This chapter examines the changing role of the state, focusing on the transition from an era of ‘government’ in which formal political institutions were the dominant actors, to ‘governance’ in which a range of public bodies, private organisations, and specialist agencies are involved in policymaking. Government involves decision-making through formal institutions and rules; it is hierarchical, with clear lines of control and accountability. Governance refers to the role of multiple non-state actors and networks in decision-making. In the period of consensus politics (1945–75), Labour and the Conservatives were broadly agreed that the state should play a leading role in the economy and welfare provision. Nationalised industries such as coal, electricity, and the railways were run as public corporations under state direction. Other forms of state intervention included public subsidies, the regulation of monopolies, laws on the environment, and so forth.