A taxing task: combating Britain's relative decline in the 1960s

The 1960s was a particularly rich period in the history of UK tax reform. The decade also saw an ambitious attempt by the UK government to reverse Britain's relative economic decline via the adoption of a 'Keynesian-plus' package of enhanced demand management, incomes policy and indicative planning. This paper argues that the two phenomena were closely related. It argues that the new Keynesian-plus policy framework transcended party ideology and led both the Conservative government and its Labour successor to use the tax system in a constructive attempt to intervene in the economy to try and raise growth. Nevertheless, despite a high level of elite consensus on the need to make the tax structure more growth-oriented, and despite a good deal of policy continuity between the two governments, viewed as a whole the changes that were made lacked coherence. A combination of Britain's adversarial party system, a tradition of secretive government policy-making and the profound fragmentation of British policy-making institutions made it impossible to devise and implement a strategic programme of reform.