Austerity Britain, 1945–51 (69 page)

The Barnett version carries a powerful charge, and certainly it is difficult to see the first Chancellor, Hugh Dalton, for all his being the author of an often reprinted textbook entitled
Principles of Public
Finance
, as one of nature’s wealth-creators. ‘Stop talking details, Nicholas! Stick to principles!’ he would boom whenever his friend Nicholas Davenport, City economist and writer, tried to explain the workings of capitalism’s citadel. But his successor Stafford Cripps was a significantly different economic animal. The diary of Raymond Streat, who first got to know Cripps when he was still President of the Board of Trade, reveals an initial deep scepticism eventually giving way to outright admiration for his grasp of detail, superb brain and unmistakable sincerity of purpose. By November 1948, with the Chancellor’s national reputation approaching its pre-devaluation zenith, Streat was telling Cripps to his face that he personally was ‘in receipt of a remarkable degree of confidence and support from the business men, notwithstanding that so many were of another party colour’. Cripps, moreover, was at the forefront of the government’s attempt to make British industry more efficient, more scientific, better managed, more rationally structured and more productive – in short, more modern.
^9.
Put another way, the goal of a flourishing economy (admittedly defined in terms of full employment rather than growth) was integral to the New Jerusalem and in no way extraneous to it. The point is sometimes forgotten.

As for the mandarins who serviced this aspiration, Barnett is predictably rude. ‘The civil-service elite was in the method of its selection, in its concept of its role and in its way of working a Victorian survival overdue for root-and-branch modernization,’ he argues. ‘This elite being a stem of the liberal Establishment, its members were mostly the fairest blooms of an arts education at public school and Oxbridge.’ Unsurprisingly, he adds, their knowledge of the outside world was ‘largely restricted to the City, Oxbridge senior common rooms and what they read in
The Times
’. Here it is harder to quarrel. Take Sir Edward Bridges, Permanent Secretary to the Treasury. He was the son of a Poet Laureate; he did not pretend to know about economics; and in lectures and writings he celebrated what he liked to call ‘the principle of the intelligent layman’. No one disputed his intelligence or administrative capacity, but his relationship with the real economy was at best tenuous.

The atmosphere more generally in post-war Whitehall is evoked in the vivid memoirs of Roy Denman, who, fresh from Cambridge, went in February 1948 to work in the Statistical Division at the Board of Trade. There he encountered a memorable assistant secretary (ie ‘a fairly senior manager’):

Mr Bacon had a square jaw, keen blue eyes and dressed, unusually for those days, with a certain elegance. These unfortunately were his main qualifications for senior office. Before anyone from the outside world came to see him he would get his secretary to stack his desk high with files garnered from obscure cupboards in order to show how busy he was. With a weary sigh, a wave of his hand indicated to his visitor the crushing burden of administration which he daily bore. ‘These are difficult times,’ he would say in a resonant voice. ‘But if we all pull together the country will get through.’

After a year of frustrating inertia, Denman moved to the timber section of the Raw Materials Department, where to his relief he found that they ‘actually did things’. The clear implication was that this was the exception rather than the rule. Admittedly the workings of government have always been an easy target, but to read William Cooper’s novel
Scenes
from Metropolitan Life
– a robust and intimate portrait of post-war Whitehall, written in the early 1950s but for libel reasons unpublished for some 30 years – is on the whole to have prejudices confirmed. It depicts a world of (to quote the critic D. J. Taylor) ‘highly intelligent men’ absorbed in ‘bureaucratic fixing and power-broking’, between them ‘conspiring to influence the world of “affairs” in the not quite conscious assumption that the whole business is an end in itself’.
¹⁰

The newly nationalised industries involved much of Whitehall’s time in the late 1940s and early 1950s. Inevitably, in operational practice, there was a series of turf wars, some of them acrimonious, between ministers and civil servants on the one hand and the boards appointed to run the industries on the other. Prices and wages, investment decisions, worker consultation, ministerial notions of ‘standardisation officers’ and an independent ‘efficiency unit’ – all were issues that created friction. ‘The meeting with the Area Board Chairman was an uproar,’ Gaitskell noted with Wykehamist tolerance in August 1948, four months after the nationalisation of the electricity industry. ‘After I had spoken they got up and one after another opposed. I did not mind the opposition but the unbelievably stupid and muddled arguments they put forward! I was really horrified that so many men, earning so much money, should be so silly.’ The problem, he added, was that ‘they are all madly keen to sell electricity and just cannot get used to the idea that at the moment they should stop people from buying it.’

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.’
¹¹
In 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’.