Health, Happiness and Prosperity: Attlee's Britain
Tales from the New Jerusalem: Aneurin Bevan visits a patient on the first day of the NHS
Our man in the ICU: Sir Leslie Melville was appointed to be the first chair of the ICU with a secret mandate to protect Commonwealth interests
Stafford Cripps was recalled from India as soon as it became clear that Labour was going to take office, becoming Chancellor of the Exchequer. Keynes, who had lost his seat of Cambridge University, was ennobled as Baron Keynes and given a roving brief as effectively the UK’s representative on all international economic matters. In December 1945, after consultation with Commonwealth partners, the UK appointed the Australian economist Leslie Melville as the first head of the ICU.
Keynes’ and Cripps’ immediate tasks involved managing the UK’s balance of payments and currency problems, ensuring that they did not mutate into full-blown crises. In March 1946, a Commonwealth finance ministers conference resulted in the creation of what came to be known as the ‘Keynes Plan’ (although it was, in truth, effectively a continuation of the Chifley Plan). Under the Keynes Plan the Commonwealth countries not physically touched by the World War would provide funds to help with the rebuilding of those which had been. Although many noted that this was, effectively, a way of ploughing money back into the UK within the rules of the ICU, it should be noted that the UK was not the only country helped (it largely kept the economy of Newfoundland afloat for a number of years, for example). In return, the Bank of England announced a devaluation of the £ against the bancor by nearly 35%, which was designed to help make Commonwealth goods more attractive for export and boost the nascent industrial capacities of Canada, Australia and the Punjab.
Of course, as we now know, the financial position of the UK would be radically transformed very suddenly over the course of October-December 1946 (which will be discussed in more detail later). However, over the first few years of his government, Attlee chose to keep a tight grip on the spending taps. As promised in their manifesto, the government nationalised the energy and rail industries but resisted the urging from some MPs to go further. Ernest Bevin, continuing in his wartime role as Minister of Labour, argued successfully that nationalisations should be limited to only those industries which could be affordably modernised and run in conjunction with the trades unions. With his allies in tight control of the TUC, nationalised companies were organised to be run by mixed boards of industry experts, civil servants and trades union representatives.
Rather than run industries themselves, Labour governments chose to regulate them instead, the idea being to direct their energies down socially useful channels while also allowing the vicissitudes of the market to force them to innovate or die. In 1948, the Iron and Steel Confederation, the largest union representing such workers in the UK, sent a delegation to Downing Street asking for nationalization of their industry. They were rebuffed and instead Bevin rolled out a series of reforms of British corporate governance that were crystalised in the Companies Act 1950. The act contained numerous provisions reforming British corporate governance but, for these purposes, its most important, long-lasting and influential provisions regarded the make-up of boards of directors. Simply put, the Companies Act required boards to contain worker’s representation on their boards (usually in the form of directly-elected trades union officials) and expanded the directives of a company so that a company director’s duty was not to simply increase shareholder value but also the well-being of the workers as a whole.
On the welfare front, the government passed the National Insurance Act 1946, the National Assistance Act 1947 and the National Health Service Act 1946 (the service itself would open in 1948), which provided comprehensive and universal healthcare, social security and sickness and disability benefits. The aim was, in the words of the Home Secretary William Norton, to “decommodify the working man from the market: to make his life one he wishes to live and not one his work forces him to live.” As the Lord Privy Seal Hugh Dalton noted, these policies brought closer to reality the old radical Liberal aim of the ‘free breakfast table,’ further demonstrating the liberal origins of this British brand of sociailism.
On the educational front, a key reform was the Returning Servicemen’s Education Act 1947, which provided funds to universities and other tertiary institutions to take on returning veterans and help them integrate into society. In addition, the education system was rationalised, ending the jigsaw pattern of local and religious education into a single system.
More economic growth was stimulated by the Town and Country Building Act 1946, which provided funds for a vast rebuilding program for cities gutted by German bombing as well as an expansion of public transport and suburban housing. Herbert Morrison, the Lord President, took personal responsibility for the program, using the experience he had gained in Greater London politics (where he had been First Minister 1920-25 and 1935-45). Enormous areas of the country were rebuilt and developed, creating the now-iconic rows of three-story terraced flats and neat shared gardens which populate working class areas of cities such as Coventry, Glasgow and London to this day. Also key to this rebuilding process was the British Nationality Act 1948, which encouraged citizens from the Empire, most notably India and the West Indies, to travel to the UK to work in under-manned services, particularly the building trade.
As the country headed into 1949, the economy was growing and rationing had been fully ended in 1947. In addition, a mixture of Keynes Plan grants and the economic gains from the discoveries in 1946 had more or less ended the monetary problems that the country had faced in 1945. Labour had largely delivered on its 1945 manifesto, even if the ‘New Jerusalem’ it had promised still felt some way away. On the other hand, the international situation remained precarious, with China engulfed in civil war, peace in Europe still only hanging by a thread and the work of continental reconstruction still undone. British troops were also facing a growing insurgency in Malaya and the nation’s hold on many of her colonial possessions was becoming increasingly tenuous. However, a cautious Attlee was counselled by his advisors to go to the country in the summer of 1949. According to legend, he was apparently finally persuaded by the King, who was due to undertake a tour of Australia and New Zealand in the autumn and winter of 1949-50 and wished to have the makeup of his government in the UK settled before his departure.