward their own plans for an ‘NHS corporation’, and Redcliffe-Maud was in many ways a rude awakening.182

200 From Dreams to Disillusionment

The Seebohm Report further confused matters by recommending local authorities create ‘social service departments’, amalgamating child care departments with all other forms of social welfare – the care of old people, for instance – while handing over local government’s vestigial functions in the health ﬁeld.183 Seebohm did not exactly meet with a chorus of approval. The Home Ofﬁce wanted to keep its direct responsibility for children’s services; the BMA worried about the implied separation between local authorities’ social service work and general practice; local authority medical ofﬁcers of health objected to the loss of many of their responsibilities, as well as elected councils’ exclusion from the NHS.184 The informed press pointed out that this ideology of integration, under which all social service work would be done by local authorities and all medical work by the NHS, might build a new wall between general practitioners and family service work that would run counter to the whole move towards health centres.185 Confronted by these competing ideas and demands, in 1969 and 1970 Crossman – with Abel-Smith as his specialist adviser – worked out a complicated two-tier solution. A local government take-over was ﬁnally ruled out, to win over the doctors; in a separate deal, the Home Ofﬁce was allowed to keep the Children’s Service, at least for now. Between 80 and 90 Area Health Authorities would be co-terminous with the Maud unitary authorities. These would be one-third appointed, onethird nominated by the professions, and one-third drawn from local government. These authorities would be supplemented with another layer of administration – ‘district management subcommittees’ – appointed by the Area Health Authorities themselves to act as their local agents. It would be these subcommittees that would carry out the detailed administration of the NHS. Though this blueprint would have done away with regions, Crossman eventually decided to keep them as appointed ‘councils’, with limited co-ordinating powers. In this way he tried to strike a balance between hospitals, who inevitably favoured regionalism as the natural evolution of the Regional Hospital Boards, and community medicine advocates, who thought local area authorities would be the best way forward.186 Crossman hoped thereby to end the embarrassing delays caused by Seebohm and Maud. Under his new blueprint, Area Health Authorities would have been the main ‘building blocks’ of the NHS, responsible to the central department for delivering policy, though they would in their turn have appointed the district-level management committees. Consultative Regional Health Councils would have taken responsibility for co-ordinating some services, for example postgraduate medical,

Health Care and the NHS 201

general staff training, and blood transfusion.187 The Welsh and Scottish Ofﬁces would have acted as the respective regional tiers of administration in those countries.188 Amalgamated local authority social service departments would have operated personal welfare, while councils would cede their remaining health functions to the NHS.189 Labour fell from power as its proposals were being converted to a White Paper; but the eventual Conservative reorganisation of 1973–74 exhibited even more clearly the strains between setting up large and efﬁcient management units, the need for consultation and cooperation, and the desire to encourage participation. The Conservatives, pursuing their own brand of ‘rationalisation’ through greater administrative direction, now reverted to powerful Regional Health Authorities, though these were not deemed to be required in Wales and Scotland. On the other hand, new Area Health Authorities – very similar to those Labour had proposed – were still supposed to devise broad policies for their particular areas, while ‘multi-disciplinary health care planning teams’ at district level were responsible for operational plans to put them into effect. Community Health Councils were set up alongside each of the District Management Teams, to ‘represent the views of the consumer’, with one-third of their members drawn from voluntary organisations and one half from local authorities. Family Practitioner Committees were given responsibility for general practice, dentistry and ophthalmic services.190 It was an extremely unwieldy system, with at least ﬁve levels of administration, and lateral cooperation essential at every level. The confusion between having different elements of the machinery put in charge of different policies, and the idea of ‘co-operation’, was very evident.191 The reorganised NHS suffered badly from this problem. While area level administrators usually worked well with the area ofﬁcers, district managers’ links to the Area Health Authority as the main unit of control were sometimes tenuous.192 Though Community Health Councils often did a conscientious job of representing consumers, district managers were often very sceptical about them, obstructing their work where they could: their one administrative power, a veto over change of use plans for hospitals, did not really help them challenge or change current practices. They were also not very well understood among the public at large.193 It also took a long time for reorganisation to issue in an NHS corporate management system. The 1973 NHS ‘Grey Book’ on Management Arrangements, and 1976 and 1977 consultative papers concerning ‘the NHS planning system’ were the ﬁrst explicit attempts to inform NHS

202 From Dreams to Disillusionment

managers and professionals about the ways in which they should be acting.194 ‘Hierarchical segmentation’, within which each individual and team had speciﬁc tasks as part of wider strategic goals, was the most explicit part of governments’ exhortations, but how this was to ﬁt with consensus management and constant co-operation was left indistinct. The 1976 consultation document, Priorities for Health, attempted to lay down clear priorities, but its 1977 counterpart, The Way Ahead, was much vaguer about how this might be achieved.195 NHS planning and management systems simply could not cope with priorities requested from the centre, especially in those years of economic crisis when such demands could not be softened with more money: many health authorities continued not to produce such plans at all. In 1978 the department ﬁnally had to instruct health authorities to adopt the same form of programme budgets that was used in Whitehall.196 Central government had attempted to impose a ‘second stage of nationalisation’, under which more control would be exercised from the centre, though information and priorities would supposedly ﬂow ‘upwards’ from individual management teams. However, the reforms relied on different layers of administrators working together in ‘consensus management’, and were brought in before, not after, many of the new ‘planning’ systems were in place. They therefore led to what the 1970s Royal Commission on the NHS recorded as ‘a great deal of anger and frustration at… a seriously over-elaborate system of… administration… [especially] the multiplicity of levels, the over-elaboration of consultative machinery, [and] the inability to get decision making completed nearer the point of delivery’.197 Governments had spent seven years tacking this way and that to please every interested party: to somehow fuse together hospitals’ ‘regional’ views and the need for local community medicine; to bring in patients’ groups; and to meet the Treasury’s demands for more central control while not excluding local government altogether. They ended up with a mess. As the ofﬁcial historian of the NHS, Charles Webster, has recently put it, ‘the assets of time were squandered in the course of a lengthy and futile attempt to appease all the relevant interest groups… on this occasion there was no Bevan to exercise decisive inﬂuence in favour of an effective and realistic solution’.198 The whole system lasted less than a decade. In 1982 Areas were abolished and District Health Authorities became the sole administrative tier below the regions. In 1988, the DHSS was split up again into its constituent Ministries. By that stage, even planning’s managerial variant and successor, as well as its ‘efﬁcient’ appeal, seemed anachronistic.

Health Care and the NHS 203

Assessment: the confusions of health planning The NHS had achieved a great deal by the early 1970s. Health care was still overwhelmingly free at the point of use, and Britain’s most modern hospitals stood comparison with the best available in other countries. Planning, termed ‘the politics of technocratic change’ by Rudolf Klein, had certainly helped achieve and hold those gains.199 Beyond this, it is important when judging effectiveness to differentiate between different types of health planning. Increasing attention was paid to the needs of previously peripheral patient groups such as the mentally ill, patients were consulted more often, and a greater urgency was given to the provision of community health services. This ﬁrst and in the long run most inﬂuential approach to health, which might be termed ‘social planning’, made permanent gains. Health administrators trying to construct plans for hospital care and community medicine at one and the same time simply had to be more ﬂexible than elsewhere. Unfortunately, the ambitions embodied in the Hospital Plans did not conform to reality, envisaging as they did a grand scheme in which District General Hospitals would make the old system entirely obsolete. This encapsulated a second type of health planning, more familiar in other parts of the planned economy and welfare state: the ideology of comprehensive solutions. There were not enough architects and builders to deliver all these projects, especially at a time when new houses, schools and universities were being built so quickly, problems were emerging in industrialised building, and new hospitals were failing to constrain current costs. Better ‘managerial planning’, the third part of the NHS planning agenda, did bear some fruit. By 1970 both hospital and family doctors were more equitably spread across the country; better statistics were available; more was known about treatment and outcomes, rather than just how much money was being spent. Right from the 1950s, there had been some ‘levelling’ in the inequitable geographical spread of both current and capital expenditure, which had privileged, for instance, the Oxford and London regions over the East Anglian and Shefﬁeld areas. There was, however, still no explicit formula or code under which to manage this programme. Only in the 1970s did the DHSS set up a Resource Allocation Working Party to provide just such a systematic and consistent approach, one more example of their turn to incremental ‘management’ rather than grand one-off plans.200 But even better and more ordered management, sufﬁcient as it might be to close the funding gap between different regions, could not on its own construct incentives

204 From Dreams to Disillusionment

that would make individual hospitals and doctors act in the way governments wished, as the NHS was a huge organisation managed in concert with doctors, nurses, dentists, administrators, local councillors and the public. Because of this complicated and contested process reorganisation and the new ideas about management soon came to look naïve and over-ambitious. In particular, this was due to the fact that they relied on administrative change as a measure of governments’ activity and commitment because it was so difﬁcult to measure other types of NHS ‘output’. Tripartism’s failings were perceived to require a uniﬁed structure, but reform did not in itself make the NHS easier to govern.201 Policy was made incrementally, by small adjustments to inherited structures and habits often opaque outside Hospital Management Committees, rather than by the inception of revolutionary new policies. Ofﬁcials had to grope forward, proceeding by smaller intellectual steps than they would have liked, before belatedly accepting this insight through the confused, haphazard, and ultimately self-defeating managerial reforms of the 1970s. The NHS of the 1960s was better funded than the neglected service of the 1950s, and it was also becoming more sensitive to vulnerable patients’ needs. But neither the hospital plans nor the community health and welfare blueprints had come anywhere near their targets by the early 1970s. There is scant evidence that the new hospital plans or administrative reforms were as theoretically sound or as well thought-out as they might have been.

8 Conclusion: Governance, Choice and History

Planning reﬂected a broader ‘culture’ or mood, and its failings were all the more agonizing for that. ‘Culture can never be wholly conscious’, T.S. Eliot had written while reﬂecting on the 1940s movement towards artistic planning: ‘there is always more to it than we are conscious of… It is… the unconscious background of all our planning’.1 That ‘unconscious background’ constituted the unspoken assumptions of the early 1960s, the intertwined emphasis on science, technology, modernisation, national competitiveness, efﬁciency and progress. These amounted to what Aaron Wildavsky called ‘a secular faith… not so much a matter for the social scientist as for the theologian’.2 Some authors label this complex of ideas ‘high modernism’, a view of the world at once positivistic, linear and rational, celebrating the machine and coping with constant change by embracing it and turning it to the ends of ‘creative destruction’.3 It was secular, urban, and characterised by a high level of technical and economic specialisation.4 The failure of planning brought that complex of beliefs into question: it was an inevitably painful process. That conﬁdence in a linear transition to an inevitable and more hopeful future had its psychological aspects. Amos Tversky and Daniel Kahneman have usefully theorised that two systemic biases exist when human beings look forwards. An ‘anchoring’ myopia exists in which individuals project the present position into the future, reﬂecting the difﬁculty of moving away from a given point or value. There is also a systematic bias towards ‘conjuncture’ – seeing patterns of events where there may in fact be none. For any plan to come to fruition in the future, a sequence of events must occur. These may seem likely in isolation, but together and as a whole they may be rather unlikely. The evidence suggests that human beings ﬁnd it very difﬁcult to accept this.5 Politicians, 205

206 From Dreams to Disillusionment

ofﬁcials and academics alike made exactly these mistakes during the planning boom. The relatively high growth rates experienced during the period 1962–1964 were taken as a starting point, rather than a successful experiment that had to be protected. NEDC and DEA plans made so many presumptions that they bear out the point about ‘conjuncture’ with little further comment. Even just closing the ‘manpower gap’ in the labour market projected a future in which incomes policies and regional planning were successful, increasing numbers of married women were returning to work, and redundancy and re-employment had been made easier, encouraging mobility in the labour force. Taken together – and similar lists could be drawn up in most policy areas – it was asking for an unlikely combination of benign outcomes. Uncertainty is endemic in economic and social life. Admittedly, not everything is uncertain: for instance, governments’ broad impression of an ageing population was quite correct. Demand for school places eighteen years ahead is relatively easy to anticipate, because the children who are going to ﬁll those places have already been born. However, population projections suggested a massive rise in the population that simply did not occur. Even a cursory look at the techniques involved shows why. To ﬁnd out how many children would be born to girls already alive in the late 1950s, ofﬁcials simply applied 1960–61 fertility rates to the likely future numbers and age proﬁles of those women. Even in the late 1960s, and following a series of reforms, population forecasts had to guess about the future. They assumed, for instance, that mortality rates in Britain would fall to the lowest level then recorded in the developed world, and that age speciﬁc fertility rates would eventually stabilise at about 2.2 children per couple.6 Plausible as these assumptions may have seemed, they relied heavily on past trends. If trend lines broke and interrelated events became less certain, planning would become much more difﬁcult. The idea that the future might emerge from a recognisable past relied partly on the stability of the economic golden age, but the slow disintegration of the Bretton Woods currency system meant that instability was on the rise. Prospects for trade might depend as much on other governments’ actions – for instance, the currency stances adopted by the French and Germans – as on national performance. Trade might sometimes expand less quickly than seemed likely only months before. The fact that 1967 was not as good a year for world trade as expected helps to explain that year’s sterling crisis. This situation was to get much worse, since the OPEC oil shock of 1973 nearly doubled world commodity prices in just two years, as well as nearly quadrupling oil prices

Conclusion: Governance, Choice and History 207

from their late 1960s lows.7 The economy became much more volatile. Inﬂation was at a relatively manageable seven per cent in 1973, before leaping to 27 per cent by 1975, subsiding to 11 per cent in 1978 and then moving back up to 14.5 per cent in 1979.8 Such interventionist bodies as the Labour government of 1974–79 did set up, such as the National Enterprise Board, were left to tend to the ‘walking wounded’ created by this situation.9 It was commonly assumed during the 1960s that the future held only increasing levels of industrial concentration, and even competition policy seems to have encouraged mergers by prohibiting collusive agreements between separate ﬁrms.10 Instead, the next thirty years would be marked by small ﬁrm creation through self-employment, and the rise of the covert ‘shadow economy’. The former trend has been the most obvious, as the 1980s witnessed a sustained upwards shift in the numbers of people who wanted or were forced to work for themselves. Male self-employment was stable during the 1970s, at around nine per cent of the male labour force; the ﬁgure for women was around four per cent. By the mid-1990s about 15 per cent of men, and seven per cent of women, were self-employed.11 Most available studies also show the unofﬁcial economy expanding from the early 1970s to the early 1990s, and some speculative estimates indicate it grew from a mere two per cent to over 10 per cent of Britain’s GDP.12 Though these sectors hardly dominated the economy, especially on their own, taken together they made it progressively much harder to understand and govern. They contributed to its increased unpredictability, a trend that was noticeable as early as 1966. Even at that point, the Ofﬁcial Committee on Statistical Policy complained that information about self-employment earnings was inadequate both for incomes policy and for measuring the progress of the Plan.13 The outside world, then, shifted against elite expectations. But there were plenty of contemporary institutional failings that also help to explain planning’s failure to meet its objectives. Anthony King, in his famous 1975 essay on administrative ‘overload’, identiﬁed four reasons why governments might not be able to meet their objectives. Some of their aims might be physically impossible, or make claims on overall resources which could not be met within the limits of the available manpower and funds. King put less emphasis on these two reasons, for they had always constrained governments, and did not seem to explain the acute frustration and failures that politicians were experiencing by the 1970s. Instead, he argued that as governments took on more responsibilities, they became dependent on increasing numbers

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of other groups, who could easily fail them or work against their policies. Fourth and last, he argued that the failure might be intellectual. ‘Knowledge and understanding’ might be insufﬁcient – all the more worrying because ‘men… realise that they understand less now than twenty years ago’.14 King may have underplayed his ﬁrst two reasons for administrative ‘overload’. Although it is true that all governments had long faced the challenge of competing and apparently incompatible claims, they were now trying to do so much that the dilemmas were becoming much more acute, and perhaps impossible to solve. Consider the full range of governments’ ambitions covered in this book. Ministers wanted to raise the growth rate to four per cent or more. At the same time, they wanted to lay down ﬁve year public spending plans, modernise industry through supply-side reform, rejuvenate economically backward regions and construct 500,000 houses a year, while also building 6,000 new schools, seven brand new universities, and 90 new District General Hospitals. The evidence suggests that there simply were not enough architects, clerks, statisticians, planners, engineers and builders to do all that. There were a number of other massive projects that only increased the pressure, including building the motorway system and rebuilding schools to take account of new educational ideas, that there has not been space to consider here. This is without even mentioning the converse requirement to allow consumer spending to rise and keep voters content with their personal stake in economic progress. Such objective overload might have overwhelmed any organisation, but the structure of British government was not well equipped to meet the challenge. Some political scientists have focussed on ‘organised anarchies’, institutions that ‘do not meet the conditions for more classical models of decision making’ as preferences, technologies and personnel shift continuously. This is known as the ‘garbage can’ model of how groups cope with adversity, in which problems and choices are partially ‘uncoupled’ and ‘choices… [are] made only when the shifting combinations of problems, solutions and decision makers happen to make action possible’.15 This was a long way from the rationalism of the planners’ models, and insiders have reported that this is exactly the way in which governments actually work. As Cairncross himself once noted: ‘bureaucracies even in normal times are usually slightly mad and in moments of crisis easily become crazy. What survives on paper may appear to be almost uniformly articulate and logical; but the atmosphere of a large Government department is frequently almost indistinguishable from that of the looney bin’.16

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Government was fragmented, with most of the initiative coming from individual departments with very different interests, and this constrained the effectiveness of policy in almost every area of policy. The supposed ‘creative tension’ between the DEA and the Treasury, so obviously problematic from the start, is only the most famous example, and this study has helped to uncover many more. Spending departments resisted some of the more radical Plowden recommendations because they thought that the Treasury was behind them. No executive or highlevel Cabinet Committee on public spending really gained a hold, contrary to Plowden’s wishes, and the post-devaluation cuts exercise was conducted in protracted meetings of the full Cabinet. The Treasury was itself engaged in a range of long-standing conﬂicts: with the DEA over the powers of regional economic planning bodies, with the Ministry of Housing over the level of council house starts, and with the Ministry of Health over the level of National Insurance contributions. Some radical policy initiatives were frustrated by inter-departmental rivalry. During 1963 and 1964, departmental differences over job security, redundancy and social security prevented the Conservatives delivering their half of a projected ‘grand bargain’ with industry and unions. The Inland Revenue and the Treasury prevented tax allowances being granted to housing associations, while in the late 1960s different Ministries pulled in opposite directions on the reform of social services and the NHS, delaying and eventually weakening the proposals. Some of planning’s aims were indeed incompatible and impossible to attain, and administrative resources were spread as thinly as money and manpower. The third cause of ‘overload’ may well have been governments’ increasing reliance on outside bodies. The more complex problems looked, the more Whitehall had to look outside its own resources for help. Central government did not entirely trust local authorities, which they perceived – often correctly – to lack the specialist knowledge and expertise to manage key areas of the welfare state. On the other hand, Whitehall’s constant spending freezes, moratoria and exhortations to do better alienated local councillors. Employers’ or unions’ leaders had similar problems. Employers rapidly turned against the planning experiment, especially after the election of an ideologically uncongenial Labour Party that extended nationalisation and appeared to want permanent controls over the economy. The banks and building societies vetoed industry leaders’ hoped-for cooperation with Labour’s projected national housing plan. The TUC, similarly, only joined the NEDC after a long period of internal wrangling, during which the Transport and General Workers Union had made its opposition obvious to everyone

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concerned. The wider lack of economic and social control, or even agreement, made internal government divisions even worse. One of the problems which planning was supposed to solve, the uncoordinated nature of government and industry, helped to bring about its failure. King’s fourth point concerned the role of information, which was indeed scarce, for the data at the behest of governments was simply not good enough for the work they were asked to do. The science of administrative statistics was still in its infancy, even in the 1960s. Information, unfortunately, is not free: it is costly to gather, assemble and understand new ‘facts’, and if the pay-offs look too diffuse, too far in the future, or too uncertain, politicians and ofﬁcials may not press home their interest in statistical reform.17 There are few areas of government service less glamorous than statistics, and even Prime Ministerial interest and sponsorship failed to rectify governments’ lack of data before the end of the 1960s. Planning was itself supposed to rectify governments’ ignorance. The plans for the North East and Scotland were intended to make up for the statistical gaps caused by the Conservatives’ relatively passive regional policy up to that point, while the community care White Papers allowed Whitehall to see the local health and welfare picture for almost the ﬁrst time. However, although a great deal of information was produced, it was often not of the highest quality. The initial industrial inquiry leading up to Conditions Favourable to Faster Growth, and the National Plan survey, were clearly inadequate. The ﬁrst looked only at seventeen industries, with a bias towards basic utilities and manufacturing. The 1964–65 survey often had to make do with trade association estimates and partial returns, and to contend with uncooperative companies and businessmen. There was a chronic shortage of statistical staff in central government, which was even worse in local government, a fact that helps to explain why local authorities’ spending ﬁgures sometimes took a year to emerge. The presence of 45 computers in midsixties Whitehall may have been a useful aid, but the situation in individual services was much worse: a mere handful of pilot computer projects were underway in the NHS by the end of the 1960s. Despite the reform of the Central Statistical Ofﬁce, the rhetoric of a responsive, quantitative, computerised ‘cybernetic’ government had run far ahead of reality. Britain’s institutions, then, were hardly up to the task. But if we turn to the other side of the equation, and look at ideologies, it is just as clear that the ideas that had made up the planning coalition were only superﬁcially and ﬂeetingly similar. This problem had been predicted in Hayek’s 1944 neo-liberal masterpiece, The Road to Serfdom. ‘Agreement

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will… exist only on the mechanism to be used’, Hayek wrote: ‘but it is a mechanism which can be used only for a common end; and the question of the precise goal towards which all activity is to be directed will arise as soon as the executive power has to translate the demand for a single plan into a particular plan. Then it will appear that the agreement on the desirability of planning is not supported by agreement on the ends the plan is to serve’.18 Chief among these controversial ends would be the question of distribution, in short, the problem of who was materially to gain from planning. Michael Posner, Treasury Economic Adviser in the late 1960s and later Chief Economic Adviser, was no liberal theorist in the Hayekian mould. But ‘there is no natural consensus about what constitutes fair shares’, he wrote in 1973: ‘no natural consensus that the “national interest” exists or should be pre-eminent, no natural consensus about the direction which economic growth should take or the uses to which its fruits should be put’.19 One way of resolving such dilemmas was an appeal to disinterested expertise, but there were as many ideas about planning as there were planners. This situation went right back to the Labour government of 1945–51, during which prolonged arguments about controls demonstrated just how complex the ﬁeld was. Businessmen, led at ﬁrst by the FBI and Hugh Beaver’s group on future planning, envisaged a consultative approach, based on better coordination, information and agreement; the TUC took a much more radical socialising approach. They wanted an arena in which organised labour could inﬂuence government policies, and a forum for making resource-allocation decisions. The Conservatives, and those in the Treasury who were enthusiastic about such experiments, thought they could use NEDC to encourage supply-side reform, granting consultation in return for acquiescence in the governments’ wages policy and search for ‘efﬁciency’. Labour, much closer to the unions, believed that the new institutions could be refashioned into a tool for ‘selective intervention’, though when they brought them into the new DEA both unions and employers were less than happy. There was never a single idea of what ‘planning’ meant, and once tested, the coalition broke up as quickly as it had come together. The extreme ends of the political spectrum soon took advantage of this administrative and ideological confusion. Both left and right would, in the decade to come, unite in lambasting the planners’ overconﬁdence, their insensitivity, and the ugly functionalism of their works. The nascent Green movement, beginning to make inroads into left-wing thought, argued that ‘bigness’ itself was one of the worst problems of developed society, privileging proﬁts over participation, and

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machine-driven growth over workers’ needs. E.F. Schumacher’s Small is Beautiful, published in 1973, was the most famous example of this movement.20 Contemporary warnings about resource depletion and the ‘population explosion’ seemed to back up these fears.21 The ﬁercest reactions were to the new urban landscape, the most starkly obvious of planning’s legacies, and they went far beyond practical criticisms of insensitive urban renewal. Robert Goodman’s book After the Planners is a good example of this mood. He rejected urban policies, participation and community advocacy as a sham, and John Palmer’s introduction to the British edition concurred. Palmer, a Lecturer at the Central London Polytechnic, attacked the Urban Programme and allied initiatives as ‘superﬁcial pluralist mechanisms’. Goodman, an Associate Professor of Architecture at MIT, labelled planners ‘agents of the oppressors… not really that far from being the Albert Speers of our time’. Rather than looking to city governments, ‘participatory’ or otherwise, residents should engage in the ‘guerrilla architecture’ of sit-ins, squats and community activism; experts should desert their jobs and help to shape these movements.22 Loathing for the new architecture and cities, partly as a proxy for the planned society itself, was by no means restricted to the left. From the other end of the political spectrum, Philip Larkin feared that ‘the whole boiling will be bricked in/ Except for the tourist parts – / First slum of Europe…/ That will be England gone…/ There’ll be books; it will linger on/ In galleries; but all that remains/ For us will be concrete and tyres’.23 The consequence of all this was a deep sense of ennui, even despair. Henry Kissinger, that personiﬁcation of the more pessimistic decade to come, once commented that ‘every success is just an entrance-ticket to more formidable problems’.24 This was the prevailing mood by the early 1970s. ‘Planning has become so complex, planners cannot keep up with it’, Wildavsky wrote in 1973: ‘he may be economist, political scientist, sociologist, architect or scientist. Yet the essence of his calling – planning – escapes him. He ﬁnds it everywhere in general and nowhere in particular’.25 Hugh Heclo has also pointed out that ‘anyone willing to follow the detailed twists and turns of contemporary social policy cannot fail to be impressed by the ever changing kaleidoscope of new problems overlooked… or created by each preceding “solution”’.26 Planning’s utopian variant, the idea that a terminal point could be reached at which some problems would be solved, faded from view. Government through planning turned out to be an illusion, because forwarding the public good does not, and cannot, reside in a single

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moment of panoptical decision. Nor can good governance be embodied in a series of regular ‘plans’, however detailed, frequent, or open to review, for it exists rather in constant judgement between social, moral, economic, administrative and political priorities – a fact which Ministers were just beginning to realise in the late 1960s. Indeed, some variants of the new planning techniques should have alerted decision makers to this fact earlier, for ‘cybernetic’ management and network analysis, with its emphasis on constant readjustment and ‘break points’ ran counter to the establishment of long-term blueprints. As James C. Scott has put it, ‘a step-by-step “muddling through” approach would seem to be the only prudent course in a ﬁeld like… public policy implementation, where surprises are all but guaranteed’.27 The ‘growth paths’ and ‘industrial ﬂexible budgets’ of the post-National Plan planning exercises were more realistic attempts to set out what could or might be done, and to mobilise support for supply-side reforms, than the National Plan had been. It was simply unfortunate that by that stage the credibility of the idea itself had been destroyed by four years of economic restraint, the failure of the Plan, and devaluation. The Economic Development Councils did useful work in bringing together ideas from industry, unions and the government, and encouraging best practice throughout each sector. As regards the welfare state, innovations such as the Community Development Programme and Housing Action Areas and, at the top of the bureaucracy, ‘costed options’ exercises concentrated minds upon choices between alternatives. Not one of these initiatives was perfect. Housing Action Areas, for instance, could only direct money to whole areas, rather than families experiencing particular problems, and as such they often paid money to gentrifying middle class families moving into cheap areas of Britain’s large conurbations. But rather than deciding targets ﬁrst, and then trying to put them into effect, all these initiatives introduced areas of choice and deliberation. The simple lesson gouverner, c’est choisir – ‘to govern is to choose’ – should have been applied earlier, even though moving forward incrementally, governing through consultation and reacting pragmatically means that planning merges back into policy. As Wildavsky put it, ‘when planning is placed in the context of continuous adjustment it becomes hard to distinguish it from any other process of decision’.28 The fate of the more managerial planning ideas helps to demonstrate the way in which policy, as opposed to planning, reasserted itself. Programme Analysis and Review was seen as one of the incoming Heath government’s most important innovations, and it had its roots in the

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programme budgeting techniques adopted in the 1960s. PAR, as it universally became known, aimed to bring a number of speciﬁc programmes every year under the eye of a Central Policy Review Staff trained in economic and quantitative techniques, and the businessmen Heath brought into the Civil Service Department. However, by this time programme budgeting had fallen from favour in the US, owing to its association with the disaster in Vietnam, and because President Johnson had tried and failed to introduce it across government all at once. Ofﬁcials’ tendency to use the technique inappropriately, and to try to compare programmes with entirely different ends on the same cash scale, was particularly unpopular.29 In Britain, the Treasury soon took control of the process, moving it away from the innovative concept of outsiders’ review and advice, and back towards traditional consultative exercise based around committees. Since most of the reports were not ‘action-orientated’, and did not ﬁt in with the time-scale of Ministers’ immediate choices and needs, PAR failed to gain a permanent foothold.30 The Treasury had to reach agreement every year with departments as to which programmes would be reviewed in this way, and individual Ministries nominated the policy areas where they either already wanted a change of direction, or thought they could easily fend it off. Departmental ofﬁcials were left to do most of the detailed work. This could hardly assist in an overall review of objectives across departments, or result in an objective appraisal. PAR was ﬁnally abolished when the Conservatives came back to power in 1979. Economic analysis continued to gain in importance, and some of the reviews conducted, for instance on social security, did have some impact in the medium term.31 Cost-beneﬁt studies of speciﬁc infrastructure projects, later joined by the widespread target setting and review machinery of the 1980s and 1990s, were eventually to be some of the most important developments in British government. But the general economic reviews that some of the most enthusiastic planners had in mind during the 1960s could not be put into effect. At least until right at the end of our period, the public was rarely consulted about the aims of planning. This was a problem in private industry, too. The industrial management expert D.W. Ewing showed, late in the decade, how companies’ planning units gathered and disseminated information, proposed goals and worked on facilities, but paid little attention to mobilising workplace support. Even in government programmes, ‘the preoccupation of staff planners seems almost always to be with physical tasks, political power problems, and procedural matters’. According to Ewing, planners were obsessed with physical

Conclusion: Governance, Choice and History 215

buildings, with the outside environment rather than the people who their plans affected, and with ‘human engineering’ and ‘ﬁxing the future’ rather than dealing with immediate, personal problems.32 Until the end of the 1960s, there was a worrying tendency for planners to act in just these ways. The Treasury’s Information Division was small, and concentrated on getting information out rather than feeding it into the policy process; though Labour made some vigorous efforts to publicise its Plan, this seems to have made little impact, and was quickly discredited when its objectives were not met. Not until the radical ‘research action’ projects mounted by the Ministry of Housing, the Skefﬁngton Report’s insistence on consultation, and the 1969 Town and Country Planning Act was there any real sense that the wider populace should be consulted as of statutory right. The Urban Programme gave grants to self-help groups that local people had already set up, recognising the need for local initiative; the creation of an NHS ‘ombudsman’ recognised that patients were not passive recipients of medical goodwill. But it had taken many years to get to that point, and by that time the idea of planning was coming under attack from all sides. Economic planning, meanwhile, was very rarely popularised or made accessible in these ways. This failure to consult or involve the public meant that voters had little personally invested in governments’ fortunes, and they began to become more sceptical about politicians’ claims. The July 1966 economic crisis destroyed Wilson’s carefully nurtured image of economic competence, and caused his own personal approval rating to drop from 70 to 57 per cent in one month. 36 per cent of the electorate told NOP that the July measures had changed their opinion of the government, ‘overwhelmingly for the worse’. It was this economic crisis that precipitated the long decline in Labour’s poll ratings. But underlying this was a slow but remorseless shift in the public mood away from growth, ‘planning’, government economic controls and industrial tripartism. The four main reasons voters listed for Britain’s economic problems in February 1967 were ‘taxes are too high’, ‘people do not work hard enough’, ‘trade unions have too many restrictive practices’, and ‘there are too many restrictions and controls’. Devaluation may have been the last straw. For the ﬁrst time, a majority of voters blamed Labour rather than the previous Conservative government for Britain’s economic problems. A majority thought that sterling’s fall in value had been caused by incompetence, and that the Government should resign. Thereafter, inﬂation and strikes became the two economic issues that voters mentioned most frequently, and on which they were most

216 From Dreams to Disillusionment

dissatisﬁed with the Government. Rising prices were the single biggest reason given for switching to the Conservatives in 1970.33 A related problem was the planners’ assumptions about economic growth. As governments found to their cost, the provision of increasing consumer afﬂuence through ever-faster growth was a wasting electoral asset. The fact that growth was faster than ever before during the early 1960s, while calls for it to be even quicker were at their height, should have been a warning sign of this phenomenon. Economic growth continued across most of the developed world, but after the early 1960s indicators of subjective well being stubbornly refused to keep up with the lines of apparently objective progress. Other issues rose to take the place of mere employment or subsistence; the relative qualities and character of work, relationships, leisure, voluntary organisation and social infrastructure.34 Some observers, such as the American social scientist Ronald Inglehart, discerned the rise of a ‘post-materialist generation’, shifting the ‘principal axis of political cleavage’ away from ‘economic issues to life-style issues, entailing a shift in the constituency most interesting in obtaining change’. Young and radicalised middle class professionals had replaced working class protestors on the barricades during the May 1968 revolt in Paris: ‘following a law of diminishing returns, economic gains became relatively less important, particularly to those segments of society that had never experienced severe economic deprivation’.35 Despite making most people absolutely wealthier, economic growth might not make anyone relatively so, and this was a recipe for frustration. Even more signiﬁcantly in the long run, economic growth turned out to be a rather unsatisfactory means of promoting happiness anyway. Michael Young had warned Labour’s leaders as early as 1949 that rising prosperity might be an ‘ever-receding aim’, for ‘the more you have, [the] more you want’.36 The sense of disillusionment was made worse by the great and often unrealistic things the public were promised that growth would achieve. Some of the increased radicalism of the late 1960s was born of frustration that the hopes of relative individual betterment had not been met.37 Planning also has to be seen in the context of the Cold War, which in Peter Hennessy’s words cast an ‘awesome, mushroom-shaped shadow over the Cabinet room’. Foreign policy overshadowed everything, and economic and social policy was no exception. Though many British Ministers and ofﬁcials knew that the Soviet economic challenge was not as formidable as it appeared, they often dare not say so for fear of losing the propaganda battle in the world at large. Capitalist governments had

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to appear ‘purposeful’, modern and dynamic, or the developing world might turn to the alternative. The Soviet propaganda drive was pushed forward in international economic and social bodies, as well as diplomatic forums: UN ﬁgures appearing to show a sustained Soviet public housing drive gave the idea of long-term government targets a lustre they would not otherwise have had. Planning in the military sphere had never quite gone away in the 1950s, since from at least the spring of 1955 the Central War Plans Secretariat of the War Cabinet was thinking about what they would do in the event of a nuclear attack on the UK. The Home Ofﬁce ofﬁcial who served on the initial interdepartmental committee that looked into this reﬂected ‘one simply had to plan’; the time period chosen for their forward look was ﬁve years.38 This type of military planning eventually leaked into economic and social debates in several ways. It was the Ministry of Defence that originally brought the House of Commons Estimates Committee to focus on long-term expenditure planning, and its early 1960s merger stimulated interest in strategic planning as a way of comparing projects and programmes across different areas. Many previous works have focussed on the ‘Americanization’ of European culture or industry, but it is important to remember that the same process was going on in governance as well. As Holger Nehring has argued, the shape of ‘Westernisation’ as the creation of a transatlantic policy community also depended on different countries’ receptions of those ideas, grounded in their own national traditions.39 American ideas were adapted and put to different uses, not only in different nations, but even in different policy areas. A number of recent studies have shown how Britain’s trade and domestic competition policies were determined in negotiations with the Americans, and often according to Cold War imperatives. British competition policy during the late 1940s was rather less restrictive than it might have been due to Washington’s emphasis on productivity and re-equipment rather than competition per se.40 There were a number of very important Whitehall visits to the US during the 1960s, including Ministry of Defence missions to Washington to ﬁnd out how they had managed the integration of military services since the 1940s. Regional health ofﬁcials visited in 1960 to study health planning, and a Ministry of Health trip in 1963 looked at management, planning and control in American hospitals. Home Ofﬁce and health ofﬁcials also went to Washington to look at the ‘head start’ educational programme that so clearly inﬂuenced the Urban Programme. The glamour of the Kennedy administration, and the early successes of the Johnson years, granted these ideas some political attraction.

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The focus of future research, perhaps, will be the fact that areas of economic and social policy at some remove from foreign policy were actually perceived to be part of a Cold War conﬂict over ideals and ways of life. Future writers, for instance, might look at the inﬂuence of American management experts. Christopher McKenna has recently pointed out how these ﬁrms expanded into Western Europe in the 1960s, lending their weight to the ‘Americanization of international organisations’. They were at the forefront of movements by now familiar from the planning experiment: the creation of large organisations with decentralised, goal-oriented project management, ‘long range planning’, strategic research, and the introduction of computers.41 They were extremely inﬂuential, even in areas apparently unconnected with economic efﬁciency. It was the US management consultants McKinsey & Co. who advised the DHSS to adopt the new administrative structure for the NHS.42 Even if planning failed to live up to its promise, government policies overall were hardly an unmitigated disaster. The economy went on growing, and actually speeded up during the late 1960s. It is true that by going for growth, and then aborting the project, Britain had made some aspects of her situation relatively worse. By the end of the 1960s, levels of inﬂation and unemployment were signiﬁcantly higher than elsewhere in the OECD, unlike the situation that prevailed in the 1950s. However, the average annual growth rate was very high even in economic downswings, and the growth in output per worker reached an alltime record.43 The 1960s saw Britain ‘catch up’ to some extent on the US leader. This was the case even in the nation’s most problematical indicator of economic performance – manufacturing productivity – though Britain was starting from a long way back, and still fell progressively further behind West Germany.44 None of this justiﬁed some of the more apocalyptic writing that characterises our period. Nor has this work attempted to detract from planning techniques in all circumstances. Given widespread political support, vigorous leadership, the potential for extensive growth and a need for structural investment, government-led planning can succeed. Such measures probably did help to change the national mood in France during the 1950s. Italy’s post-war ‘economic miracle’, initially at least, was ideologically and practically underpinned by the creation of state industrial conglomerates such as the Ente Nazionale Idrocarburi, the nationalised oil and gas giant.45 But the fact remains that most of these conditions did not pertain in Britain. Her politicians and ofﬁcials were divided, and the government machine was ill equipped to deal with the challenges of

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industrial and social leadership. She required intensive growth, based on productivity gains, and could not simply rely on pouring in more capital. This was a period of great achievements in other respects. The welfare state became relatively more generous, and some of Britain’s backward infrastructure was replaced or updated in an investment boom that would provide the nation’s basic services for decades to come. Opinion surveys showed that, even if public faith in housing policy was fraying, the NHS still attracted general public support. The difﬁculty was not that planners’ ambitions were unworthy, or even singly unattainable. The problem was that the British state had overreached itself, and both main political parties had made promises that in the event they could not keep. During the 1970s this realisation would turn to disillusionment. It would issue in a belief that government policies themselves, however cautious and well designed, were always the problem rather than part of any solution. The ﬁnal tragedy of planning was that it helped to bring about a Thatcherite reaction that rejected not only planning, but the idea of state intervention itself.

Notes Chapter 1

Introduction

1 H. Wilson, ‘Four Year Plan for Britain’, New Statesman, 24 March 1961. 2 H. Wilson, Purpose in Politics (1964), p. 28. 3 House of Commons Debates (hereafter H. of C. Debs.), vol. 645, cols. 220–1, Selwyn Lloyd statement, 25 July 1961. 4 OED; G. Benveniste, The Politics of Expertise (1973), pp. 106–15. 5 R. Toye, The Labour Party and the Planned Economy 1931–51 (Woodbridge, 2003), p. 5. 6 OED. 7 J. Leruez, Economic Planning and Politics in Britain (1975); A. Ringe and N. Rollings, ‘Responding to Relative Decline: The Creation of the National Economic Development Council’, Economic History Review 53 (2000), esp. pp. 347–50; S. Wood, ‘Why “Indicative Planning” Failed: British Industry and the Formation of the National Economic Development Council 1960–64’, Twentieth Century British History 11 (2000), esp. pp. 457–9; H. Pemberton, Policy Learning and British Governance in the 1960s (Basingstoke, 2004). 8 G.C. Peden, The Treasury and British Public Policy 1906–59 (Oxford, 2000), e.g. pp. 441–2. 9 For an attack on right-wing versions of this idea see J. Green, All Dressed Up: The Sixties and the Counterculture (Pimlico edn., 1999), p. 51. 10 J.E. Cronin, ‘Labour’s “National Plan”: Inheritances, Practice, Legacies’, The European Legacy 6 (2001), p. 215. 11 D. Ritschel, The Politics of Planning: The Debate on Economic Planning in Britain in the 1930s (Oxford, 1997), p. 29. 12 A. Oldﬁeld, ‘The Labour Party and Planning: 1918 or 1934?’, Bulletin of the Society for the Study of Labour History 25 (1972), pp. 50–4. 13 S. Glynn and A. Booth, Modern Britain: An Economic and Social History (1996), pp. 127–30. 14 G. Foote, The Labour Party’s Political Thought: A History (3rd edn., Basingstoke, 1997), pp. 126–7. 15 Toye, Planned Economy, p. 30. 16 N. Thompson, ‘Hobson and the Fabians: Two Roads to Socialism’, History of Political Economy 26 (1994), pp. 203–8, 215. 17 Toye, Planned Economy, pp. 53–4. 18 E. Durbin, New Jerusalems: The Labour Party and the Economics of Democratic Socialism (1985), p. 80. 19 A. Booth, ‘How Long are Light Years in British Politics? The Labour Party’s Economic Ideas in the 1930s’, Twentieth Century British History 7 (1996), pp. 9–13. 20 A. Budd, The Politics of Economic Planning (1978), p. 55. 21 Durbin, New Jerusalems, pp. 152–4. 22 J. Tomlinson, Problems of British Economic Policy 1870–1945 (1981), pp. 72–3. 220

Notes 221 23 Ritschel, Politics of Planning, pp. 38–9. 24 H. Macmillan, Reconstruction: A Plea for a National Policy (1933), pp. 16, 18. 25 G.W. McDonald and H.F. Gospel, ‘The Mond-Turner Talks 1927–1933: A Study in Industrial Co-Operation’, Historical Journal 16 (1973), pp. 807–29. 26 S. Fielding, P. Thompson and N. Tiratsoo, ‘England Arise’! The Labour Party and Popular Politics in 1940s Britain (Manchester, 1991), pp. 20–3. 27 R. Mackay, The Test of War: Inside Britain 1939–1945 (1999), pp. 87–9. 28 A. Calder, The People’s War: Britain 1939–1945 (Pimlico edn., 1992), pp. 163–70, 175. 29 P. Addison, The Road to 1945 (rev. edn., 1994), p. 19. 30 B.W.E. Alford, R. Lowe and N. Rollings, Economic Planning 1943–1951 (1992), pp. 2–3. 31 Addison, Road, p. 274. 32 D. Ritschel, ‘The Making of Consensus: the Nufﬁeld College Conferences During the Second World War’, Twentieth Century British History 6 (1995), pp. 280–9. 33 K. Jefferys, ‘British Politics and Social Policy During the Second World War’, Historical Journal 30 (1987), pp. 130–5. 34 Cmd. 6527, Employment Policy (May 1944), pp. 4–6, 20–2. 35 J. Stevenson, ‘Planners’ Moon? The Second World War and the Planning Movement’, in H.L. Smith (ed.), War and Social Change (Manchester, 1986), p. 58. 36 C. Barnett, The Lost Victory: British Dreams, British Realities 1945–1950 (Basingstoke, 1995), p. 153. 37 C.B. Purdom, How Shall We Rebuild London? (1945), p. 180. 38 Cmd. 6404, Social Insurance and Allied Services (November 1942), pp. 198–9; see R. Lowe, The Welfare State in Britain Since 1945 (Basingstoke, 1993), pp. 125–30; N. Timmins, The Five Giants: A Biography of the Welfare State (1995), p. 23. 39 I. Zweiniger-Bargielowska, Austerity in Britain: Rationing, Controls and Consumption 1939–1955 (Oxford, 2000), pp. 86–7, 97–8. 40 M. Chick, Industrial Policy in Britain 1945–1951: Economic Planning, Nationalisation and the Labour Governments (Cambridge, 1998), p. 14. 41 W. Beveridge, Full Employment in a Free Society (1944), pp. 199–203; Ritschel, ‘Nufﬁeld College Conferences’, pp. 290–4. 42 S. Brooke, ‘Problems of Socialist Planning: Evan Durbin and the Labour Government of 1945’, Historical Journal 34 (1991), pp. 689–91, 696–8.

Chapter 2

The Planning Fervour of 1959–1964

1 J. Tomlinson, ‘Inventing “Decline”: The Falling Behind of the British Economy in the Post-War Years’, Economic History Review 49 (1996), pp. 735–9. 2 M. Grant, ‘Historians, The Penguin Specials and the “State of the Nation” Literature, 1958–1964’, Contemporary British History 17 (2003), pp. 28–38. 3 C. Clark, Growthmanship (1960), p. 7. 4 J.C.R. Dow, The Management of the British Economy 1945–1960 (Cambridge, 1964), p. 384.

222 Notes 5 FBI, The Next Five Years: Report to Delegates on the Conference (November 1960). 6 R. Lamb, The Macmillan Years: The Emerging Truth (1995), p. 66. 7 Labour Party, Twelve Wasted Years (1963), p. 1. 8 I. Budge, ‘Relative Decline as a Political Issue: Ideological Motives of the Politico-Economic Decline of Post-War Britain’, Contemporary Record 7 (1993), pp. 14–15. 9 H. Wilson, ‘Post-War Economic Policies in Britain’, Fabian Tract 309 (1957), p. 19; Lamb, Emerging Truth, p. 68. 10 ‘If “Stop Go and Son” Win: Mr Wilson Fears Panic Cuts’, The Times, 28 September 1964. 11 R. Kneller and G. Young, ‘Business Cycle Volatility, Uncertainty and LongRun Growth’, The Manchester School 69 (2001), tables 2–3, pp. 543, 545; see P. Martin and C.A. Rogers, ‘Long-Term Growth and Short-Term Economic Instability’, European Economic Review 44 (2000), pp. 370–5. 12 R. Middleton, Government versus the Market (Cheltenham, 1996), pp. 577–8. 13 A. Whiting, ‘An International Comparison of the Instability of Economic Growth: Is Britain’s Poor Growth Performance due to Government Stop-Go Induced Fluctuations?’, Three Banks Review 109 (March 1976), pp. 38–9. 14 J.E. Alt, The Politics of Economic Decline: Economic Management and Political Behaviour in Britain Since 1964 (Cambridge, 1979), p. 113. 15 D. Butler and D. Stokes, Political Change in Britain: Forces Shaping Electoral Choice (1969), pp. 389, 402. 16 Rollings, ‘Bustkellism, The Post-War Consensus and the Managed Economy’, in H. Jones and M. Kandiah (eds), The Myth of Consensus: New Views on British History, 1945–64 (Basingstoke, 1996), p. 106. 17 N. Ferguson and G. O’Hara, ‘The Myth of the Feelgood Factor’, in N. Ferguson, The Cash Nexus: Money and Power in the Modern World 1700–2000 (2001), pp. 237–8, appendix B, pp. 427–8. 18 G.H. Gallup, The Gallup International Opinion Polls: Great Britain 1937–1975, Vol. I: 1937–1964 (New York, 1977), pp. 593, 613. 19 M. Abrams, R. Rose and Rita Hinden, Must Labour Lose? (Harmondsworth, 1960), table 2, p. 15. 20 Conservative Party Archive, Bodleian Library, Oxford (hereafter CPA) CRD 2/21/6, Douglas memorandum, ‘Crosland’s “Can Labour Win?”’, 17 May 1960. 21 J. Goldthorpe and D. Lockwood, The Afﬂuent Worker in the Class Structure (Cambridge, 1969), pp. 157–66. 22 P. Norris, Electoral Change in Britain (Oxford, 1997), pp. 120–7. 23 D. Gallie, ‘The Labour Force’, in A.H. Halsey and J. Webb, Twentieth Century British Social Trends (Basingstoke, 2000), table 8.4, p. 288. 24 H. Perkin, The Rise of Professional Society: England Since 1880 (1989), p. 444. 25 E.H.H. Green, Ideologies of Conservatism (Oxford, 2002), p. 223. 26 D. Butler and G. Butler, British Political Facts 1900–1994 (1994), p. 237. 27 K. Jefferys, Retreat from New Jerusalem: British Politics 1951–1964 (Basingstoke, 1997), pp. 94–5, 173. 28 J. Ramsden, The Making of Conservative Party Policy: The Conservative Research Department Since 1929 (1979), p. 196. 29 Jefferys, Retreat from New Jerusalem, p. 94.

Notes 223 30 N. Harris, Competition and the Corporate Society: British Conservatives, the State and Industry, 1945–1964 (1972), p. 155. 31 A. Ringe, ‘Background to Neddy: Economic Planning in the 1960s’, Twentieth Century British History 12 (1998), pp. 86–7, 90. 32 G. O’Hara, ‘“Intractable, Obscure and Bafﬂing”: The Incomes Policy of the Conservative Government 1957–1964’, Contemporary British History 18 (2004), pp. 34–8. 33 H. Macmillan, At the End of the Day, 1961–1963 (1973), p. 69. 34 I. Gazeley, Poverty in Britain 1900–1965 (Basingstoke, 2003), pp. 173–8. 35 R. Lowe, ‘The Replanning of the Welfare State 1957–1964’, in M. Francis and I. Zweiniger-Bargielowska (eds), The Conservatives and British Society 1880–1990 (Cardiff, 1996), p. 259. 36 Timmins, Five Giants, p. 256. 37 R. Lowe, The Welfare State in Britain Since 1945 (1993), pp. 135–6, table 6.2, p. 140. 38 A. Crosland, The Future of Socialism (1956), p. 379; A. Crosland, ‘On Economic Growth’, Encounter 16 (1961), pp. 65–6. 39 G. Bernstein, The Myth of Decline: The Rise of Britain Since 1945 (2004), p. 197. 40 M. Shanks, The Stagnant Society (Harmondsworth, 1961), pp. 16, 29. 41 Toye, Economic Planning, pp. 37–8, 41–3, 57. 42 M. Dobb, Soviet Economic Development Since 1917 (1957 edn.), pp. 380–1. 43 B. Webb and S. Webb, The Truth About Soviet Russia (1942), p. 52. 44 W.C. Wohlforth, The Elusive Balance: Power and Perceptions During the Cold War (Ithaca, NY, 1993), pp. 144–5, 161–2. 45 A. Nove, An Economic History of the USSR (Harmondsworth, 1969 edn.), pp. 353–4. 46 National Archives of the United Kingdom, Kew (hereafter NAUK) PREM 11/4171, Lloyd to Macmillan, 1 January 1958. 47 J.K. Galbraith, The New Industrial State (1967), pp. 67–9. 48 A. Jones, ‘The Soviet Challenge’, in Conservative Political Centre, Science and Society: Eight Oxford Lectures (1962), p. 33. 49 ‘Changing Course in Russia?’, The Economist, 11 February 1961. 50 T. Wilson, Planning and Growth (1964), pp. 26–7. 51 NAUK T 325/64, Clarke to Armstrong, ‘The position of the UK in world affairs’, 5 August 1958. 52 J.K. Galbraith, The Afﬂuent Society (Harmondsworth, 1962 edn.), p. 282. 53 B. Pimlott, Harold Wilson (1992), pp. 198. 54 A. Nove, ‘The Industrial Planning System: Reforms in Prospect’, Soviet Studies 14 (1962), pp. 3–7. 55 P. Rutland, The Myth of the Plan: Lessons from the Soviet Planning Experience (1985), p. 115. 56 J.H. Wilhelm, ‘The Failure of the American Sovietological Economics Profession’, Europe-Asia Studies 55 (2003), pp. 60–3. 57 P. Deane, ‘Measuring Soviet Economic Growth’, Soviet Studies 14 (1962), p. 134. 58 NAUK CAB 129/106, Home memorandum to Cabinet, ‘The third programme of the Communist Party of the Soviet Union’, 18 September 1961. 59 Wohlforth, Elusive Balance, p. 173.

224 Notes 60 CPA CRD 2/5/3, Policy Committee on Science and Industry, minutes, 20 October 1960. 61 ‘Planning by Whom?’, The Economist, 26 August 1961. 62 Wilson, Planning and Growth, p. 45. 63 Hall, foreword to P. Bauchet, Economic Planning: The French Experience (Eng. trans., 1964), xiii. 64 P.A. Hall, Governing the Economy: The Politics of State Intervention in Britain and France (Cambridge, 1986), pp. 141–3, 147. 65 P. Massé, ‘The Guiding Ideas behind French Planning’, Planning 27 (August 1961), pp. 212–13, 216. 66 NAUK PREM 11/3018, Selwyn Lloyd and Maudling meeting with TUC, minutes, 13 September 1960. 67 NAUK T 230/526, Ofﬁcials’ meeting, ‘Economic growth’, minutes, 31 May 1961. 68 NAUK T 325/72, Clarke memorandum, ‘French and British economic planning’, (May?) 1961. 69 S. Whickham, ‘French Planning: Retrospect and Prospect’, Review of Economics and Statistics 45 (1963), p. 337. 70 C.P. Kindleberger, ‘The Postwar Resurgence of the French Economy’, in S. Hoffman (ed.), France: Change and Tradition (1963), pp. 155–7. 71 NAUK T 325/72, Clarke memorandum, ‘The lessons of French experience’, 2 November 1961. 72 F. Perroux, The Fourth French Plan 1962–65 (1965), pp. 4, 11. 73 Massé, ‘Guiding Ideas’, p. 218. 74 J. Boswell and J. Peters, Capitalism in Contention: Business Leaders and Political Economy in Modern Britain (Cambridge, 1997), p. 31. 75 NAUK T 325/72, Boyle to Selwyn Lloyd, ‘French planning’, 6 November 1961. 76 e.g. P. Massé, ‘The French Plan and Economic Theory’, Econometrica 33 (1965), p. 266. 77 Y. Ullmo, ‘France’, in J. Hayward and M. Watson (eds), Planning, Politics and Public Policy (Cambridge, 1975), p. 31. 78 C. Clifford and A. McMillan, ‘Witness Seminar: The Department of Economic Affairs’, Contemporary British History 11 (1997), p. 126. 79 Hall, Governing the Economy, pp. 152–3. 80 Kindleberger, ‘French Economy’, pp. 146. 81 S. Estrin and P. Holmes, French Planning in Theory and Practice (1983), table 3.7, p. 82. 82 J.J. Carré, P. Dubois and E. Malinvaud, French Economic Growth (Eng. trans., Oxford, 1975), table 14.1, p. 463, tables 14.4–14.6, pp. 467–9. 83 Maddison, World Economy, table C1–c, pp. 276–7. 84 On the general theory see M. Abromovitz, ‘Catching Up, Forging Ahead, and Falling Behind’, Journal of Economic History 46 (1986), pp. 386–91. 85 J-P. Dormois, The French Economy in the Twentieth Century (Cambridge, 2004), table 3.1, p. 28, table 4.3, p. 54. 86 P. Sicsic and C. Wyplosz, ‘France 1945–1992’, in N.F.R. Crafs and G. Toniolo (eds), Economic Growth in Europe Since 1945 (Cambridge, 1996), tables 8.2, 8.3, p. 214. 87 OECD, Industrial Policy in France (Paris, 1974), table 4, p. 18.

Notes 225 88 Cmnd. 827 (Radcliffe Report), Report of the Committee on the Working of the Monetary System (August 1959), p. 337. 89 R. Cross, Economic Theory and Policy in the United Kingdom (Oxford, 1982), pp. 33–4. 90 R.E. Backhouse, A History of Modern Economic Analysis (Oxford, 1985), pp. 318–19. 91 A.P. Thirlwall, Nicholas Kaldor (Brighton, 1987), pp. 173–7. 92 P. Clarke, ‘The Keynesian Consensus and its Enemies’, in D. Marquand and A. Seldon (eds), The Ideas that Shaped Post-War Britain (1996), p. 84. 93 R.C.O. Matthews, ‘Why Has Britain Had Full Employment Since the War?’, Economic Journal 87 (1968), pp. 559–63. 94 E.F. Denison, Why Growth Rates Differ (Washington DC, 1967), p. 117. 95 Dow, British Economy, p. 152. 96 Shanks, Stagnant Society, pp. 139, 174. 97 S. Fielding, ‘Activists Against “Afﬂuence”: Labour Party Culture During the “Golden Age”, c. 1950–1970’, Journal of British Studies 40 (2001), pp. 261–2. 98 L. Black, The Political Culture of the Left in Afﬂuent Britain, 1951–1964: Old Labour, New Britain? (Basingstoke, 2003), p. 106. 99 I. Favretto, ‘“Wilsonism” Reconsidered: Labour Party Revisionism, 1952–1964’, Contemporary British History 14 (2000), p. 61. 100 Winch, Economics and Policy, pp. 273–4. 101 T. Suzuki, ‘The Epistemology of Macroeconomic Reality: The Keynesian Revolution from an Accounting Point of View’, Accounting, Organizations and Society 28 (2003), pp. 478–98. 102 L. Brunt, ‘The Advent of the Sample Survey in the Social Sciences’, The Statistician 50 (2001), pp. 179–83. 103 J. Harris, Unemployment and Politics: A Study in English Social Policy 1886–1914 (Oxford, 1972), p. 362. 104 E. Higgs, The Information State in England: The Central Collection of Information on Citizens Since 1500 (Basingstoke, 2004), p. 154. 105 A.E. Holmans, Demand Management in Britain 1953–58 (1999), pp. 75–8, 88, 146. 106 H. Macmillan, Riding the Storm 1957–59 (1971), p. 41. 107 R. Ward and T. Doggett, Keeping Score: The First Fifty Years of the Central Statistical Ofﬁce (1991), pp. 62–3. 108 A.L. Samuel, ‘The Banishment of Paper-Work’, in N. Calder (ed.), The World in 1984, Vol. I: The Complete New Scientist Series (Harmondsworth, 1965), 144–6. 109 R. Stone and J.A.C. Brown, ‘A Long Term Growth Model for the British Economy’, in R.C. Geary (ed.), Europe’s Future in Figures (Amsterdam, 1962), p. 289. 110 e.g. NAUK FG 2/79, Alan Brown memorandum to NEDO, 1 June 1964. 111 J. Agar, The Government Machine: A Revolutionary History of the Computer (2003), pp. 307, 314–15. 112 C.A. Moser, ‘The Future Role of the Central Statistical Ofﬁce’, Statistical News 1 (1968), p. 3. 113 D. Bell, ‘Notes on the Post-Industrial Society’, in N. Cross, D. Elliott and R. Roy (eds), Man Made Futures (Milton Keynes, 1974), p. 101.

226 Notes 114 J. Goldthorpe, ‘Theories of Industrial Society: Reﬂections on the Recrudescence of Historicism and the Future of Futurology’, European Journal of Sociology 12 (1972), pp. 279–85. 115 K. Kumar, Prophecy and Progress (Harmondsworth, 1978), p. 186. 116 A. Sampson, The Anatomy of Britain (1962), pp. 221, 225, 227–8. 117 T. Balogh, ‘The Apotheosis of the Dilettante’, in H. Thomas (ed.), The Establishment: A Symposium (1959), p. 89. 118 K. Theakston, The Labour Party and Whitehall (1992), pp. 116–19. 119 R. Andrews, The New Penguin Dictionary of Modern Quotations (Harmondsworth, 2000), p. 233. 120 I. Bernstein, Promises Kept: John F. Kennedy’s New Frontier (Oxford, 1991), pp. 119–22. 121 D. Shipley, Promise and Power: The Life and Times of Robert McNamara (1993), pp. 96–103. 122 NAUK PREM 13/887, Wigg to Wilson, ‘Cost effectiveness’, 20 November 1964. 123 Agar, Government Machine, p. 333. 124 J.B. Poole and K. Andrews, The Government of Science in Britain (1972), pp. 190–1. 125 Pollard, British Economy, table 9.6, p. 351. 126 Favretto, The Long Search for a Third Way: The British Labour Party and the Italian Left Since 1945 (Basingstoke, 2003), pp. 42–4. 127 Labour Party, Industry and Society (1957), pp. 13–17, 40, 48. 128 Tony Benn diary, 1 October 1963; T. Benn, Out of the Wilderness: Diaries 1963–1967 (1987), p. 66. 129 M. Wickham-Jones, Economic Strategy and the Labour Party: Politics and Policy-Making, 1970–1983 (Basingstoke, 1996), pp. 34–6. 130 T. Wilkie, British Science and Politics Since 1945 (Oxford, 1991), p. 64. 131 CPA CRD 2/5/3, Policy Committee on Science and Industry, minutes, 20 October, 15 December 1960. 132 Harvester Archive of the British Conservative Party (hereafter HABCP) 1962/20, ‘Science in Industry: The Inﬂuence of Government Policy’, November 1962; CPA CRD 2/5/3, Policy Committee on Science and Industry, draft recommendations, 23 January 1962. 133 Cmnd. 2171, Committee of Enquiry into the Organisation of Civil Science (October 1963), pp. 52–4. 134 Lord Hailsham, Science and Politics (1963), p. 71. 135 Poole and Andrews, Government of Science, p. 170. 136 e.g. NAUK FG 1/4, NEDC minutes, 6 February 1963. 137 L. Hannah, The Rise of the Corporate Economy (1976), pp. 144–53. 138 Hailsham, Science, p. 20. 139 W.G. McClelland, The Industrial Reorganisation Corporation 1966–71 (Manchester, 1971), pp. 3–4. 140 D. Edgerton, ‘The “White Heat” Revisited: The British Government and Technology in the 1960s’, Twentieth Century British History 7 (1996), p. 58. 141 R. Coopey, ‘Industrial Policy in the White Heat of the Scientiﬁc Revolution’, in R. Coopey, S. Fielding and N. Tiratsoo (eds), The Wilson Governments 1964–1970 (1993), p. 107. 142 Mintech/DES, Statistics of Science and Technology 4 (1970), table 12, pp. 34–5.

Notes 227 143 Edgerton, ‘“White Heat”’, p. 72. 144 R. Millward, ‘Industrial and Commercial Performance Since 1950’, in R. Floud and D. McCloskey (eds), The Economic History of Britain Since 1700, Vol. III, 1939–1992 (Cambridge, 1994 edn.), table 5.10, p. 149; N. Tiratsoo and J. Tomlinson, The Conservatives and Industrial Efﬁciency, 1951–64: Thirteen Wasted Years? (1998), p. 156. 145 M.J. Peck, ‘Science and Technology’, R.E. Caves et al. (eds), Britain’s Economic Prospects (Washington DC, 1968), pp. 448–56. 146 Edgerton, ‘“White Heat”’, pp. 73–4. 147 NAUK CAB 129/112, Powell, Noble memorandum to Cabinet, ‘Population prospects’, 15 January 1963. 148 Annual Abstract of Statistics 103 (1966), table 24, pp. 24–5. 149 Registrar-General’s Quarterly Return, England and Wales 444 (1959), appendix D, p. 25. 150 NAUK CAB 134/2399, MHLG memorandum to EP (O), ‘Population estimates, England and Wales’, 25 March 1963. 151 ‘Seventy Million Britons?’, The Economist, 4 May 1963. 152 See Lowe, Welfare State, pp. 72–3, table 4.3, p. 74. 153 Cmnd. 2308, South East England (March 1964), pp. 4–5. 154 NAUK PREM 11/4519, Erroll to Macmillan, 22 October 1962. 155 G. O’Hara, ‘“We Are Faced Everywhere With a Growing Population”: Demographic Change and the British State, 1955–1964’, Twentieth Century British History 15 (2004), tables 3–4, p. 259–9, 260–1. 156 Cmnd. 5258, Report of the Population Panel (March 1973), table 16, p. 50. 157 J. Glasson, An Introduction to Regional Planning (1978), table 9.5, p. 226. 158 For this stage in research agendas see D. Colander, ‘The Art of Economics by the Numbers’, in R.E. Backhouse (ed.), New Directions in Economic Methodology (1994), pp. 35–8. 159 CPA ACP 3/10 (63) 107, Goldman memorandum, ‘Britain in Top Gear’, 7 June 1963. 160 Clarke, ‘Keynesian Consensus’, p. 74. 161 Ritschel, Politics of Planning, p. 49. 162 A. Cairncross, ‘Keynes and the Planned Economy’, in A.P. Thirlwall (ed.), Keynes and Laissez-Faire (1978), p. 53.

Chapter 3

Macroeconomic Planning

1 A. Booth, The British Economy in the Twentieth Century (Basingstoke, 2001), pp. 169–71; J. Ramsden, ‘“A Party for Owners or a Party for Earners?” How Far Did the British Conservative Party Really Change After 1945?’, Transactions of the Royal Historical Society 37 (1987), pp. 54–5. 2 F. Capie, Depression and Protection: Britain Between the Wars (Cheltenham, 1994 edn.), pp. 123–4. 3 R. Middleton, Towards the Managed Economy: Keynes, the Treasury and the Fiscal Policy Debate of the 1930s (1985), pp. 165–71. 4 K. Middlemas, Power, Competition and the State Vol. I: Britain in Search of Balance 1940–61 (1986), pp. 20–2, 31. 5 Pollard, British Economy, pp. 158–61.

228 Notes 6 Winch, Economics and Policy, pp. 273–4. 7 Middleton, Government versus the Market, ﬁg. 11.4, p. 497; R. Middleton, ‘The Size and Scope of the Public Sector’, in S.J.D. Green and R.C. Whiting (eds), The Boundaries of the State in Modern Britain (Cambridge, 1996), ﬁg. 6.5, p. 118. 8 Chick, Industrial Policy, pp. 3–4; Tomlinson, Democratic Socialism, pp. 156–63. 9 Alford, Lowe and Rollings, Economic Planning, p. 5. 10 Middlemas, Power, Competition and the State, vol. I, p. 118. 11 Tomlinson, Democratic Socialism, pp. 145–6. 12 R. Tarling and F. Wilkinson, ‘The Social Contract: Post-War Incomes Policies and their Inﬂationary Impact’, Cambridge Journal of Economics 1 (1977), pp. 398–400. 13 M. Francis, Ideas and Policies Under Labour 1945–51: Building a New Britain (Manchester, 1997), pp. 173–8. 14 S. Howson, ‘The Origins of Cheaper Money 1945–7’, Economic History Review 40 (1987), pp. 433–5, 448–52. 15 Zweiniger-Bargielowska, Austerity, pp. 24–9. 16 Rollings, ‘Mr. Butskell’, p. 191. 17 N. Rollings, ‘The Reichstag Method of Governing? The Attlee Governments and Economic Controls’, in H. Mercer et al. (eds), Labour Governments and Private Industry: The Experience of 1945–51 (Edinburgh, 1991), pp. 15, 20–6. 18 Jefferys, Retreat from New Jerusalem, pp. 18–19, 24–30. 19 P.D. Henderson, ‘Government and Industry’, in G.D.N. Worswick and P.H. Ady (eds), The British Economy in the Nineteen Fifties (Oxford, 1962), pp. 329–30, 337. 20 B.W.E. Alford, Britain in the World Economy Since 1880 (1996), table 7.9, p. 234. 21 Holmans, Demand Management, pp. 61, 80–1, 83, 104–5, 123, 128, 131, 140–1, 164–5. 22 J. Tomlinson, ‘“Liberty with Order”: Conservative Economic Policy 1951–1964’, in M. Francis and I. Zweiniger-Bargielowska (eds), The Conservatives and British Society 1880–1990 (Cardiff, 1996), p. 282. 23 Rollings, ‘Mr. Butskell’, p. 197. 24 Jefferys, Retreat from New Jerusalem, p. 67. 25 K. Tribe, Economic Careers: Economics and Economists in Britain 1930–1970 (1997), pp. 51, 55. 26 B. Tew, The Evolution of the International Monetary System 1945–77 (1977), pp. 113–26. 27 P.H. Ady, ‘The Terms of Trade’, in Worswick and Ady (eds), British Economy in the Nineteen Fifties, table 1, p. 148. 28 S. Strange, Sterling and British Policy: A Political Study of an International Currency in Decline (Oxford, 1971), pp. 314–15. 29 H. James, International Monetary Cooperation Since Bretton Woods (Oxford, 1996), pp. 179–81. 30 D.A. Aldcroft and M.J. Oliver, Exchange Rate Regimes in the Twentieth Century (Cheltenham, 1998), table 4.3, p. 109. 31 W.A.P. Manser, Britain in the Balance (1971), pp. 24–7.

Notes 229 32 R. Bretherton, The Control of Demand 1958–1964 (1999), passim; F.T. Blackaby, ‘Narrative 1960–1974’, in F.T. Blackaby (ed.), British Economic Policy 1960–1974: Demand Management (Cambridge, 1978), pp. 12–28. 33 A. Graham and W. Beckerman, ‘Economic Performance and the Foreign Balance’, in Beckerman (ed.), Labour Government’s Economic Record, pp. 19–23. 34 T.F. Cripps, M.J. Fetherston and W. Godley, ‘Simulations with the Cambridge Economic Policy Group Model’, pp. 19–22, and D. Laidler, ‘A Monetarist Viewpoint’, pp. 52–5, in M. Posner (ed.), Demand Management (1978). 35 T. Bale, ‘Dynamics of a Non-Decision: The “Failure” to Devalue the Pound 1964–67’, Twentieth Century British History 10 (1999), pp. 197–203. 36 NAUK EW 28/4, Brown to Wilson, 23 July 1965; NAUK PREM 13/255, MacDougall, Balogh, Neild, Kaldor memorandum, ‘Economic situation’, 23 July 1965; NAUK PREM 13/850, Balogh, Neild, Jukes to Wilson, ‘Economic measures’, 8 January 1966. 37 NAUK CAB 128/46, Cabinet minutes, conﬁdential annex, 19 July 1966. 38 Morgan, Callaghan, pp. 268–73. 39 NAUK T 318/190, Hubback to Baldwin, ‘The length of our tether’, 16 October 1967. 40 R. Jenkins, A Life at the Centre (1991), pp. 234–44. 41 R. Solomon, The International Currency System 1945–1976 (1977), pp. 105–9, 176–87. 42 NAUK CAB 134/1813, Economic Planning Board index, 1959. 43 NAUK CAB 129/101, Heath memorandum to Cabinet, ‘Talks with employers and trade unions’, 22 May 1960. 44 K. Middlemas, Power, Competition and the State, Vol. II: Threats to the Post-War Settlement 1961–74 (1990), pp. 289, 290–1. 45 NAUK PREM 11/3018, Tewson to Lloyd, 2 August 1960. 46 Ibid., Lloyd meeting with TUC, minutes, 13 September 1960. 47 NAUK PREM 11/3291, Macmillan to Selwyn Lloyd, 8 May 1961. 48 NAUK CAB 129/105, Selwyn Lloyd memorandum to Cabinet, ‘Economic situation’, 29 June 1961. 49 NAUK CAB 128/35, Cabinet minutes, 30 July 1961. 50 NAUK CAB 134/1692, Secretaries’ memorandum to Economic Planning Committee (hereafter EPC), ‘Planning’, 6 September 1961. 51 NAUK PREM 11/4207, Selwyn Lloyd to Macmillan, 8 September 1961. 52 Ringe, ‘Background to Neddy’, p. 85. 53 NAUK PREM 11/4207, Macmillan meeting with Lee, Bishop, minutes, 14 September 1961. 54 NAUK CAB 129/106, Maudling memorandum to Cabinet, ‘Economic planning’, 20 September 1961. 55 NAUK PREM 11/4207, Selwyn Lloyd to TUC, FBI and BEC, 23 September 1961. 56 Pemberton, Policy Learning, pp. 73–6. 57 CPA CRD 2/9/47, Chambers notes, 21 June 1961. 58 H. Young, This Blessed Plot: Britain and Europe from Churchill to Blair (1998), pp. 118–30.

230 Notes 59 Cmnd 2299, Monopolies, Mergers, and Restrictive Practices (March 1964), pp. 2–6. 60 NAUK CAB 128/36, Cabinet minutes, 15 May 1962, 12 July 1962. 61 CPA CCO 20/8/5, Macleod to Macmillan, ‘Resale price maintenance’, 9 July 1962. 62 H. of C. Debs., vol. 687, cols. 224–5; Heath statement, ‘Monopolies, mergers, restrictive practices and resale price maintenance’, 15 January 1964. 63 R. Findley, ‘The Conservative Party and Defeat: The Signiﬁcance of Resale Price Maintenance for the General Election of 1964’, Twentieth Century British History 12 (2001), pp. 342–53. 64 University of Warwick Modern Records Centre (hereafter UWMRC) MSS 200/3/P7/9/1, Harrison to Selwyn Lloyd, 28 September 1961. 65 S. Wood, ‘Why “Indicative Planning” Failed: British Industry and the Formation of the National Economic Development Council 1960–64’, Twentieth Century British History 11 (2000), p. 445. 66 UWMRC MSS 200/F/3/P7/2/2, Laing to Harrison, 24 November 1961. 67 NAUK T 230/681, Cairncross to Lee, 11 October 1961. 68 Ringe and Rollings, ‘Relative Decline’, p. 341. 69 UWMRC MSS 292B/567.22/1, TUC meeting with Selwyn Lloyd, minutes, 25 October 1961. 70 UWMRC MSS 292B/20/2, TUC General Council minutes, 22 November 1961. 71 H. Macmillan, At the End of the Day, 1961–1963 (1973), p. 47. 72 NAUK CAB 128/35, Cabinet minutes, 23 November 1961. 73 H. of C. Debs., vol. 651, cols. 980, 1072, Selwyn Lloyd, Hare speeches, Supply Day debate, incomes and productivity, 18 December 1961. 74 NAUK T 298/215, Selwyn Lloyd meeting with TUC Economic Committee, minutes, 5 January 1962. 75 NAUK PREM 11/4069, Selwyn Loyd to TUC Economic Committee, 10 January 1961. 76 UWMRC MSS 292B/20/2, TUC General Council minutes, 24 January 1962. 77 NAUK T 230/681, Clarke to Trend, 2 October 1961. 78 UWMRC MSS 292B/567.22/1, TUC Economic Committee memorandum, ‘The Government’s economic policy’, 17 January 1962. 79 Ibid., TUC Economic Committee memorandum, 14 February 1962. 80 M. Shanks, Planning and Politics: The British Experience 1960–1976 (1977), p. 25. 81 NEDC, Growth of the United Kingdom Economy to 1966 (1963), p. 1. 82 Ibid., pp. 51–3. 83 NEDC, Conditions Favourable to Faster Growth (1963), pp. 10–12, 24–5, 31–3, 45, 47. 84 NAUK FG 1/4, Shone memorandum to NEDC, ‘Conditions favourable to faster growth’, 11 January 1963. 85 NAUK CAB 134/1835, Economic Steering Committee minutes, 18 January 1957. 86 P. Mosley, The Making of Economic Policy: Theory and Evidence from Britain and the United States Since 1945 (Brighton, 1984), table A.3, pp. 226–7. 87 ‘The Balance of Payments: Methods of Presentation’, Bank of England Quarterly Bulletin 4 (1964), pp. 276–8.

Notes 231 88 Cairncross diary, 11 December 1963; A. Cairncross, Diaries: The Radcliffe Committee and the Treasury 1961–64 (1999), pp. 76–7. 89 NAUK CAB 134/1696, Selwyn Lloyd memorandum to EPC, enclosing Lee memorandum, ‘Growth policy’, 28 June 1962. 90 Ringe and Rollings, ‘Relative Decline’, p. 347. 91 Cmnd 1626, Incomes Policy: The Next Step (February 1962); Cmnd. 1844, National Incomes Commission (November 1962). 92 UWMRC MSS 292B/560.1/3, TUC Economic Committee minutes, 14 February 1962; TUC Congress Report 1962 (1962), pp. 484–5. 93 NAUK T 298/226, Permanent Secretaries’ Group on Incomes and Prices, minutes, 17 May, 15 June 1962. 94 NAUK LAB 10/1842, National Joint Advisory Council (hereafter NJAC) minutes, 24 April 1963; NAUK LAB 10/1861, NJAC sub-committee on redundancy, minutes, 3 July 1963. 95 NAUK LAB 16/516, Ministry of Labour press release, ‘Security and status for workers: new Act puts Britain in the lead’, 19 March 1964. 96 NAUK FG 1/4, Shone memoranda to NEDC, ‘Future Council business’, 24 March 1963, ‘Future industrial work’, 24 April 1963. 97 Ibid., NEDC minutes, 16 October 1963. 98 NAUK FG 1/5, Maudling memorandum to NEDC, ‘Economic Development Committees’, 22 November 1963. 99 UWMRC MSS 292B/560.1/8, TUC Economic Committee papers, ‘NEDC: Economic Development Committees’, 13 May 1964, 10 June 1964. 100 NAUK FG1/4, NEDC minutes, 24 January 1963. 101 NAUK FG 1/6, ibid., 4 March 1964. 102 Ibid., ‘The next growth programme’, 19 June 1964; NAUK FG 1/6, NEDC minutes, 1 July 1964. 103 Leruez, Economic Planning, pp. 132–4. 104 Lord George-Brown, In My Way (Harmondsworth, 1971), pp. 95–6. 105 E. Roll, Crowded Hours (1985), pp. 163, 172. 106 C. Pollitt, Manipulating the Machine: Changing the Pattern of Ministerial Departments 1960–83 (1983), p. 56. 107 UWMRC MSS 200C/3/DG1/4, CBI memorandum to DEA, ‘NEDC’, 1 March 1966. 108 Leruez, Economic Planning, p. 165. 109 Cmnd. 2639, Prices and Incomes Policy (April 1965), pp. 7–9. 110 NAUK EW 8/7, FBI and BEC ‘Draft declaration of purpose’, 27 November 1964. 111 NAUK CAB 128/39, Cabinet minutes, 15 December 1964. 112 Boswell and Peters, Capitalism in Contention, pp. 35, 46–7. 113 M. Wickham-Jones, Economic Strategy and the Labour Party: Politics and Policy-Making, 1970–83 (Basingstoke, 1996), pp. 116–20. 114 NAUK CAB 129/119, Trend memorandum to Cabinet, ‘Co-ordination between the Department of Economic Affairs and the Treasury’, 16 December 1964. 115 Roll, Crowded, p. 152; J. Callaghan, Time and Chance (1987), p. 165. 116 D. MacDougall, Don and Mandarin (1987), p. 174. 117 Cronin, ‘Labour’s “National Plan”’, p. 222. 118 Pollitt, Machine, p. 53.

232 Notes 119 NAUK EW 24/93, Goodhart to MacDougall, 7 September 1965. 120 NAUK EW 24/4, Secretaries’ memorandum to Plan Coordinating Working Party (hereafter PCWP), ‘The objectives and methods of the plan’, 16 December 1964. 121 NAUK EW 24/7, MacDougall to Caulcott, ‘Draft paper on the Plan’, 11 November 1964. 122 NAUK CAB 134/1737, Economic Development Committee (hereafter EDC) minutes, 28 January 1965. 123 NAUK FG 1/8, Brown memorandum to NEDC, ‘A plan for economic development’, 26 February 1965. 124 Ibid., ‘Progress report on the Plan’, 29 April 1965. 125 NAUK CAB 130/203, DEA memorandum to MISC 1, ‘The Plan: report on progress’, 27 May 1965. 126 NAUK T 230/740, Hubback to Armstrong, ‘The Plan’, 28 May 1965. 127 NAUK EW 24/8, Dallas to Watts, ‘The industrial inquiry’, 21 April 1965. 128 NAUK LAB 8/3216, Todd to Dewar, 28 May 1965. 129 NAUK CAB 134/3274, Statistical Policy Committee, minutes, 21 April 1967. 130 NAUK T 320/586, Brown to Burdett, 25 February 1965. 131 NAUK CAB 134/3275, Secretaries’ memorandum to the Statistical Policy Committee, ‘The Jackson Report’, 28 April 1967. 132 NAUK CAB 134/3274, Statistical Policy Committee, minutes, 23 June 1967. 133 Ibid., 3 July, 31 October 1967. 134 UK Balance of Payments (1968), pp. 11–15, 49–51. 135 J. Tomlinson, The Labour Governments 1964–1970, Vol. III: Economic Policy (Manchester, 2004), p. 116. 136 NAUK EW 24/8, MacDougall to Russell, ‘Policies for the Plan’, 12 March 1965. 137 NAUK EW 24/94, Plan Steering Group minutes, 18 May 1965. 138 NAUK EW 24/8, Grieve Smith to MacDougall, ‘The Budget and the Plan’, 23 April 1965. 139 Cmnd. 2764, The National Plan (September 1965), p. 80. 140 UN World Economic Survey for 1967 (New York, 1968), table 17, p. 173; ibid. (1969), table 11, p. 90. 141 Cmnd. 2764, Plan, pp. 24–5. 142 Ibid., pp. 37–8; NAUK EW 24/6, Manpower sub-group to PCWP, ‘Additions to the labour force’, 22 April, 10 May 1965. 143 P. Paterson, Tired and Emotional: The Life of Lord George Brown (1993), p. 181. 144 NAUK EW 24/96, Grieve Smith to MacDougall, ‘The next plan’, 18 October 1966. 145 NAUK EW 24/10, Shone to Roll, 22 July 1965. 146 NAUK CAB 128/39, Cabinet minutes, 3 August 1965. 147 Cmnd. 2764, Plan, pp. 17–21. 148 B. Rodgers, Fourth Among Equals (2000), pp. 94–5; Paterson, Emotional, p. 190. 149 NAUK PREM 13/859, Wilson, Brown meeting with TUC Economic Committee, minutes, 26 July 1966. 150 NAUK T 230/781, Wilson, Jenkins, Shore, Gunter meeting with TUC Economic Committee, minutes, 18 December 1967. 151 A. Fels, The British Prices and Incomes Board (Cambridge, 1972), pp. 26–8; J. Mitchell, The National Board for Prices and Incomes (1972), pp. 23–34.

Notes 233 152 Cmnd. 4237, Productivity, Prices and Incomes Policy after 1969 (December 1969), pp. 11, 29–31. 153 NAUK EW 16/7, Albu meeting with industrial advisers, minutes, 7 July 1966. 154 NAUK CAB 134/2915, Shore memorandum to Industrial Policy Committee, ‘Review of industrial policy following devaluation’, 16 February 1968. 155 Ibid., Bond-Williams to McIntosh, 26 July 1966. 156 NAUK CAB 134/2737, Stewart memorandum to EDC, ‘Future planning work’, 30 January 1967. 157 NAUK FG 1/13, NEDC minutes, 2 August 1967. 158 NAUK FG 1/15, NEDC minutes, 11 December 1968. 159 NAUK PREM 13/2046, Graham to Wilson, ‘Economic assessment to 1972’, 1 November 1968. 160 NAUK FG 1/18, NEDC minutes, 14 January, 5 February 1969. 161 DEA, The Task Ahead: An Economic Assessment to 1972 (1969), pp. 1, 5–7, pp. 67–8. 162 T. Smith, ‘Industrial Planning in Britain’, in Hayward and Watson (eds), Planning, Politics and Public Policy, p. 116. 163 NAUK CAB 134/3198, Stewart memorandum to Steering Committee on Economic Policy (hereafter SEP), ‘Future planning work’, 16 March 1967. 164 NAUK FG 1/12, Report by exports working group EDC, ‘Through transport to Europe’, 18 May 1966. 165 R. Bailey, Managing the British Economy (1968), p. 46. 166 e.g. NAUK EW 24/118, Motor vehicles distribution and repair EDC minutes, 10 May 1967. 167 DEA, Task Ahead, p. 110. 168 e.g. NEDO, Industrial Report by the Motor Manufacturing EDC (1970), pp. 26–7. 169 NAUK T 342/18, Evans to Smith, 4 November 1969. 170 NAUK T 342/20, Treasury meeting, ‘Future of planning exercise and EDCs’, minutes, 5 February 1970. 171 Pimlott, Wilson, pp. 278, 527. 172 P. Hennessy, The Prime Minister (2000), p. 303. 173 NAUK PREM 13/945, Helsby to Wilson, ‘Ministry of Technology’, 11 November 1965. 174 NAUK PREM 13/1550, Wilson to Healey, 11 November 1966. 175 NAUK PREM 13/2681, Armstrong draft Lobby notice, ‘Machinery of Government’, 30 September 1969. 176 NAUK CAB 134/2742, Bray memorandum to EPC sub-committee on industrial policy, ‘Industrial policy’, 4 May 1967. 177 NAUK CAB 134/2738, Benn memorandum to EDC, ‘Industrial expansion Bill’, 14 June 1967. 178 NAUK PREM 13/1576, Wilson, Stewart meeting with CBI, minutes, 2 August 1967; Davies to Shore, 22 September 1967. 179 NAUK CAB 128/42, Cabinet minutes, 28 September 1967. 180 Ibid., 26 October 1967. 181 Cmnd 3509, Industrial Expansion (January 1968), pp. 2–3. 182 Public General Acts and Measures 1968, vol. I, c.32, pp. 772, 774–5; Industrial Expansion Act, 30 May 1968.

234 Notes 183 Mintech, Reports on the Industrial Expansion Act (1968/69, 1969/70). 184 Harvester Archives of the British Labour Party (hereafter HABLP), NEC minutes vol. 9, pp. 645–51 (January–April 1969), Memorandum from Study Group on economic strategy, ‘Economic planning’, 1 March 1969. 185 NAUK CAB 134/2708, Brown memorandum to EDC, ‘The industrial reorganisation ﬁnance corporation’, 5 January 1966. 186 D. Hague and G. Wilkinson, The IRC – An Experiment in Industrial Intervention (1983), pp. 50–4, 58–60, 122–5, 253–5, 258–9; McClelland, Reorganisation Corporation, table 1, p. 17. 187 NAUK CAB 134/3215, SEP minutes, 19 January 1970; Treasury, Economic Assessment to 1972 – A Revised Assessment (1970), pp. 5–6. 188 NAUK T 245/17, Armstrong memorandum, ‘The preparation of Ministerial speeches’, 6 October 1961. 189 Ibid., Monthly reports on public opinion, e.g. 31 May 1962, 9 November 1962. 190 NAUK PREM 11/3765, Macmillan circular, ‘Economic policy’, 16 May 1962. 191 NAUK T 245/21, Raphael to Hubback, ‘Pay pause: publicity’, 20 December 1961. 192 e.g. DEA, Progress Report (June 1965), pp. 5–6. 193 NAUK EW 4/29, Buckley to Porter, 27 August 1965. 194 DEA, Working for Prosperity (1965), p. 4. 195 NAUK EW 4/28, Liaison Committee on National Plan, minutes, 11 July, 6 August 1965. 196 NAUK EW 4/33, Groves to Burgh, 6 September 1965. 197 ‘National Platitudes’, The Economist, 18 September 1965. 198 ‘Totting up the Future’, New Society, 23 September 1965. 199 A. Maddison, ‘How Fast Can Britain Grow?’, Lloyds Bank Review 79 (January 1966), pp. 8–14. 200 ‘Long Term Projections Compared’, National Institute Economic Review 34 (November 1965), pp. 34–9. 201 Gallup, International Opinion Polls, Great Britain 1937–75, Vol. II (1976), pp. 831–2. 202 Ibid., Vol. II, various polls. 203 Ibid., Vol. II, pp. 852, 960, 1102. 204 CPA CCO 180/25/2/7, ORC survey, ‘Inﬂuence of issues on the electorate’, February 1968. 205 D. Butler and M. Pinto-Duschinsky, The British General Election of 1970 (1971), p. 346. 206 ‘Participation, Priorities and Planning’, Political Quarterly 39 (1968), pp. 360–1. 207 A. Albu, ‘Economic Policies and Methods’, Political Quarterly 41 (1970), pp. 141, 145. 208 Cmnd. 2767, The Parliamentary Commissioner for Administration (October 1965), p. 7. 209 Labour Party Conference Report 1968 (1968), pp. 344–7. 210 ‘Participation’, New Society, 31 July 1969. 211 ‘Whose Angel?’, The Economist, September 30, 1967. 212 M. Peston, ‘A Public/ Private Economy’, New Society, 27 July 1967. 213 ‘Unhappy Families’, New Society, 21 December 1967.

Notes 235 214 Cmnd. 4237, Productivity, Prices and Incomes Policy, p. 6. 215 G.F. Ray, ‘Labour Costs in OECD Countries 1964–1975’, National Institute Economic Review 78 (1976), table 1, p. 58. 216 J.F. Wilson, British Business History 1720–1994 (Manchester, 1995), pp. 210–11. 217 G. Meeks, Disappointing Marriage: A Study of the Gains from Merger (Cambridge, 1977), table 3C, p. 25. 218 R.E. Caves, ‘Productivity Differences Among Industries’, in R.E. Caves and L.B. Krause (eds), Britain’s Economic Performance (Washington DC, 1980), pp. 167–70. 219 P. Dunnett, The Decline of the British Motor Industry: The Effects of Government Policy 1945–1979 (1980), pp. 99–101. 220 S.N. Broadberry, The Productivity Race: British Manufacturing in International Perspective (Cambridge, 1997), table 12.56, p. 391. 221 Reports on the Census of Production, Summary Tables, 1948–1950, table 2, p. 33, 1976, table 1, p. 2. 222 W. Grant and D. Marsh, The Confederation of British Industry (1977), tables 1–2, pp. 32–3. 223 B. Eichengreen, ‘Institutional Prerequisites for Economic Growth: Europe after World War II’, European Economic Review 38 (1994), pp. 885–6. 224 See D. Marquand, The Unprincipled Society: New Demands and Old Problems (1988), pp. 160–74. 225 P. Evans, Embedded Autonomy: States and Industrial Transformation (Princeton, NJ, 1995), pp. 12–14, 247–50.

Chapter 4

Planning the Public Sector

1 Cmnd. 1432, Control of Public Expenditure (July 1961), pp. 5–6. 2 H. of C. Select Committee on Estimates, Sixth Report, 1958, xxxvi–xxxvii, xi–xiii. 3 R. Lowe, ‘Milestone or Millstone? The 1959–61 Powden Committee and its Impact on British Welfare Policy’, Historical Journal 40 (1997), pp. 469–70. 4 E. Plowden, An Industrialist in the Treasury (1989), pp. 8–12. 5 Richard Clarke papers, Churchill College Archive Centre, Churchill College, Cambridge (hereafter CCAC CLRK) 1/3/1/2, Clarke to Padmore, 8 November 1960. 6 NAUK T 325/81, Plowden Committee, second interim report, 3 June 1960. 7 NAUK CAB 129/104, Selwyn Lloyd memorandum to Cabinet, ‘Second report of the Plowden Committee’, 22 March 1961. 8 Hall diary, 31 May 1960; A. Cairncross (ed.), The Robert Hall Diaries 1954–61 (1991), pp. 235–6. 9 H. Heclo and A. Wildavsky, The Private Government of Public Money (1974), ftn. 6, p. 207. 10 G.C. Peden, British Rearmament and the Treasury 1932–39 (Edinburgh, 1979), pp. 40–4, 74–9. 11 Cairncross, Years of Recovery, pp. 302–3, 320–3. 12 K. Thorpe, ‘The Missing Pillar: Economic Planning and the Machinery of Government During the Labour Administration of 1945–51’, London University Ph.D. thesis (1999), pp. 108–11.

236 Notes 13 14 15 16 17 18 19 20 21 22 23 24 25 26

27 28 29 30 31 32 33

34 35

36 37 38 39 40 41 42

Toye, Planned Economy, pp. 153–55, 201–2, 222–3. Alford, Lowe and Rollings, Economic Planning, p. 10. Middlemas, Power, Competition and the State, Vol. I, pp. 116–18. H. Pelling, The Labour Governments 1945–51 (1984), pp. 246–50. L. Pliatzky, Getting and Spending: Public Expenditure, Employment and Inﬂation (Oxford, 1982), pp. 34–5. S.H. Beer, Treasury Control: The Coordination of Financial and Economic Policy in Great Britain (Oxford, 1956), pp. 16–23. R. Clarke, Public expenditure, management and control: the development of the Public Expenditure Survey Committee (1978), p. 3. Ibid., xx–xxi. Ibid., pp. 12–13. H. of C. Estimates Committee, Sixth Report, 1958, pp. 338–9, Serpell evidence, 13 May 1958. Cmnd 124, Defence: Outline of Future policy (April 1957), pp. 1–2, 6–8, 10. Cmnd 1639, Defence 1962: The Next Five Years (February 1962), p. 5. Bretherton, Management, p. 28. M. Daunton, ‘“A Kind of Tax Prison”: Rethinking Conservative Taxation Policy 1960–1970’, in M. Francis and I. Zweiniger-Bargielowska (eds), The Conservatives and British Society 1880–1990 (Cardiff, 1996), table 1, p. 293. M. Daunton, Just Taxes: The Politics of Taxation in Britain 1914–1979 (Cambridge, 2002), pp. 257–8. NAUK T 325/64, Bligh to Macmillan, 6 April 1960. S. Goldman, The Developing System of Public Expenditure Management and Control, Historical Appendix (1972), p. 10. NAUK CAB 129/108, Brooke memorandum to Cabinet, ‘Estimates 1962/63’, 3 January 1962. Gallup, Opinion Polls, Vol. II, p. 861. NAUK RG 23/551, NOP survey, ‘Taxation and social services’, November 1966. C.H. Lee, ‘The Growth of Public Expenditure in the United Kingdom 1881–1997’, University of Aberdeen Department of Economics Discussion Paper 99–8 (1999), table 1, p. 20. R.C.O. Matthews, ‘Why Has Britain Had Full Employment Since the War?’, Economic Journal 78 (1968), p. 560. L. Hannah, Engineers, Managers and Politicians (1982), tables A1, A3, pp. 291, 294; T. Gourvish, British Railways 1948–1973 (Cambridge, 1986), tables 1, 5, pp. 595, 603. D. Helm, Energy, the State and the Market: British Energy Policy Since 1979 (Oxford, 2003), pp. 23–30. J.C.R. Dow, The Management of the British Economy 1945–60 (Cambridge, 1964), p. 221. NAUK T 325/75, Clarke to Padmore, 4 November 1960. NAUK CAB 128/35, Cabinet minutes, 28 March 1961. S. Brittan, Steering the Economy: The Role of The Treasury (Harmondsworth, 1971 edn.), pp. 105–7. C. Thain and M. Wright, The Treasury and Whitehall: The Planning and Control of Public Expenditure 1976–1993 (Oxford, 1995), p. 37. e.g. NAUK T 298/136, Treasury memorandum to Public Expenditure Survey Committee (hereafter PESC), ‘PESC: progress report’, 14 November 1961.

Notes 237 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74

75 76

Lowe, ‘Milestone’, p. 473. NAUK PREM 11/4209, Macmillan to Selwyn Lloyd, 30 November 1960. NAUK T 320/44, ad hoc group, minutes, 1 December 1960. Ibid., 22 November 1962. NAUK T 325/75, Treasury memorandum, ‘Public investment and reﬂation’, April 1960. H. of C. Debs., vol. 645, cols. 436–7, Selwyn Lloyd statement, ‘The economic situation’, 26 November 1961. ‘The Great Deﬂation’, The Economist, 29 July 1961. NAUK CAB 128/37, Cabinet minutes, 18 July, 12 September 1963. NAUK CAB 128/38, Cabinet minutes, 23 January 1964. Clarke, Expenditure, pp. 72–3. NAUK T 298/115, Powell to Selwyn Lloyd, 16 September 1961. H. of C. Debs., vol. 684, col. 202, Maudling, Debate on the Address, 13 November 1963. NAUK CAB 128/39, Cabinet minutes, 19 October 1964. Ibid., Cabinet minutes, 28 October 1964. NAUK T 320/361, Marshall memorandum to Task Group, ‘Civil R&D programme of the AEA’, March 1965. Lord Jenkins, in ‘The Development of Concorde’, ICBH seminar, 19 November 1998, http://www.icbh.ac.uk/seminars/concorde.html. NAUK PREM 13/286, Trend to Wilson, ‘Public expenditure’, 23 December 1964. NAUK EW 25/25, Crosland to Allen, 8 January 1965. NAUK EW 24/10, Clarke to Roll, 16 July 1965. NAUK PREM 13/270, Trend brief for Wilson, ‘Public expenditure 1969/70’, 14 July 1965. NAUK CAB 129/120, Callaghan memorandum to Cabinet, ‘Public expenditure’, 26 January 1965. NAUK EW 25/28, Stevens to Jukes, 28 April 1965. NAUK CAB 128/41, Cabinet minutes, 12 July 1966. NAUK CAB 134/2395, Public Expenditure Committee minutes, 5 August 1966. NAUK CAB 128/41, Cabinet minutes, 15 November 1966. NAUK CAB 129/131, Callaghan memorandum to Cabinet, ‘Public expenditure: areas of choice’, 15 June 1967. Crossman diary, 27 June 1967; R. Crossman, The Diaries of a Cabinet Minister Vol. II (1976), p. 398. NAUK CAB 128/42, Cabinet minutes, 27 June, 6 July 1967. Castle diary, 25 November 1969; B. Castle, The Castle Diaries 1964–1970 (1974), p. 732. S. Goldman, The Developing System of Public Expenditure Management and Control (1973), p. 11. H. of C. Debs., vol. 754, col. 935, Callaghan statement, ‘£ (exchange rate)’, 20 November 1967. Ibid., vol. 756, cols. 1580–1592, Wilson statement, ‘Public expenditure’, 16 January 1968; NAUK CAB 134/3204, Jenkins memoranda to SEP, ‘Public expenditure’, 18 June 1968. NAUK CAB 128/44, Cabinet minutes, 3 July, 17 July, 29 July 1969. NAUK CAB 128/43, Cabinet minutes, 4 January, 12 January, 15 January 1968.

238 Notes 77 A. Peacock and J. Wiseman, The Growth of Public Expenditure in the United Kingdom (2nd edn., 1967), v–vi. 78 A. Downs, An Economic Theory of Democracy (New York, 1957), pp. 73–4. 79 A.C. Pigou, A Study in Public Finance (1928), pp. 49–57. 80 NAUK T 325/89, Clarke to Padmore, ‘Future planning: civil side’, 23 January 1962. 81 NAUK T 320/200, MOT memorandum to PESC Very Long Term (hereafter VLT) Committee, ‘The transport needs of Great Britain in the next twenty years’, 13 March 1962. 82 NAUK T 230/665, Clarke to Permanent Secretaries, ‘VLT and the economic map of 1980’, 22 May 1962. 83 Ibid., Holmans report, ‘An economic map of 1980’, October 1962. 84 NAUK T 311/116, Rawlinson to Clarke, 1 October 1962. 85 Ibid., Permanent Secretaries’ conference, conclusions, November 1962. 86 NAUK T 320/87, Treasury memorandum to PESC, ‘VLT’, 12 December 1962. 87 R.E. Backhouse and R. Middleton, Exemplary Economics Vol. II: Europe, Asia and Australasia (Cheltenham, 2000), pp. 166–7. 88 Castle diary, 12 July 1968; Castle, Diaries, p. 486. 89 P. Browning, The Treasury and Economic Policy 1964–1985 (1986), pp. 227–8. 90 Clarke, Expenditure, p. 128. 91 NAUK T 277/1705, Helsby memorandum to Permanent Secretaries, ‘Policy, planning and control’, 13 June 1966. 92 NAUK PREM 13/837, Wigg to Wilson, ‘Cost effectiveness’, 20 November 1964. 93 A.A. Hovey, The Planning-Programming-Budgeting Approach to Government Decision Making (New York, 1968), pp. 12–21. 94 A.C. Enthoven and K.W. Smith, How Much is Enough? Shaping the Defense Program 1961–1969 (New York, 1971), pp. 32–53. 95 Healey, Time of My Life, pp. 268–9. 96 E. Pearce, Denis Healey: A Life in Our Times (2002), pp. 358–61. 97 A. Wildavsky and N. Caiden, The New Politics of the Budgetary Process (Harlow, 1997), p. 45. 98 G.K. Fry, The Administrative ‘Revolution’ in Whitehall (1981), p. 86. 99 Heclo and Wildavsky, Private Government, p. 270. 100 Cmnd. 4506, The Reorganisation of Central Government (October 1970), p. 4. 101 T. Blackstone and W. Plowden, Inside the Think Tank: Advising the Cabinet 1971–1983 (1988), pp. 25–8. 102 Ibid., pp. 48–9. 103 A. Wildavsky, ‘Rescuing Policy Analysis from PPBS’, Public Administration Review 29 (1969), pp. 191–4. 104 NAUK T 316/92, Bridgeman to Smith, ‘PPB in the United States and Canada’, 20 November 1969. 105 P. Self, Econocrats and the Policy Process: The Politics and Philosophy of Cost Beneﬁt Analysis (1975), pp. 6–10. 106 E.L. Harper, F.A. Kramer and A.M Rouse, ‘Implementation and Use of PPB in Sixteen Federal Agencies’, Public Administration Review 29 (1969), pp. 626–8. 107 A.R. Prest and R. Turvey, ‘Cost Beneﬁt Analysis: A Survey’, Economic Journal 75 (1965), pp. 683–5.

Notes 239 108 R.E. Musgrave, ‘Cost Beneﬁt Analysis and the Theory of Public Finance’, in R. Layard (ed.), Cost Beneﬁt Analysis (Harmondsworth, 1972), pp. 106, 114–15. 109 P. Samuelon, ‘The Pure Theory of Public Expenditure’, Review of Economics and Statistics 36 (1954), p. 389. 110 P. Hall, Great Planning Disasters (1980), pp. 32–8. 111 M.S. Feldstein, ‘The Social Time Preference Rate’, Economic Journal 74 (1964), pp. 360–79. 112 W. Baumol, ‘On the Social Rate of Discount’, American Economic Review 58 (1968), pp. 800–2. 113 NAUK T 316/53, Treasury Management Account Unit memorandum, ‘Dossier on cost beneﬁt analysis in the public sector, vol. II’, May 1969. 114 Cmnd. 3437, Nationalised Industries: A Review of Economic and Financial Objectives (November 1967), pp. 6–7. 115 J. Dunkerley and P.G. Hare, ‘Nationalized Industries’, in N.F.R. Crafts and N. Woodward (eds), The British Economy Since 1945 (Oxford, 1991), pp. 398–9. 116 NAUK T 298/153, Treasury meeting, ‘Criteria for public investment’, 2 April 1962, minutes. 117 NAUK T 316/52, Treasury memorandum to PESC, ‘Discussion of common ﬁnancial problems: cost beneﬁt analysis’, 31 July 1964. 118 NAUK T 316/92, Henley to Smith, 20 November 1969. 119 U. Hicks, ‘Choice, Efﬁciency and Control in the Public Services’, in A.T. Peacock and D.J. Robertson (eds), Public Expenditure Appraisal and Control (Edinburgh, 1963), p. 150. 120 P. Colvin, The Economic Ideal in British Government: Calculating Costs and Beneﬁts in the 1970s (Manchester, 1985), p. 55. 121 Goldman, Developing System, Historical Appendix, pp. 68–9. 122 NAUK T 316/124, Goldman to Greenhill, 21 April 1970. 123 NAUK T 316/92, Treasury meeting on PPB, minutes, 3 March 1970. 124 NAUK T 316/52, Marshall to McKenna, 13 November 1964. 125 NAUK T 316/53, Treasury Management Account Unit memorandum, ‘Dossier on cost beneﬁt analysis in the public sector, vol. II’, May 1969. 126 Cmnd. 3638, The Civil Service, Vol. I: Report of the Committee (June 1968), pp. 52, 57–60, 81–8. 127 Ibid., Vol. II: Report of a Management Consultancy Group (June 1968), pp. 95–8. 128 C. Pollitt, Manipulating the Machine: Changing the Pattern of Ministerial Departments 1960–83 (1984), pp. 77–81. 129 Fry, Administrative ‘Revolution’, pp. 155–6. 130 A. Blick, ‘The Role of Special Advisers in the ﬁrst Wilson Government, 1964–70’, London University Ph.D. thesis (2001), pp. 310–11. 131 P. Hennessy, Whitehall (1990), pp. 205–8. 132 NAUK PREM 13/2068, Allen to Permanent Secretaries, 10 July 1968. 133 Crossman diary, 22 October 1968; R. Crossman, The Diaries of a Cabinet Minister, Vol. III (1977), p. 231. 134 NAUK T 277/2307, Public Expenditure Review Committee second report, January 1969. 135 NAUK T 277/2297, Marshall memorandum to Steering Committee on Public Expenditure, ‘Treatment of years 1 to 3 and 4 to 5’, 2 April 1969.

240 Notes 136 NAUK T 328/47, Armstrong to Allen, ‘Economic planning committees’, 6 January 1967. 137 NAUK T 277/1980, PESC summary report, June 1968, p. 5. 138 NAUK EW 24/133, Medium Term Assessment Committee report, (?June) 1968. 139 P. John and H. Margetts, ‘Policy Punctuations in the UK: Fluctuations and Equilibria in Central Government Expenditure Since 1951’, Public Administration 81 (2003), pp. 411–32. 140 R.W.R. Price, ‘Public Expenditure’, in Beckerman (ed.), Economic Policy, table 3.5, p. 105 and chart 3.4, p. 109. 141 Thain and Wright, The Treasury and Whitehall, p. 38. 142 NAUK T 277/1485, Treasury memorandum to PESC, ‘Estimates in 1962/63 and 1963/64’, 10 September 1964. 143 NAUK T 325/64, Rossiter to Clarke, ‘Plowden Committee’, 8 February 1960. 144 Lowe, ‘Milestone’, pp. 477–8. 145 R.F. Elliot, ‘Public Sector Wage Movements 1950–1973’, Scottish Journal of Political Economy 24 (1977), table 6, p. 145. 146 W.J. Baumol, ‘Macroeconomics of Unbalanced Growth: The Anatomy of Urban Crisis’, American Economic Review 57 (1967), pp. 416–17, 419–22. 147 M.S. Levitt and M.A.S. Joyce, The Growth and Efﬁciency of Public Spending (Cambridge, 1987), pp. 5–6, 14–15, 21, 64–6, 159–60. 148 P.M. Rees and F.P. Thompson, ‘The Relative Price Effect in Public Expenditure’, Statistical News 18 (1972), p. 18. 149 Cmnd. 2235, Public Expenditure in 1963/64 and 1967/68 (December 1963), p. 10. 150 NAUK T 320/335, Downey to Nichols, ‘Chequers brieﬁng: Clarke’s law’, 13 November 1964. 151 NAUK T 328/48, Edge to Roy, ‘Medium term projections of public expenditure 1961–66’, 1 April 1967. 152 Cmnd 4017, Public Expenditure: A New Presentation (April 1969), pp. 9, 22–4. 153 Goldman, Developing System, p. 17. 154 NAUK T 331/461, Levitt to Atkinson, ‘The productivity differential: some problems’, 23 April 1969, Levitt to Widdup, ‘The RPE for individual programmes’, 2 January 1970. 155 W. Godley, ‘The Measurement and Control of Public Expenditure’, Economic Policy Review 2 (1976), pp. 58–60. 156 P.K. Else and G.P. Marshall, The Management of Public Expenditure (1979), table 4.2, p. 51. 157 J. Bray, Decision in Government (1970), p. 126. 158 Hennessy, Whitehall, pp. 189–90. 159 D. Heald, Public Expenditure: Its Defence and Reform (Oxford, 1983), pp. 180–1. 160 J. Barnett, Inside the Treasury (1982), pp. 77–8. 161 Cmnd. 6440, Cash Limits on Public Expenditure (April 1976), pp. 2–3. 162 M. Wright, ‘From Planning to Control: PESC in the 1970s’, in M. Wright (ed.), Public Spending Decisions: Growth and Restraint in the 1970s (1980), pp. 98–9. 163 J.A. Pechman, ‘Taxation’, in R.E. Caves and L.B. Krause (eds), Britain’s Economic Performance (Washington DC, 1980), table 8, p. 245.

Notes 241 164 165 166 167 168 169

Clarke, Expenditure, p. 151. Cohen, British Economic Policy, pp. 91–2. NAUK T 298/115, Powell to Selwyn Lloyd, 16 September 1961. Heclo and Wildavsky, Private Government, pp. 250–63. H. of C. Select Committee on Procedure, First Report (July 1969), vii–xv. R. Klein, ‘The Politics of PPB’, Political Quarterly 43 (1972), pp. 280–1.

Chapter 5

Regional Planning

1 B. Rhodes and J. Moore, ‘Evaluating the Effects of British Regional Economic Policy’, Economic Journal 83 (1973), tables I–II, p. 92. 2 S. Glynn and J. Oxborrow, Interwar Britain: A Social and Economic History (1976), pp. 152–4. 3 J. Glasson, An Introduction to Regional Planning (2nd edn., 1978), p. 210. 4 A.J. Odber, ‘Regional Policy in Great Britain’, in US Department of Commerce, Area Redevelopment Policies in Britain and the Countries of the Common Market (Washington DC, 1965), pp. 335–6. 5 A. Booth, ‘The Second World War and the Origins of Modern Regional Policy’, Economy and Society 11 (1982), pp. 9–15. 6 Cmd. 6527, Employment Policy, p. 10. 7 G. McCrone, Regional Policy in Britain (1969), p. 110. 8 Ibid., pp. 109–10. 9 G. Cherry, Town Planning in Britain Since 1900 (Oxford, 1996), pp. 121–4. 10 D.H. McKay and A.W. Cox, The Politics of Urban Change (1979), pp. 199–200. 11 D.W. Parsons, The Political Economy of British Regional Policy (1986), pp. 105–8. 12 P. Scott, ‘The Worst of Both Worlds: British Regional Policy 1951–64’, Business History 38 (1996), pp. 41, 49, 54. 13 H.W. Armstrong, ‘Regional Problems and Policies’, in N. Crafts and N.W.C. Woodward (eds), The British Economy Since 1945 (Oxford, 1991), pp. 302–3. 14 Macmillan, Riding the Storm, p. 723. 15 McCrone, Policy, pp. 118–19. 16 For this dilemma see Tomlinson, Democratic Socialism, p. 174. 17 F. Perroux, ‘Economic Space: Theory and Applications’, in J. Friedmann and W. Alonso (eds), Regional Development and Planning (Cambridge, Mass., 1964), pp. 23–8. 18 M.D. Thomas, ‘Growth Pole Theory: An Examination of Some of its Basic Concepts’, in N.M. Hansen (ed.), Growth Centres in Regional Economic Development (New York, 1972), pp. 51–62. 19 L.H. Klaasen, Area Economic and Social Redevelopment (Paris, 1965), p. 77. 20 N. Kaldor, ‘The Case for Regional Policies’, Scottish Journal of Political Economy 17 (1970), p. 343; on the theory see N. Kaldor, Causes of the Slow Rate of Economic Growth of the United Kingdom (Cambridge, 1966). 21 D. North, ‘Location Theory and Regional Economic Growth’, Journal of Political Economy 63 (1955), pp. 247–8, 257; W.W. Rostow, The Stages of Economic Growth: A Non-Communist Manifesto (Cambridge, 1960), pp. 7–9. 22 M. Blaug, ‘A Case of Emperor’s Clothes: Perroux’s Theory of Economic Domination’, Kyklos 17 (1964), p. 560.

242 Notes 23 See J.B. Parr, ‘Growth Pole Strategies in Regional Economic Planning: A Retrospective View, Part II, Implementation and Outcome’, Urban Studies 36 (1999), p. 1250. 24 S.R. Dennison, The Location of Industry and the Depressed Areas (Oxford, 1939), pp. 201–2. 25 J.A. Schumpeter, Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process (New York, 1939), esp. p. 86. 26 Scottish Council, Report of the Committee on Local Development in Scotland (Edinburgh, 1952), pp. 33–4. 27 M.J. Moseley, Growth Centres in Spatial Planning (Oxford, 1974), pp. 9–13. 28 Kaldor, ‘Regional Policies’, pp. 340–7. 29 M. Chisholm, ‘On the Making of a Myth? How Capital Intensive is Industry Investing in the Development Areas?’, Urban Studies 7 (1970), pp. 289–93. 30 See D. Linehan, ‘Regional Survey and the Economic Geographies of Modern Britain 1930–1939’, Transactions of the Institute of British Geographers NS 28 (2003), pp. 96–122. 31 B. Balassa, The Theory of Economic Integration (Homewood, Ill., 1961), p. 209. 32 E.T. Nevin, A. Roe and J.I. Round, The Structure of the Welsh Economy (Cardiff, 1966), pp. 11–16. 33 A.J. Brown, J.K. Bowers, P. Cheshire, H. Lind and V.H. Woodward, ‘Regional Problems and Regional Policy’, National Institute Economic Review 46 (1968), pp. 43–5. 34 R.W. Fowler, ‘Duration of Unemployment on the Register of Wholly Unemployed’, Studies in Ofﬁcial Statistics Research Series 1 (1968), table C, pp. 20–3. 35 A.J. Brown, ‘Surveys of Applied Economics: Regional Economics, With Special Reference to the United Kingdom’, Economic Journal 79 (1969), pp. 772–3. 36 E.T. Balopoulos, Fiscal Policy Models of the British Economy (Amsterdam, 1967), pp. 168–83, 259–66. 37 NAUK BT 173/16, Regional Controllers Conference, minutes, 8 October 1963. 38 NAUK CAB 134/2436, Ministry of Labour memorandum to Committee on Regional Development, ‘Distribution of Industry’, 8 July 1964. 39 NAUK PREM 13/1432, Wilson MS note on Trend, ‘1965 review of statistics’, 9 September 1965. 40 Abstract of Regional Statistics 1 (1965), tables 3, 17, 35, pp. 8, 25, 41. 41 Ibid., 6 (1970), tables 8, 35, 61–6, pp. 12, 46–7, 81–4. 42 Ward and Doggett, Keeping Score, p. 149. 43 G. Cherry and U. Wannop, ‘The Development of Regional Planning in the UK’, Planning Perspectives 9 (1994), p. 40. 44 NAUK T 222/1272, O’Donovan memorandum to Regional Organisation Committee, ‘Regional staffs’, 30 December 1959. 45 NAUK PREM 11/4519, Macmillan to Hailsham, 5 January 1963. 46 NAUK CAB 134/2436, Trend memorandum, ‘Committee on regional development: composition and terms of reference’, 23 October 1963. 47 NAUK EW 7/155, Powell, Sharp meeting, minutes, 15 November 1963. 48 NAUK EW 7/17, McIntosh memorandum, ‘Regional development’, 6 March 1964. 49 NAUK BT 177/2196, Bergin to McIntosh, ‘Regional structure of departments’, 31 August 1964.

Notes 243 50 NAUK PREM 11/4278, Hailsham to Macmillan, 11 September 1963. 51 NAUK CAB 129/114, Joseph and Hailsham memorandum to Cabinet, ‘Regional planning’, 15 October 1963. 52 HABLP LPRD memoranda, I, II/RD 466, Jay memorandum, ‘Regional planning’, May 1963. 53 N.M. Hansen, French Regional Planning (Bloomington, Indiana, 1968), pp. 83–5. 54 H. of C. Debs., vol. 703, col. 1829, Brown statement, ‘Regional economic planning’, 10 December 1964. 55 DEA, Economic Planning in the Regions (1966), pp. 5–6. 56 C. Clifford, ‘The Rise and Fall of the Department of Economic Affairs, 1964–69: British Government and Indicative Planning’, Contemporary British History 11 (1997), pp. 101–2. 57 NAUK LAB 8/3348, St John Wilson to Dunnett, 19 May 1966. 58 NAUK EW 7/315, Steele memorandum, ‘Developments in regional policy having implication for regional planning’, 3 May 1966. 59 NAUK EW 7/1145, Steele memorandum, ‘Private sector planning, regions’, 29 June 1966. 60 NAUK CAB 134/2762, Environmental Policy Committee (Ministerial) (hereafter EP (M)) minutes, 20 February 1967. 61 NAUK EW 7/513, Steele to Peterson, ‘The next Plan: regional component’, 20 October 1965. 62 NAUK EW 25/258, Secretaries’ memorandum to LTPD, ‘An alternative choice of strategy for long-term population distribution’, 20 January 1966. 63 NAUK EW 25/259, LTPD minutes, 5 October 1967. 64 NAUK EW 7/315, Brown, Rodgers, Greenwood meeting, minutes, 14 June 1966. 65 NAUK EW 6/3, Cox to Vernon, 13 July 1966. 66 DEA, Humberside: A Feasibility Study (1968), pp. 3–51. 67 NAUK EW 25/28, Rees to Brown, 11 January 1965. 68 NAUK EW 7/513, Emanuel to Cory, ‘Public expenditure and regional policy’, 11 October 1965. 69 NAUK EW 25/30, Henley to Cory, ‘Public expenditure and regional policy’, 2 November 1965. 70 NAUK T 277/1593, Treasury Public Expenditure Committee (hereafter TPEC) minutes, 15 November 1965. 71 NAUK T 331/120, Marshall to Isaac, 11 September 1968. 72 South East EPC, A Strategy for the South East (1967), p. 64. 73 NAUK EW 7/315, Beagley to Allen, ‘The next stage in regional planning’, 12 October 1967. 74 NAUK EW 7/682, Shore to Cadbury, ‘Government’s views on the Council’s ﬁrst report’, 20 December 1967. 75 NAUK EW 7/315, Peterson to Burgh, ‘Future development of the regional machinery’, 27 October 1967. 76 NAUK CAB 134/2762, Stewart memorandum to EP (M), ‘Regional economic planning councils’, 14 February 1967. 77 NAUK CAB 130/165, Bishop, Bancroft memorandum, ‘Distribution of industry policy: report of an interdepartmental committee’, 3 July 1959. 78 Ibid.

244 Notes 79 NAUK CAB 129/98, Erroll memorandum to Cabinet, ‘Distribution of industry’, 20 July 1959; NAUK CAB 128/33, Cabinet minutes, 23 July 1959. 80 NAUK CAB 128/33, Cabinet minutes, 8 September 1959. 81 H. of C. Debs., vol. 613, cols. 45–6, 58–59, 90–1, Maudling speech, second reading, Local Employment Bill, 9 November 1959. 82 McCrone, Policy, pp. 131–2. 83 NAUK CAB 134/1625, Macpherson memorandum to Distribution of Industry Committee (hereafter DIC), ‘Changes in the list of development districts’, 12 June 1961. 84 Ibid., DIC minutes, 24 October 1961. 85 NAUK BT 177/2039, Whitehouse to Fisher, 9 February 1963. 86 NAUK CAB 134/1626, DIC minutes, 30 November 1962. 87 NAUK CAB 134/1697, EPC minutes, 16 January 1963. 88 Ministry of Labour Gazette (various issues). 89 Gallup, Opinion Polls, vol. I, p. 670. 90 NAUK PREM 11/4520, Macmillan to Maudling, ‘Modernisation of Britain’, 30 November 1962. 91 D. Butler and A. King, The British General Election of 1964 (1965), pp. 315–16. 92 J.D. McCallum, ‘UK Regional Policy 1964–72’, in G.C. Cameron and L. Wingo (eds), Cities, Regions and Public Policy (Edinburgh, 1973), ft. 1, p. 271. 93 J. Tomlinson, ‘Conservative Modernisation, 1960–64: Too Little, Too Late?’, Contemporary British History 11 (1997), pp. 20–1. 94 P. Barker, ‘Rivalling the Metropolis’, New Society, 25 June 1964. 95 ‘Northumbrian Vision’, The Economist, September 30, 1961; ‘Uprooting Clydeside’, The Economist, June 23, 1962. 96 NAUK PREM 11/4296, Macmillan memorandum to Cabinet, ‘Modernising Britain’, 29 October 1962. 97 Scottish Council, Development and Industry: Report of Inquiry into the Scottish Economy (Edinburgh, 1961), pp. 161–3, 178. 98 ‘The Scottish Recipe’, The Economist, 22 December 1962. 99 NAUK CAB 134/1692, Maclay memorandum to EPC, ‘The Scottish economy’, 15 December 1961. 100 NAUK CAB 134/1699, Hailsham memorandum to EPC, ‘Visit to the North East of England, 4–8th March, 1963’, 19 March 1963. 101 NAUK CAB 129/113, Erroll memorandum to Cabinet, ‘The Local Employment Act and the North East’, 10 April 1963. 102 M. Aldridge, The British New Towns: A Programme Without a Policy (1979), pp. 62–3. 103 NAUK CAB 134/1700, Noble memorandum to EPC, ‘The economy of central Scotland – report by the Scottish Development Group’, 18 June 1963. 104 Cmnd. 2206, The North East: A Programme for Regional Development and Growth (November 1963), p. 26. 105 NAUK CAB 128/37, Cabinet minutes, 25 July 1963. 106 NAUK CAB 134/1697, EPC minutes, 23 September 1963. 107 H. of C. Debs., vol. 728, col. 941, Jay speech, Industrial Development Bill, second reading, 16 May 1966.

Notes 245 108 McCrone, Policy, p. 126. 109 MHLG, A New City: A Study of Urban Development in an Area Including Newbury, Swindon and Didcot (1966), pp. 69–85; MHLG, Central Lancashire: Study for a City (1967), pp. 13–15; SDD, The Lothians Regional Survey and Plan (Edinburgh, 1966), pp. 219–22. 110 Aldridge, New Towns, pp. 62–4. 111 Cmnd. 2764, Plan, pp. 96–7; Cmnd. 2864, The Scottish Economy 1965 to 1970: A Plan for Expansion (January 1966), pp. 57–60. 112 NAUK CAB 134/1742, Crossman memorandum to EDC, ‘Investment grants: regional aspects’, 9 December 1965. 113 Moore and Rhodes, ‘Effects’, table A4, p. 109. 114 Gallup, Opinion Polls, vol. II, pp. 951–2. 115 D. McKie, ‘By-Elections of the Wilson Government’, in C. Cook and J. Ramsden (eds), By-Elections in British Politics (1997), pp. 223–63. 116 Crossman diary, 12 June 1967; R. Crossman, The Diaries of a Cabinet Minister vol. II. Lord President of the Council and Leader of the House of Commons (1976), p. 377. 117 D. Eversley, ‘Shades of Prosperity’, New Society, 4 January 1968. 118 NAUK CAB 130/338, BOT memorandum to MISC 168, ‘Investment incentives in grey areas’, 8 September 1967. 119 Cmnd. 3438, Fuel Policy (November 1967), pp. 50–1. 120 NAUK PREM 13/2587, Jay to Stewart, 13 June 1967. 121 NAUK CAB 134/3196, SEP minutes, 26 September 1967. 122 NAUK CAB 134/2762, EP (M) minutes, 17 October 1967. 123 Ibid., 10 November 1967. 124 Cmnd. 3998, The Intermediate Areas (April 1969), pp. 150–1. 125 NAUK CAB 134/3211, Secretaries’ memorandum to SEP, ‘Report of the working group on ﬁscal and economic aspects of regional policy’, 13 March 1969. 126 NAUK CAB 134/3212, Allen memorandum to SEP, ‘Intermediate areas: the Hunt Report’, 14 March 1969. 127 NAUK BT 177/2417, Dunwoody to Crosland, 14 November 1968. 128 NAUK CAB 134/3212, Shore memorandum to SEP, ‘Regional policy: Hunt Report’, 17 March 1969. 129 NAUK CAB 134/3209, SEP minutes, 19 March 1969. 130 H. of C. Debs., vol. 782, cols. 669–71, Shore statement, ‘Hunt Committee (Report)’, 24 April 1969. 131 Crossman diary, 21 April 1969; Crossman, Diaries, vol. III, pp. 448–9. 132 Ibid., 17 April 1969; ibid., p. 444. 133 G. Hallett et al., Regional Policy For Ever? Essays on the History, Theory and Political Economy of Forty Years of ‘Regionalism’ (1973), pp. 30–2. 134 Daunton, Just Taxes, pp. 254–6. 135 F.T. Blackaby, ‘Narrative 1960–74’, in Blackaby (ed.), Economic Policy, pp. 24–5. 136 H. of C. Debs., vol. 675, col. 482, Maudling Budget statement, 3 April 1963. 137 Public Acts and Measures (1963), Ch. 18, pp. 284–5; Local Employment Act, 10 July 1963. 138 NAUK CAB 129/112, Hailsham memorandum to Cabinet, ‘Visit to the North East of England, 4–8th February 1963’, 14 February 1963.

246 Notes 139 NAUK PREM 11/4519, Macmillan to Maudling, 22 February 1963. 140 NAUK CAB 134/2396, PE (M) minutes, 12 December 1962. 141 Cmnd. 2206, The North East, p. 21; Cmnd. 2188, Central Scotland: A Programme for Development and Growth (Edinburgh, November 1963), pp. 9–10. 142 Cherry, Town Planning, pp. 162–3. 143 NAUK T 320/71, Marples to Macmillan, 26 October 1962. 144 NAUK T 224/1069, Clarke to Padmore, 24 July 1962. 145 NAUK T 320/71, Boyd-Carpenter to Macmillan, ‘Acceleration of defence orders’, 10 December 1962. 146 NAUK CAB 134/1697, EPC minutes, 5 February 1963. 147 Hall, Urban and Regional Planning, p. 140. 148 A. Graham, ‘Industrial Policy’, in Beckerman (ed.), Economic Record, table 5.1, p. 184. 149 NAUK EW 24/20, Opie, Stewart, Marquand to MacDougall, ‘Payroll subsidy for the depressed regions’, 5 May 1965. 150 NAUK EW 24/19, MacDougall to Burgh, ‘Second report of Sir Richard Clarke’s tax committee’, 12 March 1965. 151 NAUK EW 24/20, BOT memorandum to Fiscal Incentives Committee, ‘Views of the Board of Trade’, 19 May 1965. 152 NAUK T 320/667, DEA memorandum to SET group on regional differentiation, ‘Regional effects of SET’, 12 September 1966. 153 NAUK LAB 8/3436, Kaldor to Bretherton, 3 January 1967. 154 NAUK T 320/667, SET group on regional differentiation, minutes, 12 October 1966. 155 NAUK EW 25/348, Secretaries’ memorandum to SET group on regional differentiation, ‘Report to SET working group’, 14 November 1966. 156 NAUK CAB 134/3198, Jay memorandum to SEP, ‘Financial assistance to development areas’, 2 March 1967. 157 NAUK T 328/198, Baldwin to Edwards, ‘Regional employment premium’, 20 March 1967. 158 NAUK CAB 134/3198, Callaghan memorandum to SEP, ‘A proposal for a regional employment premium’, 1 March 1967. 159 Cmnd. 3310, The Development Areas: Regional Employment Premium (June 1967), pp. 4–6. 160 NAUK CAB 128/39, Cabinet minutes, 3 November 1964. 161 HABLP RD I/II, Re 523, LPRD memorandum, ‘Study group on regional policy: summary of draft report’, October 1969. 162 NAUK CAB 134/2770, Crosland memorandum to EP (M), ‘Review of regional policy’, 14 November 1969. 163 Mintech, Local Employment Acts: Report for 1969/70 (1970), tables 1–3, pp. 31–2. 164 Ministry of Labour Gazette (September 1966), p. 579; Department of Employment and Productivity Gazette (July 1968), p. 573. 165 B. Rhodes and J. Moore, ‘Evaluating the Effects’, pp. 99–103; Hallett et al., Regional Policy, p. 85. 166 B. Ashcroft and J. Taylor, ‘The Effect of Regional Policy on the Movement of Industry in Great Britain’, in D. Maclennan and P.B. Parr (eds), Regional Policy: Past Experience and New Directions (1979), pp. 42–54, 60–1; table 7.5, p. 146.

Notes 247 167 B. Rhodes and J. Moore, ‘Regional Economic Policy and the Movement of Firms to Development Areas’, Economica 43 (1976), table 3, p. 27. 168 Balassa, Economic Integration, p. 201. 169 S. Fothergill and G. Gudgin, Unequal Growth: Urban and Regional Employment Change in the UK (1982), pp. 51–61, 69–71. 170 V. Nichols, ‘Growth Poles: An Evaluation of their Propulsive Effect’, Environment and Planning 1 (1969), p. 199. 171 M. Chisholm, ‘Regional Policies in an Era of Slow Population Growth and Higher Unemployment’, Regional Studies 10 (1976), pp. 202–4. 172 R. Dennis, ‘The Decline of Manufacturing Employment in Greater London 1966–74’, Urban Studies 15 (1978), pp. 72–3. 173 Hallett et al., Regional Policy, p. 82. 174 D. Keeble, Industrial Location and Planning in the United Kingdom (1976), pp. 217–20, 236–9. 175 C.M. Law, British Regional Development Since World War I (1980), table 25, p. 132. 176 M. Chisholm and J. Oeppen, The Changing Pattern of Employment: Regional Specialisation and Industrial Localisation in Britain (1973), pp. 74–95. 177 Keeble, Industrial Location, pp. 202–3. 178 J.N. Randall, ‘The Changing Nature of the Regional Economic Problem Since 1965’, in Maclennan and Parr (eds), Regional Policy, table 5.1, p. 117.

Chapter 6

Housing

1 NAUK T 224/710, Joseph speech to Conservative Party Conference, October 1963. 2 Cmnd. 2838, The Housing Programme 1965 to 1970 (November 1965), p. 17. 3 See D. Fraser, The Evolution of the British Welfare State (3rd edn., Basingstoke, 2003), p. 83. 4 Barnett, Lost Victory, p. 153. 5 G.E. Cherry, Town Planning in Britain Since 1900 (Oxford, 1996), pp. 123–4. 6 P. Malpass and A. Murie, Housing Policy and Practice (Basingstoke, 1987), ﬁg. 4.1, p. 72. 7 H. Jones, ‘“This is Magniﬁcent!” 300,000 Houses a Year and the Tory Revival after 1945’, Contemporary British History 14 (2000), pp. 115–16. 8 Merrett, State Housing, p. 157. 9 P. Weiler, ‘The Rise and Fall of the Conservatives’ “Grand Design for Housing”, 1951–64’, Contemporary British History 14 (2000), pp. 128–9, 133. 10 A. Simmonds, ‘Conservative Governments and the New Town Question in the 1950s’, Urban History 28 (2001), p. 77. 11 I. Levitt, ‘New Towns, New Scotland, New Ideology, 1937–1957’, Scottish Historical Review 86 (1997), pp. 234–5. 12 P. Merlin, New Towns: Regional Planning and Development (1971), pp. 38–9. 13 Galbraith, Afﬂuent Society, p. 207. 14 S. Alderson, Britain in the Sixties: Housing (Harmondsworth, 1962), p. 10. 15 L. Needleman, ‘A Long-Term View of Housing’, National Institute Economic Review (Nov. 1961), pp. 20–1. 16 P.A. Stone, Urban Development in Britain (Cambridge, 1970), vol. I, pp. 289–90.

248 Notes 17 NAUK CAB 152/97, Conference on the Social Services, minutes, 2 December 1967. 18 Holmans, Housing Policy, table 4.4, p. 104; Cmnd. 2764, National Plan, pp. 171–2. 19 D. Donnison, The Government of Housing (Harmondsworth, 1967), pp. 356–63. 20 A. Simmonds, ‘Raising Rachman: The Origins of the Rent Act 1957’, Historical Journal 45 (2002), p. 855. 21 NAUK RG 40/211, Winkler to Moss, 22 December 1959. 22 L. Moss, The Government Social Survey: A History (1991), pp. 110–17. 23 D. Sheppard, Access Arrangements in High Blocks of Flats (1962), tables 24, 34, 38, pp. 51, 68, 74. 24 F.T. Burnett and S.F. Scott, ‘A Survey of Housing Conditions in the Urban Areas of England and Wales, 1960’, Sociological Review 10 (1962), p. 77, and table C, p. 42. 25 P.G. Gray, The Housing Situation in 1960 (1962), tables 40–3, pp. 50–2. 26 M. Woolf, The Housing Survey in England and Wales 1964 (1967), table 4.2, p. 73. 27 NAUK RG 23/363, Cullingworth report, ‘Social Survey: Scottish housing’, 1965. 28 NAUK HLG 124/139, Newell to Coles, 18 November 1964. 29 NAUK HLG 124/107, Phillips to Sharp, 27 November 1964. 30 NAUK HLG 118/810, Bradshaw memorandum to Housing Intelligence and Research Committee, ‘Coordination of housing research’, 10 November 1967. 31 NAUK HLG 118/809, MHLG memorandum to same, ‘Research needs of planners in central government’, n.d. (November 1967?). 32 G. Penrice, ‘Recent Developments in Housing Statistics’, Economic Trends 181 (1968), xiii–xx. 33 MHLG, ‘House Condition Survey, England and Wales, 1967’, Economic Trends 175 (1968), xxiv–xxvii. 34 NAUK HLG 118/453, Ofﬁcial working party on London housing, sub-group on statistics, minutes, 13 January, 3 February 1966. 35 J. Morton, ‘London’s Housing Transfer’, New Society, 5 December 1968. 36 A. Power, Property Before People: The Management of 20th Century Council Housing (1987), pp. 77–8. 37 MHLG, Stafﬁng of Local Government: Report of the Committee (1967), pp. 30–5. 38 N. Dennis, Public Participation and Planner’s Blight (1972), pp. 103–16, 125–9, 139–44. 39 MHLG, Homes for Today and Tomorrow (1961), pp. 15–27, 1–2, 8–12. 40 Malpass and Murie, Policy and Practice, p. 80. 41 J. Greve, London’s Homeless (1964), table 1, p. 15, and pp. 57–8. 42 R. Silvey, ‘Cathy’s Second Homecoming’, New Society, 23 March 1967. 43 P. Seyd, ‘Shelter: National Campaign for the Homeless’, Political Quarterly 46 (1975), pp. 418–25. 44 D. Wilson, I Know It Was the Place’s Fault (1970), pp. 118–19, 230–2. 45 NAUK CAB 129/109, Hill memorandum to Cabinet, 23 May 1962. 46 CPA CRD 2/23/24, Brieﬁng paper for Joseph, ‘Tory housing discontents’, 17 July 1962. 47 A. King, The British General Election of 1964 (1965), pp. 128–9, table, p. 143.

Notes 249 48 Gallup, Opinion Polls, vol. I, pp. 767, 771. 49 UN, Annual Bulletin of Housing and Building Statistics for Europe (Geneva, 1958). 50 PEP, ‘Housing in Britain, France and West Germany’, Planning 31 (1965), pp. 250–66. 51 M. Miller, The Rise of the Russian Consumer (1965), pp. 120–6. 52 ‘Changing Russia: Prosperity Within Grasp?’, The Economist, 1 June 1963. 53 NAUK PREM 11/4297, Macmillan to Hill, 19 May 1962. 54 A. Denham and M. Garnett, Keith Joseph (2001), p. 101. 55 Murie and Malpass, Policy and Practice, p. 82. 56 NAUK HLG 117/173, Capital investment review paper, [April?] 1963. 57 NAUK T 224/711, Petch to Bretherton, 16 January 1964. 58 F. Berry, Housing: The Great British Failure (1974), pp. 130–2. 59 B. Kilroy, ‘Housing Finance – Why So Privileged?’, Lloyd’s Bank Review 133 (July 1979), pp. 42–3. 60 G.E. Noel, Harold Wilson and the ‘New Britain’ (1964), pp. 162–3. 61 NAUK PREM 13/374, Wilson to Brown, 8 June 1965. 62 Cmnd. 2838, Housing Programme, p. 7. 63 D. Donnison, ‘Housing: Plan or Rhetoric?’, New Society, 2 December 1965. 64 NAUK T 171/805, IR memorandum to Budget Committee, ‘Capital Gains Tax’, 20 October 1964. 65 NAUK T 224/721, Stubbs memorandum, ‘Assistance for mortgagers: tax relief’, 14 June 1965. 66 NAUK CAB 128/41, Cabinet minutes, 15 November 1966. 67 Holmans, Housing Policy, table 6.16, p. 277. 68 Crossman diary, 30 October 1964; R. Crossman, The Diaries of a Cabinet Minister, vol. I (1975), pp. 38–9. 69 Crossman diary, 29 April 1965; ibid., pp. 207–8. 70 NAUK T 224/721, Crossman to Diamond, 4 June 1965. 71 Ibid., Diamond, Crossman meeting with BSE, minutes, 17 June 1965. 72 NAUK HLG 118/595, Cohen to Crossman, 7 September 1965. 73 NAUK PREM 13/960, Crossman to Wilson, 24 August 1965. 74 NAUK HLG 118/595, MHLG meetings with BSA and NFBTE, minutes, 14, 29 September, 27 October, 11 November 1965. 75 NAUK PREM 13/960, Crossman to Wilson, 24 August 1965. 76 NAUK HLG 117/173, Rickard to Ward, 16 November 1964. 77 NAUK CAB 128/39, Cabinet minutes, 25 February 1965. 78 DoE, Housing and Construction Statistics (May 1971), table XV, p. 82. 79 NAUK CAB 129/125, Crossman memorandum to Cabinet, ‘Immediate increases in the local authority housing programme’, 28 June 1966. 80 NAUK PREM 13/963, Greenwood to Wilson, 17 October 1966. 81 NAUK CAB 130/306, MISC 113 minutes, 20 January 1967. 82 NAUK CAB 128/42, Cabinet minutes, 20 July 1967. 83 NAUK CAB 128/43, Cabinet minutes, 5, 11 January 1968; NAUK CAB 13/3201, SEP minutes, 11, 15 July 1968. 84 M. Morris, ‘Councils that Fail to Build’, New Society, 28 November 1969. 85 Simmonds, ‘Raising Rachman’, p. 850. 86 Cmnd. 2605, Report of the Committee on Housing in Greater London (March 1965), pp. 38–9.

250 Notes 87 Simmonds, ‘Raising Rachman’, pp. 858–60, 866–7. 88 D. Donnison, C. Cockburn and T. Corlett, Housing Since the Rent Act (Welwyn, 1961), p. 74. 89 Denham and Garnett, Keith Joseph, p. 93. 90 K.G. Banting, Poverty, Politics and Policy: Britain in the 1960s (1979), table 2.3, p. 29. 91 NAUK CAB 130/227, MISC 44 minutes, 16 March 1965. 92 MHLG, Council Housing: Purposes, Procedures, and Priorities (1969), p. 33. 93 Donnison, Government of Housing, table 14, p. 195. 94 Timmins, Five Giants, pp. 190–1. 95 Banting, Poverty, Politics and Policy, p. 35. 96 NAUK CAB 129/103, Brooke memorandum to Cabinet, ‘Housing policy’, 17 June 1960. 97 CPA CRD 2/23/17, Conservative Housing Committee minutes, 2 July 1963. 98 J. Morton, ‘From Peabody to Shelter’, New Society, 27 April 1967. 99 J. Burnett, A Social History of Housing 1815–1985 (Newton Abbot, 1978), p. 278. 100 NAUK CAB 129/103, Brooke memoranda to Cabinet, ‘Housing policy’, 17 June, 29 November 1960. 101 NAUK HLG 118/128, Draft note to Cabinet, May 1962. 102 NAUK CAB 129/110, Joseph memorandum to Cabinet, ‘Housing’ 2 October 1962. 103 Weiler, ‘Middle Way’, pp. 383–4. 104 NAUK CAB 129/113, Joseph and Noble memorandum to Cabinet, ‘Housing’, 10 May 1963. 105 Cmnd. 2050, Housing (May 1963), pp. 7–8. 106 ‘No Master Builders’, The Economist, 1 June 1963. 107 NAUK T 224/701, Joseph to Maudling, 14 February 1963. 108 NAUK T 171/803, Gilmore to Petch, 1 April 1965. 109 P. Malpass, Housing Associations and Housing Policy (Basingstoke, 2000), pp. 140–1. 110 Banting, Poverty, Politics and Policy, pp. 48–9, tables 2.6–2.7, p. 64. 111 Malpass and Murie, Policy and Practice, table 4.3, p. 77. 112 A. Murie, P. Niner and C. Watson, Housing Policy and the Housing System (1976), p. 4. 113 H. Carter, ‘The Strange Death of Labour England: Collective Provision and Social Cohesion in Southwark 1950–2000’, University of Oxford M.Phil. thesis, 2002, pp. 20, 50. 114 Stone, Urban Development, vol. I, tables 7.1, 7.3, pp. 102, 104. 115 NAUK T 224/711, Joseph to Douglas-Home, 13 January 1964. 116 Ibid., Treasury, MHLG, MPBW ofﬁcials’ meeting, minutes, 1 February 1964. 117 NAUK T 224/720, Treasury brief, ‘Housing’, 12 October 1964. 118 Denham and Garnett, Keith Joseph, pp. 100–2. 119 P. Dunleavy, The Politics of Mass Housing in Britain 1945–1975 (Oxford, 1981), pp. 90–1, 164–5. 120 NAUK T 224/381, Mithchell to Vinter, 2 December 1961. 121 Cmnd. 2228, National Building Agency (December 1963). 122 PEP, ‘Housing’, p. 224. 123 NAUK T 224/711, Cairncross to Petch, 29 January 1964.

Notes 251 124 M. Glendinning and S. Muthesius, Tower Block: Modern Public Housing in England, Scotland, Wales, and Northern Ireland (New Haven, Conn., 1994), p. 200. 125 Cmnd. 2050, Housing (May 1963), pp. 4–5. 126 B. Finnimore, Houses From the Factory: System Building and the Welfare State (1989), pp. 91–2. 127 NAUK PREM 11/4518, Douglas-Home, Joseph, Rippon meeting, minutes, 17 December 1963. 128 NAUK CAB 134/1705, MPBW memorandum to EPC Building sub-committee, 30 January 1963. 129 Cmnd. 2050, Housing, p. 11. 130 Finnimore, Houses from the Factory, pp. 144–6, 262. 131 NAUK CAB 134/1704, Report on construction industry load to EPC Building Sub-Committee, 30 November 1962. 132 NAUK T 224/713, Long-Term Programming Group, minutes, 17 December 1963. 133 NAUK CAB 134/1705, MOL memorandum to EPC Building SubCommittee, 3 May 1963. 134 RIBA, The Industrialisation of Building (1965), p. 10. 135 D. Bishop, ‘Labour Requirements for House Building’, The Builder 6374 (1965), p. 151. 136 M.C. Fleming, ‘Housebuilding Productivity in Northern Ireland’, Urban Studies 4 (1967), table II, p. 127. 137 NAUK HLG 118/302, North Tyne Housing Consortium working party, minutes, 17 February 1965. 138 ‘Planning the Means’, The Economist, 11 December 1965. 139 NAUK PREM 13/963, Wilson to Greenwood, Stewart, 7 September 1966. 140 NAUK CAB 134/1738, Pannell memorandum to EDC, ‘Building controls’, 17 March 1965. 141 NAUK HLG 118/808, MHLG memorandum to working party on control of building, 21 July 1965. 142 NAUK PREM 13/375, Pannell to Wilson, 23 August 1965. 143 NAUK EW 25/344, Construction Industry EDC memorandum, ‘Supply and demand position in the construction industries 1966 to mid-1968’, December 1966. 144 MHLG, ‘Current Trends in Housing Progress’, Economic Trends 175 (1968), xii–xxi. 145 E.W. Cooney, ‘High Flats in Local Authority Housing in England and Wales Since 1945’, in A. Sutcliffe (ed.), Multi-Storey Living: The British WorkingClass Experience (1974), p. 151. 146 MHLG, Report of the Inquiry into the Collapse of Flats at Ronan Point (1968), pp. 52–3. 147 MHLG, Living in Flats: Report of the Flats Sub-Committee of the Central Housing Advisory Committee (1952), p. 1. 148 ‘Housing Standards: Signs of Convalescence’, Town and Country Planning 30 (1962), p. 4. 149 Glendinning and Muthesius, Tower Block, pp. 181–5. 150 NAUK HLG 157/38, MHLG memorandum, ‘Report by MHLG team’, 17 May 1968. 151 NAUK HLG 118/863, MHLG Circular 62/68, ‘Appraisal and strengthening’, 15 November 1968.

252 Notes 152 NAUK HLG 118/1151, Jenkins to Crosland, 12 December 1969. 153 NAUK HLG 118/805, Swafﬁeld to Ulrich, 8 January 1968. 154 NAUK HLG 118/875, Stevenson circular to local government associations, 5 September 1968. 155 L. Esher, A Broken Wave: The Rebuilding of England 1940–1980 (1981), pp. 132–4. 156 R. Smart, ‘Bring Back the Environment’, Ofﬁcial Architecture and Planning 35 (1972), p. 33. 157 N. Taylor, ‘The Failure of “Housing”’, Architectural Review 142 (1967), p. 341. 158 e.g. MHLG, The Density of Residential Areas (1952), table 16, p. 51. 159 MHLG Design Bulletin 18, Designing a Low-Rise Housing System (1970), esp. pp. 45–6. 160 D. Bishop, ‘Labour Requirements for House Building’, The Builder 6374 (1965), pp. 152–4. 161 A. Crosland, ‘Towards a Labour Housing Policy’, Fabian Tract 410 (1971), p. 4. 162 M. Young and P. Wilmott, Family and Kinship in East London (Harmondsworth, 1957), pp. 197–9. 163 P. Hall, ‘Monumental Folly’, New Society, 24 October 1968. 164 A. Stones, ‘Stop Slum Clearance – Now’, Ofﬁcial Architecture and Planning 35 (1972), p. 109. 165 R. McKie, Housing and the Whitehall Bulldozer (1971), pp. 45, 50, 61–2. 166 MHLG, Housing Survey Reports 1–5 (1969–70), in each table 20, p. 11. 167 Power, Property Before People, p. 51. 168 J. Yelling, ‘Public Policy, Urban Renewal and Property Ownership 1945–55’, Urban History 22 (1995), pp. 49–50. 169 J.B. Cullingworth, Essays on Housing Policy: The British Scene (1979), pp. 78–9. 170 NAUK HLG 118/581, Iley to Morton, 6 May 1966. 171 NAUK HLG 118/782, MHLG Statistics Branch memorandum, ‘The national house improvement grants survey 1967’, March 1968. 172 NAUK HLG 118/810, MHLG memorandum to Housing Intelligence and Research Committee, ‘Gaps in housing research’, 7 March 1968. 173 L. Needleman, The Economics of Housing (1965), pp. 200–4. 174 J. Yelling, ‘The Incidence of Slum Clearance in England and Wales 1955–1985’, Urban History 27 (2000), pp. 246–7, 249–50. 175 M. Middleton, ‘The Civic Trust’s Improvement Schemes’, Town and Country Planning 30 (1961), pp. 477–82. 176 B. Lapping, ‘Participation’, New Society, 12 December 1968. 177 MHLG, Historic Towns: Preservation and Change (1967), pp. 37–49. 178 J. Lambert, C. Paris and B. Blackaby, Housing Policy and the State (1978), pp. 21–31. 179 NAUK HLG 117/161, MHLG memorandum to Working Party on Concrete Panel System, ‘Terms of reference’, 30 September 1963. 180 Ibid., MHLG memorandum, ‘Survey of St Mary’s area, Oldham’, 1964. 181 MHLG Design Bulletin 20, Moving Out of a Slum (1970), pp. 2–3, 6, 18–19, 21; Design Bulletin 22, New Housing in a Cleared Area (1972), pp. 6, 11, 64. 182 MHLG Design Bulletin 21, Families Living at High Densities (1970), pp. 4, 8, 28–9, 36.

Notes 253 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198

199 200 201 202 203 204 205 206 207 208 209

210 211 212

213

T.L. Blair, The Poverty of Planning (1973), pp. 79–80. MHLG, The Deeplish Study (1968), v, and pp. 2, 13–17, 26–7, 69–71. MHLG, Our Older Homes (1966), pp. 6–9, 13–15. Yelling, ‘Urban Renewal’, pp. 9–10. Cmnd. 3602, Old Houses into New Homes (April 1968), p. 5 and table 14, p. 29. T. Duncan, Housing Improvement Policies in England and Wales (Birmingham, 1974), pp. 71–2. K. Hourihan, ‘Urban Planning in the Twentieth Century’, Urban History 27 (2000), pp. 386–7. H.J. Gans, People and Plans: Essays on Urban Problems and Solutions (New York, 1968), p. 83. PAG, The Future of Development Plans (1965), pp. 3–9, 15. Cmnd. 3333, Town and Country Planning (June 1967), esp. pp. 3, 8–9. R. Atkinson, ‘Post-War Urban Policy in Britain’, Policy Studies 16 (1995), pp. 8–9. P. Chapman, ‘CDP’, Ofﬁcial Architecture and Planning 34 (1971), pp. 919–20. Only £9.5m had actually been spent by the time Labour left ofﬁce: NAUK T 227/3191, Home Ofﬁce circular, ‘Urban programme no. 3’, 12 June 1970. DoE, Unequal City: Final Report of the Birmingham Inner Area Study (1977), p. 144. DoE, People and Planning: Report on Public Participation in Planning (1969), pp. 13–21, 47–8. T. Mason, ‘Intention and Implication in Housing Policy: A Study of Recent Developments in Urban Renewal’, Journal of Social Policy 6 (1977), pp. 18–19. Merrett, State Housing, p. 118. C. Hamnett, ‘Gentriﬁcation and the Middle-Class Remaking of Inner London, 1961–2001’, Urban Studies 40 (2003), p. 2401. Thomas, Housing and Urban Renewal, pp. 67–75. Gibson and Langstaff, Urban Renewal, p. 31. Yelling, ‘Slum Clearance’, ﬁg. 1, p. 236, and tables 1–2, pp. 238–9, table 6, p. 253. Cmnd. 3333, Planning, pp. 2, 5. B. Crick and G. Green, ‘People and Planning’, New Society, 5 September 1968. R. Johns, St Ann’s Nottingham: Inner City Voices (Warwick, 2002), pp. 222–3. J.P. Reynolds, ‘Public Participation in Planning’, Town Planning Review 40 (1969), pp. 131–46. ‘Hail and Farewell’, Town and Country Planning 38 (1970), p. 316. J.S. Davies, ‘The Governance of Urban Regeneration: A Critique of the “Governing without Government” Thesis’, Public Administration 80 (2002), pp. 318–20. Dennis, Public Participation, p. 27. P. Hall et al., ‘Non-Plan: An Experiment in Freedom’, New Society, 20 March 1969. NAUK RG 23/551, NOP survey for Social Survey, ‘Taxation and social services’, November 1966; CPA CCO 180/17/1/4, ORC public opinion survey, June 1969. Lowe, Welfare State, p. 252.

254 Notes 214 J. Muelbaeur and A. Murphy, ‘Booms and Busts in the UK Housing Market’, Economic Journal 107 (1997), pp. 1701–27; J. Skinner, ‘The Dynamic Efﬁciency Costs of Not Taxing Housing’, Journal of Public Economics 59 (1996), pp. 397–417. 215 K. Barker, Review of Housing Supply, Interim Report (2003), table A2, p. 180.

Chapter 7

Health Care and the NHS

1 Webster, Health Services, vol. II, pp. 106–7. 2 On relative ‘austerity’, see J. Tomlinson, ‘Paying for Welfare in the Twentieth Century’, in R.M. Page and R. Silburn (eds), British Social Welfare in the Twentieth Century (Basingstoke, 1999), pp. 40–1. 3 G. Godber, The Health Services (1975), p. 13; G. Forsyth, Doctors and State Medicine: a Study of the British Health Service (2nd edn., 1973), p. 87. 4 R. Lowe, ‘The Second World War, Consensus and the Foundation of the Welfare State’, Twentieth Century British History 1 (1990), p. 163. 5 R. Klein (3rd edn.), The New Politics of the National Health Service (Harlow, 1995), pp. 17–18. 6 C. Webster, The National Health Service: A Political History (2nd edn., Oxford, 2003), p. 40. This development greatly disappointed the Labour Left; see J. Stewart, ‘The Battle for Health’: A Political History of the Socialist Medical Association, 1930–51 (Aldershot, 1999), pp. 188–98. 7 Lowe, Welfare State, table 7.1, p. 165. 8 C. Webster, ‘Conservatives and Consensus: the Politics of the NHS 1951–64’, in A. Oakley and A. Williams (eds), The Politics of the Welfare State (1994), p. 56. 9 Tomlinson, ‘Paying for Welfare’, in Page and Silburn, British Social Welfare, table 2.1, p. 41. 10 Webster, Health Services, vol. II, pp. 51–2, 63. 11 CPA CCO 180/25/2/7, ORC surveys, ‘Inﬂuence of issues’, February 1968, ‘Survey on issues’, March 1969; Gallup, International Opinion Polls, vol. II, pp. 1053–4. 12 e.g. C. MacInnes, ‘Out of the Way: National Health Lottery’, New Society, 5 May 1966. 13 D. Paige and K. Jones, Health and Welfare Services in Britain in 1975 (Cambridge, 1966), table 1, p. 4, table 12, p. 59, table 21, p. 101. 14 J.P. Martin, Hospitals in Trouble (Oxford, 1984), p. 3. 15 B. Robb, Sans Everything (1967), xiii–xiv, p. 9. 16 NAUK MH 159/213, MOH press release, 9 August 1967. 17 Cmnd. 3687, Findings and Recommendations Following Inquiries into Allegations Concerning the Care of Elderly Patients in Certain Hospitals (July 1968). 18 H. of C. Debs., vol. 768, col. 214: Robinson statement, ‘Sans Everything, reports’, 9 July 1968. 19 ‘Haste, Ignorance and Inhumanity’, New Society, 18 July 1968. 20 Webster, Health Services, vol. II, p. 231. 21 NAUK MH 159/221, Croft to Hedley, 21 August 1967. 22 Cmnd 3975, Report of the Committee of Inquiry into Allegations of Ill-Treatment of Patients and Other Irregularities at the Ely Hospital, Cardiff (March 1969), pp. 122–3, 125–32.

Notes 255 23 NAUK PREM 13/2803, Crossman to Wilson, 17 March 1969. 24 T. Dayell, Dick Crossman (1989), pp. 175–6; A. Howard, Crossman (1990), pp. 294–5. 25 Martin, Hospitals in Trouble, pp. 117–18. 26 NAUK MH 96/1895, Board of Control reports on Ely, May 1953, March 1955. 27 NAUK MH 96/1894, Mackessack memorandum, ‘Pre-arranged visit to Ely Hopsital’, 27 June 1967. 28 NAUK MH 96/2318, Williams memorandum, ‘Post Ely Policy working party’, April 1969; Crossman diary, 11 April 1969; Crossman, Diaries, vol. III, p. 436. 29 NAUK MH 159/314, Raven to Hedley, ‘Central professional consultative group’, 18 March 1969. 30 NAUK MH 96/2318, Welsh RHB survey, ‘Long stay hospitals in Wales’, April 1969. 31 Webster, Health Services, vol. II, p. 236. 32 MoH, National Health Service: The Administrative Structure of the Medical and Related Services in England and Wales (1968), p. 24. 33 NAUK MH 150/492, PEP minutes, 29 July 1969, 9 October 1969. 34 Crossman diary, 11 April 1969; Crossman, Diaries, vol. III, p. 436. 35 V.R. Fuchs, ‘The Basic Forces Inﬂuencing Costs of Medical Care’, in V.R. Fuchs (ed.), Essays in the Economics of Health and Medical Care (New York, 1972), pp. 39–49. 36 W.J. McNerney, Hospital and Medical Economics: Population, Services, Costs, Methods of Payment and Controls (Chicago, EU, 1962), vol. I, pp. 5–6, 70–1, 368–9. 37 G. Forsyth and R.F.L. Logan, Demand for Medical Care (Oxford, 1960), p. 109. 38 M.S. Feldstein, ‘Economic Analysis, Operational Research and the State’, Oxford Economic Papers 15 (1963), p. 28. 39 W. Polner, ‘Studies Without Economics’, Journal of Health and Human Behaviour 5 (1964), pp. 121–3. 40 K. Lee, ‘Need versus Demand: The Planner’s Dilemma’, in K. Lee (ed.), Economics and Health Planning (1979), pp. 54–63. 41 A. Williams, ‘“Need” as a Demand Concept’, in A.J. Culyer (ed.), Economic Policies and Social Goals: Aspects of Public Choice (1974), pp. 60–73. 42 A.J. Culyer, Need and the National Health Service: Economics and Social Choice (1976), p. 17, table 3.1, p. 20. 43 Klein, New Politics, p. 52. 44 Ibid., p. 44. 45 B. Taylor, J. Stewart and M. Powell, ‘Central and Local Government and the Provision of Municipal Medicine, 1919–1939’, English Historical Review (forthcoming, 2006), pp. 8–9. 46 Lowe, ‘Welfare State’, p. 173. 47 Ofﬁce of Health Economics, Efﬁciency in the Hospital Service (1967), table C, p. 22. 48 Feldstein, ‘Economic Analysis’, pp. 24–5. 49 Higgs, Information State, pp. 158–60. 50 G. Godber, ‘The Physician’s Part in Hospital Planning’, British Medical Journal, 4 April 1959.

256 Notes 51 NAUK MH 137/356, MoH memorandum, ‘Work of branch HS3 (D)’, 22 February 1962. 52 NAUK MH 159/28, NHS Central O&M Unit, ‘Memorandum on nonnursing duties in wards’, November 1968. 53 NAUK MH 137/366, NHS Advisory Council for Management Efﬁciency, minutes, 6 January 1960. 54 NAUK MH 137/369, Secretaries’ memorandum to the NHS Advisory Council for Management Efﬁciency, ‘Statistical and ﬁnancial comparisons committee: draft report’, 2 March 1961. 55 NAUK MH 170/14, Heasman to Winner, 19 August 1963. 56 The British Imperial Calendar and Civil Service List (1970), pp. 267–8. 57 NAUK MH 137/356, Logan memorandum to committee on statistical and ﬁnancial comparisons, ‘Studies in the third remit’, 13 November 1961; NAUK T 227/2230, MoH memorandum, ‘Hospital costing’, September 1964. 58 See M.S. Feldstein, Economic Analysis for Health Service Efﬁciency (Amsterdam, 1967), pp. 9–51. 59 A.F. Long, ‘Planning, Uncertainty and Judgement: The Case of Population’, in K. Barnard and K. Lee, Conﬂicts in the NHS (1977), p. 198. 60 DHSS, NHS Twentieth Anniversary Conference (1968), p. 40. 61 NAUK T 227/2815, MoH memorandum, ‘Computer projects in the NHS’, (?) June 1968. 62 NAUK T 227/2230, DHSS press release, 6 January 1969. 63 NAUK MH 170/14, Aldridge to Adams, 17 March 1964. 64 NAUK T 227/2815, Alton to Widdup, 25 July 1968. 65 A. Maynard and A. Ludbrook, ‘Thirty Years of Fruitless Endeavour? An Analysis of Government Intervention in the Health Care Market’, in J. van der Gaag and M. Perlman (eds), Health, Economics, and Health Economics (Amsterdam, 1981), table 2, p. 58. 66 V.R. Fuchs, ‘The Contribution of Health Services to the American Economy’, in Fuchs (ed.), Essays in the Economics of Health, table 1–1, p. 14; Abel-Smith, Health Expenditure, table 5, p. 20; Culyer, Need and the National Health Service, table 10.1, p. 127. 67 Maynard and Ludbrook, ‘Government Intervention’, table 1, p. 56. 68 Culyer, Need and the National Health Service, table 10.2, p. 128. 69 Abel-Smith, Health Expenditure, p. 97. 70 Cmnd 1604, Hospital Plan for England and Wales (January 1962), pp. 3–5, 274–5; Cmnd 1602, Hospital Plan for Scotland (January 1962), pp. 17–18, 20–2, 32. 71 NAUK MH 137/40, Marre to Robertson, ‘Hospital capital development’, 1 January 1960. 72 R. Shepherd, Enoch Powell (1996), pp. 204, 211; S. Heffer, Like the Roman: The Life of Enoch Powell (1998), p. 267. 73 Cmnd 1604, Plan, p. 1. 74 G.L. Cohen, ‘Hospitals for Patients’, New Statesman, 8 June 1962. 75 ‘Return to Planning’, The Lancet, 5 January 1957. 76 A.L. Abel and W. Lewin, ‘Report on Hospital Building’, British Medical Journal, 4 April 1959. 77 NAUK T 227/1168, Richards memorandum to Treasury investment committee, ‘Investment review 1956’, 9 November 1956.

Notes 257 78 Webster, ‘Consensus’, p. 62. 79 H.M. Somers and A.R. Somers, Medicare and the Hospitals: Issues and Prospects (Washington DC, 1967), pp. 198–201. 80 NAUK MH 90/85, Robinson to Waher, enclosing agenda for October visit, 7 September 1960. 81 Ibid., Godber report on visit to USA, 22 April 1960, Godber memorandum, 26 May 1960. 82 NAUK MH 119/15, MoH Hospital Memorandum, ‘Hospital building’, 17 January 1961. 83 NAUK MH 134/40, Fraser to Powell, 16 June 1961. 84 OHE, Hospital Service, table A, p. 15. 85 NAUK MH 137/42, Gedling memorandum, ‘Long term proposals’, 8 June 1961. 86 Nufﬁeld Provincial Hospitals Trust, The Hospital Surveys: The Domesday Book of the Hospital Services (Oxford, 1946), p. 4. The full version was published by HMSO as the Ministry’s Hospital Survey in 1945. 87 See Acton Society Trust, Hospitals and the State: Hospital Organisation and Administration under the National Health Service (5 vols., 1955–8); the survey design on hospitals is in vol. II, The Impact of the Change (1956), pp. 1–3. 88 J. Stewart, ‘The National Health Service in Scotland, 1947–74: Scottish or British?’, Historical Research 76 (2003), pp. 399–401. 89 Cmnd 1602, Plan for Scotland, p. 13. 90 NAUK MH 148/1, Millward memorandum, ‘Bed use’, June 1962. 91 D.M. Fox, Health Policies and Health Politics: The British and American Experience 1911–1965 (Princeton, NJ, 1986), p. 185. 92 Ofﬁce of Health Economics, Building for Health (1970), pp. 10–11. 93 M.S. Feldstein, ‘Hospital Planning and the Demand for Care’, Bulletin of the Oxford University Institute of Statistics 26 (1964), p. 368. 94 P. Draper, M. Kogan and J.N. Morris, ‘The NHS: Three Views’, Fabian Research Series 287 (1970), p. 5. 95 Abel and Lewin, ‘Hospital Building’, pp. 110–13. 96 NAUK T 227/1380, Powell to Selwyn Lloyd, 17 July 1961, Selwyn Lloyd to Powell, 19 July 1961. 97 H. of C. Debs., vol. 633, cols. 988–9, Powell statement, 1 February 1961. 98 Webster, ‘Consensus’, p. 59. 99 H. of C. Debs., vol. 645, col. 224, Selwyn Lloyd statement, 25 July 1961. 100 NAUK MH 137/41, Clarke to Fraser, ‘Hospital building’, 29 November 1960. 101 NAUK MH 134/40, Powell to Butler, 20 December 1960. 102 OHE, Hospital Service, table B, p. 16. 103 Cmnd 1432, Control, pp. 11–12. 104 J. Mohan, Planning, Markets and Hospitals (2002), p. 117. 105 NAUK MH 133/231, BRS note, ‘Hospital work at BRS’, October 1959. 106 E. Blackaby, ‘Will the Hospital Programme Work?’, New Society, 2 June 1966. 107 NAUK MH 123/232: Stone to HMC Chairmen, 31 December 1960; see ‘Hospital Planning’, The Lancet, 10 June 1961. 108 W. Mackie, ‘Planning the Hospitals of the Future’, The Lancet, 26 January 1963. 109 e.g. MoH, Hospital Building Note 12: Outpatient Department (December 1961).

258 Notes 110 NAUK T 227/1741, Treasury memorandum, ‘Cost target – nurses’ homes’, 16 September 1960. 111 A. Lapping, ‘Health: Hospital Circular’, New Society, 16 May 1968. 112 J. Welshman, ‘Hospital Provision, Resource Allocation and the Early National Health Service: The Shefﬁeld Regional Hospital Board, 1947–74’, in S. Mandelbrote and M. Pelling (eds), Medicine, Science and Reform 1500–2000 (Aldershot, 2005), p. 17. 113 Mohan, Planning, pp. 148–50; R. Biddle, ‘An Examination of the Local Consequences Arising from the Hospital Plan for England and Wales’, unpublished MA paper, Oxford Brookes University, 2005. 114 See J. Stewart, ‘Hospitals, Regions and Central Authority: Issues in Scottish Hospital Planning, 1947 to 1974’, in Mandelbrote and Pelling (eds), Medicine, Science and Reform, pp. 2–3, 7. 115 NAUK T 227/1546, Clarke to Fraser, 31 January 1961. 116 NAUK MH 133/233, MoH divisional memorandum 22, ‘Progress of building schemes’, August 1962. 117 NAUK T 227/1380, Fraser, Clarke meeting, minutes, 28 June 1963. 118 Ibid., Boyd-Carpenter to Powell, Powell to Boyd-Carpenter, 30 July, 1 August 1963. 119 NAUK MH 137/46, MoH memorandum, ‘Handling of “forward look” estimates’, April 1962. 120 NAUK MH 166/348, Carswell to Mottershead, 4 December 1967. 121 DHSS oral evidence to the H. of C. Estimates Committee, 15 December 1969; H. of C. Estimates Committee, Minutes of Evidence (1969/70), p. 45. 122 NAUK MH 166/348, Crossman meeting with ofﬁcials, minutes, 24 January 1969. 123 M. Wheeler, ‘How Many Acute Beds do we Really Need?’, British Medical Journal, 28 October 1972. 124 NAUK MH 166/348, Hospital Building Division memorandum, ‘Best buy design’, October 1973. 125 Ibid., Brough to Carswell, 27 November 1967. 126 H. of C. Committee of Public Accounts, Third Report from the Committee of Public Accounts (1974/75), xlviii, pp. 213–14. 127 NAUK MH 166/767, Stone memorandum, ‘Hospital building research and development’, July 1972. 128 NAUK MH 137/366, NHS Advisory Council for Management Efﬁciency, minutes, 17 March 1960. 129 Klein, New Politics, p. 68. 130 OHE, Building for Health, pp. 16–22. 131 DHSS, The Functions of the District General Hospital (1969), pp. 6–9. 132 C.J. Ham, Health Policy in Britain (1982), p. 44. 133 P. Hall, ‘The Development of Health Centres’, in P. Hall, H. Land, R. Parker and A. Webb (eds), Change, Choice and Conﬂict in Social Policy (1975), pp. 281–3. 134 NAUK MH 134/62, Humphries to Herzmark, 14 October 1960. 135 Ibid., ‘Review of health centre projects which failed’, 1960. 136 Paige and Jones, Health and Welfare Services, table 5, p. 38. 137 A. Lindsey, Socialized Medicine in England and Wales: The National Health Service 1948–1961 (Oxford, 1962), pp. 153–5; Ham, Health Policy, p. 20.

Notes 259 138 Central Health Services Council, The Field of Work of the Family Doctor (1963), pp. 32–3. 139 ‘Planning for Community Health’, The Lancet, 22 April 1967. 140 R. Smith, M.P. Curwen, J. Chamberlain and W.J.H. Butterﬁeld, ‘The Woolwich and Erith Project’, The Lancet, 19 March 1966. 141 NAUK MH 119/19, Robinson to GPs, 1 January 1965. 142 NAUK MH 119/23, Executive Council memorandum, 24 April 1967, Circular 7/67, 21 April 1967. 143 NAUK T 227/1334, Walker-Smith to Boyle, 14 April 1960. 144 ‘Green Light for Hospitals’, The Economist, 27 January 1962. 145 J. Lewis, The Voluntary Sector, the State and Social Work in Britain (Cheltenham, 1995), pp. 73–4, 101–6, 111. 146 NAUK CAB 134/1982, Powell, Noble memorandum to Home Affairs Committee, ‘Social workers and health visitors’, 15 July 1960. 147 NAUK MH 130/245, Powell to Butler, 21 July 1961. 148 Cmnd 169, The Law Relating to Mental Illness, Royal Commission Report (May 1957), pp. 3–4, 19. 149 H. of C. Debs., vol. 598, cols. 719–20, Walker-Smith, Mental Health Bill Second Reading debate, 26 January 1959. 150 K. Young and N. Rao, Local Government Since 1945 (Oxford, 1997), p. 132. 151 NAUK MH 119/13, Circular 9/59, 4 May 1959. 152 Thane, Old Age, pp. 420–6, 452–3. 153 NAUK T 227/1170, Boys to Rossiter, 8 January 1960. 154 NAUK T 227/1336, Embling to Bryars, ‘Local health and welfare services’, 13 June 1961. 155 NAUK MH 137/140, Treasury to Departments, ‘Public sector investment’, 29 October 1959. 156 NAUK MH 119/13, Circular 2/62, 23 February 1962. 157 Cmnd 1973, Health and Welfare: The Development of Community Care (April 1963), tables I (a), I (c), II, IV, pp. 366–7. 158 P. Townsend, ‘The Timid and the Bold’, New Society, 23 May 1963. 159 NAUK MH 134/40, Fraser to Powell, 12 April 1961. 160 ‘Subtle Pressures on Community Services’, New Society, 25 April 1963. 161 NAUK MH 134/40, Dodds to Russell-Smith, 9 February 1961. 162 NAUK MH 154/69, Russell-Smith to Fraser, 9 May 1963. 163 Webster, Health Services, vol. II, p. 127. 164 A. Maynard and R. Tingle, ‘The Objectives and Performance of the Mental Health Services in England and Wales in the 1960s’, Journal of Social Policy, 4 (1975), table 1, p. 155, table 5, p. 162, and table 7, p. 164. 165 A. Lapping, ‘Community Careless’, New Society, 9 April 1970. 166 See J. Stewart, Taking Stock: Scottish Social Welfare After Devolution (Bristol, 2004), pp. 93–4. 167 NAUK MH 156/75, MOH ofﬁcials’ meeting, minutes, 7 January 1966. 168 P. Townsend, ‘Family Welfare and Seebohm’, New Society, 1 August 1968. 169 NAUK MH 78/333, Francis to Wrigley, 10 January 1961. 170 NAUK RG 26/148, Committee on mental health statistics, report, 4 August 1960. 171 R. Klein, ‘Policy Problems and Policy Perceptions in the National Health Service’, Policy and Politics 2 (1974), p. 233.

260 Notes 172 173 174 175 176 177 178

179 180

181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200

201

NAUK PREM 13/2393, Balogh to Wilson, 14 September 1968. A. Lapping, ‘A Ministry of Social Welfare?’, New Society, 23 May 1968. Hennessy, Whitehall, pp. 419–21. See BMA, Review of the Medical Services in Great Britain (1962). Comp. Res. 18, Sutton and Cheam CLP, 4 October 1966; Conference Report (1966), p. 182. NAUK T 227/2369, Petch to Couzens, ‘Organisation of the health service’, 30 March 1967. NAUK CAB 134/3281, Robinson memorandum to SSC, ‘Administrative structure of the medical and related services in England and Wales’, 13 October 1967. P.A. Hall, Reforming the Welfare: The Politics of Change in the Social Services (1976), pp. 22–32. A.F. Long and G. Mercer, ‘Context, Priorities, Concepts and Problems’, in A.F. Long and G. Mercer (eds), Manpower Planning in the National Health Service (Farnborough, 1981), pp. 19–20. Cmnd 4040, Royal Commission on Local Government in England, Report (June 1969), p. 356. Webster, Health Services, vol. II, pp. 356–7. Cmnd 3703, Report of the Committee on the Local Authority and Allied Personal Social Services (July 1968), pp. 30–2, 51, 181–5. Hall, Reforming the Welfare, pp. 85–9, 93–5. ‘Integrating All Over’, New Society, 25 July 1968. Crossman diary, 9 December 1969; Crossman, Diaries, vol. III, p. 753. DHSS, The Future Structure of the National Health Service (1970), pp. 8, 16, 23–4. Welsh Ofﬁce, The Reorganisation of the National Health Service in Wales (Cardiff, 1970), p. 17. Hall, Reforming the Welfare, pp. 106–7. Webster, Political History, pp. 99–111. Royal Commission on the NHS, Management of Financial Resources (1978), pp. 51–2. J.C. Sunderland, ‘Health Administration and the Jaundice of Reorganisation’, in Barnard and Lee, Conﬂicts, p. 149. C.J. Ham, ‘Power, Patients and Pluralism’, in ibid., pp. 102–6. e.g. DHSS, Management Arrangements for the Reorganised NHS (1972), pp. 44–53. A. Creese, ‘Problems in Applying Economics to Health Service Planning’, in Lee (ed.), Health Planning, pp. 141, 153. K. Lee and A. Mills, Policy Making and Planning in the Health Sector (1982), pp. 86–7. Long and Mercer, ‘Context, Priorities, Concepts and Problems’, in Long and Mercer (eds), Manpower Planning, p. 10. C. Webster, NHS Reorganisation: Learning from History? (1998), p. 13. Klein, New Politics, p. 59. J. Welshman, ‘Inequalities, Regions and Hospitals: the Resource Allocation Working Party’, in M. Gorsky and S. Sheard (eds), Financing Medicine: The British Experience Since 1850 (forthcoming, 2005), pp. 9–10, 16–24. J.P. Newhouse, The Economics of Medical Care: A Policy Perspective (Reading, Mass., 1978), pp. 100–8, lists the problems involved from a theoretical perspective.

Notes 261

Chapter 8

Conclusion: Governance, Choice and History

1 T.S. Eliot, Notes Towards the Deﬁnition of Culture (1948), p. 94. 2 A. Wildavsky, ‘If Planning is Everything, Maybe It’s Nothing’, Policy Sciences 4 (1973), pp. 151, 153. 3 D. Harvey, The Condition of Postmodernity: An Inquiry into the Origins of Cultural Change (Oxford, 1989), pp. 35–6. 4 D. Lyon, Postmodernity (1994), pp. 23–7. 5 A. Tversky and D. Kahneman, ‘Judgement Under Uncertainty: Heuristics and Biases’, Science 185 (1974), pp. 1128–9. 6 O’Hara, ‘Demographic Change’, p. 264. 7 R. Coopey and N.W.C. Woodward, ‘The British Economy in the 1970s: An Overview’, in R. Coopey and N.W.C. Woodward (eds), Britain in the 1970s: The Troubled Economy (1996), tables 1.4–1.5, pp. 6–7. 8 M-S. Schulze and N.W.C. Woodward, ‘The Emergence of Rapid Inﬂation’, in ibid., table 5.4, p. 123. 9 P. Whitehead, The Writing on the Wall: Britain in the Seventies (1985), pp. 143–5. 10 See G. Symeonidis, The Effects of Competition: Cartel Policy and the Evolution of British Industrial Policy (Cambridge, Mass., 2001), e.g. pp. 329–31. 11 M. Taylor, ‘Self Employment in Britain: When, Who and Why?’, Paper presented to the Conference on Self-Employment, Economic Council of Sweden, Stockholm, March 2004, ﬁg. 1, p. 21. 12 D. Enste and F. Schneider, ‘Increasing Shadow Economies All Over the World: Fiction or Reality?’, Institute for the Study of Labour Discussion Papers 26 (1998), table 3.1, p. 43, tables 3.3.2–3.4, pp. 48–9. 13 NAUK CAB 134/3325, Ofﬁcial Committee on Statistical Policy, minutes, 14 March 1966. 14 A. King, ‘Overload: Problems of Governing in the 1970s’, Political Studies 23 (1975), pp. 288–94. 15 M.D. Cohen, J.G. March and J.P. Olsen, ‘A Garbage Can Model of Organisational Choice’, Administrative Science Quarterly 17 (1972), pp. 16–17. 16 P. Brigden and R. Lowe, Welfare Policy under the Conservatives 1951–1964 (1998), xviii. 17 R. Rose, ‘The Market for Policy Indicators’, in A. Shonﬁeld and S. Shaw (eds), Social Indicators and Social Policy (1972), pp. 124–36. 18 F. von Hayek, The Road to Serfdom (1962 edn.), p. 46. 19 Middleton, Charlatans, p. 267 20 E.F. Schumacher, Small is Beautiful: Economics as if People Mattered (Abacus edn., 1974), e.g. pp. 61–2. 21 For instance, D.H. Meadows, The Limits to Growth: A Report for the Club of Rome’s Project on the Predicament of Mankind (1972), pp. 34–8, 109–17, 122–8. 22 R. Goodman, After the Planners (Harmondsworth, 1972), pp. 34–5, 42, 236–8, 246. 23 ‘Going, Going’, in P. Larkin, Collected Poems (1990 edn.), pp. 189–90. 24 C. Bell, A World Out of Balance: American Ascendancy and International Politics in the 21st Century (Double Bay, Aus., 2003), p. 236. 25 Wildavsky, ‘If Planning is Everything’, p. 127. 26 H. Heclo, Modern Social Politics in Britain and Sweden (New Haven, Conn., 1974), p. 287.

262 Notes 27 J.C. Scott, Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed (New Haven, Conn., 1998), p. 328. 28 Wildavsky, ‘If Planning is Everything’, p. 135. 29 Klein, ‘Politics of PPB’, pp. 272–3. 30 Hennessy, Whitehall, pp. 235–6. 31 Blackstone and Plowden, Inside the Think Tank, pp. 48–9. 32 D.W. Ewing, The Human Side of Planning: Tool or Tyrant? (New York, 1969), pp. 27, 32–9. 33 Wilson papers, Bodleian library, MS Wilson c.1083, NOP Bulletins, August 1966, February 1967, NOP devaluation survey, 21 November 1967; MS Wilson c.1084, NOP Bulletin, November 1969, MS Wilson c.1085, NOP post-election survey, June/July 1970. 34 M. Argyle, ‘Subjective Well-Being’, in A. Offer (ed.), In Pursuit of the Quality of Life (Oxford, 1996), pp. 39–40. 35 R. Inglehart, The Silent Revolution: Changing Values and Political Styles Among Western Publics (Princeton, NJ, 1977), pp. 285–6. 36 M. Francis, ‘Economics and Ethics: The Nature of Labour’s Socialism 1945–1951’, Twentieth Century British History 6 (1995), p. 235. 37 R.H. Frank, Luxury Fever: Why Money Fails to Satisfy in an Era of Success (1999), pp. 72–3, on subjective indicators, and pp. 124–40 on the reasons why relative income is the key to individual satisfaction. 38 P. Hennessy, The Secret State: Whitehall and the Cold War (Harmondsworth, 2002), pp. 43, 123, 131. 39 H. Nehring, ‘“Westernization”: A New Paradigm for Interpreting West European History in a Cold War Context’, Cold War History 4 (2004), pp. 176–8. 40 H. Mercer, Constructing a Competitive Order: The Hidden History of British AntiTrust Policies (Cambridge, 1995), pp. 86–92. 41 C.D. McKenna, ‘The World’s Newest Profession: Management Consulting in the Twentieth Century’, Enterprise and Society 2 (2001), pp. 675–8. 42 Ham, Health Policy, pp. 27, 101. 43 N. Crafts, ‘Economic Growth’, in Crafts and Woodward (eds), British Economy Since 1945, table 9.1, p. 261. 44 S. Broadberry, ‘Manufacturing and the Convergence Hypothesis: What the Long-Run Data Show’, Journal of Economic History (1993), tables 4–5, pp. 783–4. 45 F. Carnevali, ‘State Enterprise and Italy’s “Economic Miracle”: The Ente Nazionale Idrocarburi, 1945–1962’, Enterprise and Society 1 (2000), pp. 249–55, 273–6.

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Bibliography 265 Cmnd. 2864, The Scottish Economy 1965 to 1970: A Plan for Expansion (January 1966). Cmnd 2986, The Selective Employment Tax (May 1966). Cmnd 3310, The Development Areas: Regional Employment Premium (June 1967). Cmnd. 3333, Town and Country Planning (July 1967). Cmnd. 3437, Nationalised Industries: A Review of Economic and Financial Objectives (November 1967). Cmnd. 3438, Fuel Policy (November 1967). Cmnd. 3509, Industrial Expansion (January 1968). Cmnd. 3602, Old Houses into New Homes (April 1968). Cmnd. 3638, The Civil Service (June 1968). Cmnd. 3687, Findings and Recommendations Following Inquiries into Allegations Concerning the Care of Elderly Patients in Certain Hospitals (July 1968). Cmnd. 3703, Report of the Committee on Local Authority and Allied Personal Social Services (July 1968). Cmnd. 3936, Public Expenditure 1968–69 to 1970–71 (February 1969). Cmnd. 3975, Report of the Committee of Inquiry into Allegations of Ill-Treatment of Persons and Other Irregularities at the Ely Hospital, Cardiff (March 1969). Cmnd 3998, The Intermediate Areas (April 1969). Cmnd 4017, Public Expenditure: A New Presentation (April 1969). Cmnd. 4040, Report of the Royal Commission on Local Government in England (June 1969). Cmnd 4237, Productivity, Prices and Incomes Policy after 1969 (December 1969). Cmnd. 4506, The Reorganisation of Central Government (October 1970). Cmnd. 5258, Report of the Population Panel (March 1973). Cmnd. 6440, Cash Limits on Public Expenditure (April 1976).

Other Parliamentary papers Board of Trade/Ministry of Technology, Reports on the Local Employment Acts (1962–1970). Idem, Reports on the Industrial Development Act (1967–70). House of Commons Debates, series seven, various volumes. Public Bills and Minutes of Proceedings, 1959/60–1969/70. Public General Acts and Measures, 1959/60–1969/70.

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266 Bibliography DoE, Unequal City: Final Report of the Birmingham Inner Area Study (1977). DoE, Housing and Construction Statistics (various issues). Ministry of Health, Hospital Building Note 12: Outpatient Department (1961). Ministry of Health, National Health Service: The Administrative Structure of the Medical and Related Services in England and Wales (1968). Department of Health and Social Security (DHSS), NHS Twentieth Anniversary Conference (1968). DHSS, National Health Service: The Future Structure of the National Health Service (1970). Ministry of Housing and Local Government (MHLG), The Density of Residential Areas (1952). MHLG, Homes for Today and Tomorrow (1961). MHLG Design Bulletin 7, Housing Cost Yardstick for Schemes at Medium and High Densities (1963). MHLG, The Deeplish Study: Improvement Possibilities in a District of Rochdale (1966). MHLG, A New City: A Study of Urban Development in an Area Including Newbury, Swindon and Didcot (1966). MHLG, Stafﬁng of Local Government: Report of the Committee (1967). MHLG, Historic Towns: Preservation and Change (1967). MHLG, Central Lancashire: Study for a City (1967). MHLG, Housing Survey Reports 1–5 (1969–70). MHLG Design Bulletin 18, Designing a Low-Rise Housing System: The Pilot Project at Shefﬁeld (1970). MHLG Design Bulletin 20, Moving Out of a Slum: A Study of People Moving from St Mary’s, Oldham (1970). MHLG Design Bulletin 21, Families Living at High Density: A Study of Estates in Leeds, Liverpool and London (1970). MHLG Design Bulletin 22, New Housing in a Cleared Area: A Study of St Mary’s, Oldham (1971). Ministry of Labour Gazette (various issues). National Economic Development Council (NEDC), Conditions Favourable to Faster Growth (1963). NEDC, Growth of the UK Economy to 1966 (1963). National Economic Development Ofﬁce, Industrial Report by the Motor Manufacturing EDC (1970). Planning Advisory Group, The Future of Development Plans (1965). Registrar-General’s Quarterly Reports for England and Wales (various issues). Reports on the Census of Production (various issues). Scottish Council, Report of the Committee on Local Development in Scotland (Edinburgh, 1952). Scottish Council (Toothill Report), Development and Industry: Report of Inquiry into the Scottish Economy 1960/61 (Edinburgh, 1961). Scottish Development Department, The Lothians Regional Survey and Plan (Edinburgh, 1966). South East Economic Planning Council, A Strategy for the South East (1967). HM Treasury, Economic Assessment to 1972 – A Revised Assessment (1970). Welsh Ofﬁce, National Health Service: The Re-Organisation of the National Health Service in Wales (Cardiff, 1970). UK Balance of Payments (various issues). UN World Economic Surveys (New York, various issues).

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268 Bibliography P. Deane, ‘Measuring Soviet Economic Growth’, Soviet Studies 14 (1962), pp. 132–7. E.F. Denison, Why Growth Rates Differ (1967). E. Devons, Planning in Practice: Essays in Aircraft Planning in Wartime (Cambridge, 1950). M. Dobb, Soviet Economic Development Since 1917 (1957 edn.). S.R. Dennison, The Location of Industry and the Depressed Areas (Oxford, 1939). D. Donnison, C. Cockburn and T. Corlett, Housing Since the Rent Act (Welwyn, 1961). J.C.R. Dow, The Management of the British Economy 1945–1960 (Cambridge, 1964). P. Draper, M. Kogan and J.N. Morris, ‘The NHS: Three Views’, Fabian Research Series 287 (1970). T.S. Eliot, Notes Towards the Deﬁnition of Culture (1948). D.W. Ewing, The Human Side of Planning: Tool or Tyrant? (New York, 1969). Federation of British Industry, The Next Five Years: Report to Delegates on the Conference (November 1960). M.S. Feldstein, ‘Economic Analysis, Operational Research and the State’, Oxford Economic Papers 15 (1963), pp. 19–31. M.S. Feldstein, ‘Hospital Planning and the Demand for Care’, Bulletin of the Oxford University Institute of Statistics 26 (1964), pp. 361–8. M.S. Feldstein, ‘The Social Time Preference Rate’, Economic Journal 74 (1964), pp. 360–79. M.C. Fleming, ‘Housebuilding Productivity in Northern Ireland’, Urban Studies 4 (1967), pp. 122–36. R.W. Fowler, ‘Duration of Unemployment on the Register of Wholly Unemployed’, Studies in Ofﬁcial Statistics Research Series 1 (1968), pp. 15–25. V.R. Fuchs, ‘The Contribution of Health Services to the American Economy’, in V.R. Fuchs (ed.), Essays in the Economics of Health and Medical Care (New York, 1972), pp. 3–38. V.R. Fuchs, ‘The Basic Forces Inﬂuencing Costs of Medical Care’, in Fuchs (ed.), Medical Care, pp. 39–49. Gallup Organisation, International Opinion Polls, Great Britain 1937–75 (2 vols., 1976). S. Goldman, The Developing System of Public Expenditure Management and Control (1972). J. Goldthorpe and D. Lockwood, The Afﬂuent Worker in the Class Structure (Cambridge, 1969). J. Goldthorpe, ‘Theories of Industrial Society: Reﬂections on the Recrudescence of Historicism and the Future of Futurology’, European Journal of Sociology 12 (1972), pp. 263–88. J. Greve, London’s Homeless (1964). N.M. Hansen, French Regional Planning (Bloomington, Indiana, 1968). E.L. Harper, F.A. Kramer and A.M Rouse, ‘Implementation and Use of PPB in Sixteen Federal Agencies’, Public Administration Review 29 (1969), pp. 623–32. U.K. Hicks, ‘Choice, Efﬁciency and Control in the Public Services’, in A.T. Peacock and D.J. Robertson (eds), Public Expenditure Appraisal and Control (Edinburgh, 1963), pp. 146–64. A.A. Hovey, The Planning-Programming-Budgeting Approach to Government Decision Making (New York, 1968). J.K. Galbraith, The Afﬂuent Society (1958).

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Index Abel-Smith, Brian, 15–16, 178–9, 184, 200 Abercrombie, Patrick, 7, 101–2 Abrams, Mark, 13 Abstract of Regional Statistics, 106 Acts of Parliament Civic Amenities Act (1967), 159 Distribution of Industry Act (1945), 102–3 Distribution of Industry Act (1958), 103 Housing Act (1954), 145–6 Housing Act (1961), 148 Housing Act (1969), 161 Housing Act (1971), 164 Housing Act (1974), 164 Industrial Development Act (1966), 116 Industrial Expansion Act (1968), 62–3, 67 Industrial Transfer Act (1928), 101 Local Employment Act (1960), 112, 114–15, 120, 126 Local Employment Act (1963), 120–1 Prices and Incomes Act (1966), 59 Rent Act (1957), 132, 146–7 Rent Act (1965), 149 Special Areas Act (1934), 101 Town and Country Planning Act (1947), 7, 102–3, 159 Town and Country Planning Act (1969), 161, 215 Albu, Austen, 67 ‘Americanization’, 217–18 Atomic Energy Authority (AEA), 31, 75 Attlee, Clement, 5, 8, 39 balance of payments, United Kingdom as trigger for policy action under ‘stop-go’, 9

poor forecasting record of late 1950s, 50 problems of undermine four per cent growth target in 1963–64, 52 statistics improve in the mid-1960s, 57 terms of trade shift in UK’s favour during 1950s, 41–2 triggers sterling crises of 1960s, 42–3 UK balance improves after devaluation, 44 Balogh, Thomas, 28, 92, 198 Baumol, William, 89, 95 Beaver, Hugh, 11, 20, 47, 211 Beckerman, 66, 85 Beddoe, Jack, 109 Beneviste, Guy, 2–3 Benjamin, Bernard, 131 Benn, Tony, 29, 31, 62–3, 119 Bergson, Abram, 18 Bernstein, George, 16 Bevan, Aneurin, 168–9, 175, 202 Beveridge, William, 7–8, 15 Bevin, Ernest, 38 Birch, Alan, 44 birth rate, see demographic changes Bishop, F.A., 14 Blackett, Patrick, 30–1 Blaug, Mark, 105 Board of Trade conﬁdent about ‘problem’ regions’ economic recovery in 1959, 112 determined to use ‘planning’ as means to increase competition, 46 discretionary assistance to be available in ‘intermediate areas’ from 1969, 119 loss of some industrial sponsorship to Ministry of Technology in 1965, 62 285

286 Index Board of Trade – continued ofﬁcials oppose ‘package deal’ with the TUC in 1962, 51 powers under 1945 Distribution of Industry Act, 102 refuses to accept 25 per cent growth target of 1965, 55 Regional Controllers report poor coverage of regional data, 106 Regional Controllers unhappy about being unable to help areas near those listed for regional aid, 113 Regional Development division created, 108 retains responsibility for investment grants even after DEA created, 53 sets up tripartite working parties in export industries in 1940s, 38–9 statistics not compatible with those of Ministry of Labour, 57 tensions with Ministry of Housing and Local Government over regional policy, 107–8 Wilson as President of in favour of permanent price controls, 39 Boothby, Robert, 5 Boyle, Edward, 21, 64 Brain, Ronald, 134 Bray, Jeremy, 98 British Leyland, 64, 69 British Medical Association, 180, 184, 198, 200 British Transport Commission (BTC) ‘railway plan’ of 1955, 75 Brittan, Samuel, 53, 55 Brooke, Henry, 77, 140, 146, 148 Brown, George, 43, 52, 54–5, 58–60, 65–6, 110, 141 Buchanan, Colin, 89, 121 Buchanan Report, see Trafﬁc in Towns Budge, Ian, 11 Building licensing, 38, 40, 101–2, 154 Butler, David, 12 Butler, Richard Austen, 9, 40, 75, 185

by-elections Glasgow Woodside in 1963, 14 Hamilton in 1967, 117 Orpington in 1962, 14, 35 South Dorset in 1963, 14 Cairncross, Alec, 21–2, 41, 50, 84, 105, 152, 208 Callaghan, James, 43, 55, 80–3, 123, 145, 149, 154 Castle, Barbara, 63, 85 Catherwood, Fred, 53 Cathy Come Home, 136 Central Policy Review Staff, 87 Central Unit for Environmental Planning, 110 Chambers, Paul, 46 Chester, T.E., 183 Civil Service Department, 91 The Civil Service: Report of the Committee (1968), see Fulton Report Clark, Colin, 10, 24 Clarke, Peter, 23, 35 Clarke, Richard, 20, 23, 28, 49, 73, 75, 79–81, 85, 91, 95–6, 121, 185, 187 Lord Cohen, 44, 143 ‘Cold War’, 16–19, 216–17 Cole, Dorothy, 15 Cole, G.D.H., 5, 7, 15–16 computers application to NHS management problems, 177, 210 hoped-for breakthroughs in government data analysis, 26 slow and bespoke analysis of National Plan, 56–7 Treasury doubts about claims for computer technology, 28 Conditions Favourable to Faster Growth, or ‘Orange Book’ (1963), 49–50, 210 Confederation of British Industry (CBI) changing and increasingly favourable views of planning in early 1960s, 11, 211 divided and heterogeneous grouping, 70

Index 287 initially attracted by French planning model, 21 oppose Industrial Expansion Act in 1967–68, 62–3 positive response to idea of NEDC, 47–8 reject idea of planning following failure of National Plan, 59 Conservative Research Department, 14 The Control of Public Expenditure (1961), see Plowden Report cost-beneﬁt analysis, 88–91, 214 Cousins, Frank, 48, 54, 62 Cripps, Stafford, 38, 74 Cronin, James, 3 Crosland, Anthony, 16, 27–8, 124, 157 Crossman, Richard, 30, 92, 119, 133, 143–5, 149, 153, 171–3, 189, 198, 200 Cruickshank, Henry, 189 Cullingworth, J.B., 133, 146 Dalton, Hugh, 4–5, 17, 38, 74 defence policy based on manpower cuts and nuclear deterrence in late 1950s, 75 creation of Programme Evaluation Group, 86 increases enthusiasm for programme budgeting, 86 initially interests Estimates Committee in long-term planning, 217 White Paper of 1962 argues for long-term planning, 76 demographic changes actuarial assumptions in 1940s and 1950s, 7–8 census of 1961, new data, 32–3 discovery of rising birthrate in late 1950s and early 1960s, 32–3 implications of for NHS, 170, 192 implications of for state housing stock and care of old-people, 33–4, 131–2 linear methods of planners’ projections, 206

‘population explosion’ recedes as threat, 34, 127 Denington, Evelyn, 160 Denison, Edward, 23 Dennis, Norman, 135 Dennison, S.R., 105 Department of Economic Affairs (DEA) accepts limited coverage of industrial inquiry, 56 Brown resigns from in 1966, 59 ‘concordat’ with Treasury, 54–5, 209 creation of, 2 estimates effects of Selective Employment Tax on rural regions, 123 great number of presumptions in planning of, 206 has to guess about future of economic policy when drawing up National Plan, 57–8 propaganda drive on the National Plan, 65 regional planning ideas resisted by other Ministries, 110–11, 209 sponsors Economic Planning Councils, 109–11 structure, powers and purpose, 52–5 takes over ‘Very Long Term planning’ exercise as basis for social planning, 85 turns to ‘selective intervention’ after devaluation, 60 undermined by rise of Ministry of Technology, 62 uses work of Cambridge economists under Stone, 26 Department of Scientiﬁc and Industrial Research (DSIR), 28–9, 31, 186 devaluation causes cuts in housing programme, 145 changes context of public spending decisions, leads to cuts, 83 Labour government’s decision not to devalue in October 1964, 43

288 Index devaluation – continued Labour government’s decline in popularity afterwards, 66, 215 Special Economic Advisers advise devaluation in 1965, 43 Sterling eventually devalued from $2.80 to $2.40 in November 1967, 43 Dobb, Maurice, 17 Domar, Evsey, 23 Donnison, David, 132–3, 142 Douglas, James, 13 Douglas Home, Alec, 80, 151–2 Dow, J.C.R., 10, 24, 78 Downs, Anthony, 84 Dunwoody, Gwyneth, 118 Durbin, Evan, 5, 7–8, 39 East Anglia takes great deal of strain of population increase and internal migration, 34 Economic Development Committees (‘little Neddies’) as means of involving public in planning, 64–5 Building Industry EDC, complains over labour market overheating, 154 creation of, 52 expansion in number under Labour, 61 more closely involved in planning after failure of National Plan, 61 role in National Plan, 55–6 economic growth British economic growth not as poor as perceived, 16 Butler’s promise to double national wealth within a generation, 9 ‘catch up and convergence’, 22, 218 Conservatives’ four per cent target, 49–50 Continuing political pressure for promise of high growth rates in 1965, 55 failure to meet the 25 per cent growth target set in 1965, 67–8

speeds up in late 1960s, 218 thought to be hampered by ‘stop-go’, 9–11 25 per cent target by 1970 included in National Plan, 55 Economic Growth and National Efﬁciency (1961), Treasury report, 20, 46 Economic Planning Board, 44 The Economist, 28, 33, 65, 67, 79 Eliot, T.S., 205 Ely Hospital, Cardiff, 171–2 ‘embourgeoisement’ thesis, 13 Ennals, David, 177 Erroll, Frederick, 33, 115 Ewing, D.W., 214 Fabian Society Crosland pamphlet on housing, 157 report on The Administrators, 27 Federation of British Industries (FBI), see Confederation of British Industry Feldstein, Martin, 174, 176, 184 First World War, see War, First World France attractive to industrialists and Conservative Party Ministers in early 1960s, 21 Commisariat du Plan, 18 economic growth outstrips Britain in 1950s, 9 fewer scientists than Britain in 1960s, 31 lower direct taxation burden than in Britain, 77 Modernisation Commissions, 19–20 planning as voluntary, 20–1 planning system, assessment of, 21–2 regional planning machinery, inﬂuence of, 108 Fraser, Bruce, 180, 182, 185, 187 Fraser, Michael, 14 Fulton Committee on the Civil Service, 91

Index 289 Gaitskell, Hugh, 5 Galbraith, J.K., 17–18, 29, 131 ‘garbage can’ model of organisational choice, 207–8 General Elections 1945, 6 1959, 137 1964, 52, 114, 137 Germany, West economic growth outstrips Britain, 9 elite agreements as key to economic success, 70–1 higher taxes than in Britain in early 1960s, 77 manufacturing productivity outstrips Britain’s, 218 only slightly greater numbers of scientists than Britain in 1960s, 31 thought to have more concerted housing policy, 138 Gillie, Annis, 191 Godber, George, 172, 180–1 Godley, Wynne, 96 Goldman, Peter, 35 Goldthorpe, John, 13 Goodman, Robert, 212 Graham, Andrew, 60, 91 Greater London Council (GLC), 131, 134–5, 158, 159 Greenwood, Anthony, 110, 145, 160 Greve, John, 136 Grieve Smith, John, 58 The Growth of the United Kingdom Economy to 1966, or ‘Green Book’ (1963), 49 Guillebaud, Claude, 181 Lord Hailsham, 29–30, 107, 115, 121 Hall, Peter, 157, 165 Hall, Robert, 14, 19, 73, 77 Hare, John, 48, 51 Harris, Jose, 25 Harrison, Cyril, 47 Harrod, Roy, 23 Hart, Judith, 67, 83 Healey, Denis, 86, 98 Health, Ministry of administrative weakness, 169

creation of Statistics Branch and Organisation and Methods Unit, 175–6 statistics, lack of, 175–7 Health and Social Security, Department of abolition of, 202 creation of, 198 employs McKinsey & Co. as management consultants, 218 Heath, Edward, 44, 87, 162, 173, 213–14 Heathcoat Amory, David, 11, 73 Helsby, Laurence, 85, 91 Hennessy, Peter, 216–17 Hill, Charles, 45, 64, 136, 139–40 Hinden, Rita, 13 Hobson, J.A., 4 Hodson, J.L., 6 Holmans, Alan, 84 hospital plan of 1962, see National Health Service, hospital plan of 1962 Houghton, Douglas, 198 housing ‘Action Areas’, 164, 213 building societies offered minimum building ‘ﬂoors’ as part of national plan, 144 building targets in late 1940s, 7, 130 Cathy Come Home, impact of, 136 Conservatives’ return to general local authority house building in early 1960s, 140 Conservatives’ 300,000 dwellings a year target in early 1950s, 130 cost overruns of mid-1960s as indicator of overheating, 152, 154 destruction of in Second World War, 129 emphasis on high ﬂats, 150 exempted from Capital Gains Tax, 142–3 400,000 a year housing target, 140–1 General Improvement Areas, 161–3 homelessness increases in 1960s exerts political pressure, 135–6

290 Index housing – continued housing associations, Conservative and Labour attempts to revive, 147–9 housing associations, hampered by lack of tax relief, 149–50 housing conditions improve over period, 166 implications of population forecasts of early 1960s, 33–4 improvement grants, 161–3 industrialised building and reorganisation as panacea, 151–2 industrialised building, more expensive than forecast, 153–5 Labour boosts local authority house building, 144–5 middle class anger over cost of, 136–7 Milner Holland Report of 1965 reveals inadequacy of London housing, 147 mortgage income tax relief, 141, 143 national housing plan, failure to meet quantitative targets, 145 national housing plan of 1965, 2, 129, 141–4, 164 ‘option mortgages’, 143 ‘Parker Morris’ standards of 1961, 135 price rises, 137 private rented sector, decline of, 145–6, 147 private rented sector, 1957 Rent Act as attempt to revive, 146 public turns against council housing in late 1960s, 166, 219 renovation policies, long local history, 158 renovation policies, newly popular in late 1960s, 157–8 Rent Act of 1957, based on poor statistics and unpopular, 146 Rent Act of 1957, failure of, 146–7 Rent Act of 1965, based on rent panels’ assessment of zero shortage, 149–50

Schedule A income tax, abolition of, 141 ‘Shelter’ pressure group, creation of, 136 slum clearance, 130, 134, 142, 157, 159, 164 statistical investigations reveal scale of dilapidation and need, 132–5 threat of overwhelming demand given population projections of early 1960s, 131–2 unﬂattering international comparisons in late 1950s and early 1960s, 138 very old British housing stock, 166 withdrawal of general needs subsidy for council housing in 1956, 130 Housing and Local Government, Ministry of creation of Research Advisory Group by Crossman, 133–4 creation of Statistics Branch in 1964, 133 Deeplish Study, 160 desire for centralised housing register frustrated by local authorities, 134–5 English regional ofﬁces wound up in 1950s, 107 extremely sceptical about high ﬂats, 155 Intelligence and Research Committee, 134, 158 Old Houses into New Homes (1966), 160 ‘participation’ as key to new survey methods of late 1960s, 159–60 Planning Advisory Group, 161–2 problems with participation, 164–5 push for New Towns to receive regional assistance, 116–17 regards Regional Economic Planning Councils as nuisance, 109 re-opens Cardiff, Manchester and Newcastle ofﬁces in 1962–63, 108, 153

Index 291 St Mary’s Study, Oldham, 159 tensions with Board of Trade over regional policy, 107–8 tensions with DEA over planning for entirely new population centres, 109–10 uses Ronan Point disaster to bring high-rise experiment to an end, 155–6 Howe, Geoffrey, 171–3 Howell, David, 87 Hunt, Joseph, 117–20, 124 Hunt Report, 118–19, 124 Huxley, Aldous, 7 Imperial Chemical Industries (ICI), 6, 29, 46 incomes policy as means of holding down inﬂation, 14–15 British incomes not signiﬁcantly out of line with other developed economies, 69 Council on Pay, Productivity and Incomes (‘Cohen Council’), 44 failure of incomes to respond to pay targets over medium term, 68–9 ‘guiding light’ of 2.5 per cent in 1962, 51 Labour brings in incomes policy in late 1940s, 39 Labour tries to reach ‘package deal’ in 1964–65, 53–4 National Board for Prices and Incomes, creation of in 1965, 54 National Incomes Commission created in 1962, 51 need for restraint frustrates publication of regional price indices, 107 part of rationale for creating National Economic Development Council, 45 ‘pay pause’ of 1961, 42 prices and incomes ‘plateau’ of 1956–57, 40 strengthened following sterling crisis of 1966 with ‘part IV’, 59

2.5 per cent to 4.5 per cent ‘range’ approach pursued in 1969–70, 59 volatility of public sector wages given government expenditure restraints, 95 zero ‘norm’ of 1968–69, 59 Independent Labour Party (ILP), 4 Industrial Reorganisation Corporation, 63–4 Industry and Society, Labour Party (1957), 29 inﬂation after First World War, 4 annual increase in Retail Price Index, 69 close to European norm up to mid-1960s, 16 devaluation and deﬂation as combined answer to, 43 house price inﬂation, 136–7 in construction industry, 151 increased by Korean War, 39 middle class anger at price rises, 12–14, 66, 215–16 overcrowding in South East England as possible future cause of, 121 problems of control in Second World War, 8, 24 restrictive business practices as perceived cause of, 10 rises and becomes more volatile in 1970s, 207 Inglehart, Ronald, 216 Institute of Community Studies, 15 interest rates Radcliffe Committee argues usefulness of has declined, 22 rises increase cost of housing, 137 sharp rises of 1961–62, 42 very low in late 1940s under Labour, 39 The Intermediate Areas (1969), see Hunt Report investment commentators perceive as opposite to wasteful consumer spending, 24

292 Index investment – continued economic imperative thought to lie in raising investment, 23–4 investment grants, 122–3 investment allowances as incentive, 120–1 public sector takes lower share of national wealth than before Second World War, 77–8 Italy example of success of planning during ‘extensive’ growth, 218–19 growth in GNP, 10 housebuilding completions, 138 lower income tax than Britain, 98 Jay, Douglas, 109, 116 Jenkins, Roy, 83, 96, 119 Johnson, President Lyndon, 86, 214, 217 Jones, Aubrey, 17 Jones, Cyril, 175 Jones, Jack, 54 Joseph, Keith, 129, 137, 140, 146, 148–9, 151, 153 Kahneman, Daniel, 205 Kaldor, Nicholas, 23, 95, 104, 122–3 Kennedy Administration, United States as technocratic, expert, well advised, 27–8 Keynes, John Maynard, 5, 23, 36 Keynesian thought based partly on idea of shared moral values, 35 post-Keynesian ideas on economic growth, 23 Khrushchev, Nikita, 17–18 Kindleberger, Charles, 21 King, Anthony, 207–10 Kissinger, Henry, 212 Klein, Rudolf, 203 Korean War, 39 Labour, Ministry of complains about lack of procedure and agenda for Economic Planning Councils, 109

in war-time Coalition, 38 makes initial moves towards central bargaining under Heath in 1960, 44 statistics not compatible with those of Board of Trade, 57 takes back incomes policy responsibility from DEA in 1966, 55 Laing, Maurice, 47 Larkin, Philip, 212 Lee, Frank, 51 Leruez, Jacques, 3 Liberal Party, 4, 14, 35 Lindsay, A.L., 7 The Listener, 3 Lloyd, Geoffrey, 17 Lloyd, Selwyn, 1–2, 15, 21, 44–5, 73, 77, 79, 185 local authorities arbitrary building surveys in redevelopment areas, 135 group together in building consortia to boost ‘efﬁciency’, 153 Labour government in late 1960s refuses to give them powers in health sector, 199–201 Labour subsidises their borrowing for housing purposes, 144 Maud Report reveals staff overstretch, 135 post-war Labour government refuses to entrust with NHS, 167–8 Redcliffe Maud Royal Commission on, 199 Seebohm Report on local social services, 199–200 Location of Ofﬁces Bureau, 122 London Abercrombie Plan for, 102 demand for public services in, 121 housing conditions in, 133, 135–6, 147, 150 New Towns around, 129 ofﬁce building in, 122, 124 population moves out of, 34 privileged status within NHS, 203

Index 293 proposed third airport, 89 rebuilding of after Second World War, 6–7 Victoria Underground Line, 91 MacDougall, Donald, 55, 57, 122 Maclay, John, 115 Macleod, Iain, 47, 79 Macmillan, Harold, 5, 11–12, 14–15, 17, 25, 29, 44–8, 50–2, 75, 79, 103, 107, 114, 117, 121, 130, 139–40 macroeconomics changes in central to planning experiment, 22 dependent on budgetary reforms during Second World War, 24 Maddison, Angus, 65 Marples, Ernest, 121 Massé, Pierre, 20–1 Matthews, R.C.O., 23 Maud, John, 135 Maudling, Reginald, 20, 45, 50, 52, 80, 112, 149 McGowan, Harry, 6–7 McIntosh, Ronald, 122 McKenna, Christopher, 218 McKie, Robert, 157 McNamara, Robert, 28, 86 Meade, James, 24, 74 ‘merger boom’ early 1960s as peak of the boom, 30–1 trend moves in other direction from 1970s, 207 unexpected and deleterious impact of the ‘merger boom’ on productivity, 69–70 Merseyside as ‘problem’ economic region, 101 Board of Trade conﬁdent about recovery, 112 Labour Ministers oppose ‘delisting’ in 1969, 118–19 Liverpool City Council accused of leaving large areas empty, 157 placed back on list of areas to be helped, 113–14 placed on ‘stop list’ to prevent ﬁnancial help in 1960, 113

short-term government orders increase to raise demand, 121–2 Lord Mills, 45 Mond, Alfred, 6 Morrison, Herbert, 4, 6, 39, 168 monopolies and mergers policy, 30–1, 46–7 Musgrave, Richard, 88 National Board for Prices and Incomes (NBPI) creation of in 1965, 54 National Economic Development Council (NEDC), 2, 15, 29, 35, 45, 49–52, 61, 206 National Economic Development Ofﬁce (NEDO), 26, 29, 45 National Federation of Building Trade Employers, 144 National Health Service (NHS) administrative reorganisation, 198–202 ‘Best Buy’ hospitals, 188–9 British Medical Association converted to ‘planning’ case, 180 Community Health Councils, proposals for, 201 computers in, 177, 210 demographic change, implications of in early 1960s, 170, 192 District General Hospitals, increasingly perceived as too large, 189–90 Executive Councils, 168 general practice, 167–9, 174, 176–7, 190–2, 200–1 geographical care ‘lottery’, 170 health centres, 190–2 Hospital Advisory Service, 173 hospital plan of 1962, 2, 167, 179–88 industrialised building methods, faith in, 186–9 inﬂuence of new health economics, 173–4 Labour’s abolition of prescription charges in 1964, 81

294 Index National Health Service (NHS) – continued lack of ﬁnancial control, 169 local health and welfare plan of 1963, 2, 194–8 mental illness, 192–4 Ministry of Health, administrative weakness, 169 Nufﬁeld Hospitals Trust, 174–5, 183–4, 186, 191 ‘participation’ as aim of NHS reorganisation, 201, 203–4 Post-Ely Working Party, 172–3 prescription charges, 169 public support for principles of NHS, 169, 219 Regional Hospital Boards, 168, 182–3, 188 reorganisation, widespread unhappiness with, 201–2 Resource Allocation Working Party, 203 Scottish NHS, 183, 196–7, 199, 201 social work, 192, 194–7 spending increases during 1960s, 167–8, 180–1 statistics, lack of, 175–7, 183–4, 194–5 tripartite structure, 167–8, 190, 204 United States as example of health reforms, 174, 181–2, 191, 217 vulnerable patients, treatment of, 170–3 Welsh NHS, 172–3, 201 World Health Organisation compares with other health care systems, 178–9 National Plan of 1965 based on suspect balance of payments assumptions, 57–8 Cabinet scepticism on publication, 58 ‘check list’ of actions to ensure its success, 58, 65 failure to reach growth targets, 67–8 industrial inquiry and its failings, 55–7 ‘manpower gap’ of inadequate labour resources to meet targets, 58

regional planning machinery not ready to participate in, 109 reliance on previous NEDC planning efforts, 55 relies on input-output relationships established in 1950s, 57 replaced by ‘range’ approach after 1967, 59–61, 64 tied to public expenditure targets, 81–2 25 per cent growth rate, 55 Vague about regional ‘growth areas’, 116 National Insurance system employers and trade unions prefer to push social costs onto, 51 ﬂat-rate contributions, 7 Treasury promotes higher contributions, 209 National Investment Council of 1946–48, 38 nationalisation alienates employers during period of ‘planning fervour’, 209 government investment in nationalised industries rises after Second World War, 78 helps to frustrate other means of managing the economy, 39 inter-war Labour Party calls for nationalisation of Bank of England, 5 Labour technocrats replace with emphasis on science policy in early 1960s, 28–9 Labour’s NHS policy as ‘second stage of nationalisation’, 202 nationalised industries asked to borrow at near-market rates, 89 Needleman, Lionel, 158–9 Neild, Robert, 27, 53, 122 Netherlands, positive views of that country’s incomes policies, 48 New Fabian Research Bureau, 5 New Society, 65, 67, 114 New Towns, 114–16, 129–31, 150 The New York Times, 31 Noble, Michael, 32 Noel-Baker, Francis, 24

Index 295 North East England appointment of Hailsham as responsible for development, 107 as ‘problem’ economic region, 101 increased infrastructure spending from 1963, 121 North Tyne Development Group as example of shortlisting building contractors, 153 Washington New Town designated, 115 White Paper on economic development in 1963, 2, 210 wide areas of scheduled for regional help so as to encourage growth, 115 O’Gormon, Gerald, 172 Ombudsman, 67 opinion polling demonstrates public turning against council housing in late 1960s, 166 Harold Wilson’s falling popularity after devaluation, 215 housing moves up lists of voters’ concerns, 137 lends weight to ‘economic politics’ thesis, 12–13 records public support for principles of NHS, 169 reveals collapse in public conﬁdence in Labour government and planning, 66 shows increasing concern among voters at high levels of taxation, 77 shows public very unhappy about unemployment in winter of 1962–63, 113–14 Organisation for Economic Co-Operation and Development (OECD) publication of international economic data, 9 Organisation for European Economic Co-Operation (OEEC), see Organisation for Economic Co-Operation and Development

Padmore, Thomas, 95 Palmer, John, 212 Pannell, Charles, 154 Parkin, Ben, 147 Parliamentary Commissioner for Administration, see Ombudsman ‘participation’ idea taken up by Labour to replace ‘planning’, 67 fails to engage public, 214–15 fashionable in ‘research-action’ survey approaches later in 1960s, 159–62 problems in housing ﬁeld when it reveals resistance to government designs, 164–5 tensions with managerial and long-term planning variants in health care, 203–4 pedestrianisation, harbinger of urban renewal, 159 Pemberton, Hugh, 3 Perroux, Francois, 20, 104 Picture Post, 7 Pigou, A.C., 84 Pilcher, C.D., 149 planning, economic and social, concepts of based on linear view of change, 205–6 complexity and consequent lack of precision, 212–13 confusion between managerial, ‘participatory’ and long-term variants, 203–4, 213–14 Conservative Party ideas, 1–2, 5–7, 14–15, 21, 29–30, 35, 40–1, 44–7, 77, 87, 107–8, 114, 119–20, 129–31, 146–8, 169, 190, 211 Conservative sceptics within Cabinet in 1961, 46 ‘culture’ of planning as ‘high modernism’, 205 deﬁnition of, 2–3, 35–6 Depression, inter-war, effects of, 5, 17, 37, 101, 105 ‘expertise’ versus ‘moral choices’ in, 211–12

296 Index planning, economic and social, concepts of – continued First World War, impact of, 4, 28, 40, 130 green movement, emerging views of, 212 Labour Party ideas, 1–2, 4–7, 11, 24, 28–9, 38–9, 62–4, 67, 74–5, 98, 102–3, 108–9, 116, 119–20, 122–5, 129–30, 137, 141–3, 149–50, 198–9, 209 lapse in intensity during 1950s as reason for vagueness in early 1960s, 41, 72, 102–3, 130–1, 169 ‘overload’ as cause of failure of, 207–8 popularity and lack of popularity, 8, 12, 65–6 Second World War, impact of, 6, 8, 17, 24, 37–8, 56, 102, 142 Lord Plowden, 73, 75–6, 78–9, 83, 99 Plowden Report recommendations, 72–3, 75–6, 78–9 Lord Polwarth, 115 Posner, Michael, 211 ‘post-materialism’, 216 poverty as relative concept, 15–16 perceived to be increasing, 16 Power, Ministry of taken over by Ministry of Technology in 1965, 62 Powell, Enoch, 32, 80, 99–100, 167, 175, 180–1, 184–5, 192 Price, David, 29 Priestley, J.B., 6–7 Programme Analysis and Review (PAR), 87, 213–14 programme budgeting, 85–8, 91, 214 Public Building and Works, Ministry of sponsor of industrialised building methods, 152–3 public expenditure cash limits on after 1976, 98 failure to contain within planned totals, 93–100 inadequacies of planning system prior to 1960s, 75

inter-war efforts to plan on long-term basis, 73–4 Labour’s plans for rises in forestalled by Conservative spending, 80–1 Medium-Term Assessment Committee from 1967, 92 post-war Labour government’s attempts to plan, 74–5 Public Expenditure Committee created under Labour, 82 recommendations of Plowden Report, 72–3, 78 relative price effect, 94–7, 173 relies on four per cent growth target in 1962–63, 80 Review Committee of 1967–68, 92 ‘strict review’ of 1964–65, 81 Survey Committee, 78–9, 83, 85 tension between short-term management and long-term planning, 76, 79, 98 tied to Labour’s National Plan targets in 1965, 81–2 underspending over short term, 93–4 volume or ‘real terms’ planning, 94–5 Public Expenditure Survey Committee (PESC) creation and initial failure in 1961–62, 78–9, 83 ‘staggering’ amount of work involved, 85 Rachman, Perec, 147 Radcliffe Committee on the Workings of the Monetary System, 22–3 rationing Conservatives dismantle in 1950s, 40 very unpopular when expanded to new foodstuffs in peacetime, 8 Raven, Kathleen, 172 Lord Redcliffe-Maud, 199–200, 208 Regional Economic Planning Boards creation of, 108–9 Regional Economic Planning Councils creation of, 108–9

Index 297 DEA tries and fails to use in making national public expenditure decisions, 110–11 dissatisﬁed with level of input into policy, 112 failure to bring fully into making of regional policy, 124 regional planning development districts, small ‘pockets’ created under 1960 Local Employment Act, 112 effects of in terms of employment creation, 127 ‘grey areas’ adjacent to 1966 Development Areas, pressure to help, 116–17 Hunt Report on ‘grey areas’, 118–19, 124 inadequacy of statistics in early 1960s, and reform measures, 106–17 increased infrastructure spending on North East and Scotland from 1963, 121 inﬂuence of ‘new regional economics’, 104–7, 114 ‘intermediate areas’, creation of, 119 inter-war measures, 101–2 investment allowances as incentive, 122–3 investment grants, 120–1 Labour extends areas scheduled for help by creating Development Areas in 1966, 116 Ministerial and ofﬁcial dissatisfaction at constant reviews of areas to help, 113 over-dependent on ‘decanting’ urban employment and population, 127–8 over-dependent on manufacturing industry, 128 reduced in scale and scope under Conservatives in 1950s, 103 Regional Economic Planning Boards, 108–9 Regional Economic Planning Councils, 108–12, 124

Regional Employment Premium, 123–4 rejuvenated after 1958 recession, 103 Special Development Areas, creation of in older coalmining districts, 118 spending on, 125–7 tension between high technology and increasing employment, 105, 128 relative price effect, 94–7, 173 Resale Price Maintenance (RPM), 46–7 ‘research-action’, 159 Rice-Davies, Mandy, 147 Ringe, Astrid, 3 Rippon, Geoffrey, 152 rising relative expectations of prosperity, 9–10, 12–14, 216 roads programme, 75 Robb, Barbara, 170 Robinson, Joan, 23 Robinson, Kenneth, 171, 191–2 ‘Robot’ plan of 1952, 40 Rodgers, William, 110 Roll, Eric, 55, 58, 110 Rollings, Neil, 3 Ronan Point ﬂats, disaster at, 154–6, 165 Rose, Richard, 13 Rostow, Walt, 28 Rothschild, Victor, 87 Sampson, Anthony, 27 Sandford, Jeremy, 136 Sandys, Duncan, 75 Sayers, R.S., 22 Scanlon, Hugh, 54 science policy defence spending predominates in until 1960s, 31 different Conservative and Labour views of in early 1960s, 30 fragmented administrative structure up to 1960s, 28 Labour Party turns to as alternative to nationalisation, 28–9 spending increases in 1960s, 31 Trend Report of 1963, 29–30

298 Index Schumacher, E.F., 212 Schumpeter, Joseph, 105 Scotland Cairncross Report for Scottish Council recommends ‘new centres of industry’, 105 Central Scotland as ‘problem’ region, 101 Cullingworth surveys of Scottish housing, 133 Cumbernauld designated as a New Town, 130 DEA favours Dunfries and Galloway as new population centre, 109 demographic change in mirrors England and Wales, 32 effects of Selective Employment Tax, 123 Fort William pulp mill project, 122 increased infrastructure spending from 1963, 121 local health and welfare services better organised than in England and Wales, 196–7 1963 White Paper deﬁnes ‘growth areas’, 115 1964 sees large swing away from Conservatives, 114 Scottish Development Department created, 115 Scottish Nationalist popularity in late 1960s, 117 Scottish Ofﬁce as proposed Regional Health Council for that country, 201 Scottish Ofﬁce investigations into juvenile delinquency, 199 Toothill Report on regional development, 114–15 Treasury regards NHS management as better than in England and Wales, 183 White Paper on economic development of in 1963, 2, 210 whole of Scotland except Edinburgh scheduled for regional help in 1966, 116 Scott, James C., 213

Second World War, see War, Second World Seebohm, Frederick, 199–200 Selective Employment Tax, 122–3 Self, Peter, 88 self-employment, 207 Serota, Bea, 199 Serpell, Derek, 75 Shanks, Michael, 16, 24, 53 Sharp, Evelyn, 73, 147 Shone, Robert, 20, 52, 58 Shore, Peter, 29, 58, 63, 118 Signposts for the Sixties, Labour Party (1961), 29 Skefﬁngton, Arthur, 162 Skellern, Eileen, 172 Snowden, Philip, 73 Stanley, Oliver, 5 statistics Board of Trade and Ministry of Labour data not compatible, 57 government computers allow quicker analysis, 26 housing statistics reveal scale of housing dilapidation in early 1960s, 132–5 inadequacy of regional statistics in early 1960s, and reform measures, 106–7 increase in quality crucial to new science of macroeconomics, 25 increase in range during Second World War, 38 lack of reliable external balance data during 1950s, 50 limitations of for policy, 210 Ministry of Health’s lack of statistics, 175–7, 183–4, 194–5 ofﬁcial and Ministerial reviews in 1965–67, 56–7 paucity of trained staff, 56–7 Rent Act of 1957 based on poor data, 146, 165 Whitehall reforms of in late 1950s, 25 ‘steam Keynesianism’, 23 sterling crises, 1, 38, 41–3, 66 Stewart, Michael, 60, 112, 198 Stokes, Donald, 12

Index 299 Stone, Alan, 157 Stone, Richard, 24–6 ‘stop and go’ economic cycle, 9, 11–12, 78 South East England ‘congested area’ requiring Development Certiﬁcates under 1947 Act, 102 fear of congestion recedes, 128 inter-war economy booms, 101 migration into, and perceived danger of overcrowding, 33, 121 reality that moves into East Anglia and South West England reduce pressure, 34 South Wales as ‘problem’ economic region, 101 South West England takes great deal of strain of population increase and internal migration, 34 Soviet Union economic performance as less impressive than appeared, 18 fears about economic and defence implications of Khrushchev reforms, 17 housing policy thought of as increasingly impressive, 138–9 impresses western observers with ‘spartan’ approach, 16–17 model for some inter-war Labour thinkers, 17 renewed interest in economy during 1950s and 1960s, 17 Sweden, positive views of that country’s incomes policies, 48 The Task Ahead: An Economic Assessment to 1972 (1969), 60–1, 92 The Task Ahead: A Revised Assessment (1970), 64 taxation advice on as particularly inﬂuential in policy process, 124 Capital Gains Tax, housing exempt from, 142–3

cuts in ‘go’ phase of economic cycle, 11 faster economic growth as a way of avoiding rises in, 16 French government uses to steer investment, 21 implications of shown in Public Expenditure Survey reports, 92 income tax cuts of 1950s, 40 increased on proﬁts in late 1940s, 39 Inland Revenue resists use of taxes to steer economy, 74 Labour attempts to avoid raising taxes through ‘strict review’, 82 mortgage interest tax relief, 142–3, 146, 148–9 only rudimentary understanding of use to choke off demand after First World War, 4 public unhappiness at high level, 66, 77, 166 rebates for exporters, 50 relatively high direct taxes in Britain, 76–7, 98 Schedule A income tax on housing, abolition of, 141 Selective Employment Tax, 122–3, 125–6 Selwyn Lloyd prepared to consider increases in as part of incomes policy, 48 tax incentives for investment, 120–1 tax increases under Labour, 43, 77, 80 wealth of previous academic writing on, 84 Technology, Ministry of (‘Mintech’) creation of, 31 encourages industrial application of scientiﬁc breakthroughs, 31–2 growth of at Wilson’s encouragement, 62–3 promotes ‘common register of businesses’, 57 Thorneycroft, Peter, 12, 45 Titmuss, Richard, 199

300 Index Tomlinson, Jim, 39, 57 Town and country planning, 7, 101–3, 107, 110, 159, 161, 164–5, 215 Townsend, Peter, 15–16, 172, 193 Toye, Richard, 2–3 Trade Unions Congress (TUC) Economic Committee insists on price and dividend restraint to take part in economic planning, 48 General Council demands more ‘planning’ in 1960 meetings with government, 44–5 General Council vetoes participation in NEDC in 1961, 48 most radical unions ‘made an example of’ during Second World War, 38 only ‘acquiesces’ in deﬂationary measures and incomes policies of 1966, 58 only agrees to participate in NEDC following private assurances about proﬁts and dividends control, 48–9 opposes Conservatives’ ‘guiding light’ incomes policy in 1962, 51 opposes labour controls after 1945, 8, 39 promised fast growth, rising incomes and prices and dividend restraint by George Brown, 54 reluctantly acquiesces in incomes policy in late 1940s, 39 remains committed to planning ‘in depth’ following failure of National Plan, 59 Trafﬁc in Towns, or Buchanan Report (1964), 27, 121 Transport, Ministry of sends in published plans to ‘Very Long Term’ exercise, 84 use of cost-beneﬁt analysis on building of M1 and Victoria Line, 91

Treasury Advisory Committee on 1945 Distribution of Industry Act, 102 agrees to 1962 Hospital Plan as basis for current spending reductions, 179–80 ‘concordat’ with DEA, 54–5, 209 encourages use of cost-beneﬁt analysis, with little success, 90 extension of wartime planning in peacetime, resistance to, 6 ‘forward look’ at social services in 1955, 75 frustrated by failure of Hospital Plan to secure savings, 185, 187 Information Division, 64, 215 medium-term targets in National Plan, attempted use to cut spending, 81 opposes Regional Economic Planning Councils’ role in public expenditure decisions, 111 personal direct taxation, worries over burden, 77 ‘planning’ as means of securing supply side reforms, 46, 211 public expenditure, perceived lack of control over, 72 sceptical about analytical basis of National Plan, 56 Scottish NHS management regarded as better than in England and Wales, 183 seeks public expenditure reductions in late 1950s and early 1960s, 76 Regional Organisation Committee wound up, 107 tries to delay abolition of NHS prescription charges in 1964, 81 25 per cent growth target of 1965, refusal to accept, 55 wants Public Expenditure Surveys to cost programmes from ‘ﬁrst principles’, 79 Trend, Burke, 29–31 Tversky, Amos, 205

Index 301 unemployment, 5–6, 9–10, 14, 16, 35, 58–9, 66, 101, 113–14, 117 Union of Shop, Distributive and Allied Workers (USDAW), 44 United Nations (UN) publication of international economic data, 9 publication of international housing data, 138 Urban Programme, 161–2, 198, 215 United States of America brings down ‘Bretton Woods’ system of ﬁxed currencies in early 1970s, 44 external balance weakens during 1960s, 41 inﬂuence of health care policies, 174, 181–2, 191, 217 inﬂuence of housing policy and US ‘consultation’, 161 Labour politicians fear for link with US if they devalue, 43 outﬂow of dollars creates unofﬁcial ‘Eurodollars’ market, 42 use of programme budgeting in Department of Defense, 86, 214, 217 USA, see United States of America USSR, see Soviet Union ‘Verdoorn Law’ on manufacturing productivity, 104 ‘Very Long Term Planning’, 84–5 von Hayek, Friedrich, 8, 210–11 Wales hospitals as requiring emergency action, 172–3 large swing against Conservatives in 1964 General Election, 114

most of Wales scheduled for regional help in 1966, 116 Nationalist by-election successes, 117 North Wales as one of DEA’s favoured locations for new cities, 109–10 South East Wales as ‘grey area’ listed for discretionary help, 119 South Wales as ‘problem’ economic region, 101 Welsh Ofﬁce as proposed Regional Health Council, 201 West Wales as particularly harmed by Selective Employment Tax, 123 War, First World, 4, 28, 40, 130 War, Second World, 6, 8, 17, 24, 37–8, 56, 102, 142 Webb, Sidney, 4, 17, 24 Weeks, Hugh, 47, 54 Wildavsky, Aaron, 86, 205, 212–13 Wilkinson, Ellen, 35 Williams, Alan, 90 Williams, Shirley, 27 Wilmott, Peter, 157 Wilson, Des, 136 Wilson, Harold, 1, 11–12, 18–19, 21, 24, 28–31, 39, 43, 56, 62, 67, 83, 91, 106, 119–20, 141, 143, 154, 198, 215 Wilson, Richard, 51 Wilson, Thomas, 18–19 Woodcock, George, 54, 60 Working for Prosperity (1965), 65 World Health Organisation publishes comparative international health care statistics, 178–9 Young, Michael, 157, 216 Younghusband, Eilenn, 192–3