Records of the National Economic Development Council

Records of the National Economic Development Council relating to its responsibilities for long term economic planning. Comprises minutes and memoranda in FG 1

Topics

Trade and commerce

Tripartite collaboration between government, trade unions and industrialists was adopted by the Macmillan administration in 1961 as a necessary precursor to economic planning. Planning was preceived as a means to encourage steady, sustained economic growth.

In July 1961 the Chancellor of the Exchequer announced a 'joint examination of the economic prospects of the country stretching five or more years into the future'. After meetings with trade union and employers' representatives that September he proposed creating a National Economic Development Council (NEDC) to conduct this examination.

The Chancellor would be the Council's chairman and its membership of around twenty was to be made up of two other government ministers, representatives of trade unions and management in both private and public sector industry, and possibly some independent members. The government gave assurances that it was not delegating economic policymaking, but that it would listen to NEDC's recommendations. A full-time secretariat, the National Economic Development Office (NEDO) was also created.

The initial membership was announced in February 1962: the Chancellor, the President of the Board of Trade and the Minister of Labour for the government; six senior private sector managers plus two chairmen of nationalized industries and six trade union leaders. There were also three independent members: the Director-General of NEDO and two academics.

The NEDC, known as 'Neddy', met for the first time on 7 March 1962 then a little less often than monthly until 1987.

From December 1964, following restructuring of economic departments the chairmanship of NEDC was taken over by the First Secretary of State and Secretary of State for Economic Affairs - head of the newly-created Department of Economic Affairs (DEA). The Minister of Technology and the DEA's chief industrial adviser were added to the government side.

On 28 August 1967 the Prime Minister took over charge of the DEA and from October chaired NEDC. The continuing Secretary of State for Economic Affairs remained a member of the NEDC and the Chancellor of the Exchequer, who had occasionally attended1964-7 became more frequent.

From April 1968 the Prime Minister nominally remained the NEDC chairman, but the Secretary of State for Economic Affairs normally took his place. At the same time the Minister of Labour was substituted by his replacement the Secretary of State for Employment and Productivity (renamed the Secretary of State for Employment in October 1970).

With the abolition of the DEA in October 1969, the Prime Minister resumed the chair of NEDC until soon after the 1970 general election when NEDC came under the Treasury, with the Chancellor of the Exchequer as chairman. Membership of the government group on NEDC continued to vary.

From 1970 to 1974 only three Councillors were drawn from the government: the Chancellor was accompanied by the secretaries of state for Employment and for Trade and Industry, the latter taking over the responsibilities of the Minister of Technology and the President of the Board of Trade.

The Prime Minister chaired NEDC during the economic and political crises of the mid-1970s, even though full council meetings were only intermittently held at this time. An unofficial 'Group of Four' of the CBI's Director General, the TUC's General Secretary, the Director General of NEDO, and the Treasury Permanent Secretary supplanted the NEDC under the Heath government with NEDO mainly servicing this group.

From 1974-1979 the government's NEDC representatives were the Chancellors of the Exchequer and the Duchy of Lancaster, and the secretaries of state for Employment, Energy, Industry, Prices and Consumer Protection, and Trade.

The Conservative government which followed withdrew from the NEDC the Chancellor of the Duchy of Lancaster and, with the abolition of his department, the Secretary of State for Prices and Consumer Protection. In their place came the Secretaries of State for Education and Science, and for the Environment. With the re-creation in 1983 of the Department of Trade and Industry two secretaries of state with Council membership were replaced by one.

Excepting changes in personnel, the management and union contingents remained broadly the same throughout the NEDC's life, although the basis for selection of the management representatives was altered in 1965 when the FBI and the BEC, in association with the NABM, amalgamated to form a unified employers' organization, the Confederation of British Industry. Rather more changes occurred among the NEDC's group of independent members, which varied both in size and in its inclusion of members ex officiis.

From 1965 until 1971 the chairman of the National Board for Prices and Incomes had a seat on the Council, and the chairman of the National Enterprise Board and representatives of the Manpower Services Commission and the National Consumer Council all joined the NEDC in the late 1970s. The Governor of the Bank of England became a member of the Council in 1980.

During the 1980s the NEDC lost prominence, and in June 1987 the Chancellor announced that the Council would meet quarterly instead of ten times in the year. Of these meetings he would attend only that held each April, following the budget. In June 1992 the succeeding Chancellor announced that the NEDC and its Office were to be abolished with effect from 31st December of that year. Any future dialogue between the government and the two sides of industry was to be conducted by government departments, with the Trade and Industry Department taking most of the burden.

The purpose of the NEDC was to examine Britain's economic performance, to consider how it might be improved, and to make recommendations based upon its findings. Though in practice it was NEDO that undertook the work of investigation and the production of reports, it was the Council, whether in full session or through specialized working parties and committees, which in broad terms determined the programme of research and assessed the implications of the results.

Aside from its intended role in economic planning the NEDC emerged as the national forum for tripartite consultation, and as such exhibited at times a political aspect which had not been envisaged at its inception. In carrying out its task the NEDC enjoyed freedom of action and virtual independence. Given that the Council was intended to be an alternative to the Treasury as a source of information, this was quite deliberate. Independence had its drawbacks, however; the NEDC had no executive power and neither NEDC members nor NEDO staff had a right of access to official documents or to a place at the government's own discussions on economic policy.

The NEDC was neither a governmental agency nor an offshoot of any of the three departments with which it was at various times most closely associated. Permanent officials of the Treasury, DEA and Cabinet Office were normally excluded from the Council and its formal connexion with these departments did not extend beyond its being chaired by their respective heads. No act, instrument, order or charter had been used to establish the NEDC; its remit and its constitution were to be found only in the Chancellor's statements.