ABSTRACT
This chapter reviews the implementation of Labour’s policy goals in the areas of economic and social policy. In practice ‘fine tuning’ had the unfortunate effect of legitimizing the policies of deflation which were pursued by the Labour government with increasing vigour after 1965. The other disadvantage of incomes policy apart from these problems of enforcement, is that it tends to distort differentials, and in effect it ‘freezes’ labour markets. The 1945 Labour government faced the enormous problems of trying to rebuild a wartime economy which had been starved of investment, and was dominated by the production of arms. The Labour government of 1964 took office with the intention of revitalizing the economy and stimulating growth after what were seen as ‘thirteen wasted years’ of Conservative government. Labour in office chose to work with industry rather than in conflict with it, and so it abandoned the original strategy.
