‘A Supreme Example of Whitehall “Tinkering” ’

Competition and Credit Control contributed to the abandonment of hire purchase terms control, but officials continued to search for another mechanism that could target consumer expenditure. Their quest became more pressing after 1973, as tremendous economic difficulties strengthened the desire to control the growth of the money supply. Competition and Credit Control failed to restrict credit expansion and was modified by the introduction of the ‘credit corset’. Hire purchase terms controls returned, alongside the voluntary system for other forms of consumer credit. The failure was dramatic enough for Labour’s front bench to advocate a return to ceilings on bank advances and the withdrawal of credit cards. In office, however, Labour accepted the status quo and relaxed some controls following pressure from the consumer durables sector. The general thrust of the experience in the 1970s led officials and ministers to lose faith in the capacity of the state to effect change.