Austerity Britain
Page 55
Undoubtedly, there existed by about 1950 a general sense of disappointment with the experience of nationalisation so far. Much of that disappointment was social – ‘speaker after speaker reiterated the fact that no attempt was made on the part of the management to inform the employees of what they were doing and why’ was the chorus in November 1950 at a conference of London employees of nationalised corporations – but it was also economic. Herbert Morrison, architect of nationalisation, had already told the emblematically named Socialisation of Industries Committee that it was necessary to put in place ‘more effective checks upon the efficiency of their management’, while over the next year or two research by the non-partisan Acton Society Trust revealed a degree of worker indifference-cum-hostility to the new dispensation that hardly stimulated higher productivity. Management structures, moreover, were unwieldy, overcentralised and rigidly hierarchical, all of which militated against encouraging talent, while that same management had no qualms about appointing ex-trade union officials as heads of personnel. Unsurprisingly, given that nationalisation in the first place was the result of social and political at least as much as economic considerations, there was also a deep and pervasive reluctance to use the price mechanism in resource allocation. Altogether, from the perspective of a twenty-first-century privatised world, it was far from cutting-edge.
Yet even in strictly economic terms, the story was perhaps not quite so black and white. The economist John Kay wrote almost movingly in 2001 about the recently deceased Central Electricity Generating Board (CEGB), hub for virtually half a century of the nationalised electricity industry:
It represented the best of central planning. It was run by highly intelligent administrators and engineers who were dedicated to the public interest. It employed the most advanced techniques of risk management and economic analysis.
Its pride and joy was the central control room of the National Grid. The engineers who worked there had details of the running costs and availability of every generating plant in England and Wales. They would constantly monitor and anticipate demand and instruct plant managers to produce electricity, or stop producing electricity, by reference to what they called the ‘merit order’. The objective was to ensure that output was always achieved at the lowest possible cost.
Kay, though, does not regret the CEGB’s passing. ‘Centralisation, giganticism, secrecy and complacency – in retrospect, it displayed all of these.’11In the early 1950s, however, such perceptions were barely starting to take shape.
Anyway, the nationalised industries represented only about a fifth of the economy. Sir Topham Hatt on the Island of Sodor may have quietly changed from the Fat Director into the Fat Controller once the railways were nationalised, but the great majority of British managers spent their whole working lives in the private sector. There was no great premium placed on merit. ‘It is true beyond any doubt that nepotism is still widespread in private industry, and so long as it persists on its present scale it frustrates all efforts to provide equality of opportunity in the business world,’ Anthony Crosland complained in 1950. ‘There are far too many firms which recruit, if not entirely from founder’s kin, at least on a generally “old boy” basis, and there is nothing more exasperating than to observe, in the universities today, the appalling lack of correlation between ability and jobs obtained.’ Soon afterwards, a survey of 1,243 directors from 445 large companies found that almost three-fifths had been to public school and a fifth to Oxbridge, predictably with arts graduates twice as numerous as science ones. Their average age was 55, and almost three-quarters had changed jobs either once or never at all. A subsequent survey of directors, in the mid-1950s, found that about a third were sons of directors, most of them directors of the same firms.
In a bravura passage, Correlli Barnett (who as a young man worked in industry in the 1950s) portrays the lifestyle of the British directorate:
At the summit of the industrial system stood an elite predominantly blessed with the accent of the officers’ mess: men bowler-hatted or homburged, wearing suits of military cut either bespoke or at least bought from such approved outfitters as Aquascutum or Simpsons of Piccadilly; gentlemen indeed, confident of manner, instantly recognizable by stance and gesture. They lived in large detached houses on a couple of acres of garden in the suburbanized countryside that surrounded the great cities all within ‘exclusive’ private estates adjacent to the golf course. They drank gin and tonic; had lunch in a directors’ dining room resembling as near as possible a club in St James’s; dined in the evenings; drove a Humber, Rover, Alvis, Lagonda or perhaps a Rolls-Royce; and were married to ladies who played bridge.
It is a portrait that, notwithstanding an element of caricature, has the ring of authenticity about it. So, too, does Barnett’s depiction of British middle management in the early to mid-1950s – a world in which the extent of promotion almost invariably corresponded with educational background and ‘the snobbery of the socially unsure’ permeated everything:
With the exception of the public-school men [probably about one in five], these managers were all denizens of that unchartable sea that lay between the two well-defined shores of the upper class and the working class. All spoke in regional or plebeian accents, with the original roughness sandpapered down to a greater or lesser degree; they ate dinner at midday (though this was changing); bought their ready-made suits from Meakers, Dunn’s or Horne Brothers; wore at the weekends blazers with breast pockets adorned with the crests of such un-crack regiments as the Royal Army Service Corps; drove staidly respectable motor cars like Morris Oxfords or Austin Dorsets; and were blessed with ‘lady wives’ who were proud of their well-furnished ‘lounges’.
As with the directors above them, this is an evocation of a profoundly conservative, risk-averse and mentally as well as materially unambitious culture – a culture in which managers were ‘for the most part content to jog along decade after decade in the same cosy working and domestic routines’.12
Barnett’s uncompromising reading of immediate post-war British history has provoked understandable dissent, even at times distaste, but it is surprising that his detractors, mainly from the left, have been unwilling to recognise the sheer weight and power of his onslaught on the complacent, insular British establishment of those years. It is possible, though, to make some sort of defence of the businessmen. Against an overarching twentieth-century background of family capitalism gradually giving way to managerial capitalism, there was among senior managers a slowly rising proportion of university graduates (some 30 per cent by 1954, only 1 per cent less than West Germany); a Labour government initiative led directly to the establishment of the British Institute of Management; and there were an increasing number of American companies (such as Ford) and management consultants eager to spread the gospel of modern management techniques. ‘We’re All Specialist Now’ was one of the chapters in Professional People, written in 1952 by the renowned specialists on the middle class, Roy Lewis and Angus Maude, and it included a section on ‘The Management Movement’.
Nor was the dominance of ex-public schoolboys in the upper echelons of British companies necessarily a formula for disdainful amateurism. Geoffrey Owen, in his authoritative survey of post-war industry, asserts that in the 1940s and 1950s ‘it was common practice for public schoolboys, if they did not go on to university, to undergo some form of technical training after leaving school, perhaps as a premium apprentice in an industrial company’. Owen adds that ‘if there was an anti-industrial bias in the education system, it was to be found at Oxford and Cambridge, where some professors regarded a career in business as intellectually and morally demeaning’. Owen also implicitly queries the conventional wisdom deploring the relative ease with which accountants – as opposed to engineers – were able to penetrate senior levels of management. ‘Employers,’ he writes, ‘saw that the rigorous training which accountants had to undergo was a good preparation for management.’ One such accountant, qualifying in the late 1920s, was the self-m
ade, utterly capable but also visionary Leslie Lazell, who by the early 1950s was running the Beecham pharmaceutical group and beginning to turn it into a very successful – and international – science-based, marketing-oriented enterprise, all fuelled by a huge research effort which he ensured was properly funded.13
Moreover, whatever the overall sluggishness of the business world, some striking entrepreneurs were at work. Jules Thorn and Michael Sobell, for example, were both foreign-born outsiders who by the early 1950s were starting to shake up the still heavily cartelised electrical industry, with Sobell (father-in-law of Arnold Weinstock) about to make a fortune through the manufacture of television sets; Daniel McDonald, starting out with £300 capital and a shed in the West Midlands, was the inventor and manufacturer of Monarch gramophones, which from the early 1950s had a simplicity of design and lower unit costs that enabled him to take on the more upmarket Garrard model, eventually making him one of Britain’s richest self-made men; the thrifty, driven and despotic Joseph Bamford, founder of J. C. Bamford, was the inventor and manufacturer of the hugely profitable JCB excavator; and Paul Hamlyn, a German Jewish refugee, began his innovative and highly rewarding publishing career in 1949 with an imprint characteristically called Books for Pleasure.
There was also, sui generis, the case of Alastair Pilkington. He was finishing his war-interrupted mechanical-sciences course at Cambridge when the turning point of his life occurred. It is an episode that has become shrouded in mythology; the historian Theo Barker tells the authorised version:
Alastair’s father had become interested in his family tree and so had Sir Richard Pilkington, a shareholding member of the St Helens glassmaking family. When it became clear that there was no traceable link between their respective ancestors, the two men got round to discussing the rising generation. Would Pilkingtons be interested in employing an up and coming engineer when he had completed his degree? As it happened, the company was then very concerned about its shortage of well-qualified engineers. Harry Pilkington [a director] saw Alastair’s father and subsequently had Alastair himself up to St Helens for close scrutiny over a three-day period. More remarkable, the board decided that ‘a member of the Pilkington family, however remote, could be accepted only as a potential family director’. So it came about that Alastair, having passed the preliminary test, started work at Pilkington Bros Ltd in August 1947 as a family trainee.
This was also a turning point in the firm’s fortunes. ‘Four years after starting work at Pilkingtons, he conceived the idea that molten glass could be formed into a continuous ribbon by pouring it into a bath of tin and “floating” it while it cooled.’14Such was the revolutionary float-glass process, eventually to become world-famous. It had been a triumph of not-quite-nepotistic recruitment.
For every wealth-creator, unfortunately, there was at least one Lord Portal of Hungerford. An ace fighter pilot in one world war, Chief of the Air Staff in another, his first big peacetime job (1946–51) was as Controller of Atomic Energy. ‘I cannot remember that he ever did anything that helped us,’ the very able Christopher Hinton, responsible for the production of fissile material, unsentimentally recalled. By the late 1940s Portal was taking on directorships – of the Commercial Union, of Fords and of Barclays DCO, where after lunch he invariably picked up a copy of the Field, not the Economist – before in 1953 assuming the chairmanship of one of the country’s most prestigious companies, British Aluminium. His principal qualities remained his distinguished war record and, of course, the famous ‘Portal’ nose.15
It was an emblematic career, in that British management in these years remained essentially unprofessional. In the 1950s it was still unusual for a top British company to be organised along divisional lines, while it was not until the 1960s that the first business schools began to appear. Typical, moreover, of the often skewed priorities in British corporate culture was what seems to have been an almost systematic downgrading of the status of production managers, in accordance with the maxim ‘Men who can manage men, manage men who can only manage things.’ And what men who managed men needed was ‘a balanced cultivated life’, as one leading manager enjoyed telling an international conference in 1951. ‘He should have long weekends,’ the manager explained; ‘he should play golf . . . he should garden . . . he should play bridge, he should read, he should do something different.’
Two witnesses of the industrial scene were unimpressed by what they saw. When Maurice Zinkin joined Unilever in 1947, he was ‘shocked’ to find how many of its British-based companies were ‘old-fashioned and badly managed’:
One of the toiletry companies I went to see was still selling its perfectly good face cream on a silly advertising story about a dying sheikh and his secret desert well. Port Sunlight was still training for overseas service managers of a technical level not high enough to make them acceptable to the increasing nationalism of overseas governments. It was also, even to my inexpert eye, over-manned.
So, too, the economist Alec Cairncross, who after his stint in Whitehall returned to academic life, at Glasgow University, in 1951. There he tried to get the local shipbuilding industry interested in management studies but met a complete lack of interest. It was not, he recalled in the 1990s, as if that industry had nothing to learn:
In a large yard, employing more than 5,000 workers, the organisation of the work below board level was in the hands of the yard super-intendent, who was distinguished from the other workmen by his bowler hat and not much else. But there was no planning staff of the kind customary in modern factories. That work was devolved to the foreman on the job, and he set about it like a foreman on any building site. Each ship was built as a one-off job.
In fact, ‘management in the industry was almost non-existent.’
No single case study can claim to be representative, but there is something peculiarly compelling – and perhaps indicative – about Courtaulds, the large textile manufacturer based in Coventry. It is a story told with relish by the company’s historian, Donald Coleman. In 1946 the ailing septuagenarian chairman, Samuel Courtauld, had to find a successor. In effect, the choice lay between P. J. Gratwick and John Hanbury-Williams. One had ‘long textile experience, much shrewdness, and some enthusiasm for the bottle’; the other had ‘presence, diplomatic skills, and splendid manners’, not to mention a double-barrelled name. The position went to Hanbury-Williams – from a long-established landed family, son of a major-general, married to Princess Zenaida Cantacuzene, a director of the Bank of England and a gentleman usher to King George VI. Coleman’s characterisation is savage:
Hanbury-Williams knew little or nothing about production technology, despised technical men, remained ignorant of science, and wholly indifferent to industrial relations . . . He was contemptuous or patronizing to those he could refer to as ‘technical persons’ . . . His tactical ability to rule in a small and fairly homogeneous group, and to give suitably beneficent and urbane nods to the doings of the executive directors, allowed dignity to masquerade as leadership. But this activity, or inactivity, totally lacked strategy and ideas . . . There is no evidence that Hanbury-Williams had any innovative ideas whatever.
In 1952, six years into a reign that lasted into the 1960s, Hanbury-Williams reflected on the company’s organisation: ‘There has been a Gentlemen’s Club atmosphere in the Board Room, and I believe it is in true to say that over the years this has spread to all the Departments of our business. It is in fact part of the goodwill of the Company which we must safeguard.’ A rare iconoclast (and incisive administrative talent) on the board was Sir Wilfrid Freeman, who only the year before had flatly described Courtaulds as ‘over-centralized, constipated, and stagnant’ – a situation unlikely to change while the insufferably complacent Hanbury-Williams was still in harness.16But, bearing Portal in mind, the fact that the trenchant Freeman had in an earlier life been an Air Chief Marshal serves as a warning against facile typecasting.
Across the table from management sat the trade unions. During the war, t
he appointment of Ernest Bevin, the greatest living trade unionist, as Minister of Labour in Churchill’s coalition had signalled their arrival at the national top table, along with the spread to many industries of national pay bargaining. After the war, their leaders continued to be consulted by government on a regular basis, and by 1951, against a background of full employment, their membership stood at an all-time high of 9.3 million. Some perspective is needed: the average density of trade union membership (ie in relation to the workforce as a whole) struggled in these years to rise above 45 per cent, while the sheer number of unions (735 in 1951) inevitably made it a somewhat incoherent patchwork quilt of a movement. Nevertheless, the contrast with the travails of the inter-war slump, when membership bottomed out at 4.35 million in 1933, was unmistakable.17