Too big to fail — Lessons for today and the future from British industrial policy, 1960–1990

British industrial policy for two sectors (automotive and aerospace manufacture) in the period the 1960–1990 is considered and compared with the challenges facing the United Kingdom following the financial crisis of 2008. The history of the period 1960–1990 is informed by interviews with well-placed policy-makers of the time. These observations complement the historical record to confirm that British industrial policy was then more often a pragmatic response to events than the consequence of political ideology. Four particular phases of policy are observed: consolidation, investment, nationalisation and privatisation. During the decade 2000–2009 several British companies in banking, transport and energy have been subject to similar state interventions. In 2010 these companies are at various stages on the four step journey considered by the paper. The paper provides four lessons from the past for twenty-first century policy makers tasked with taking forward the companies with state investment and ensuring a return to economic prosperity.

Research Highlights► 1960-1990 UK aircraft and automotive industrial policy was more pragmatic than ideological. ► We observe four phases to policy: consolidation, investment, nationalisation and privatisation. ► We note resource injection must be accompanied by capability enhancement. ► We note governments talk long-term, but act short-term. ► We draw parallels between historic events and current issues following the 2008 financial crisis.