The Shock of the New

Over nearly two decades NEDO had developed its own ethos and sense of history. The self-confidence which this inspired gave it strength to stand up to a radical questioning of the value and desirability of intervention, mounted by government itself. NEDC’s accumulated wisdom and its members’ political skills were to be tested at a time when economic decline appeared sharply to accelerate. Immediately after the May 1979 election, but before the onset of what in 1979–82 was to be a recession more serious in terms of declining output, closures and unemployment, for British industry as a whole than the financial crisis of 1974–5, the Director General spoke openly about deindustrialisation as a process which could be seen stretching back to the early 1970s. Comparisons of Britain’s relative position vis-à-vis Germany and France since 1975 showed that in that time virtually every index had worsened comparatively, even though the 1970s rate of growth had been higher than that of the 1960s. For the immediate future, the prognosis could only be declining competitiveness, exacerbated by domestic inflation and an overvalued pound.1