Austerity Britain, 1945–51 (24 page)

In May 1946, shortly after James Lansdale Hodson had noted, almost certainly accurately, that ‘the nation isn’t behind grandiose nationalisation to anything like the degree the Front Bench pretends’, Morrison explained to the Commons, in the context of the Civil Aviation Bill, how it was to be done: ‘Competent business people will be appointed to manage the undertaking, with a considerable degree of business freedom; on the other hand, it will be a public concern, appointed by public authority, and therefore, the spirit of the public interest must run right through the undertaking.’
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Based to a large extent on the inter-war public corporation, this model for the post-war years was accepted with remarkably little debate – and with remarkably few realistic alternatives being put forward.

Over the years, though, there would be many criticisms of the way in which nationalisation took place. The financial and business guidelines were unduly restrictive, resulting in an unrealistic pricing policy and an inability to diversify into such areas as manufacturing; too many ‘non-believers’ were appointed to the nationalised boards, including not just businessmen but a motley crew of peers and retired generals; it was too easy for ministers to interfere or, according to some, too difficult; there was little coherent planning that related the newly nationalised industries to the economy as a whole; and so on. The criticism, though, that would resonate most through the years, at least from the left, was that a golden opportunity had been missed to institute a meaningful form of workers’ control.

Yet at the time there were few who saw this as a runner. ‘From my experience,’ Cripps discouragingly told a Bristol audience in October 1946, ‘there is not as yet a very large number of workers in Britain capable of taking over large enterprises.’ He added that ‘until there has been more experience by the workers of the managerial side of industry, I think it would be almost impossible to have worker-controlled industry in Britain, even if it were on the whole desirable.’ Morrison did not disagree, and, more significantly, neither did the left-wing Aneurin Bevan. There is no evidence, moreover, that the workforces themselves, certainly in the form of their union leaders, wanted control or even a measure of control. When Emanuel (Manny) Shinwell, responsible for the nationalisation of the coal mines in his capacity as Minister of Fuel and Power, on two separate occasions in 1946 offered two seats on the National Coal Board (NCB) to the miners’ leaders, he got nowhere. ‘They refused, saying that administration was not their affair’ was how he recalled the outcome. But it went down in the folklore of industrial relations that (in the subsequent words of the veteran industrial correspondent Geoffrey Goodman) ‘the NUM President, Sir William Lowther, awkward and gruff as they used to chisel them in the Durham coalfield, told Shinwell to go to hell’.

Indeed, it is far from certain that the majority of workers in the relevant industries were especially keen on the prospect of nationalisation as such. Hodson, visiting South Yorkshire in May 1946, was told by a colliery managing director that his workers were about equally divided on the subject: ‘Of those for it, 25 per cent are Socialists who accept it as they accept all the Government does, and the other 25 per cent believe it means more pay for less work. Of those against it, 25 per cent think these particular pits are well run and will be less efficient under the government and that they’ll suffer; the other 25 per cent hate change of any sort.’ It was a lack of enthusiasm that contrasted sharply – and ominously – with the scenes in Westminster a few months earlier, as old miners, now Labour MPs, shed tears as they passed through the ‘aye’ division-lobby to vote for the takeover of the coal mines and even burst into song. ‘The strains of “The Red Flag” and “Cwm Rhondda” were heard clearly in the Chamber,’ recalled one very socialist, already rather bored newish Labour MP, Tom Driberg, pre-war founder (as William Hickey in the
Daily Express
) of the modern gossip column.

Still, these were early days. Clause Four may have become the cornerstone of Labour’s constitution back in 1918, but in his book-length tract
Labour’s Plan for Plenty
, published in early 1947, Michael Young saw public ownership as only at the start of its journey:

No one in the Labour Party would claim that the last word has been said about nationalisation, or that the Party’s views on the subject need not undergo further development . . . There is scope for variety in structure and for continuous experiment in methods of public administration. That is the way in which the organisation of nationalised industries can be steadily improved and the ground cleared for a rapid extension of public enterprise.
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6

Farewell Squalor

What really enthused the Labour Party and its supporters was welfare and the Attlee government’s creation of the modern welfare state. Even
The Times
, daily organ of the British establishment, was strongly in favour of a national health service, seeing it as a desirable trade-off between state and citizen. ‘The new social services will come to claim too large a share of the national income,’ it warned in friendly rather than threatening fashion in May 1946, ‘if the citizen, in pursuit of security, leisure, and comfort, fails to understand that what he expects of society can only be secured by the enterprise, diligence, and self-discipline with which he makes his personal contribution to the enlargement of the national product.’

The optimistic assumption that welfare and productivity would go hand in hand was not shared by the
Financial Times
and (presumably) its readers, still mainly in the City. ‘Britain is piling up a large burden of social services in outlays on health, education, national insurance, family allowances and subsidies for housing and for food,’ it had declared balefully a few weeks earlier:

We are a nation of producers with an ever-increasing overhead of social charges . . . With these extensive commitments, we shall have to meet the competition of the United States for the markets of the world, once the immediate famine for goods of all kinds has abated. When we have topped our potential wave of prosperity, how shall we deal with the challenge of reviving German and Japanese exporting industries, now temporarily out of commission?

Forty years later, the historian Correlli Barnett took up the charge, arguing forcibly in
The Audit of War
(1986) and then
The Lost Victory
(1995) that Britain during and after the war had made a profoundly mistaken choice by not giving economic reconstruction clear, unambiguous, unsentimental priority over social reconstruction. Instead, according to his pungent reading, the country fell victim to a hugely damaging and economically illiterate virus of elite-driven ‘New Jerusalemism’ – in his caustic words, ‘the creation of that better, more equal Britain to be built when there were blue birds over / the white cliffs of Dover’.

Barnett’s assessment of the existence of that mood, at least among the ‘activators’, is surely correct. Yet as others have pointed out, the notion that a long, arduous, ultimately victorious ‘people’s war’ did not have to result in welfare improvements for that people, at least in the short term, is essentially ahistorical – flying in the face of the inescapable political realities of that time. If the Tories had been returned to office in 1945, they almost certainly would have created a welfare state not unrecognisably different from the one that Labour actually did create. Moreover, even within the strictly economic parameters of the debate, it is possible that Barnett has significantly overstated the cost of that welfare state. ‘An austerity product of an age of austerity’ is how one of his main adversaries, Jim Tomlinson, has crisply characterised it, showing in detail how, whatever may have happened later, the Attlee government could not be justly accused of extravagance in its welfare provisions. By 1950 the 10 per cent of British GDP that comprised public spending on social welfare may have been above the comparable proportions in Scandinavia, Italy and the Netherlands but was significantly below those of Belgium, Austria and West Germany. ‘The welfare state was created,’ Tomlinson gladly concedes, ‘but in a context where it consumed a quite limited level of resources, and where it was continuously vulnerable to a resource allocation system which gave priority to exports and industry, and restrained both private and collective consumption.’

Unsurprisingly, at a time when relatively few activators quarrelled with the assumption that a collectivised economy was not only more benign than a free-market economy but also more efficient, there was little debate about whether the
public
provision of health, education, housing and so on was the right road to be going down. Anyway, it seemed glaringly obvious to almost everyone that only if the state were actively involved as provider was there a chance of reasonable equality of outcome in the receipt of welfare services. Might the welfare state lead to a dependency culture? Barnett has written, in a notorious passage, of how the New Jerusalem ‘dream’ turned into ‘a dank reality of a segregated, subliterate, unskilled, unhealthy and institutionalised proletariat hanging on the nipple of state maternalism’. To which one can retort that there were indeed many free lunches between 1945 and 1979 – but that it was not society’s losers who ate most of them, let alone the best of them.

Instead, if there was a flaw at the heart of the classic social-democratic welfare state, it was the assumption that those operating it were by definition altruistic and trustworthy, together with the accompanying assumption that those receiving its benefits should be passive, patient and grateful. Or, as Julian Le Grand has put it, echoing the Scottish philosopher David Hume, it was a system designed to be ‘operated by knights for the benefit of pawns’, certainly not by ‘knaves’ on behalf of ‘queens’.
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That paternalist model may have seemed psychologically convincing in the 1940s – though even then it was questionable, given a realistic analysis of popular attitudes – but over the ensuing decades it would become ever less so.

‘He is a big, heavy man, not very tall but thick set, with very powerful arms and shoulders, dark, round-headed, and beetle-browed with eyes, nose and chin all rather prominent and large, speaks with a lisp and a Welsh intonation’ was how in August 1945 a Ministry of Health official, Enid Russell-Smith, described her new chief, Aneurin (‘Nye’) Bevan. Some months later, on a visit to Doncaster with him, she noted that ‘here and there among the audience one sees that beatific expression on a worn old face which means that some pioneer in the Labour movement is seeing all Heaven in a Labour Minister in a Labour Government expounding a Socialist policy’.
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But if no one denied that Bevan was a fine, inspiring orator, capable also of considerable personal charm, what surprised many – friends as well as enemies – was the remarkably effective way in which he pushed through the creation of the National Health Service. Inevitably the scheme had many complexities, but at root there were seven key elements. Access to health care was to be free and universal; costs would be met from central taxation, not insurance; all hospitals – whether local authority or voluntary, cottage or teaching – were to be nationalised; the great majority of these hospitals would be run by regional hospital boards; the other two legs of a tripartite overall structure would be executive councils (overseeing GPs, dentists and opticians) and local authorities (still responsible for such miscellaneous activities as vaccinations, ambulances, community nursing, home help and immunisation programmes); NHS ‘pay beds’ would enable consultants to combine private practice with working for the NHS; and GPs would no longer be allowed to buy and sell practices but would not be put on a full-time salary basis, with the capitation (ie per patient head) element in their income making it easier for patients to move between doctors. There were plenty of dramas to come, but the NHS Bill that Bevan put forward in March 1946 more or less became actuality just over two years later.

Producing and implementing a broadly coherent, working scheme out of the medley of conflicting vested interests that he inherited was indisputably a virtuoso performance. There were, nevertheless, significant sacrifices involved. When Herbert Morrison, in a fierce Cabinet tussle, unsuccessfully fought for the continuing, even expanded, control of hospitals by local authorities, he was invoking not only his own faith and roots in municipal socialism but also, in the recent words of Rudolf Klein, ‘a view of the world anchored in the values of localism: a view which stressed responsiveness rather than efficiency, differentiation rather than uniformity’. ‘If we wish local government to thrive – as a school of political and democratic education as well as a method of administration – we must consider the general effect on local government of each particular proposal’ was how Morrison himself put it. The regional boards, moreover, were appointed rather than elected and distinctly lacking in accountability. Apart from the almost statutory tame trade unionist, their social composition over the years would tend strongly to the upper-middle class; as for the NHS’s foot soldiers, Bevan at the outset ruled out specific representation on either the regional boards or hospital management committees. ‘If the nurses were to be consulted, why not also the hospital domestics? the radiotherapists? the physiotherapists? and so on,’ he rather querulously asked the General Secretary of the Trades Union Congress (TUC), Sir Walter Citrine. Perhaps the most telling criticism of Bevan is that he succumbed to the consultants, not wanting to fight against them as well as the deeply suspicious GPs. Accordingly, the consultants had their fears of having to work for local authorities allayed; financially, had their mouths (as Bevan himself would later concede, or perhaps boast) ‘stuffed with gold’; and generally saw their role exalted way above that of the GPs. ‘The consultants ruled the new health service’ would be the verdict 40 years later of David Widgery (East End GP and socialist intellectual), ‘and they were bound to shape the health service, above all the new generations of doctors, in their own image.’

However, the biggest disappointment at the time, at least on the left, concerned Section 21 of Bevan’s Act. ‘It shall be the duty of every local health authority to provide, equip, and maintain to the satisfaction of the Ministry, premises which shall be called “Health Centres” . . .’ – that was the promise. Long a socialist aspiration, these centres would not only house GPs, dentists, chemists and the local authority clinics but also receive visits from hospital consultants. Preventive and curative medicine would be equally emphasised, and in time all general practice would take place within them. Such aims inspired a young London doctor, Hugh Faulkner, demobilised in 1947. ‘When I came into general practice and began to look at it,’ he recalled, ‘I found myself in conflict with the basic development of the general practice as basically a cottage industry, as very much a series of small businesses, which were quite openly in conflict with one another; the GPs that used to talk about the opposition, meaning the GP in the next road, and none of the GPs round here spoke to one another . . . It seemed to me that the isolation of doctors was perpetuating a very low level of medical care.’ Faulkner, based in Kentish Town, responded by building up his own group practice, which focused on the social context of health and developed a team that included a health visitor, a midwife and a social worker.

But for a long time the larger trend ran the other way, with the British Medical Association (representing GPs) in particular dead set against health centres – so much so that after ten years of the NHS only ten had been built. For Rodney Lowe, a leading historian of the welfare state, the fate of health centres exemplified ‘the balance of power enshrined in the new organisational structure’, in that ‘patients were expected to seek out professional care – doctors were not expected to make themselves readily available to patients’. Strikingly, there is no evidence of Bevan exercising any political will and trying to bring the apparently cherished concept to fruition; indeed, the probability is that, aware of the medical profession’s widespread opposition, he deliberately sat on it. Virtually no health centres, municipal control eroded, the consultant as king – it is apposite to quote the bittersweet words of Sir Frederick Messer, a Labour MP and one of the minister’s better-informed critics. ‘I think his outstanding success,’ Messer reflected after watching Bevan perform in the Commons, ‘was the way he applied the anaesthetic to supporters on his own side, making them believe in things they had opposed almost all their lives.’
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