Private industrial investment
In 1945 the newly elected Labour government possessed a wider range of economic controls than any previous (or subsequent) peacetime British government. Direct controls extended over more than one- quarter of all consumer items. Building licences were required for all but very small building jobs. Licences were also required for the acquisition of most types of plant and machinery. 1 In the financial markets, the Capital Issues Committee continued to vet all requests to make new issues. Ostensibly, it might be thought that an opportunity existed for a Labour government to deploy these controls to initiate substantial restructuring within an economy which had exhibited serious weaknesses both before and during the Second World War. 2 In particular, many of the controls on raw materials, buildings and fund- raising carried particular potential for influencing the level and pattern of fixed capital investment, an area of fundamental importance for the long-term development of the economy. Not only was the increasing capital-intensity of economic production one of the leading characteristics of twentieth-century capitalist development, 3 but also, the management of capital investment had been identified, most famously by Keynes, as one of the principal means of state economic management. Given the extent and apparent potential of the Attlee government's controls, and the subsequent longer-term British economic problems of comparatively low economic growth and productivity, it is possible that later commentators will come to view this early post-war period as a 'missed opportunity'. Such a narrow reading of the use of controls would overlook many of the wider social and economic purposes to which controls were applied. None the less, while examining the nature of the Attlee government's approach to private industrial investment, this chapter will discuss the extent to which such a policy was directed towards effecting a fundamental restructuring of basic sectors of the economy.
One response to perceived structural and operating problems in utility industries was to transfer them to public ownership in the form of nationalised industries. Government policy towards these public corporations, which accounted for just over one-sixth of total investment