Austerity Britain

by David Kynaston

  MPs and Ministers seem to be strongly against Bevan – attributing our setback to ‘vermin’.1.

  Bevan did get his way on steel, but otherwise the King’s Speech was notably short of substantive content.

  With Herbert Morrison for his part continuing to press the case that ‘consolidation’ should be the order of the day, attention soon turned to a weekend meeting in May (at Beatrice Webb House, Dorking) of the Cabinet, Labour’s National Executive Committee and the TUC. ‘It is, I think, quite clear that the majority of the electorate are not disposed to accept nationalization for the sake of nationalization,’ argued Morrison in a pre-meeting memo pouring scorn on the notion that electors would become enthusiastic about a new nationalisation programme ‘if we only bang at them hard enough’. But at Dorking there was stalemate, with Morrison at best winning by default, and it was clear that the question of nationalisation was far from settled.

  That autumn, Gallup sounded out public opinion. Only 32 per cent approved of the nationalisation of the steel industry (set for 15 February 1951); in terms of other industries (insurance, chemicals, cement, sugar, meat) where Labour in theory was committed to some form of nationalisation, approval ratings varied between 31 and 22 per cent, with in each case at least one in two disapproving. As for the existing nationalised industries, only health (overwhelmingly) and coal (45 per cent for, 39 per cent against) received approval, with gas and electricity, the railways and road transport all being viewed by a majority as having suffered under nationalisation.2. These were striking figures, but they did little or nothing to undermine Labour’s by now deeply ingrained belief – not only on the left – that public ownership was integral to the party’s ‘very soul’.

  It was in mid-April, a month before Dorking, that the ailing Stafford Cripps presented his last Budget. Explicitly Keynesian, with its stress on fiscal policy as the best way of attaining economic goals, it was understandably viewed as the culmination of the Labour government’s shift (in progress since 1947) away from central planning and towards demand management. ‘A graveyard of doctrine’ was how The Times almost gleefully described the party at last learning the lessons of almost five years in government, and Cripps in his speech emphasised his aversion to using ‘the violent compulsions that are appropriate to totalitarian planning’.

  Even so, despite earlier ‘bonfires’, there remained on the part of Labour ministers a stubborn attachment to direct economic controls as indispensable to the maintenance of full employment. Only weeks after the budget, the President of the Board of Trade, Harold Wilson, warned his colleagues that there was ‘an acute danger of Keynesian ideas dominating our thinking so much that we shall be driven into a Maginot-like dependence on purely financial methods of preventing a depression’. Or, put another way, the arrival of full-flowering Keynes-ianism did not mean that Britain changed overnight from being a significantly controlled economy – whether in terms of building licensing or exchange control or rationing or food subsidies or government control over raw materials such as coal or import controls. Labour’s instincts, moreover, remained essentially interventionist. When one moderate junior minister, James Callaghan, made a speech in May accepting that nationalisation should not go beyond the existing fifth of the economy in public ownership, he was at pains to spell out that the other four-fifths could remain in private hands only if it fulfilled stringent, government-ordained requirements in such areas as investment, earnings and the distribution of dividends.3.

  Nor on the other side of the political divide was the Keynesian centre ground unequivocally embraced. One influential Tory, Richard Law, argued forcibly in his 1950 book Return from Utopia that a strong and free economy would remain unattainable so long as exchange controls were still in place, while from that July the bankers and brokers of the City of London found an economic pundit they could trust – and, just as importantly, understand – in the financial journalist Harold Wincott, who began a regular column in the Financial Times espousing a passionate pro-market economic liberalism and soon acquired a considerable following. ‘Capitalism here is in a parlous state,’ he declared in his first piece (entitled ‘Rediscovering Capitalism’). ‘Some members of the Government abuse it with blind, unreasoning hate; others realise the mischief they have done and are doing but are prevented by the psychological barriers they themselves have built up from putting right past wrongs. The Opposition apologises for capitalism – and steadily emasculates it.’4.

  Generally, the political temperature was surprisingly low during the immediate post-election period. Labour concentrated on nursing its small majority, while the Tories were broadly content to wait on events. Inevitably, the main day-to-day storm clouds concerned the most controversial figure in British politics: Bevan. Justifiably proud of his creation of the NHS and still Minister of Health, he had been engaged since the previous autumn in a determined guerrilla campaign to keep the service free. Prescription charges had been theoretically introduced after devaluation, but he had managed to stop them coming into operation. Now, in the spring of 1950 and in the uncomfortable position of being the principal scapegoat for Labour’s electoral near-disaster, he prepared for a more protracted scrap as the issue returned to the fore.

  The essence of the case put forward by the Treasury (where Hugh Gaitskell had become Minister of State and was soon effectively deputising for Cripps) was simple: the NHS was continuing dramatically to overshoot its spending estimates and could not be afforded unless charges were introduced – charges which Gaitskell believed to be right in principle as well as financially necessary. Bevan was adamant that the level of NHS spending would soon start to stabilise of its own accord, a view that most historians have endorsed. Whatever the rights and wrongs, the crucial fact was that by the summer, after several months of disputation, two of Labour’s outstanding talents were at bitter loggerheads. ‘He’s nothing, nothing, nothing!’ declared Bevan to a colleague about the apparently super-rational Wykehamist whom he could barely bring himself to believe deserved to be a member of the party, while Gaitskell, though genuinely appreciative of his opponent’s parliamentary oratory, reckoned him a ‘slippery and difficult’ customer.5. The NHS remained, for the time being, free.

  None of this had much of a message for Michael Young in Labour’s research department, as he continued to explore what he saw as his party’s shortcomings in government. At the end of March, he gave a paper entitled ‘The British Socialist Way of Life’ to a Fabian conference in Oxford. Declaring that it was ‘no longer possible to look forward with confidence to steady progress towards the Socialist Commonwealth’, and arguing that it had been a serious mistake to concentrate so much during the election on the nationalisation issue, Young suggested an alternative, less dogmatic emphasis:

  In trying to express the basic idea that should underlie our new policy he had been driven to use the word ‘brotherhood’ for want of a better. His ideal for society was based on the model of the good family, in which the governing principle was that needs should be met by holding all resources available for use where they were needed most . . . The basis of social life was in the family; but the family needed a good deal of outside support if it were not to be in danger of disruption under the impact of modern forces.

  ‘How wealthy do we really want to be?’ Young asked. And, after rejecting the American model (‘not achieving happiness by multiplying people’s wants’) and stressing the importance of mental as well as physical health, he turned to what, along with the family, would become the key concept of his life’s work: ‘One essential was to get back for people the sense of community, for which there was no proper basis in the life of modern cities. Those who become isolated in family homes, without close contacts with their neighbours, have no foundation for a satisfactory way of life.’ Young concluded with an almost mystical appeal to ‘the democratic Socialist way’ as the best alternative – in the context of the decline of religion – to the dangers of fascism and Communism: ‘A more satisfactory emot
ional life based on the sense of brotherhood will react to produce a better family life, based on the mutual love of parents and children. On this basis it is possible to build a new religion to fill the void left in men’s minds by the collapse of the old beliefs.’

  Almost certainly Young by this time was in a mood of growing disenchantment. ‘It was obviously impossible to carry through the major proposals in the watered-down but still substantial version of Let Us Face the Future [the 1945 manifesto] contained in Labour Believes in Britain [the 1949 policy statement], but why nothing was done on such matters as insurance, public buying and consumers’ advice, not even committees of enquiry set up, is still a mystery,’ he would write in 1953 about the aftermath of ‘the pyrrhic victory of 1950, which condemned the government to passivity’. He was especially disappointed by the failure of the government – in particular Wilson at the Board of Trade – to set up a consumer advisory service that would provide comparative testing of products on behalf of the public. The chronology is uncertain, but it seems that Young stopped day-to-day work at the research department in May, though he received party funding to write ‘a report on the means of giving ordinary people, whether workers, consumers or citizens, a bigger part in running a socialist democracy’. Later that year, in search of inspiration, he set off on a world tour, encompassing Israel, Australia, New Zealand, India, Pakistan, Malaya and Singapore. He planned to return in 1951 not only to fulfil his commission but also to continue work on the thesis he had already begun at the London School of Economics (LSE) on how Labour and the other parties operated at a local level.6. He still had, in other words, an essentially political orientation, but the signs were clearly visible of a growing impatience with the parameters of conventional politics.

  Anthony Crosland, getting used to life in the Commons, was similarly impatient but took some comfort from having been quickly recognised as one of Labour’s rising young stars. Barely three months after the election, he was chosen to deliver a reply on the Home Service to what he called ‘the unending bellyache of the prophets of woe’ – a ‘dreary chorus of gloom’ pouring forth ‘in the City columns of the newspapers, in The Times and the Economist, in the speeches of company chairmen and Conservative politicians, in broadcasts by orthodox financial experts’. The bulk of his talk was devoted to a sober, authoritative-sounding and predictably positive assessment of the current position, before concluding that, for all the irrationality of some of Labour’s inveterate opponents, there was ‘no reason why some of us should not remain sane and normal, and admit that a fully-employed economy reaching record levels of production, exports, and capital investment must be in a pretty sound and healthy state’.

  That autumn, at another Fabian conference on ‘Problems Ahead’, Crosland offered his critique of Young’s earlier analysis. The two men were friends, but this did not stop Crosland speaking somewhat derisively about Young’s ‘ideas of groups of extroverts (in shorts) indulging in jolly bouts of brotherly love over glasses of milk’. Overall, though, he fully endorsed Young’s thrust that Labour needed to abandon its overly statist ways and instead rediscover the ‘moral-cultural-emotional appeal of the William Morris tradition’, a tradition that was ‘still a perfectly effective Socialist dynamic’. Crosland’s mentor, meanwhile, continued to gaze watchfully as well as lovingly upon his protégé. ‘Am thinking of Tony, with all his youth and beauty and gaiety and charm and energy and social success and good brains . . . & with his feet on the road of political success now, if he survives to middle age – I weep,’ the by now veteran Labour politician Hugh Dalton confided to his diary soon afterwards. ‘May he live to reap all the harvest of happiness and achievement which his gifts deserve!’7.

  If there was an equivalent of Crosland in the much larger Tory intake of 1950, it was probably Iain Macleod. Both men were cerebral, charismatic and socially liberal; they had a similarly quixotic, highhanded streak in their respective temperaments; and each was capable of engendering great loyalty from some colleagues, fierce dislike from others. For Macleod, as the son of a Scottish doctor who practised in Yorkshire, it was natural that the social services should become his formative parliamentary speciality. In his maiden speech in March, focusing largely on NHS spending, he sought to identify where Labour’s welfare state had taken a wrong turn:

  Today the conception of a minimum standard which held the field of political thought for so long, and in my view should hold it still, is disappearing in favour of an average standard. To an average standard, the old-fashioned virtues of thrift, industry and ability become irrelevant. The social services today have become a weapon of financial and not of social policy. This may sound Irish, but it is both true and tragic that, in a scheme where everyone has priority, it follows that no one has priority.

  Macleod was, in other words, questioning the principle of universalism and instead advocating what would become known as ‘selectivity’, or ‘targeting’.

  Later in 1950, he was one of the principal authors and co-editors of a substantial pamphlet called One Nation: A Tory Approach to Social Problems, according to the title page jointly written by nine new MPs (including Enoch Powell and Edward Heath, though the latter probably did not contribute significantly). Despite its consensual, nonadversarial title, with its deliberate nod to Disraeli, the pamphlet had a surprisingly hard edge, especially given the probable imminence of the next general election. The old, pre-1945 themes of sound finance, voluntarism, charity, efficiency and self-reliance were all invoked; it was claimed that ‘the social well-being of the nation’ had ‘already been endangered by the redistribution of wealth’; and a key criterion ‘governing the size of the social services budget’ was that ‘the good it does must outweigh the burden which it places on the individual and on industry’.8. The pamphlet, published in October, made a considerable impact, and its authors soon established the One Nation Group as a regular dining club. Such developments were a clear indication that not all the young political talent was now going to Labour; they also suggested that the nature of the post-war welfare state was not yet set in stone.

  To the man who in 1950 was poised to emerge, even more than Bevan, as the conscience of this new dispensation, the concept of selectivity was anathema. That spring saw the publication of Problems of Social Policy by Richard Titmuss – 42, no academic qualifications and still a relatively little-known figure. The book, an account of the social services during the war, transformed Titmuss’s life. Its most influential cheerleader was the doyen of British ethical socialists, R. H. Tawney, who in the course of an ultra-admiring three-page review in the New Statesman, with the author’s name misspelled throughout, noted how ‘a recurrent theme’ was ‘the gradual, un-premeditated, emergence from a morass of obsolescent cant of new conceptions of the social contract’. Within months, Titmuss was appointed to the LSE’s first chair in Social Administration, the position he would occupy for the rest of his life.

  Over the years, there have been many attempts (perhaps stimulated by the absence of a full-length biography) to characterise Titmuss’s beliefs and outlook. According to A. H. Halsey, ‘his socialism was as English as his patriotism, ethical and non-Marxist, insisting that capitalism was not only economically but socially wasteful, in failing to harness individual altruism to the common good’; Alan Deacon has emphasised Titmuss’s essentially moralistic conviction that only if social services were universal would they ‘not only redistribute resources but do so in a manner which itself fostered a sense of mutual responsibility’; and Hilary Rose has argued that for Titmuss the key people in bringing about ‘the good society’ – a society based on the values of equality and community – were to be the enlightened, altruistic middle classes, ‘with greatest hope being placed on those whose lives were expressed within public service, whether as officials or professionals’.

  There was also fascination with Titmuss the person. One physical description, soon after his death in 1973, evoked an El Greco quality, with ‘his great eyes, emaciated
face, long body and that indefinable air of what one could only call saintliness’. Yet like most saints, he was not a man altogether at ease with himself. ‘In discovering the huge disparities in life chances between those at the bottom and those at the top of the social scale, he was at the same time commenting on his own lack of fortune in not being born at the top,’ his daughter, the feminist writer Ann Oakley, has reflected. ‘Awareness of class was central to his intellectual perception of society. But it was also constantly felt as an aspect of his own life.’ Put another way, Clark’s Commercial College, where he had learnt book-keeping at the age of 15, was very different from Dartington (Young) or Highgate (Crosland) or Fettes (Macleod). Unsurprisingly, as Oakley added about Titmuss’s far from straightforward relationship with the British establishment, ‘you didn’t have to be a detective to discern my father’s concealed adulation of certain unsocialist institutions’.9.

  The Attlee government had two fundamental foreign-policy decisions to take in the summer of 1950. The first concerned Europe. On 9 May the French Foreign Minister, Robert Schuman, publicly unveiled his plan – largely the work of Jean Monnet – for a supranational body under which member states would pool their production of coal and steel. By early June it was clear that Britain was unwilling to participate in what would become in due course the European Coal and Steel Community – the start of ‘Europe’ as an economic-cum-political project, with the Schuman Plan billed from the outset as ‘a first step in the direction of European federation’. Ernest Bevin was still Foreign Secretary; his biographer Alan Bullock has emphasised that his negative response was essentially determined by ‘practical arguments such as Western Europe’s dependence on American support’ and ‘the importance to Britain of her position as a world trading power, and as the centre of the Commonwealth’.