by Simon Heffer
Organised labour, angry at industrial compulsion, resolved at a meeting in late June of the Triple Alliance of miners, railwaymen and transport workers that ‘the conscription of wealth should have preceded the conscription of human life’, and demanded that a register of wealth and property be established ‘to prepare for a real equality of national sacrifice.’91 It was further proof of the popularity of Bolshevik ideas. James O’Grady, an Independent Labour MP and president of the General Federation of Trade Unions, announced that despite legal restrictions on strikes there had been one hundred and twenty-three in the previous twelve months, and ‘he had never known a time when the relations between the Government Departments and organised labour had been so bad as now.’92
Shortly after these events, in July, a shortage of beer caused discontent in a number of large towns, and in towns with big munitions factories. London, Birmingham, Leeds, Sheffield, Newcastle and Barrow-in-Furness were among those affected. There were calls for a 50 per cent increase in production, to 15 million barrels a year; and, inevitably, accusations that the price of beer had risen to a shilling a quart in some country districts during the hay harvest, with profiteering by brewers and publicans. The government acknowledged ‘difficulties’ (blamed on distribution) in rural areas.93
Fearing a breakdown of civil order, the government announced that in the next quarter the food controller would permit an increase of one-third in beer production; and the priority would be to distribute this to areas with substantial tracts of arable land to harvest, and to areas with munitions factories. The catch was that the strength of the beer would be reduced. This upset the Irish, whose stout and porter could not be brewed at such a low gravity: it was added to the lengthening list of grievances. Later in the summer, in the cause of cheering up the working man, the government pegged the price of beer – including an officially approved new ‘Government Ale’ – at 5d a pint, while specifying that the lighter beer popular in the eastern counties should sell at no more than 4d a pint. The government further increased, by a third, the quantity of beer that could be brewed until the end of September, men being thirstier in the summer, and those bringing in the harvest having to be catered for. The brewers, accused of profiteering, cut the price of mild and porter: they wished to escape blame for any rioting.
For the first time, the Home Office became active in the monitoring and suppression of dissent, when Sir George Cave, the home secretary, decided to take more precautions against revolution. He established an informal security committee with representatives of the Armed Forces, the police and several interested government departments to review intelligence; and from April 1917 Scotland Yard had a section of its Criminal Investigation Department operating routine surveillance of the organised working class, of areas where defeatism was thought rife. Lists of ‘dangerous, suspicious persons’ were drawn up.94 When later in the year the National War Aims Committee was established, the Home Office would work closely with it and with the British National Workers’ League, comprised of ‘patriotic’ socialists and a counterweight to the Union of Democratic Control. The policy was ruthless, but effective.
Unrest among the working classes was further fed by poor and unrepaired housing, threats of food rationing and rises in prices. Yet sporadic strikes, usually provoked by specific local complaints, continued to vex the government into the autumn of 1917. Railwaymen, for example, complained about working conditions – they sought an eight-hour day, which would have cost the government £10 million a year in overtime – and the engineers’ union made similar demands, which threatened munitions factories. The government used DORA to ban them from striking, offering to provide a conciliation service to mediate between management and men instead.95 Afraid the railways might be compromised, the government ordered a review of canals, with a view to using them to shift goods. Railway workers then demanded another 10s a week. The War Cabinet authorised the Railway Executive to give members of the National Union of Railwaymen an extra 5s a week. The NUR refused the offer. It was raised to 6s, and accepted; and the government braced itself for other unions to put in claims.96
Apart from such local difficulties there was, nonetheless, evidence of the rise of a more deep-seated radicalism. A series of articles in The Times in September contended that ‘behind the meaningless and stupid term ‘labour unrest’ lies a conscious revolutionary movement which aims at the complete overthrow of the existing economic and social order, not in some uncertain future, but here and now.’97 The newspaper argued that workers in areas such as Clydeside had long regarded the real conflict as between the ruling elites of the combatant countries, and irrelevant to the international brotherhood of the working class. The growth of revolutionary ideas in Russia, inspired by the theories of Marx, helped promote hitherto continental ideas – collectivism, syndicalism and anarchism – among British workers. The Times felt that those workers were unwitting tools of arch-manipulators in the revolutionary movement, and the public were ignorant of the plot to wreck capitalism. ‘The upshot is that obscure revolutionaries have the Government and the nation by the throat and mean to strangle them,’ it wrote in a leading article that reflected on the others it had published on the subject. It believed Britain would rise up against them ‘when it realises the danger.’
Wage rises for munitions workers took the average pay to £3 15s a week for skilled workers and £2 3s for unskilled. Nevertheless there was a week-long strike in Coventry in late November over union recognition, and the failure of employers to agree to union procedures: no amount of public outrage at its effect on the war effort made any difference. Inevitably, the government had to impose a settlement, which was as simple as offering discussions about the role of shop stewards.
Precisely because the demand for labour remained inexorable the union movement was in a position to demand more money, however unpatriotic that was. By late 1917 around 10,000 workshops were making munitions of war, 5,000 of them controlled by the Ministry of Munitions, including 150 national factories. The building of workers’ housing absorbed almost the entire construction trade, with 1,500 new homes in greater London alone. Any non-essential building costing more than £500 now required a licence. On the land, prisoners of war worked throughout 1917 and, without them, the nation might have gone hungry. With shipping losses reduced but still running at twice the rate of new tonnage, the Army had to release 200,000 men to work in shipyards. This could not have come at a worse time: the end of the fighting between the revolutionary regime in Russia and the Central Powers allowed a movement of German men and guns from the Eastern to the Western Front, where British troops were already under strength. Demand for steel, and the coal to make it, rose, but there was a shortage of miners: there had been sporadic strikes of colliers over pay and the condition of their machinery in South Wales during the summer, with at times 12,000 men idle. It was feared coal for households would run out during the winter.
In late September the miners demanded an extra 10s a week, on top of a request for a 25 per cent pay rise, which alone would have cost between £25 million and £30 million a year, and would mean their pay would have risen 65 per cent in three years. Guy Calthrop, the coal controller, told the War Cabinet that ‘the men were out of hand’, but conceded that since 1914 the cost of living had risen by 83 per cent.98 He doubted munitions factories could function for more than ten days without continuing supplies of coal, and most had no space for stockpiles. The War Cabinet realised it had to make concessions, ‘while recognising that the demand by the miners was unreasonable and deeply to be deplored’. The public deplored the consequential rise of 2s 6d a ton in the price of coal. The granting of such concessions was, however, the means with which a government in desperate straits dealt with the legacy of industrial unrest that had poisoned British life before 1914.
V
Having resolved to pursue the war to its end, the government found itself struggling to cope not just with labour relations and supplies, but with ever-mounting costs. By
the spring of 1917, and despite the levying of higher taxation, the financial situation was dire. In 1913 the state had spent 8.1 per cent of the nation’s gross domestic product; in 1917 it would spend 38.7 per cent of it.99 And although many incomes had risen because of overtime, Treasury figures had shown it took a sovereign to buy in March 1916 what in March 1914 had cost 15s.100 On 3 April Law told the cabinet that Britain’s gold reserves were down to $219 million, and the war was costing $75 million a week: within three weeks the country would run out of money. The previous December the rate of loss of reserves had been $5 million a day, or $35 million a week, so the problem was increasing.101 The national debt in April had been £4 billion – compared with £651 million before the war – and was rising by £135 million a month. By July it was rising by £180 million a month; the interest alone was costing £110 million a year.102 The fighting was but one expense: welfare services were increased, especially for soldiers’ dependents, and hostels were provided for war workers. The public voiced concern about the availability of treatment for soldiers discharged because of wounds or disabilities, which would require more expenditure.103 Also, the dependents of such men, and of the dead, had to be looked after. Government figures in March 1917 showed 518,741 of these reliant on the largesse of the Ministry of Pensions, created to administer this proto-welfare state.104 There were 140,275 disabled men; 62,796 widows; 128,294 children of widows and 157,544 children of disabled men; and 29,832 other dependents. In addition, around 125,000 widows had not yet reached the pensionable stage, and another 130,000 men were either medically unfit for work after their war service or still in hospital with their injuries being assessed.
By 1917–18 Britain also had loans of £1,333.2 million outstanding to its allies, and £194.5 million to the Empire. The national debt rocketed by over 1,000 per cent, from £706 million in 1914 to £7,481 million by the Armistice: only around 22.1 per cent of the cost of the war was met by taxation.105 During the war the numbers paying income tax more than trebled from 1.1 million to 3.5 million, and revenues almost equal to those from income tax were raised by the excess profits duty, introduced by McKenna in 1915 to placate trades unionists who feared employers were going to become unduly rich. Law would eventually raise income tax to 30 per cent and the excess profits duty to 80 per cent.
The cost of war continued to rise inexorably. In April 1917 it was £6.25 million a day; by July it was £7.75 million. The difference, over a year, between prediction and reality was equivalent to the country’s total revenues. Law had claimed an excess profits tax should raise an extra £7 million a day; but had been forced to rein in tobacco and entertainment taxes, so it would raise at most £4 million a day. A deputation of working men visited him, complaining that high tobacco taxation would bring unrest because of its regressive nature: it hit those on lower incomes harder than the middle class.
The average rate of income tax in 1914 was 1s in the pound; now it was 5s, and 8s 3d (or 41.5 per cent) for those paying super tax, causing qualms about improving production and investment if it continued to rise.106 The excess profits duty raised £29 million in the first year of the war, but £125 million in the second. The government maintained it could outlast Germany; some MPs were not so sure, or worried that Britain faced ruin. Luckily, the inclination of many wage-earners to donate to charities that helped servicemen and their families or to buy War Bonds eased pressure on the Treasury. Indeed by 1917 the National War Bonds, bearing a 4 or 5 per cent rate of interest and redeemable after five to ten years, had become the main means of raising money. The money supply doubled during the war. When peace came and lenders redeemed their bonds, Britain avoided the hyperinflation that wrecked the German economy. This was because so much of its debt was held by overseas investors, and the liquidity did not go back into the domestic economy. Also, unlike the Germans, the British paid considerably higher taxes throughout the war. Nonetheless the government would have to borrow to repay its debts, and this would store up problems for later in the 1920s and 1930s.
The Commons debated public spending on 6 July, as much to complain about the new, apparently unaccountable style of government as to warn ministers about out-of-control expenditure. A motion, signed by MPs of all parties, demanded a select committee to scrutinise spending decisions. Colonel Godfrey Collins, its proposer, said: ‘the supreme object of the House of Commons is to control expenditure. But the necessary knowledge is deliberately withheld, and without knowledge control cannot be effective.’107 In another swipe at Lloyd George’s modus operandi, Collins observed that ‘the Government use the Press daily for their purposes, and the increasing use of the Press by the Government has diminished the power of this House. The House of Commons is not properly informed about finance. The Government ask for supplies of money and refuse supplies of information.’
Collins claimed Law could not act as chancellor properly while being Leader of the House in Lloyd George’s almost permanent absence. The financial secretary to the Treasury – Stanley Baldwin, in his first government job – was also hardly ever in the House, because he was in the Treasury doing Law’s job. ‘If the Government refused the appointment of this Committee the public will say it is a deliberate attempt to shield their actions from criticism. To-day there are 3,000,000 Income Tax payers, and every citizen is feeling the financial effect of this War. I challenge the moral right of the Government to impose taxation if they withhold control and knowledge of expenditure from this House.’108 He blamed the bureaucracy, notably for having put functionaries with no experience of the working man in control over him.
The creation of vast new government responsibilities, as central to Lloyd George’s plan to give an impression of dynamism as to the necessities of prosecuting the war, had dramatically driven up public spending. Collins complained that ‘everywhere men are crying out against bureaucracy and the multiplication of unnecessary Departments. The evils of borrowing and inflation are apparent to all. What we are now proposing every business man recognises as essential for the successful prosecution of his own business.’ Other speakers commended nineteenth-century finance ministers, notably Gladstone, in cutting expenditure after the Crimean and other wars. Law said he could not cut expenditure during a war, but had to counter talk of mortgaging Britain’s future to fund the enormous state payroll. One MP alleged there were 8,000 ‘clerks, porters and others’ in the Ministry of Munitions alone.109 The authorisation of extra expenditure rested with the War Cabinet, or even just Lloyd George himself. Law promised a select committee, though was vague on its terms of reference.
It was scarcely surprising, given all the pressures, hardships and sense of bereavement that prevailed in Britain, that a spirit of privation and gloom pertained at the start of 1917, and lasted throughout the year. The gloom, to start with, was literal as well as figurative: for days after Christmas 1916 fog paralysed London. Food and fuel were in ever shorter supply, with temperance campaigners agitating to have the government ban brewing to save sugar, which was especially scarce. Railway companies announced reductions in services and station closures, with journeys slowing down and fares rising by around 50 per cent, with a view to deterring civilians from travelling: a forerunner of the ‘Is Your Journey Really Necessary?’ posters from the next war. Regulation was seen as the answer to any difficulty, but ignored fundamental causes. Where it was brought in – be it price controls, rent controls or intervention in essential industries – it caused or aggravated long-term problems of supply.
The last vestiges of pre-war life were being eradicated. All racing was finally cancelled after the Newmarket Spring Meeting of 1917: train travel for civilians was too difficult, motoring almost impossible, and those attending race meetings were stigmatised as loafers, shirkers and unpatriotic. However, a powerful lobby from breeders forced the War Cabinet to decree on 4 July that the sport could be resumed, and forty days’ racing were allowed ‘in view of the national importance of horse-breeding’ provided they were mostly at Newmarket or at other c
ourses where the horses would not travel far from their stables, and not more than 1,200 horses were in training – to conserve feed.110 Other animal enthusiasts were less favoured: even dog shows were banned, under DORA.111
Repington, observing British life de haut en bas, noted in July 1917 the effect of the conflict on his upper-middle-class world. ‘The only visible signs of war are that the men now wear usually short coats and black ties in the evenings, that dinners are shorter, and that servants are fewer and less good. There is a want of taxis and of petrol, and sugar in some places is rather scarce.’ He did not feel there had been too bad an effect on his social inferiors. ‘The working classes are well paid, and food is abundant if dear. There is the minimum of privation, and no general and real suffering from the war’ – an astonishing assertion, but a sign of how easy it was as a well-to-do Englishman in 1914–18 to carry on partying.112
‘The greatest sufferers,’ he believed, ‘are the middle classes, especially the humble gentlewomen, with fixed incomes, and those who have lost husbands or sons.’ There was a degree of truth in this. Although the traditional officer class took a disproportionately high number of casualties in the fighting, the richest had tended to live off unearned income and continued to do so, albeit more highly taxed. The middle classes had no such cushion of capital and a station in life to keep up for which no separation allowance would compensate, if their breadwinner was in the services; and if he were killed there was often terrible hardship, an awareness of which caused the formation of various charities to support the widows and orphans of ‘temporary gentlemen’. The well-to-do also endured a magnification of the old ‘servant problem’, in that there was hardly any spare labour to undertake tasks for them. Even Repington, as he explained in his usual lofty tone, suffered when trying to have repairs done on his house; his builder said that ‘he has eleven men instead of the forty he had before the war, and that they are all old and not venturesome on high ladders. Their wages are one-third up, and the price of materials is awful.’113
