The changing face of Labour corporatism

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The Independent Online
1945-51: the nationalised state: post-war Britain. The government retained strong directive powers over industry, allocating raw materials towards an export drive to fund borrowing from the US and reduce pressure on sterling. Nationalisation of gas and electricity, coal, the railways, steel and part of the road haulage system. Incomes policies and dividend restraint.

1964-70: the tripartite state: George Brown, Labour's deputy leader, pioneered partnership between government, employers and unions. Department of Economic Affairs created to co-ordinate national plan, which set out industrial sector growth targets. Ministry of Technology backed hi-tech British champions. Government encouraged mergers, such as creation of British Leyland. Steel renationalised. Post Office turned into a state corporation. Tripartism crashed amid switch to deflationary policy in 1966 to stave off balance of payments crisis.

1974-79: the social contract state: high inflation encouraged Government to co-operate with unions to implement incomes policy from 1975. In social contract, pay restraint matched with generous tax treatment of low-paid. Financial penalties threatened against employers who broke pay norms, controls placed on prices. Social contract broke down in 1978-79 winter of discontent. Aerospace, shipbuilding and British Leyland nationalised. National Enterprise Board, state quango, bought stakes in companies.

1997?: the broker state:Tony Blair is presiding over a big change in Labour policy. Unions would have much less influence than with previous Labour governments, but would have some say in the setting of the rate for the minimum wage.

This week Mr Blair indicated an important strategy would be to broker deals with industry leaders. He would regulate monopolies, clawing back windfall utility taxes where profits were judged excessive. He would also secure concessions from big industry as the price of a licence to operate in certain markets. The "broker state" would, for example, ensure public institutions were linked to the information superhighway in exchange for BT being allowed to break into television broadcasting.

Given high levels of government spending and control over health, education, social security and defence, there is plenty of further scope for brokered deals.

Jack O'Sullivan

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