ABSTRACT
Any analysis of government-industry relations between the wars must begin with the legacy of the First World War. The lack of an intellectual conversion to the merits of a greater degree of government participation in economic affairs and a politically charged labour relations crisis in the coalmining industry were not the only factors impelling the state towards decontrol. Equally important were the postwar boom and the rise of the Treasury as the most powerful Whitehall department. Financial orthodoxy, therefore, was to prove a powerful brake on any industrial policy initiative which entailed subventions from public funds. The debate on the effects of the return to gold on industry has focused on the issues of overvaluation as it affected the level of exports and also on the deflationary impact of the restrictive monetary stance that the gold standard policy entailed. The events of 1926 provide a watershed of sorts in the evolution of interwar industrial policy.
