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The limits of social democracy? Tax and spend under Labour, 1974-79

Author

Listed:
  • Tom Clark

    (Institute for Fiscal Studies and Prospect Magazine)

Abstract

In 1974 Britain elected a Labour government pledged to expand public spending significantly. Labour followed its programme for two years, but after that began to cut both government spending and taxation, anticipating the post-1979 Conservative agenda. This paper examines the history of this government, using it as a test-case for various 'New Right' economic and political theories that suggest that government expansion eventually hits structural limits. Such theoretical accounts prove unsatisfactory. By contrast, several short-term factors seem to have played an important constraining role. But an examination of the political thinking within the 1970s Labour Party suggests that autonomous ideological changes were the most crucial determinant of the policy reversal.

Suggested Citation

  • Tom Clark, 2001. "The limits of social democracy? Tax and spend under Labour, 1974-79," IFS Working Papers W01/04, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:01/04
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    More about this item

    Keywords

    State; Labour; 1970s; Social-democratic;
    All these keywords.

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-

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