Obituary: Sir Robert Shone

Robert Minshull Shone, economist, born Birkenhead 27 May 1906, Lecturer London School of Economics 1935-36, General Director Iron and Steel Control 1940-45, CBE 1949, Director British Iron and Steel Federation 1950-53, Executive Member Iron and Steel Board 1953-62, Kt 1955, Director General National Economic Development Council 1962-66, Research Fellow Nuffield College Oxford 1966-67, Visiting Professor City University 1967-83, Special Professor Nottingham University 1971-73, died 13 December 1992.

BRIDGING successfully the gap between industry and academic life was a rare enough achievement to make Robert Shone a natural choice as the new National Economic Development Council's first Director General in 1962.

A qualified engineer with an MA in Economics from Chicago, Shone had acquired his experience in the iron and steel industry, before enduring the Second World War. As an Executive Director of the Iron and Steel Federation in 1953-62, he tried to shape what was by then a partly denationalised concern to be the model of state-influenced (rather than state-owned) industry. By the late 1950s he had become convinced that the key to such industries' deep structural problems was to break a double oligopoly: on the union side, of overmanning and restrictive practices, on management side of inertia and failure both to modernise and to stand up to irresponsible demands from the shop floor. These conclusions found reinforcement in his work for PEP (Political and Economc Planning) on its 1959 study of growth in the British economy.

Selwyn Lloyd chose Shone for NEDC well before any public announcement was made, but gave him no brief apart from two understandings: that government should in future supervise unions' and managements' power in the market place, and that co-operation between them would help to improve productivity and stem Britain's relative economic decline.

Shone was also given privileged access to No 11 Downing Street as an interlocutor on behalf of industry as a whole. He appointed an exceptionally able staff, including Donald MacDougall, to the economic section of the National Economic Development Office (which did NEDC's staff work) and Tom Fraser who, as industrial director, instituted the 17 sector inquiries on which was based NEDC's first publication, the 'Orange Book' - Conditions Favourable to Faster Growth (1962).

But ministers exaggerated the hoped-for target of 4 per cent growth, despite Shone's reservations, while the Treasury banned from the 'Green Book' - Growth of the UK Economy to 1956 - any mention of devaluation, shutting NEDC out of macroeconomic debate. Shone nevertheless oversaw the Economic Development Committees (EDCs) which began successfully to investigate supply-side problems of particular industrial sectors: and developed the Director General's role, firstly to use counsel to reach tripartite consensus about what needed to be done, and secondly to produce high-quality research and reports showing the way.

NEDC was hampered by the absence of City participants. Despite Shone's persuasiveness, the trade unions' initial fears that it was no more than a cover for incomes policy prevented an agreement on reform and modernisation in 1963, despite the 'dash for growth' associated with the new Chancellor, Reginald Maudling. After the 1964 election, George Brown robbed the Office of its best people to staff his new Department of Economic Affairs. Shone stayed on, loyally but unwillingly, until 1966. He had little sympathy with Labour ministers who thought that they could reshape the economy from the centre, over and above the two sides of industry, and he was not surprised at the collapse of the overblown National Plan. British 'planners' had not learned from West German and French experience what could suitably be grafted on to a very different system.

Shone returned to academic life, to visiting professorships, authorship based on his industrial work, and became a director of M & G Group, Rank Organisation, and APF Holdings. His principal legacy, the Orange Book, fermented quietly in Whitehall and materially influenced the next Labour government's much-underrated Industrial Strategy after 1975. Shone had steered NEDC (and at one remove government thinking) between indicative planning - which he believed had no weight - and a command strategy which he detested. He shared with Selwyn Lloyd a belief that the mixed economy required co-operation by management and unions if modernisation and growth were to be achieved.

Like others in the Sixties, Shone presumed a rational response by both sides, which he found occasionally, among trade-unionists such as George Woodcock as well as enlightened employers. The 1964 election undermined his vision, the 1980s appeared to discredit it. Shone was clear-sighted about where blame for relative decline lay, yet he never abandoned his belief in tripartism as the basis for balanced growth in a humane capitalist society. NEDC's downgrading in the Eighties saddened him and his death coincides with its extinction.