This chapter examines the Conservative Party's attitudes to public spending since 1945, concentrating on two key periods of sustained Conservative rule, 1951–64 and 1979–97. The argument, put briefly, is that Conservative attitudes to public spending have been rather more ‘ambivalent’ over the years than the party's embedded scepticism about the benefits of public expenditure would suggest. Bulpitt’s (1986) important observation about Conservative ‘statecraft’ – that Tory governing elites have always attempted to insulate themselves from too close an engagement with immediate political pressures by attending to matters of ‘high politics’, particularly the competent management of prevailing macro-economic conditions – provides a possible explanation for this ambivalence. It is certainly the case, for example, that Conservative governments have presided over very different macro-economic conditions at different times, and have tried to adjust their approach to public spending accordingly. However, as Stevens has pointed out, Bulpitt's account is essentially ‘agency-driven’. He argues instead that other factors such as ‘political contingency and underlying political and economic circumstances’ (2002, p 122) are likely to play a significant role in attitudes to, and the management of, public expenditure. This broader perspective seeks to blend ‘agency’ and ‘structure’, and in so doing provides a richer account of ‘ambivalence’ and Tory vicissitudes in relation to public spending, both within and between the two periods under review.

Patterns of public spending, 1945–2010

The key ‘facts and figures’ about UK public spending provided in the tables in this section give some basic information about spending levels as a percentage of Gross Domestic Product (GDP) since the Second World War. But what is ‘public expenditure’? For the purposes of this chapter, ‘Total Managed Expenditure’ (TME) is used to depict overall spending levels since 1945. The key elements of TME have not changed markedly over time and comprise public sector current expenditure and public sector net investment and depreciation (Crawford et al, 2009, p 14). Table 3.1 shows TME as a percentage of GDP in selected years since 1950/51. It shows that TME rose gradually throughout the 1950s and then more rapidly through the 1960s until it peaked in 1976. Thereafter, TME has continued to rise in real terms but has fluctuated with the economic cycle, increasing in the recessions of the early 1980s and early 1990s, but in both instances falling back as growth resumed.