ABSTRACT
In this chapter the concern will be to explain the Labour Government’s record on public expenditure during the period 1974–9. It will be argued that there is a need to explain how and why the Government managed to secure three years of voluntary incomes restraint whilst at the same time was also able to reduce the levels of public expenditure. These policies have to be contrasted to the years 1970–4, when the Heath Government, in its attempt to reduce unemployment, sought a partnership with the trade unions which eventually led to the Government recognising certain trade union demands for expanding public expenditure. This chapter asks whether the strategies of the Labour Government marked a departure from the commitments to full employment and an expanding welfare state that had been the foundations of government policy in the post-war period.
