Labour in Power 1945-1951

Labour in Power 1945-1951

When considering the Labour administrations of 1964 –1970 and 1974 – 1979, there is a strong temptation to disown them as failures and not having achieved what they promised. This is as much the case for Labour supporters and historians as it is for general political historians.

The same cannot easily be said for the 1945 - 1951 administration which is regarded by many as having gone a long way to fulfilling it’s agenda. Both wings of the party, Hugh Gaitskell from the right and Anuerin Bevan from the left could both look back with pride at the achievements of the 45-51 administration.

Having said that, critics like Tony Benn and Ralph Miliband, regard the Attlee years as ones of wasted opportunity. Tony Benn has commented in his diaries that 1945 established the ‘welfare capitalist consensus’ whilst Miliband argues strongly that Labour’s option for the path of consensus was at the expense of root and branch transformation of British Society.

OK so lets look a little more critically at the Attlee years. In particular the following themes.

• Britain’s financial state in 1945
• The nationalization programme
• The Welfare state and social policy
• Trade Union Reform
• The Conservatives
• Foreign Policy
• The 1950 and 1951 Elections

The British Economy

As long back as 1940 it had been recognized, that Post War reconstruction in Britain would depend on financial assistance from the United States. Further, Britain’s survival in the war would be dependent on such assistance. In August 1940, Sir Kingsley Wood the then Chancellor of the Exchequer reported that Britain was to all intents and purposes bankrupt.

The approval of Lend-Lease in 1941, the deal, which financed the British war effort, and in 1944, which financed the reconstruction, would not have to be repaid effectively, signaled the end of Britain as an independent power.

When Truman unexpectedly reneged on the agreement and cancelled lend lease, Britain was forced to negotiate a loan of $3.75 Billion at interest of 2% - a lot in those days – Hugh Dalton remarked that the fiscal situation was “grimmer than any of us could imagine”.

The British were divided over the loan, the government felt they had no choice if they were to follow through with their commitments. The conservative abstained in a vote and a number of Labour figures - Callaghan and Foot – argued against

The important point here is that Britain lost not only her independence, but also many of her trading advantages because of conditions attached to the American Loan. First, the favourable tariffs applied to goods from inside the Brtiish Empire states would no longer apply. Britain had to eventually accept the policies of the GATT agreed in 1947. Second, Britain had to give up important wartime controls over her currency and make the pound convertible by 1947.

Inevitably, heavy selling of sterling in July 1947 led to major economic downturn by the end of that year.

For Britain’s part there was a general feeling of betrayal, after all wasn’t it us who stood four square in the face of tyranny from the Axis powers? Well this rather depends on how you view the objective circumstances.

For most Americans, WW2 was Britain getting them involved in another Land War like 1917. Many Irish Americans had little sympathy with an old imperialist power, and black America returning to ghetto’s from segregated regiments had few concerns about Britain.

What was to become a familiar post war pattern - a major devaluation of sterling stalled the currency crisis.

Nationalization

David Childs documents one of the defining features of the Labour Government’s nationalization programme as the day when on Vesting Day - the day the mines were taken over - an aged miner 91 year old Jim Hawkins raised himself to the platform and said

“I’m 91 years old and I’ve waited all my life for this moment”

Such was the joy in the mining industry, which arguably had borne the brunt of the industrial war effort and the poverty of the 1930s, the nationalization of the mines was almost a justification in itself for the Labour Government.

However, the nationalisation programme in itself was not something new. It’s easy to build up this picture of 1945 as some kind of watershed in socio-economic organization, but the in most areas of the post war reconstruction we find a continuation of older polices and developments.

Disraeli had begun a trend by purchasing a minority stake in the Suez Canal Company (an involvement which would cost Britain dear in years to come). Under the Conservatives Britain acquired, a majority stake in the Anglo-Persian Oil Company and it became generally recognized that the fragmented rail network was inefficient in comparison to continental state owned ones.

During the interwar years the Conservatives created the BBC and the Central Electricity Board, the creation of the London Transport Board was under the auspices of a Conservative dominated Commons in 1933 and Imperial Airways was bought and became British Airways LTD under the Conservatives in 1939.

So the trends toward state intervention were already apparent.

However the impact of the nationalization of the coal mines in particular, cannot be underestimated. Under private hands and with poor health and safety protection on average two miners were lost every day. In 1943, 713 were killed in mining accidents.

The programme of nationalisation took in

• The Bank of England 1946
• Coal 1947
• Transport 1948
• Electricity 1948
• Gas 1949
• Iron and Steel 1951

And a total of approx 2.5 million addition workers employed by the state, giving of course the unions a pretty big stake in economic policy making.

The Welfare State.

Whilst the Labour left were anxious to see the nationalisation of the economy and the trade unions were anxious to see nationalisation as a step to improving the lot of the average worker. The vast bulk of the population were concerned with the main issues of scarcity (rationing was to continue until 1956), poor health, poor housing conditions and the paucity of educational provision for vast majority.

Much of what we recognize as the welfare state was created between 1946 – 1949. The main source of this was the National Insurance Programme, which included the National Insurance Act, The Industrial Injuries Act and the National Health Act.

The National Insurance Act placed the whole country under one universal scheme covering unemployment, sickness, maternity, guardianship, retirement and death. Truly ‘cradle to grave’ as Beveridge had argued in 1942.

The NHS regarded as a flagship of this Labour administration had a difficult birth. There were many opposed to a universal health scheme, the conservatives were lukewarm, but the principal opposition came from the BMA, which counted most heath practitioners in its number.

In the end Aneurin Bevan got his way but not without giving up much he believed would be right. Principal amongst these was the concession to consultants that Private beds would be available in NHS hospitals, hospitals newly nationalised by the Government.

You cannot underestimate the importance of the NHS to the British working class. In one stroke, it removed major regional and social imbalances in the provision of health care.

In addition to Social security, health and nationalisation the new administration began to reform Housing provision. Britain’s housing stock was in a poor state before the war, afterwards having suffered from major bombing this stock was reduced by more than a third.

The initial solution was ‘pre-fabs’ - factory built houses designed to last a very short time, in fact, they lasted considerably longer, well into the 1950s.

The major change came in the Town and Country Planning Act of 1947, which obliged Councils to survey their housing stock and make recommendations for plans of rebuilding. The government was often criticized, not least by its own backbenchers for not coming up with a major plan for urban renewal but the truth is that time and money constraints prevented everything being solved immediately.

In education, the government found themselves hamstrung by the 1944 Education Act which it had forced trough the commons at the tail end of the war. They managed to raise the school leaving age to 15, but the tripartite system of Secondary modern, Grammar and public, envisaged in the 44’ act remained untouched.

For a government committed to levelling up, the irony of this system has not been lost on social and political historians. In many ways, the public schools who had much to fear from a nascent Labour government remained largely untouched.

Constitutional reform.

Modest programmes of constitutional reform, representation of the peoples act 1948 removed the business vote thus stopping the middle class having two votes. The Parliament act 1949 halved the amount of time that the Lords could delay legislation to one year.

Trade Union Reform

Having brought 2.5 million workers into the employ of the state, most of which allied to TU’s its not surprising that some of the TU law of the 1930s would be repealed.

The trade disputes act 1927 was repealed. Contracting in was replaced by contracting out of the political levy.

The repeal of this act also removed the illegality attached to Civil Service Unions.

But, the Labour party faced a battle in the unions. The war had improved the fortunes of the CPGB whose members had secured strong presence in the TU movement. This was a perceived as being a particular problem by the Government especially as the Cold War began to hot up in the immediate post war period.

They ran an active campaign against austerity measures still supported by the government. And campaigned successfully against the White paper on wages and incomes which was to be the first of a series of, misguided attempts at incomes policies.

The Conservatives

What of the conservatives in all this? They had been the majority party for much of the interwar years how did the position of opposition suit them?

In short badly. The conservatives suffered with the arrogance that only long-term power could bring. It took them a long time to reconcile themselves to the fact that governance was now a job for somebody else.

One they had sorted that out they were able to repackage their policies and realign themselves politically to a new mood. The party committed itself to the mixed economy and the welfare state.

The party reorganised itself under the competent guidance of Lord Woolton, put money back in the coffers and set in place a structure of constitutuency associations, whose reputation for fund raising became.

Having said all this, the changes made to the conservatives were not the reasons why they clawed back support in 1950 and triumphed in 1951.

Foreign Policy

Whilst reform was growing at home a general and growing unease was occurring globally about imperialism.

Britain faced problems on most fronts of its empire. In India where the question of independence was not disputed, but the means the how’s and why’s most certainly were.

In Palestine, where growing claims to Jewish nationality and statehood were passionately resisted by the Palestinian Arabs. Pressure from Truman to encourage Jewish settlements in the area was hard for the British to resist. There was little doubt that the western powers saw Palestine as a Zionist state as the means to assuage its collective guilt over the holocaust.

You can also read about unrest in Malaya, war in Korea, the threat to economic interests in the middle east.

Arguably, the most significant feature of the immediate post war period was the onset of the cold war and the establishment of NATO.

There isn’t time to consider this in great detail here, but suffice to say that Britain was poorly served by a very ill Ernest Bevin compounded by the fact that Harry Truman had a poor knowledge of world Affairs and Stalin was deeply suspicious and paranoid about the west.

All the major powers were wary of each other, with the memory of Munich fresh for most little was to be given either way.

The main significance for Britain was its role in developing NATO in 1949 and its pursuit of a Nuclear Strategy, which it foolishly believed, would keep defence costs down.

Elections

In 1950 the Labour party were affected by a number of factors that would take their electoral toll.

Firstly boundary revisions of constituencies which historically always affect Labour lost them about 35 seats. A postal vote facility for ex pats and servicemen and women cost them about ten seats.

On greater turnout than 1945 Labour 13.2 million to the Tories 12.5 reducing the Labour majority to six seats - barely workable.

Although Labour hardened its support amongst the working class, the middle class vote hardened against them. Lord Blake has noted that this period was between cheap servants and cheap washing machines. As domestic service dried up as an industry, middle class life altered quite markedly and this led to a growing disenchantment with Labour.

Controlling the commons under such circumstances was impossible. The election of 1951 in October of that year returned the Conservatives with a Majority of 17. There was a general trend against Labour compounded by the fact that they accused the Conservatives of stoking up a third world war. Labour tried hard to tarnish them with extremist tendencies that were not there worked in the same way as Tory fear mongering in 1945.