Introduction

In the British economy in the Second World War state intervention reached unprecedented heights as government extended its control over both product and factor markets. It was argued that this extension of state power was necessary in order to mobilise resources to meet the strategic and economic strains the war would impose and that it was merely a temporary phenomenon which would be reversed with the onset of peace. Although business in general supported the temporary centralisation of economic power in the hands of the state, this did not prevent it from being concerned that the extension of state power would itself be permanent or that it might have potentially important implications for industrial management, control and structure (Howlett 1994b). Such fears found their most obvious focus in those cases where the state took control of private companies and, in particular, where it nationalised private companies. Three firms were nationalised during the war: the airframe manufacturers Short Brothers; S.G. Brown Ltd., makers of precision instruments; and Power Jets Ltd, who made jet propulsion engines (Tivey 1973, p. 40, Edgerton 1984).

Of these, the case of Short Brothers attracted most attention. In a debate on its nationalisation in the House of Lords in April 1943 the government attempted to allay the concerns of the business community by stating: ‘there is no need to fear that this is the thin end of the wedge’ (PRO 1943d).