The Attlee government was the first in peacetime to put a high and continuing priority on raising the level of productivity in British industry. In doing so it was able to draw on diagnoses, prescriptions and actual institutions from the war period, but otherwise it was entering a policy area previously little explored and one which was both largely unanticipated and foreign to the mainstream of Labour's previous thinking. In pursuing this policy Labour was largely concerned with raising productivity in the private-industrial sector of the economy, so that the focus on productivity necessarily raised a range of issues about how the government was to deal with privately owned firms.
Given this context, this chapter is divided into three parts. The first looks at productivity as a policy objective -- where it came from and how it was formulated. Second is the issue of policy instruments -- how did the government think higher productivity was to be attained? The third and largest section looks at the constraints on policy, especially those related to the government's attempts to change private-sector firms' behaviour in the name of higher productivity.
Prior to and immediately after its election victory in 1945, Labour's central policy concern was with the prevention of unemployment. 2 Whilst this concern never disappeared over the next six years, it quickly became apparent that the most pressing problem in managing the economy was the balance of payments, in turn, at least in the short run, a supply problem. 3 This led to a government 'prosperity' campaign, launched at the beginning of 1946. 4 The initial focus of this was how to 'man-up' certain industries to expand their output, but it quickly became apparent that with a finite supply of labour, most of the expansion of output could only come from increased productivity. By late 1946 it was recognised that the campaign was becoming essentially one concerning the raising of productivity, and Herbert Morrison proclaimed in October that he 'would put this problem of increased productivity first among the current economic problems to which planning must help to find the answer'. 5