ABSTRACT
Over the past eighteen years Conservative economic policy makers have taken the British economy on a remarkable roller coaster ride which has seen two deep recessions, a triumphant boom and a mature recovery. In the process they have created the electoral paradox of winning in a recession (1992 – and virtually 1983) and losing during a recovery (1997). The shape of macro-economic policy has been transformed by the ending of the British establishment’s love affair with Keynesianism 1 and by its flirtations with Europe, although there remains considerable institutional continuity. In contrast, in the realm of micro-economic policy, on the supply side of the economy, there have been a series of profound institutional changes. Privatization has eliminated the state-owned sector of industry; the labour market has been transformed by measures in industrial relations and education; and financial re-regulation has changed the face of the financial sector. Meanwhile supply side policy has gone through a cycle of disengagement, detachment and revival of interest in the idea of competitiveness.
