How do you explain the rise and fall of "corporatism" in British government policy?

Corporatism can be seen as one of the strongest elements in the argument for the existence of a post-war consensus; the fact that both Labour and Conservative governments pursued almost indistinguishable economic policies - an area where the parties were previously opposed to one another - demonstrates that this period was unique. However, to claim that corporatism is a purely post-war phenomenon would be misleading; elements of its thought can be traced back at least to the depression years of the 1930s, and these emerging ideas were influenced by the success that planning by Lloyd George's Ministry of Munitions had in boosting military production during the crisis period of the Great War. Thus in order to trace the history of corporatist government policy, we must look at these periods as well as the post-war era. Secondly, we must clarify what is meant by "corporatism," as it is misleading as with most grand theories to expect a single, unambiguous definition when several theories are grouped under one heading; different interpretations of corporatism lead to different strategies being pursued by different groups; at a basic level, however, it can be agreed that corporatism is a form of co-operation between the government and the two major interest groups in the running of the economy, namely the trade unions and the employers. Where theories of corporatism (and indeed, applications in different countries) differed was in what the distribution of power among these three was to be. So it is clear that there is also an element of inter-spatial as well as inter-temporal differences that must also be examined.
The first attempt at corporatism was, as noted above, the planning undertaken to support the war effort of the First World War. Lloyd George's period as Minister of Munitions is taken as a paradigm of this period as he transformed a situation of chronic shortage of military materiel - namely weapons and shells - and increased production such that Britain was able to field a fully-equipped fighting force on the continent. This was done through the passing of the Munitions of War acts, which gave the government control over the war-production industries, and enabled it to direct labour to reduce the shortage (although industrial conscription was not introduced). Essentially, the unions agreed that striking was to be illegal in this period, and in return, most workers were guaranteed job tenure. However, with the general conservative effect the war had on British society, and especially the return to orthodox economic method, this form of control over the economy was not pursued after this period. It was not until the severe economic conditions of the 1930s that pressure groups and politicians turned towards corporatism as a way to lift the economy out of its trough. This pressure emerged along with the assertion of the realisation that Britain's position in the world economic order was declining, and that the traditional protectionist policies of the imposition of tariffs and minor government intervention in the economy were not improving the situation. Given the rise of monopolies at home and increased competition from abroad, it appeared necessary to have a system of comprehensive planning that could foresee and absorb any future impacts on the economy. The way this was to be established was a point of dispute between the theorists; however, they agreed on the need for the establishment of some national economic body that could co-ordinate economic policy between the nation's economic interests according to a "master-plan" it would draw up. The two main pressure groups promoting corporatism at this time were Political and Economic Planning (PEP) group, which incorporated many senior parliamentary figures from the Conservative and Liberal parties, and the Industrial Reorganisation League led by Harold Macmillan. These two groups independently drew up legislation termed the "Self-Government for Industry" Bill. This bill was generally accepted by the Conservatives but rejected by Labour. The trade unions were also hostile, as they believed to co-operate with it would reduce the level of influence they had through the accepted practice of voluntary agreements achieved through collective bargaining, and they were not willing to give this up without gaining a substantial voice in determining economic policy. Many businessmen were also opposed to the legislation on the grounds that it was a straight jacket designed by theorists who had no understanding of how industry worked, although there was a general sympathy among the business community for the aims of the bill; the opposition in part stemmed from trepidation as to its potential consequences for employers' sovereignty over their labour force, and their ability to plan their own affairs. This combination of opposition from the two groups that would be most affected by the bill caused its failure. It is also important to remember that at this time, the fascist regimes in Germany and Italy were gaining control over those respective states, with economic policies that were involved authoritarian planning of the economy that was easy to construe as not much beyond what many in Britain were proposing. The restriction of civil liberties that such systems could impose was unacceptable to many.
After the Second World War, with the rise of Keynesian economics and the coalition that had operated from 1940, forms of corporatism became viewed as the best way in which to achieve full employment and go about reconstructing the economy. As had happened during the Great War, the need to mobilise society for the conflict had lead to changes in popular and elite perceptions towards many established policies. Thus policies which less than a decade earlier would have been attacked by some Conservatives as being explicitly and unacceptably socialist were now generally accepted; these included the Beveridge report and the notion of the welfare state, as well as wide-ranging nationalisations, which the Conservatives did little to reverse when they came to power in 1951. The trade unions had also emerged from the war stronger, and during the conflict had consulted with Ernest Bevin, the Minister for Labour, over many issues; to maintain this co-operation during peace-time was thus seen as a natural extension that would benefit the country economically. Given the Golden Age post-war boom that the advanced industrial countries enjoyed, this policy was seen to be vindicated. Only once between the end of the war and 1960 was any form of pay restraint attempted; a voluntary agreement between the Chancellor Cripps and the TUC to restrict wage increases was in operation for over two years between early 1948 and late 1950 before the TUC abandoned the policy. However, once the long economic decline started, friction between the unions and the government increased, and since 1960 there have been almost continuous attempts to restrict wage rises by the government, most of which eventually broke down. It was only when Mrs. Thatcher was elected after the "winter of discontent" that attempts at incomes policies were abandoned in favour of restricting the involvement and power of the unions in pushing for large wage increases with the threat of striking if the employer in question did not acquiesce.
The break with both corporatism and consensus did not occur spontaneously at the 1979 election, but had been in evidence for some years previously, perhaps as early as Edward Heath's attempts to implement monetarist policies that ended in an abrupt U-turn in 1972. Monetarist economic thought inspired Thatcher greatly, especially the theories of Milton Friedman and Friedrich von Hayek. It was through think-tanks such as the Institute for Economic Affairs (IEA) and the Adam Smith Institute that these theories were developed into policies that the politicians could put into practice. These ideas were taken up by the New Right as it became obvious that the interventionist policies that had been pursued since the war were failing. No longer could the government keep up with and plan for the fast-changing world economy, with economies across the world closer than ever before and subject to the rapid spreading of economic malaises. Furthermore, Britain's domestic structural insufficiency was not helped through deficit spending on large scale capital projects; what was needed was a reallocation of resources away from failing industries to new areas, The distorted nature of economic activity was threatening to leave the economy bogged down indefinitely. The final humiliation came with a �3 billion bailout from the IMF in 1976. Monetarism urged that markets be let loose to lift the economy both in the short- and longer-term; recovery could not be achieved by a bureaucracy trying to support an unsustainable position through widespread planning involving seemingly intransigent labour representatives. With all these theories in mind, Thatcher abandoned corporatism in favour of liberalisation and limited state intervention.
However, Taylor has argued that the unions in Britain should not to be used entirely as scapegoats for the economic problems the country has faced, as they were only reacting to external pressures such as the oil shocks of the early 1970s. Instead, he argues that the unions here have been, compared with their European counterparts, more willing to accept the dominance of government in the tri-partite corporatist system, and have not demanded to be closely involved in the planning and implementation of long-term economic policy. Instead, Taylor agues, the nature of the trade unions here, being as they were involved in the creation of the Labour party that could articulate their interests in parliament, has meant that they are satisfied with the standard voluntary collective bargaining arrangements between workers and employers, as this gives them more leeway to negotiate than determinations made by government. Unlike their continental partners, they were not interested in gaining any kind of political power over policy, but were instead content to settle for a fair bargain for their members. It was their pursuit of these fair settlements during the stagflation years of the mid-1970s that produced so many divisions between them and the government. Yet this account fails to incorporate the necessity to increase competitiveness and productivity that would have helped Britain regain ground in existing industries and also transfer resources into newer ones where she would have an advantage over other countries, and it can be argues that the unions failed to take this long-term view when pushing for seemingly excessive wage increases.
Corporatism then was an attempt to incorporate powerful interest groups into a new form of social contract. The fascist objection to it never materialised in this country, as use of authoritarian state control would not be combined with a flamboyant and belligerently rhetorical vision of national unity as was the case in pre-war Germany and Italy. As it became more acceptable as a progressive and mature way to reconcile economic differences through co-operation and thus achieve full employment and maximum economic growth, it was adopted by successive governments as an unquestionable economic strategy. However, as the period of past-war Golden Age growth passed, challenges arose to the Keynesian orthodoxy, which eventually re-established classical economic theory, calling for a return to limited government intervention in the economy, and highlighting the importance of letting markets work without interference. This philosophy, though not as dogmatic as Thatcherism, can still be seen in operation today, and could well be termed a new economic consensus.