A New Hope for an Old Britain?: Nostalgia and the British Labour Party’s Alternative Economic Strategy, 1970–1983

I

A significant section of the British Labour Party blamed the party’s 1970 General Election defeat on the policies and performance of Harold Wilson’s 1964 to 1970 Labour Governments. In 1970, as James Cronin has described, “There was a widespread and vague sense within the party that Labour’s defeat had been largely self-inflicted, that the loss was perhaps a fitting rebuke for failures in government, and that it might require a rethinking of party policy and strategy.”¹ According to Martin Pugh, for many party members, “The 1970 defeat was the signal to release the accumulated resentment over the government’s record since 1964 and the prime minister in particular.”² Within the Labour Party, disaffection with the policies and the political record of the 1964 to 1970 Wilson Governments fueled the rise of the party’s left wing.³

It was in this political climate that the Labour Party’s Alternative Economic Strategy (AES) was formulated. The AES’s conceptual origins lay in the subcommittees of Labour’s National Executive Committee (NEC) during the party’s period in opposition between 1970 and 1974.⁴ Its policies were embodied in Labour’s Programme 1973, Labour’s Programme 1976, and Labour’s 1983 General Election Manifesto, The New Hope for Britain. The AES envisaged a widespread extension of public ownership. Labour’s Programme 1973 argued that a future Labour Government should gain control of twenty-five of Britain’s leading companies (as well as those in which the Government had already heavily invested).⁵ Stuart Holland was the economist who became most closely associated with the development of the AES. Holland believed that a high level of state control was necessary in order to combat the rise of multinational power and to rejuvenate the stuttering British economy.⁶ He suggested that “recent acceleration in the trend to monopoly and multinational capital has eroded Keynesian economic policies, and undermined the sovereignty of the capitalist nation state.”⁷ Holland argued that public ownership offered a means by which Britain could reverse recent global trends and develop a socialist economy. The Government was to gain a majority shareholding stake in new dynamic growth industries. This process of nationalization was to be facilitated by a National Enterprise Board.⁸

Holland’s initial vision of the AES was heavily influenced by state holding and planning institutions in European countries like France and Italy.⁹ His exploration of the possibilities of alternative European models of public ownership was less insular than the understanding of the strategy that would become dominant within the party. Over time, withdrawal from the European Economic Community (EEC) became a central component of the AES. The AES’s supporters fought ardently for a “no” vote at the 1975 referendum on Britain’s membership. The 1980 Labour Party Conference demanded Britain’s withdrawal from the EEC.¹⁰ Increasingly, Labour opposed the perceived freemarket capitalism of the EEC. By the mid-1970s, protective import controls were deemed to be a necessary prerequisite to the successful implementation of the AES.¹¹ The AES also advocated increased industrial democracy and workers’ control in British industry. These proposals were interlinked with the AES’s promotion of public ownership and they were underpinned by the idea that “it would be easier to pioneer and develop the institutions and the operation of industrial democracy in a centrally controlled industry run in the spirit of public service than in a disparate one operated under the urge of the maximisation of profit.”¹²

The AES has been portrayed by both historians and political scientists as a modern, progressive, and forward-looking strategy. A consensus has formed around the idea that modernity influenced the AES’s polices and shaped Labour’s programmatic commitments. Mark Wickham-Jones has argued: “The Alternative Economic Strategy marked a radical departure in the kind of social democracy that Labour advocated. The adoption of the AES indicated a break with Labour’s Revisionist past.”¹³ Stephen Haseler has declared: “By the late 1970s it [Labour] had become...