DBWI: The Atlee Government doesn't collapse

The Post War period has been one of great success for Britain, along with Germany it is the dominant economic power in Europe and is a World leader in the electronics, computing, financial, aerospace and motor industries. "The British Miracle" began with the election of Sir Anthony Eden's Conservatives in 1947 after the Government of Clement Atlee fell after losing a confidence vote.

The sorry tale of Atlee's Administration that sought to create a "New Jerusalem" is well known but it is worth repeating. Atlee pulled Labour out of the Wartime National Government after VE Day despite Churchill's wish that it continue until Japan had been defeated. Many commentators expected Labour to win a comfortable if not landslide victory due to the Party's agenda of creating a National Health Service, an extensive welfare state and the Nationalisation of key sectors of the economy. However Labour had underestimated the Tories and become complacent, after D-Day, Churchill had expected the War in Europe to be concluded that year freeing up significant forces for the Pacific campaing. Assuming that an election would be no more than 18 months away, Churchill asked Eden to get the Party ready for the election. Although the European War lasted longer than Churchill expected, by the time the election was called Eden had overhauled the Tories' national organisation and Oliver Stanley and Oliver Lyttleton had produced a manifesto that while rejecting Labour's nationalisations, accepted the need for the Government to play a greater role in the economy. Churchill was unable to play much part in the campaign as he was busy preparing for the Potsdam Conference and Eden fronted the campaign in his absence.

The expectation of a large Labour majority made the final results a complete shock, Labour had a majority but just 4 seats. Eden's skilful attacks on the scale of Labour's plans for nationalisation were attributed with making large sections of the electorate uneasy about their agenda. Seeing that his long time deputy was in the asendency, Churchill immediately resigned as Tory Leader to write his memoirs and warn of the growing Soviet threat. The failure to secure a larger majority set off furious recriminations within Labour and these didn't take long to begin to derail the Government's agenda.

Labour did secure nationalisation of the coal industry, the Bank of England and the railways, but the Party's flagship plan for the NHS caused a major split in the Cabinet. Health Minister Nye Bevan wanted the NHS to be a single organisation with all healthcare nationalised under his Ministry, this was opposed by the Deputy PM Herbert Morrison, who wanted local authorities to continue to run the majority of hospitals and the new health centres. The British Medical Association was vehmently opposed to Bevan's plan and lobbied for changes. Fearful of a conflict with the powerful BMA, Atlee decided to compromise, the local authorities would remain responsible for heathcare and would be empowered to take over hospitals from churches, charities and private bodies that ran them, all hospitals would be legally obliged to treat people free of charge, the BMA was mollified with concessions to hospital consultants and a genorous increase in pay. Incensed at what he saw as a betrayal by Atlee, Bevan angrily resigned from the Government, 3 days later he told a packed rally in Cardiff, "This Labour Government had an opportunity to prevail over those reactionary elements that seek to prevent the creation of universal healthcare, instead of joining in that noble cause Mister Atlee and Mr Morrison chose to stuff their mouths with gold! Bevan would remain an implacable critic of a Government whose problems were only just beginning.

The next blow was the severe winter of 1946/47, food stocks ran critically low forcing the Government to draw up plans for a State of Emergency and the imposition of "starvation rationing." Stocks of coal also ran low and criticism mounted of the Energy Minister Manny Shinwell especially as he had beleived the mineworker's union's forecasts for coal production. As the crisis ran on Shinwell was the subject of increasingly furious demands for his sacking but having lost Bevan, Atlee couldn't afford to lose another minister who was popular with the Party's rank and file. The winter also highlighted continued public unhappines over the continuation of rationing.

The Government's standing took another knock in the summer when the pound was made fully convertible, a condition of an American loan, the economy wasn't strong enough when conversion was implemented and this resulted in a major run on the pound resulting in a humiliating devaluation and the suspension of convertibility. By this time a string of by-election defeats had robbed the Government of it's majority and left it dependent on the votes of the 2 Communist MP's, however they were annoyed by the suspension of plans to nationalise the Iron and Steel Industry and were losing patience with Atlee. The next blow was over the Bill to establish the Scottish NHS that October when Bevan and his allies tabled amendments that would nationalise all Scottish hospitals, nearly a hundred Labour MP's rebelled and the Bill was only passed due to Tory support. Eden immediately tabled a Motion of Confidence in the Government which was lost after the Communists abstained. In the resulting General Election in November, public anger over the Government's handling of events and the continuing rationing saw the Tories elected in a landslide.

The rest is history, the Tories implemented a series of controversial but ultimately successful reforms that resulted in a period of sustained and high growth through the 1950's. Their success is reflected in the fact that they subsequently held power until 1969 and that Labour was eventually forced to reconcile itself to Edenism and abandon nearly all of the policies that Atlee had been elected on. This remains an issue of great contention within Labour, many on the Left of the Party condemn Atlee for his lack of conviction in not supporting Bevan over the NHS and also J.M. Keynes for agreeing to convertibility as a condition for the American loan. However many on the Party's Right wing believe that the 1945 agenda would not have worked. What do people here think? Was Atlee's vision basically sound and he was just the unlucky victim of unfortunate circumstances or was his project doomed to failure from the start? How would Britain look today if Atlee's "New Jerusalem" had been implemented?

OOC Sorry for rambling on a bit! This is part of a Post War Britian TL that I've been working on, I've published some of the first part of it as a DBWI to get people's opinions as to how plausible it is! ;)
 
The Oncoming Storm,

I like your idea, I am in fact working on a similar Franco-British Miracle in my own TL once the war is over. I however thing that achieving this would be a lot more difficult than you think and might very well be tied to a need to make the war shorter, or less costly shall we say. Hindsight is a wonderful thing and we can now tell that the plans to build a New Jerusalem only partly worked and that they may have had a role in the average British economic performance post war. I have a gut feeling that deeper issues where at work regarding Britain's poor economic performance, perhaps having the Conservatives in place instead of the Labour Party would have helped. Perhaps it would have not since it is possible that they would not have had the nerve the push forward the required reforms.
 
The Oncoming Storm,

I like your idea, I am in fact working on a similar Franco-British Miracle in my own TL once the war is over. I however thing that achieving this would be a lot more difficult than you think and might very well be tied to a need to make the war shorter, or less costly shall we say. Hindsight is a wonderful thing and we can now tell that the plans to build a New Jerusalem only partly worked and that they may have had a role in the average British economic performance post war. I have a gut feeling that deeper issues where at work regarding Britain's poor economic performance, perhaps having the Conservatives in place instead of the Labour Party would have helped. Perhaps it would have not since it is possible that they would not have had the nerve the push forward the required reforms.

Thank you for your comments! My main motivation for researching this topic is that Britain seemed to get every major economic decision from 1945 until the 1970's badly wrong. A lot of that was due to the Post War Consensus established after 1945. You are correct that the underlying lack of competitiveness was a deep seated problem, British industry had been less efficient than America's and Germany's since Edwardian times, and radical measures were needed to address this. I believe that Labour's plan was flawed for 2 reasons, firstly the scale and expense of their agenda was too severe for a war damaged economy to take and secondly Labour had no strategy for reforming industry apart from nationalisation, which was primarily just to appease the unions. The issue facing British industry wasn't so much ownership but working practices and productivity and Labour had no plan to address this. What should have happened is that investment should have been made in new equipment and working practices, however this would have resulted in a need for fewer workers something that went against the Butskellite commitment to "full employment at all costs." The least productive firms and mines should have been allowed to close to free up investment for the most viable ones and efforts should have gone onto creating new industries to replace those jobs that had been lost.

You're right that a shorter WW2 would have helped but I don't see anyway that could have happened, Britain was the junior partner of America and it's ability to force the pace of the War was constrained. Perhaps if someone other than Eisenhower had been Supreme Commander who was prepared to go all out and not use the gradual broad front approach then the War would have been shorter but that in turn creates the risk of more Arnhem style debacles.

Another potential earlier POD is if Labour doesn't adopt Clause 4 and the commitment to nationalisation, for that you need the Co-Operative Party to become the dominant force in Labour's interwar development as opposed to the Fabians but I don't see how that could be avoided. This makes the Tories the most likely party to carry out the sort of reforms that were needed, a Tory victory in 1945 is borderline ASB, far more likely is a narrow Labour majority resulting in a mid term collapse of Atlee's Government under the weight of the problems it faced. IOTL the scale of Labour's victory meant that the Tories adopted Labour's agenda with only cosmetic changes which didn't address the underlying problems. In the event of a narrow Labour win, the Tories' most likely response would have been to adopt those parts of Labour's agenda that were clearly popular, free healthcare and increased welfare but rejecting full scale nationalisation while accepting the need for Government intervention in the economy. What I have in mind is a sort of British dirigisme.

Yes you're correct about hindsight being a wonderful thing but aren't all the threads here written on that basis?! ;)
 
Without a Labour government there is a possibility that our share of Marshall Aid might be used upon modernising industry rather than free eye prescriptions and the like - not that those are bad things, but Marshall Aid wasn't given for that purpose.
 
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