During the inter-war years, a number of Conservative radicals had sought to move the party towards the corporatist policies then popular across Europe. Even during the Second World War, the Tory Reform Committee was active the House of Commons as a virtual party within a party pressing a paternalist corporatist agenda often in sympathy with Labour's statist policy. After the 1945 election defeat, Winston Churchill created the Conservative Research Department of Central Office; he put R.A.Butler in charge of a 'rethink' of domestic policy which took the party firmly to the left. The key policy document, 'The Industrial Charter' of 1947, largely bought into Harold Macmillan's pre-war corporatist 'Middle Way' (the middle being half way between Manchester and Moscow, or free market liberalism and state communism) supporting the nationalisation of the Bank of England, coal and railways, the establishment of state planning and central economic direction, alongside industrial 'co-partnership' and industrial councils.

Experience of the Labour Government of 1945-51, however, led Churchill's administration to bravely begin a 'bonfire of controls', ending rationing, including amidst great controversy rationing of sweets and chocolates, and quietly forgetting about co-partnership. Under Macmillan, the rot set in, and the doctrine of the 'left only ratchet' and the inevitability of the decline of capitalism prevailed.