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Britain's state in 1945

• Britain had fought WW2 with US loans, by 1945 Britain owed the USA £4198 million, debt repayment cost the government £70 million a day
• British GDP had shrunk 25% because of the war, balance of payments problems
o Decline in British trade – 66%
o Only 2% of British industry was producing goods for export in 1945
o Overseas military spending had increased 400% 1938-46
• German bombing had destroyed infrastructure
o 4 million homes destroyed
o 2.25 million homeless
o 20% schools and hospitals destroyed or damaged
• Known as the ‘people’s war’


The Election Campaign

• Conservative claims that Labour’s left wing party chairman, Harold Laski, would exert undue influence over an incoming labour government
• Vicky suggested in cartoons that Churchill was standing everywhere, relying heavily on Churchill, toured the country in a great cavalcade, Attlee with his wife in a little motor car
• Before parliament dissolved, Churchill suggested that Labour would form a gestapo, Attlee demolished this the next day discerning between wartime and political leader Churchill, conservatives like Butler felt the broadcast damaged the Conservatives
• Labour’s new Jerusalem:
o Full employment
o Address social inequalities through social insurance
o Nationalisation
o Resolve BoP problems
o Build 400,000 houses a year


1945 Election Result and interpretation

Labour: 11,995,152 votes, 393 seats, 47.8%
Conservative: 9,988,306 votes, 213 seats, 39.8%
Liberal: 2,248,226 votes, 12 seats, 9.0%
•The Conservative campaign was negative and ill judged, but not the main cause for defeat
•Main factors were:
o Many voters identified the Conservative Party with 1930s failures – slump and appeasement – and this outweighed admiration for Churchill as an individual
o The leftwards drift of public opinion during the war, evidenced by the extraordinary reception of the 1942 Beveridge Report, fuelled by successes of wartime planning and assisted by the work of the Army Bureau of Current Affairs
• Also significant was the way in which the war enhanced Labour’s credibility as a party of government – its leaders gained experience of high office and its role in the Churchill coalition enabled its staff to shake off their ‘pacifist image’
• Enlistment of officials in the armed forces meant that Conservative organisation at the local level had more or less disintegrated
- Labour won a majority in every region, strong mandate to carry out is platform


Ending the Coalition

• Churchill, Attlee and Bevin wanted to end the coalition when Japan was defeated but the Labour party conference at Blackpool pushed Atlee to end it with the defeat of Germany
• Churchill agreed an earlier election would be beneficial and commentators expected him to win
• May Churchill formed a ‘caretaker’ Tory cabinet and voting was delayed by 20 days to allow the armed forces vote, many abroad, an unusual election
• Although party politics would resume, a camaraderie consensus had been built, Captain Roy Jenkins and Major Denis Healey of Labour now faced Colonel Heath and Brigadier Powell of the Tories, all had been civilians prior
• Leading labourites had served five years with Tories, Attlee and Eden addressed each other in letter ‘My dear Clem’, and ‘my dear Anthony’
• Churchill had a real respect for his Labour colleagues, tears were shed at a farewell Cabinet meeting as he declared ‘The light of history will shine on every helmet’, far cry from Chamberlain’s attitude to Labour in the 30s, ‘dirt’
• 1945 a personal consensus, but also and agenda consensus, agreement on foreign policy, both parties supported a close USA relationship, extension of welfare
• Churchill’s caretaker government had established child allowances and Butler the pattern of education with his 1944 Act
• Ritual conflict for the election? Consensus giving way


Why did Labour win 1945?

• Labour had many advantages: consistently ahead in opinion polls, Conservative suffering of 1930s, unemployment held against the Tories, pre-war dealings of appeasement with Hitler at Munich were looked on with shame, sins of the Conservative past
• Much of the press’ hostility had been reversed but the shift of the Daily Mirror to support Labour just before the war, Daily Express and Mail still hostile, but Mirror had largest circulation in 1950
• Labour better organised locally, Tories had left the constituencies ‘unattended’ to fight the war, Labours’ ‘electoral machinery was in good order’ – Dalton, Labour campaign more professional targeting marginal seats
• Perhaps most important a mood change, deference towards upper classes had declined, increased faith in the state to create social parity, faith that evil Nazi Germany had been defeated, ‘build Jerusalem’ – Archbishop of Canterbury
• Atlee effectively embodied this spirit (still a conservative figure in many ways), argued Labour now the all-embracing party ‘main streams into river of national life’
• Comparatively Conservatives were a ‘class party’ of ‘property and privilege’, had dominated since 1918 but now seemed old fashioned, Labour was change, 1945 Gallup poll showed 56% people wanted extensive change
• Labour leadership won respect during the war
• Conservatives used an out of date electoral register overemphasising the old vote
• Churchill’s scare tactics were ineffective, after the Gestapo reference there was an attempt to emphasise the power of the Labour left embodied by Professor Harold Laski of the LSE who was Party Chairman
• Beaverbrook press ran a campaign suggesting Labour was extremist, electorate unconvinced
• First Past the Post, Conservatives need 46,000 votes to win, Labour only 30,5000
• May 1945, Evening Standard’s, Labour leaders ‘want to be dictators’


Who were the key Individuals in the Labour government 1945-51

• Clement Attlee: Prime Minister, 1945-51. Middle class background, educated public school and Oxford. Major in the army in First World War. Famously terse and laconic style.
• Ernest Bevin: Foreign Secretary, 1945-51. Son of a West Country farm labourer, left school at eleven. One of the founders of TGWU in 1920’s. Right winger, Atlee loyalist and a serious political heavyweight.
• Herbert Morrison: Leader of the House of Commons and domestic policy supremo, 1945-51; briefly Foreign Secretary, 1951. Working-class Londoner. Right winger (‘Socialism is what a Labour government does’) who was a skilled party manager but also ambitious and devious. Disliked by colleagues, especially Bevin.
• Stafford Cripps: President of the Board of Trade, 1945-47, the Chancellor of the Exchequer, 1947-50. Like Attlee and Dalton, public school educated and a lawyer by training. On the far left of Labour in 1930s ad was briefly expelled from the party, but subsequently moved towards the centre. Teetotaller, vegetarian, up at 5am each day – the ‘embodiment of austerity’
• Hugh Dalton: Chancellor of the Exchequer, 1945-47. Educated at Eton and Cambridge and had a background in academic economics. Booming, extrovert, larger than life character.
• Aneurin (‘Nye’) Bevan: Minister of Health and Housing, 1945-51. Son of south wales miner, left school at elven. Fiery left wing orator who described the Tories in 1948 as ‘lower than vermin’


Explain the welfare state

• The Beveridge Report, 1942:
o Governments had to overcome the five giants of Want (poverty), Disease (ill-health), Ignorance (poor education), Squalor (poor housing) and Idleness (unemployment)
o Concentrated on Want and argued for a comprehensive state run scheme of social insurance which would protect people from ‘cradle to grave’ through unemployment, sickness, maternity and old age benefits
o Recommended that this scheme should build on earlier National Insurance Acts, which paid out benefits from a National Insurance Fund, into which employees, employers and the state paid contributions
• Three most important ‘welfare state’ measures introduced by the post-war Attlee government were the 1946 National Insurance Act, the 1946 National Health Service Act and the 1948 National Assistance Act
• Universality was key, no means testing, benefits paid for by insurance contributions
• Was a pre-existing National Insurance system covering sickness and unemployment introduced by the Liberals’ National Insurance Act, 1911. There was separate provision for old age pensions, however, gaps in the system – children and non-working wives were not covered by sickness insurance. The Beveridge Report called for these gaps to be filled and for the system to be rationalised, and Labour followed Beveridge’s recommendations. Introduced a comprehensive ‘cradle to grave’ scheme of social insurance, offering unemployment and sickness benefits, old age pensions, maternity grants and death grants. The ‘giant’ targeted by the Act was Want – It sought to offer security against the poverty which ill-health, unemployment, and poor housing had created.
o Contributory – you were eligible for benefits if you paid contributions, minimum number of contributions necessary to receive benefits
o Self-financing scheme: contributions were to pay for benefits
o Old age pensions established
• Jim Griffiths was responsible for implementing the National Insurance scheme
• Health care was patchy. GPs practises were effectively owned and run by GPs themselves: charged patients fees, though insured workers received treatment under the 1911 sickness insurance scheme. Hospital treatment was delivered through a mixture of private hospitals, hospitals run by local authorities and charity hospitals. Dental treatment, prescriptions and eye care all had to be paid for separately. The 1946 National Health Service Act established the principle of GP and hospital treatment paid for out of taxation and free at the point of delivery. These arrangements meant the effective nationalisation of hospitals. Dental treatment, eye care and prescriptions were also to be free.
• Opposition to the NHS within the medical profession: hospital consultants were concerned about losing lucrative private patients, GPs didn’t want to become salaried employees of the state. Health Minster Aneurin Bean bought off both groups (‘stuffed their mouths with gold’) – consultants were allowed to treat private patients while being salaried NHS employees and could have ‘pay beds’ in hospitals for these patients; GPs were to be technically self-employed, contracting their services to the NHS, and they were to be paid by ‘capitation’ fees.
o Left wingers felt somewhat undermined, auxiliary clinics etc. were administered by local authorities
o By July 1948 90% GPs had agreed to sign up
• Huge levels of pent up demand for health care was released: in the first year of its operation 187 million prescriptions were written and 8 million pairs of spectacles were dispensed.
• National Assistance Act covered the rest, personal means tests applied by a board, separate from previous act, widespread support shown as Conservatives failed to oppose second or third readings of the bill
• Considerable difference to all but the wealthiest, expanded on previous provisions, broadening them to give almost universal security from poverty, overshadowed by National Health Service Act
• NHS: 80% paid by taxation, 20% through contributions, 388 hospitals under 14 regional hospital boards
• Bevan hugely successful in piloting the NHS through Cabinet and parliament and negotiating with bodies such as the BMA, scheme became a popular success, thousands now received treatment, NHS became the biggest employer in the country but also a sacrosanct national institution


Explain Housing and Town planning provisions

• By 1945, 700,000 fewer houses than in 1939, Bevan was responsible but didn’t make it the priority he should have done
• Bevan was responsible for two housing acts extending local authority power and hoping to end social segregation with all classes in council houses, biggest success was building 157,000 prefab houses which Bevan in fact disliked
• He didn’t meet the 300,000 houses a year target due to his insistence on quality, but despite a slow start 750,000 new home were built by September 1948


Explain Education provisions

• Labour left to implement 1944 Butler Act, Ellen Wilkinson was appointed Minister for Education, greatest achievement was increasing the school leaving age to 15 in 1947 despite Treasury opposition
• Emergency building programme built temporary facilities for extra pupils, a crash-training programme created 35,000 extra teachers out of service personnel, another programme produced 928 primary schools by 1950
• Butler’s tripartite system implemented as far as finance would allow, many areas failed to produce technical schools, but opportunities for bright working class students contributed massively to social mobility, many enjoyed once out of reach educations


Explain Labour's nationalisation programme

• Labour’s nationalisation supported by all sections of the party: for the Labour right it was an essential ingredient of economic planning, though a once and for all exercise; for the Labour left, it was a first step, to be followed by others, on the path to a fully socialist economy: for trade unionists, especially in the coal and railway industries, with their histories in conflict with bosses, there were hopes of an easier ride in industrial relations.
• Nationalisation, iron and steel accepted, was not opposed with much vigour by either Conservatives or Liberals.
• Industries nationalised were the Bank of England 1946, Civil Aviation 1946, Coal 1947, Public Transport, including the Railways 1947, electricity 1948, Gas 1949, Iron and Steel 1950. Overall 20% of the economy was nationalised.
• Private shareholders in these enterprises were compensated to a total bill of £2.7 billion
• The new nationalised industries were run at ‘arm’s length’ from government as ‘public corporations’ – that is, along business lines by a board of directors, mostly made up of businessmen, appointed by ministers. The National Coal Board (NCB) to run the mines e.g. The architect of this model was Labour’s domestic policy supremo, Herbert Morrison. In the Morrisonian public corporation there was not element of workers’ control or even workers’ representation.
• Labour did surprisingly little detailed planning on nationalisation before taking office in 1945.


Explain the economic situation and austerity

• Britain was a trading country which financed imports of food, raw materials and manufactures through exports of:
o Manufactured goods
o Income from financial services like insurance and from the income from foreign investments
• If imports exceeded exports the result was ‘balance of payments’ difficulties and threats to the stability of the £
• Britain’s economic position deteriorated sharply as a result of the war. It lost out in export markets to rivals not at war and overseas investments were liquidated to support the war effort. In the later years of the war there was reliance on US ‘lend-lease’ to keep the UK afloat.
• The British hoped that ‘lend-lease’ would continue and allow post-war reconstruction, but in 1945 it was abruptly ended, leaving Britain facing a ‘financial Dunkirk’. Keynes was sent to negotiate a $3.7bn loan from the US, but the Americans, determined to liberalise the world’s trading system, made the terms tough. Britain had to agree to the full convertibility of the £ against the $ by 1947 – which meant that those countries who traded using the £ (the so-called ‘sterling area’ countries) and who had assets held in £s, (‘sterling balances’) could switch to the $, threatening the stability of the £.
• By 1947 Britain’s post-war economic reconstruction still had a very long way to go, the loan was fast running out and an exceptionally severe winter led to fuel shortages (mismanagement by Power Minister Emanuel Shinwell) and a slowdown in production which hit exports. In these circumstances the ‘convertibility’ Britain had promised led, when introduced, to a stampede away from the £. Faced with a major financial crisis, the government had to suspend convertibility.
• Food rations cut further than they had been during the war, potatoes rationed for the first time, plots to replace Attlee sprung up, when Dalton made the mistake of speaking to a journalist about his budget before announcement he had to resign and Attlee replaced him with Cripps, smart manoeuvring following political unrest by Attlee
• The route by which ministers now tried to rebuild Britain’s fragile finances and economy was:
o An export drive
o Strict controls on imports
o Minimising wage increases – to which the unions agreed
o Retention, and tightening, of wartime rationing arrangements on e.g. food, clothing and fuel
• This programme became known as one of ‘austerity’. The high priest of austerity was Stafford Cripps, who replaced Dalton as Chancellor and appeared to regard ‘austerity’ not just as a disagreeable temporary necessity but as something good in itself.
• Cripps had to encourage production, but for exports i.e. holding down domestic living standards but promoting hard work, Cripps had to encourage this through budgetary methods opposed to physical controls of rationing, but the result was the same – drab sufficiency
• Petrol rationing and taxation meant small cars went for export and the £30 currency limit made travel difficult
• Standard income tax remained 45%, but surtax was payable on top for the wealthy, beer tax 7 times higher than in 1939 – Cripps needed the revenue to suppress domestic spending but fund the aforementioned foreign policy plans and the NHS which had costs which far exceeded forecast
• Full employment meant that spending could be cut from its 1930s level but pressure was placed on housing in which production fell
• Despite high exports in 1948 and Marshal Aid a temporary downturn in the US economy caused a BoP crisis
• Next month, Cripps’ health was falling had to go to Switzerland, he and Bevin were opposed to devaluation but Atlee was persuaded to and went with Bevin to Washington to negotiate a simultaneous package, increased Marshall aid, lower US tariffs to encourage exports and agreement on a £-$ ration, the pound fell substantially from £4.30 to £2.80 to the $ but:
o It was seen as a humiliation
o It damaged Labours reputation for economic competence
o It angered holders of ‘sterling balances’ who lost money
o It pushed up the costs of imports
• Signs of discontent in the country, Labour losing control of the London County Council in 1949, the ‘Housewives League’ established and complained of rationing, queuing and petty indignities of life under Labour
• Country almost rebellious, shown in Passport to Pimlico, after 9 years of high minded self-denial in the name of greater good, demand for freedom and choice grew
• But there were real achievements:
o Despite setbacks and sterling crises in 1947 and 1949, exports soared from £266 million in 1944 to £2.2 billion in 1950
o Devaluation had a real impact on British goods, now cheaper, pored through the ports
o Labour getting real improvements in welfare care enabled them the cooperation of TU leaders, in 1948, the TU Congress effectively agreed to a wage freeze
o The freeze lasted well into 1950 and the period saw an absence of strikes, only 9 million working days lost in 1945-50 compared to 178 million 1918-23, rising living standards
o At the board of trade, Wilson progressively removed items from rationing
o Television spread throughout the land, licenses rose 15,000 to 344,000


What was the world climate like

• Cold war kept defence spending high, Britain a ‘moth eaten great power’, 1948 still 940,000 troops in the British army
• Bevin instrumental in receiving Marshal Aid and setting up NATO to deal with Stalin’s threat, KGB replaced Gestapo etc., some hard lefts disliked the USA, the embodiment of capitalism and were distrusting of Bevin’s line
• Attlee and Bevin determined that Britain should cooperate with the USA to contain communism to remain a great power, a key element with Conservative consensus
• Bevin wanted nuclear capabilities, sent a brigade in the Korean war, rearmament to face soviet threat increased financial strain


To what extent was the Labour government Socialist

• The case for ‘not very’ can be made:
o Ministers like Attlee, Bevin, Morrison were far from doctrinaire socialists
o The ‘welfare state’ measures built on earlier Liberal and Conservative measures, and at least some of the inspiration for them came from Beveridge – a Liberal
o Much of what the Labour government did wasn’t opposed by Liberals or Conservatives
o Industries nationalised were mostly either public services or loss-makers or both and as such were not much wanted by the private sector; the way the industries were run perpetuated the ‘Us and Them’ divide between bosses and workers; and 80% of British industries remained in private hands
o After the financial crisis of 1947, the government focused on ‘consolidation’ and did not maintain the reforming momentum of 1945-57 – Labour left-wingers (the Keep left group) were disappointed and critical
o Britain remained a class-based and unequal society
• On the other hand:
o Britain no longer had a straightforward free enterprise economy after 1945-51 but was instead a mixed economy
o Labour’s reforms did involve some redistribution of wealth from rich to poor
o The ethic of ‘fair shares for all’ took root to some degree in British society
o The NHS was genuinely radical: it wasn’t directly foreshadowed in the Beveridge Report ad it was introduced in the face of fierce opposition from vested interests. It is, of course, the most enduring moment of the Attlee government.


Conservatives in opposition

• Humiliating defeat in 1945, but Churchill often absent from parliament, writing his war memoirs, however still managed to appoint, Lord Woolton to party chairman, RA Butler to head the Conservative research department producing the 1947 Industrial Charter
• Woolton wanted the Tories to be more dependent on more lesser subscriptions, rather than a handful of big ones which kept constituency parties in the control of few wealthy people, candidates forbidden to contribute more than £25 to the local fund to encourage less wealthy applicants
• Membership leapt from just under 1 million in 1945, to 2,250,000 in 1948, even toyed with the idea of changing the party’s name, stressed the need to refer to Labour as the Socialist party


Explain the changing political ideological changes in the period

• Tories have often been seen as the ‘stupid’ party as well as ‘selfish’, Marxism implied the intellectual tide was behind socialism, late 1940s a reaction
• Hayek in The Road to Serfdom warned of the dangers of the enhanced powers of the state as a threat to freedom, Orwell’s Animal Farm and 1984 rejected the Communist experiment, by 1950 the Conservative party far stronger


The Decline and fall of Labour

• Conservatives looking more formidable, Labour looking more divided and exhausted, 1949 losses in the London Local elections, responding to the threat created division, Morrison a Londoner urged the need for caution and consolidation to avoid the tax burden, Bevan diametrically opposed
• Atlee organised a GE in February 1950 rather than struggle on, high 84% turnout, Labour campaigned on its record and secured 46% of the vote
• Conservatives focused on the evils of nationalisation and government control, securing a 3.3% swing in their favour, Liberals effectively bankrupted themselves to gain only nine seats
• Despite this, Labour lost many seats as turnout came from safe seats, Labour lost big in southern England, in London Labour lost 17 seats as a result of declining inner-city populations, redrawaing of boundaries damaged Labour the most, with a majority of 5 instead of 146
• Serious problem in getting measures through, Conservatives on the offensive and Labour leadership was tired and dying, Bevan felt he deserved more of Attlee when offered the Ministry of Labour, Gaitskell replaced Cripps as Chancellor
• 1950 exposed the fragility of the economy, starting well for exports following devaluation and the sense that prosperity was coming, by autumn the Korean war had broken out, rearmament became necessary, war in Asia pushed up commodity prices, new BoP crisis, Tus grew impatient of wage restraint and unofficial striking in 1949, TUC rejected wage restraint completely in 1950
• But it was the Cabinet which ultimately failed, Bevin could no longer continue, died in April and replaced by Morrison who was a failure, Atlee fell ill before Gaitskell’s budget which was hotly contested by Bevan and Wilson
o Bevan argued against prescription charges
o Wilson opposed rearmament
• Together with John Freeman, they resigned


General Election 1951

• The Tories bogeyman became Bevan instead of Laski which probably didn’t work, but Labour’s divisions certainly did
• Conservatives emphasised nationalisation and Tate and Lyle denounced Labour through their packaging, ‘Mr Cube’, Labour focused on the differences between moderate Atlee and war-mongering Churchill
• Conservatives entered with more money, increased membership and a revamped image of studied moderation, Churchill campaigned on Labour as the party of the queue, whilst Conservatives the part of the ladder offering betterment
• Another close fought contest with high turnout, Labour increased their vote to 48.8% more than the Conservative 48%, Liberal vote collapsed, but FPP gave the Tories more seats, many Labour votes piling on safe northern constituencies, L295, C321, L6, O3
• Conservatives secured a working majority and Atlee resigned at 77, Churchill returned to number 10


How far did Labour create a more equal society

• An equal society can be seen as one in which:
o There are no great disparities of wealth and power
o There is equal opportunity, with those born in disadvantaged circumstances able to make good
• On these criteria, Labour made relatively limited progress towards greater social equality-though how realistic is it to expect it to have done more given the gargantuan tasks facing it in 1945 (conversion from a wartime to peacetime economy; establishing a welfare state; liquidating the Empire in the Indian Sub-continent; responding to the Soviet challenge in Europe) is another matter
• The ‘welfare state’ reforms, in particular the NHS, which was paid for out of taxation and which proved expensive, did involve some transfer of wealth from rich to poor in the sense the rich were taxed relatively heavily to help pay for it – tax reliefs were, however available for mortgages, bank loans and private pension schemes, and these very largely benefitted the better off
• The biggest failure came in education, where Labour faithfully implemented the R.A. Butler 1944 Education Act, which had set up a tripartite system of secondary education built around the 11+ examination: grammar schools for the able minority, technical schools (which never really got off the ground) for a second narrow tier of children, and secondary moderns for the majority. Critics argued that a system which branded so many as failures did little to promote equality. Labour left private education and did little to open up routes into higher education
• Private healthcare was also left untouched: Bevan’s deal with the hospital consultants in 1948 in some ways entrenched it
• Deep class divisions remained a feature in British society: people knew their place and social mobility was relatively limited. ‘Innovations in welfare were superimposed on a class and institutional structure which closely resembled pre-war years’ K.O Morgan, The People’s Peace, 1990)


Assess Labour 1945-51

• Labour achieved in six years much of what it had set out to do and few compare in long lasting effects, made Britain a nuclear power, began the retreat from the Empire, special friendship with USA and created a welfare state, NHS replaced India as the jewel in the crown
• From the left perspective Labour did too little, a government of social conservatives left much of British life untouched, in education it was content to apply the Butler act dividing children at 11, little done to promote technical schools, even less to end private school privilege, hunting continued
• Despite the loss of India, Britain still seen as a great power, in Europe on par with France and Italy
• Death penalty continued with popular support, judges and senior civil servants still drawn from upper class families
• To the right, Labour tried to build the New Jerusalem without addressing the real problems of economic modernisation
• It cosily accepted a partnership with Conservative TUs who resisted modern technology and work practises, money borrowed from the USA and spent on the NHS
• But despite these failings the government achieved much, it nursed the economy to something like health, maintained a wide consensus of support, carrying the middle class with its attempts to build a fairer society, many historians feel that overall, judgement on the Atlee government should be positive