What happened to the Labour Party?
I am old enough to remember listening to the results of the general election of 1945 and sensing the surprise at the size of Attlee’s majority shared by Conservative and Labour supporters alike. And I remember the comment then made by one of my relations to the effect that the problems facing the country in the aftermath of the Second World War were such that no government would be able to address them without losing popularity, so that the Conservatives could plausibly look forward to being returned as the unintended beneficiaries next time round. It was, in its way, a prophetic remark. But the Attlee government was, nevertheless, an authentically reforming one inspired by an explicit set of principles and committed to a legislative programme which was duly put into effect in accordance with pledges the electorate had been given.
It was not a revolutionary government, in the sense that some members of the Labour Party would have liked it to be. But nor was it a consensual one. However little the Conservatives were to do, once in power again after 1951, to put the clock back to 1935, the 1945 election was fiercely contested across a clear ideological divide. There is something of a paradox here, since it suited both sides to pretend that 1945 was more of a watershed than it subsequently turned out to be: the left, because they wanted to show that the Labour Party was at last in a position to carry the country towards the long-awaited socialist millennium, and the right because they wanted to show that the Labour Party was at last revealed in its true crypto-Communist colours. But more far-reaching and long-lasting institutional changes in British society, and in the functions and powers of the British state, had in fact taken place under Lloyd George between 1915 and 1922. The difference was that in the immediate aftermath of the First World War, it suited the left to pretend that nothing had changed because socialism had not yet overthrown capitalism, while it suited the right to pretend that pre-1914 ‘normalcy’, as it came to be called, had (thank goodness) been restored. In the 1950s, a myth of consensus could be constructed because by then it suited the Conservative Party to present itself as modern and unconfrontational, while it suited the Labour Party to present itself as moderate and pragmatic.
In 1945, however, Labour stood for four distinctive principles on which its priorities in domestic policy rested and with which the Conservative Party overtly disagreed. The first principle was the universal provision of welfare services on the basis of need. It is true that Churchill in a broadcast to the nation following the publication of the Beveridge Report in 1943 had talked about establishing a National Health Service on ‘broad and solid foundations’. But the Conservative Party’s idea of universal provision on the insurance principle of contributions made to provide against risk was a long way away from Labour’s vision of across-the-board provision financed out of the resources of central government.
The second principle was progressive taxation. There was no question of outright confiscation of private property – Dalton’s flirtation with the idea of a ‘capital levy’ caused a flutter of indignation among the rich, but had no serious repercussions – and capital gains were not yet taxed at all. But inheritances were taxed at near punitive levels (although frequently circumvented through the device of discretionary trusts) and a marginal income tax rate as low as 40 per cent at the top end would have been unthinkable. Tawney had argued in the 1920s that ‘by taking money where it can most easily be spared, and spending it where it is most urgently needed, it produces the maximum of social benefit with the minimum of economic disturbance.’ The carefully balanced antitheses may come over a little too rhetorically now, but they encapsulate exactly what many in the Labour Party would have agreed that they had in mind.
The third principle was the protection of the legitimate interests of organised labour in the face of the traditional domination of capital. Tensions between the trade-union and Parliamentary wings of the labour movement had a history which went back to the Labour Party’s formation and has continued to the present day. But in 1945, with the formidable Ernest Bevin imperturbably loyal to Attlee as prime minister, unemployment low, free collective bargaining unchallenged, pay differentials after tax relatively narrow, and union leaders determined to resist the incursions of the Communist left, there was the appearance, at least, not only of identity of purpose but of a long-awaited recognition that, to quote Tawney again, ‘the traditional division of functions between “labour” and “management” no longer corresponds to economic realities, and that the debatable land between them, which has hitherto been claimed as the province of one party, must in future be recognised as the concern of both.’
The fourth principle was that of a strong civil service charged with the implementation of central planning in the interests of the nation as a whole. It was not that Attlee ever envisaged a command economy and the compulsory direction of labour. But the experience of the war had helped to encourage a belief among the moderate as well as the radical left that some degree of direct governmental control was the necessary safeguard against a return to what were held to be the unpalatable but otherwise inescapable consequences of unfettered market capitalism. What mattered was that authority should be entrusted to an effective non-partisan bureaucracy on which Labour ministers could rely.
In all this I have said nothing about nationalisation. The famous Clause IV had been in the Labour Party’s constitution since 1918, and in 1945 the party’s intention to take coal, gas, electricity, the railways, and iron and steel into public ownership was explicitly declared. Nationalisation continued to be a contentious issue throughout most of the period of the Attlee government. But its importance was rhetorically magnified by left and right alike. On the left, the illusion that working conditions, including worker-employer relations, would be transformed for the better by nationalisation was soon dispelled by the experience of the coal mines. On the right, the exaggerated fear of large-scale takeovers of efficient and profitable businesses concealed the Conservative Party’s earlier and unquestioning acceptance of public ownership of the Post Office, broadcasting and the airways. From the unions’ point of view, a nationalised industry could, on the one hand, pay high wages thanks to its access to virtually unlimited reserves of taxpayers’ money, but, on the other, could, if the government of the day was sufficiently determined, stand up to wage demands which other employers might be forced to concede because they could not afford the costs of a protracted strike in the way that a nationalised industry could. In practice, the nationalised industries were run in much the same way by much the same kind of people as before. Hopes that workers recruited onto boards of directors could do much if anything more than compromise themselves in the eyes of those whom they purported to represent were predictably dashed. Clause IV preserved a life of its own as a totem round which internecine warfare was waged between rival factions within the Labour Party, but it had by then ceased to have a corresponding resonance among the electorate.
The social services in general and the NHS in particular soon came up against the dilemma of limited resources facing relentlessly expanding demand. More and more money was spent on health, as it was on education. But the scale of expenditure, and the size of the bureaucracy needed to administer it, were such that they couldn’t fail to generate both perceived and imagined inefficiencies and anomalies. As different governments succeeded one another, changing priorities and administrative reorganisations followed hard on each other’s heels without persuading either the public or the professions serving them that they had succeeded in achieving their proclaimed objectives. Neither schools nor hospitals, housing departments nor benefit offices seemed able to meet the public’s rising expectations.
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