ABSTRACT
The mid-1970s saw the disintegration of the post-war Keynesian welfare consensus in a period when the political alliance between the Labour government and trade unions appeared, in both institutional and programmatic terms, to be closer than at any time since the 1930s. The issue of public expenditure lay at the heart of the crisis of economic management that ended the post-war consensus. This chapter argues that sectoral cleavage among British trade unions over public expenditure fatally undermined the ‘social contract’ in ways normally ignored in analyses largely focused on the question of wage controls.
