Family Britain, 1951-1957 (12 page)

4

Hardly Practicable

Kenneth Barrett ran the John Hilton Bureau, in effect a citizen’s advice bureau subsidised by the
News of the World
, which each week printed a selection of the problems sent to the Bureau and its responses; Dr W. Hartston was Senior Medical Officer of the London County Council. The two men started to correspond in February 1951, and before long Hartston was looking forward to meeting Barrett and ‘discussing the health aspect of public alarm, public ignorance, public anxiety and public opinion that are our mutual interest’. In late June the meeting of the well-meaning paternalists duly took place in Cambridge (where the Bureau was based). Soon they were in action together, seeking to inch the New Jerusalem just a little closer to reality:

3 August, Barrett to Hartston
. By the way, would you like to do something for me? I am enclosing herewith a file which tells its own story. I think I mentioned the case to you when we were together. Somebody ought to kick somebody else’s bottom in the L.C.C. Housing Department. If you read through the file from the beginning, it’s just possible you may feel like exercising your own muscles.

11 August, Hartston to Barrett
. I propose to investigate as far as I dare (you will appreciate the difficulty of poking my nose into a Housing Department matter, but difficulty does not mean no poking!) why this long delay and what can be done for Sage both medically and architecturally.

28 August, Barrett to Hartston
. These housing tragedies sometimes send me home nearly in tears, because there’s so little one can do and I realise that Local Authorities are by and large doing their best. What I cannot stand is the holier-than-thou complacency of the London County Council and some other Authorities. What I cannot stand also is their bloody laziness. Obviously no real investigation has ever been made.

30 October, Hartston to Barrett
. Now concerning the matter of our pore [
sic
] friend Sage. I failed to impress the Professor of Medicine at the London Hospital but
have
succeeded in getting Dr Richardson, one of the kinder consultants at St Thomas’s Hospital, to see Sage & advise (& arrange) any treatment that might help him. At the least it will show Sagey that he’s not altogether abandoned. I’ve spoken to Sage’s family doctor who, while not terribly enthusiastic, acquiesces. So honour, peace and warmth flow all around – I hope.1

For Barrett, Hartston and Sage alike, there was by now a Tory government in office, barely six years after the momentous Labour landslide of 1945. How committed would it be to upholding the broadly socialist – certainly collectivist – settlement that the Attlee government had put in place? Would it seek a return, no doubt with a twist of paternalism-cum-modernity, to the verities of social individualism and economic liberalism? One particularly intelligent observer did not see turning back the clock as a realistic option. Britain, argued Albert Camus on the Third Programme shortly after the election, was doing better than Continental countries at social justice, and as a consequence this meant it was winning the Cold War, even if at the price of austerity. Camus went on confidently: ‘The Conservative Government, if it wishes both to maintain peace and discourage aggression, will have to leave intact the main social reforms of which Britain is enjoying the benefit.’

He was proved right, in the sense that, broadly speaking, the settlement held in the months and years after October 1951. There was no meaningful attempt to reform, let alone dismantle, the NHS or the welfare state more generally; the only industries to be denationalised were steel and road haulage; the goal of full employment remained sacrosanct; rent controls stayed in place, at least for the time being; and the position and privileges of the trade unions were positively enhanced. Even so, all the evidence is that what was involved was a lukewarm acceptance of the settlement motivated by essentially pragmatic considerations, in the context of an uncomfortably narrow parliamentary majority.

‘I have no doubt about the wisdom of making severe cuts in Government expenditure,’ one of the Tory elders, Lord Woolton, wrote to Churchill not long after the election. But he went on: ‘We shall find ourselves in politically difficult waters if we begin by making serious cuts in the social services . . . and leave ourselves open to the charge that what we have saved by this means we have later spent in the reduction of taxation.’ Or, as Conservative Central Office revealingly informed party workers in January 1952, ‘there is every sign that after six years of the Welfare State elaborate education is necessary to introduce each unpopular measure’. Significantly, as opinion polls consistently showed, the welfare state was almost as popular with the middle as with the working class. As for the lack of extensive denationalisation, which would have carried much less political risk given the public’s relative indifference to the subject, the key constraint seems to have been economic, with the new Chancellor, Rab Butler, telling Churchill that a mixture of balance-of-payments problems and insufficient liquidity in the economy made such a policy impracticable. There was also perhaps an element of loss of nerve. ‘Houses and meat and not being scuppered,’ Churchill famously if privately summed up his less than heroic aims after his first five months back in harness. The electoral catastrophe at the end of the war had cut deep, and the parliamentary party – including its many stolid, gentlemanly, landowning backbenchers, as well as its near-octogenarian leader – had little appetite for needless hostages to fortune.

The conflict between political and economic constraints on the one hand and non-socialist instincts on the other was embodied in the person of Butler – architect of the 1944 Education Act, creator of a more emollient brand of post-war Conservatism and surprise choice as Chancellor. What is striking about his early record at No. 11 is the extent to which he
did
seek to adopt distinctively Tory policies. The infusion of anti-inflation monetary policy (tainted by association with the inter-war Bank of England under Montagu Norman and thus in cold storage throughout the 1940s) as a counterpoint to the ruling Keynesian orthodoxy, moves towards a significant loosening of controls (including over prices and direct investment), old-fashioned Treasury parsimony towards the departments of health, education and even housing – all were significant pointers that culminated in March 1952 with Butler’s first Budget. In it he raised Bank Rate from 2½ to 4 per cent, cut a swingeing £160 million from food subsidies (provoking angry cries of ‘class war’ in the Commons) and made tax changes in such a way as to appeal specifically to the skilled, better-off worker, clearly seen as politically detachable from the working class as a whole. For the first time since the war, declared an appreciative
Financial Times
, people had been given ‘a Budget which genuinely provides incentives’. An aged Tory diarist was even more enthusiastic. ‘There is a new festival spirit about,’ exulted ‘Chips’ Channon. ‘A young Queen; an old Prime Minister and a brave buoyant Butler budget. Has he put us in for a generation?’2

All bets would have been off if Butler had had his way just a fortnight or so earlier. ‘Operation ROBOT’ was a top-secret plan that took its memorable name from the three officials – Sir Leslie
RO
wan (Treasury), Sir George
B
olton (Bank of England), ‘
OT
to’ Clarke (Treasury) – most closely associated with its formulation during the winter of 1951–2.3 In essence, ROBOT involved simultaneously making sterling readily convertible into other currencies and floating the pound so that it found its own level. The plan was in part a panic reaction to a widening balance-of-payments deficit and rapidly shrinking reserves; in part an attempt to restore the City of London as a leading international financial centre, with sterling as its authentic international currency; and in part a deliberate strategy to trigger a supply-side revolution through unleashing the market forces of convertibility and floating – shock treatment that would make the economy more competitive. The immediate domestic implications were undeniably deflationary, and from the first there were doubters at both the Bank and the Treasury. ‘The move would be violently controversial and contrary to the trend of economic thought since Keynes,’ warned one of Clarke’s colleagues, E. R. Copleston. ‘There would be severe industrial unrest, and it would be political suicide for the Government – the discipline of the gold standard, the rule of the Bankers etc . . .’

Briefly it seemed that ROBOT had political legs. ‘C of E sold, PM interested and great hopes favourable decision,’ Bolton buoyantly noted on 20 February. Two days later, Churchill received a Bank deputation, headed by ‘Kim’ Cobbold, the Governor, formally advocating the plan. They were, he reported afterwards, ‘a fine, patriotic body of men, anxious to do what was right for the country’. But by the end of the month, following two lengthy Cabinet discussions, opposition to the plan had both spread and hardened. Butler, although seemingly a believer, made a weak, unconvincing case; Sir Anthony Eden, the Foreign Secretary, was convinced that its implementation would jeopardise the recently established European Payments Union; and Churchill himself, though instinctively in favour of liberating the pound, was not only alarmed by Eden’s hostility but swayed by two of his closest advisers, Lord Cherwell and Sir Arthur Salter – who seldom agreed on anything, but who were, this time, in unison, as Churchill observed. At one of the discussions, there was a particularly telling contribution by the Lord Privy Seal. ‘Under democratic government with universal suffrage such violent reversals of policy were hardly practicable,’ insisted the Tory grandee Lord (‘Bobbety’) Salisbury. ‘Even if the case for this change were abundantly clear on the merits, there would be very great difficulty in persuading the public to accept it. Moreover, the adoption of this policy would create an unbridgeable gap between the Government and the Opposition . . .’ Eden, walking away from that meeting with Macmillan, agreed. ‘The country are not ready,’ he told his colleague, ‘to cast away the whole effort of years and return to “Montagu Normanism” without a struggle.’ Put another way, the shadow of the inter-war slump was still as psychically oppressive in 1952 as it had been seven years earlier.

Did the burial of ROBOT matter? Almost certainly, yes. ‘At the very least,’ Nigel Lawson has claimed from the Thatcherite side of the fence, ‘it is hard to believe that the conduct of British economic policy, and our national economic performance, would have been as lamentable as they were during the 1960s and 70s had the liberating economic logic of ROBOT been allowed to prevail’ – that in fact the decision represented ‘the fork in the road’. But if for Lawson the tantalising might-have-been was ‘the progressive post-war adoption of the market economy rather than the stultifying interventionist consensus which was to reach its nemesis in the late 1970s’, there was also a might-have-been on the other side of the fence – the ‘1945’, post-war-settlement side. Specifically, one can argue that although the failure of ROBOT undeniably reflected the political impossibility of attempting to turn the clock back to a pre-Keynesian paradise, at the same time the lack of significant opposition to the
goal
of achieving full sterling convertibility – a goal to which the government was fully signed up by the end of summer 1952 – revealed, through its concomitant underpinning of sterling as a reserve currency, the limits of Keynesianism. The rejection of ROBOT may have suggested that domestic priorities had a higher status than international ones, but the convertibility target distinctly implied otherwise. ‘Our economic survival in the next year or two will largely depend upon world confidence in sterling,’ Macmillan privately reflected. But even that instinctively Keynesian prestidigitator must have wondered whether the competing priorities were truly compatible.4

The post-war settlement was also under apparent threat on another front.
The Social Services: Needs and Means
was the title of a January 1952 pamphlet by two rising youngish Tory politicians, Iain Macleod and Enoch Powell. The general tone was sober and far from hostile to the welfare state, but one early passage attracted considerable attention. ‘The general presumption,’ the authors insisted about the social services, ‘must be that they will be rendered only on evidence of need, i.e. of financial inability to provide each particular service out of one’s own or one’s family’s resources.’ And: ‘The question therefore which poses itself is not, “should a means test be applied to a social service?” but “why should any social service be provided
without
test of need?”’ Whatever the financial pressures on funding the services, such a concept of selectivity was of course wholly antithetical to those committed to the principle of universalism – a principle owing much to the deeply resonant stigma attached to means testing between the wars.