BPG FINALS 2020 – Attlee
,Labour’s Victory in 1945 and Attlee’s Governments, 1945-51
Background – Churchill’s Wartime Coalition Government (1940-45):
Very reforming government – key impacts:
• Introduction of revolutionary Keynesian demand management policy (use not necessarily
full acceptance) – First used in the 1941 budget to counter inflation (though Rollings argues
it did not become a fully accepted policy until the mid-1950s). The economy stayed mixed,
but with much greater government intervention, and with greater trade union involvement
in policymaking. Brooke argues demand management was not fully appropriated in the
early 40s
• Commitment to full employment (or at least a high and sustainable level) becomes a
government objective, and is accepted by all the major parties.
• Publication of the Beveridge Report in 1942 (Lord Beveridge was an economist and Liberal
peer). The Conservatives adopted many of the Report’s principles but claimed they could
not be afforded. The Report identified five ‘Giant Evils’ (squalor, ignorance, want, idleness,
and disease) and made the following recommendations:
1. Proposals for the future should avoid “sectional interests”, and a “revolutionary
moment in the world’s history is a time for revolutions, not for patching”.
2. Social insurance is only one part of a “comprehensive policy of social progress”.
3. Policies of social security “must be achieved by co-operation between the state and
the individual”, with the state securing the service and contributions. The state
“should not stifle incentive, opportunity, responsibility; in establishing a national
minimum, it should leave room and encouragement for voluntary action by each
individual to provide more than that minimum for himself and his family”.
• Butler Education Act 1944 (passed with cross-party consensus) provides for free education
for all children, raises the school leaving age, establishes the division between primary and
secondary schools, and divides secondary schools into three different types (‘grammar’,
‘secondary technical’, and ‘secondary modern’).
• All parties go to the polls in 1945 committed to social and economic reconstruction, which
could suggest that the reforms subsequently implemented were not really ‘socialist’ – the
Conservatives would have implemented a very similar programme.
• How did they fund their reforms? Taxation policies (Dalton, Cripps, Gaitskill)
o Drastic reduction in defence spending – from £5 billion in 1945 to less than £1
billion I 1950
o Dalton first budget (1946) – increased standard rate of tax on earned income from
50% to
o Dalton – imposed graduate death duties of up to 75% on large estates
o Top marginal rates of income tax rose from 65% n 1938 to 97.5% in 1948
o Estate duty increased from below 60% to 80% by 1950
o Dalton – National Defence Contribution continued post-war as a profits tax. Was
also differentiated to increase taxes on profits distributed to shareholders rather
than retained for investment – at 5%
o Maintained high purchase taxes (increased revenues from indirect taxation)
o Cripps increased distributed profits tax to 30% in 1949
o Cripps – ‘special contribution’ on investment incomes over 2000pa
,Post-war Consensus Theory
Addison argues the coalition created a ‘post-war consensus’ (though not necessarily social
harmony), manifested in three ways:
1. Industrial economy:
o Agreement that the economy needs to be managed / planned to maximise output.
o Informal mechanisms for tripartite consultation between employers, trade unions
and civil servants had become institutionalised.
2. Whitehall (civil service / policymakers / central administration):
o New ministries had been created during WW2, e.g. of Supply and Information.
o Number of civil servants almost doubles to 667,000 between 1939 and 1945.
o New civil servants joined from ‘outside’, including Beveridge and Keynes
3. Party political convergence:
o Labour joined Churchill’s government, with Attlee serving as Deputy Prime Minister
1942-45, Bevin as Minister of Labour 1940-45 (he joined on the proviso that workers’
social conditions were improved, and that trade unions were empowered), and
Dalton and Morrison also holding key roles on the ‘home front’.
o Led to ‘The Economist’ coining the term ‘Butskellism’, since the policies of Gaitskell
(Labour) and then Butler (Conservative) as Chancellor were so similar.
Challenges to consensus theory:
1. Brooke- it has too commonly been accepted that Labour simply embraced a consensus on social
reform, largely developed elsewhere in the war years.
o Addison: consensus of Keynes and Beveridge that shaped post-war politics rather than
any distinctive contribution from Labour – however Brooke argues on a number of
important questions of domestic policy it was not at all clear in 1945 that Labour would
just follow the course suggested by the coalition & the Attlee governments shows this
o There was consensus on the need for reform of social security BUT the contents of this
reform were far from consensual: ‘In health, education and social insurance, for
instance, the Labour Party maintained a distinctive edge to its social policy. The party’s
planners viewed the reports and white paper emanating from the coalition not as
blueprints for easy appropriation, but as platforms on which to build more radical
reforms.’
o Debate between revisionists and fundamentalists:
▪ Revisionist – preferred to see public ownership as one means to a fairer society
▪ Fundamentalists – committed to the chapter and verse of clause IV of the 1918
constitution
o Main contribution of Brooke is demonstrating how large the Labour Party’s contribution
was to the consensus:
▪ His use of the minutes of local and regional Labour parties and councils gives
evidence of the pressures from their constituency to which Labour leaders were
forced to respond
▪ Demonstrates members relentless at pressing for reforms
o Does make a concession that socialist ideology did transform during war- that public
ownership of industry ceased being regarded as an end in itself and became only one
means among many to achieve an efficient managed economy.
▪ But this still exited as a debate within the Labour party, it was just the conditions
of the war that made nationalization as a means rather than an end that made
it more desirable
, ▪ Innovations in the sphere of financial policy – Keynes; if public ownership
justified in terms of economic efficiency, extending beyond industries set out in
Labour’s immediate programme (1937) was unnecessary; war showed economic
controls could be accomplished more easily with other methods than
nationalization
o Not a wholesale adoption of Keynesianism – instead they merged demand management
with an increased faith in socialist planning
o Move towards planning and general regulation of industry, rather than a reliance
exclusively on nationalization
o 1944, another Labour policy sub-committee admitted that the possibility of nationalizing
the shipping industry was 'extremely remote' – Labour left expressed disapproval on two
occasions in 1944
o White paper was generally accepted in Labour party when presented in 1944. But Labour
left saw nationalization as a way of asserting Labour’s distinctive identity in the coalition
o Manifesto of 1945 masked these differences – but they re-emerged in the following
years
2. Jefferys: there was no real consensus, as Churchill’s coalition was very divided, they were just
hidden due to public unity being needed for the war
o Jefferys – more continuity between pre-war tory government and coalition – policy
didn’t change as much in wartime as is conventionally argued – against Addison ‘new
middle ground’ view – eg national insurance, medical reform, employment policy
▪ Conservatives determined to limit influence of Labour within the coalition
▪ Publication of Beveridge report – Conservative as well as Labour supported it;
but Labour saw it as a minimum, Conservatives believed the coalition policy had
produced the maximum installment of reform possible for a post-war
administration
▪ New attitude towards reform after 1943 stemmed at least in part from a desire
not to be seen as opposing measures which had received widespread public
support
o Three crucial Beveridge reform:
▪ National insurance
▪ Medical reform
▪ Employment Policy
o National insurance: 1944 white paper produced – reaffirmed many recommendations
made by Beveridge but abandoned his emphasis on providing a minimum subsistence
income; social security symbolically replaced by ‘national insurance’; aimed at unifying
and extending the pre-war insurance system, rather than providing income security
o Medical reform: 1944 white paper committing government to new and free national
health service; white paper was an evolution from the pre-war system of local
government and health insurance; was hesitant on contentious issues such as
administrative structure and relationship between previously separated voluntary and
local authority hospitals; Minister for Health Willink (C) made several modifications –
administrative role of local government was to be weakened at expense of professional
organizations, new financial provisions for voluntary hospitals, doctors for new health
centers would not be local salaried employees; intended as a consultative document; –
resulted in significant opposition at Labour’s annual conference in 1944
o Employment policy: pledge by government to work for high levels of post-war
employment; 1944 white paper acknowledging the power of public expenditure in
lowering unemployment; white paper called for ‘high and stable level of employment’
not full employment
