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The New International, March–April 1952

Jim Hinchcliffe

The Second Labor Government

Lessons Drown from the Experience of British Labor

(February 1952)


From The New International, Vol. XVIII No. 2, March–April 1952, pp. 68–74.
Transcribed & marked up by Einde O’Callaghan for ETOL.


The return of a Tory Government precariously based on a minority vote has ushered in a vital new phase for the British Labor movement. Both the result and subsequent actions by the Conservatives have been extremely revealing and have commenced the process of injecting fresh life into the movement generally.

The Co-operative Sunday paper Reynolds News conceived a Tory return in terms of an immediate and vicious large scale onslaught on working class conditions which would quickly result in the emergence of pre-war conditions of poverty and unemployment. The first reactions, however, were surprisingly mild. On the day after the Tory victory, the Daily Telegraph editorial stated that the “result was no defeat for the Socialists – and no victory for the Tories.” Both the Daily Express and the Daily Telegraph gave the advice that the newly elected government “will have to proceed very cautiously” in view of their precarious position.

The Daily Mail, always an outright spokesman for the Conservatives, admitted that a government with such a small majority would be tested by quick results, and named housing, cost of living, etc., as the type of issues on which they would be judged.

Winston Churchill, who had done his best to create parliamentary chaos over the preceding 18 months, now made a statement in which he said that he hoped there would be a lull in party strife and urged his supporters to see the good points in their opponents.

The Daily Telegraph in its editorial of November 1, 1951, devoted an entire column to pointing out that the interests of the T.U.C. were really the interests of the Tories!

This amazing about-face, which has caused no small amount of consternation among their supporters, can only genuinely be understood, if we understand the changed relationship of class forces both nationally and internationally.

At present, the British Labor movement, known as the “Trinity of Labor,” and made up of the united strength of the Labor Party, Trades Unions and Co-operative Movement, constitutes an extremely powerful and unique combination, and can be said to express the general trend of socialistic thought in the United Kingdom.

The fact is, we still have the biggest support, with over 250,000 more voters than the Tories could muster. It is this overwhelming power and confidence which is making the Tories very wary. For them, the existence of their own class is at stake over the period of the next ten to fifteen years, and they recognize only too clearly that at the present time they lack the real power to act boldly and decisively.

Even the electoral figures give them a strength they do not in reality possess. For their strength lies in the residential areas while Labor’s strength lies in the industrial and productive areas of the country.

Their future boldness depends to a large extent on the way in which the British Labor movement reacts to the present situation, and the type of policy it will attempt to formulate for the next election. The experience of the past six years, however, has resulted in a totally different outlook, and the evolution of socialist thought since 1929 and the second Labor government, gives us an interesting insight as to what we may expect in the future.

In 1929, too, Britain was subject to a severe economic crisis. In many respects the situation was not so difficult as in 1945, for her foreign investments were still intact and her world power was still considerable. The Labor government at that time, renowned for its inaction, could conceive of a solution only in terms of economy cuts. There was no thought of redistribution of the national income in favor of the working class, neither was there any policy to develop and maintain full employment. It is interesting to note that even in 1945 the Labor government did not consider it possible to maintain full employment. The present National Insurance Scheme still bases its contributions upon the existence of 1½ million unemployed which in itself indicates how little faith the Labor leaders had in their ability to provide a job for everybody.

In addition, the increased working class share of the national income (38 per cent to 47 per cent after tax) has been due almost entirely to the efforts of the Trades Unions. Government taxation has redistributed only 1 per cent in favor of the working class.

Thus, it is clear that Labor Party philosophy has been and is very incomplete, and if we were to presume pre-war conditions – and a pre-war relationship of class forces – the prospects would not be very bright.

Fortunately, many new factors have come into play in the postwar era, for not only did the working class emerge very much stronger at the end of the last war, but the capitalists also emerged very much weaker – a factor of equal importance. The general loss of investments, plus the 1945 election result stunned the Tories into a state of helplessness which was no small factor in helping the Labor government to tackle the post-war problems.

It was not that the Labor leaders had changed, but that the conditions had, and as we know it is the conditions which determine consciousness.

1945 began five years of intensive legislative work, and it is quite true that more results were achieved in five years than in any previous fifty. There was no co-ordinated plan so far as the legislation was concerned, and this caused people like G.D.H. Cole to make the comment that the Labor Party had pushed through legislation in an ill-digested manner. However, the idea of co-ordinated planning was to develop a little later, and largely as a result of empirical experience.

The scope of Britain’s overseas trade problem can be seen by the simple fact that whereas income from investments paid for 21 per cent of our imports in 1938, they paid for only 3 per cent in 1949. The fact that, despite this, an overall balance of trade was achieved by 1950 was a remarkable result. It was the first time since 1870 that Britain had achieved a trading balance and this enabled the cessation of American aid and the development of a more independent attitude generally.

The fact that this balance did not last, and was very precarious at best, does not alter the remarkable character of the achievement and was one which nobody had previously thought possible.

Labor’s major achievement, however, lay in the maintenance of full employment. Critics have attempted to minimize this achievement by saying it was due to either post-war boom conditions, American aid, or the needs of re-armament. But in France, Italy and Germany considerable unemployment existed despite equal amount of American assistance and considerable rearmament programs. Whereas Britain has kept unemployment down to around 1 per cent, Italian unemployment has been in the region of 13 per cent and German 9 per cent.

It is interesting to note that despite criticism of Labor’s housing program, for every two houses the whole of Europe including Scandinavia has built in the post-war years, the United Kingdom has built one. Great Britain builds in one month what France builds in 12 months, and France, remember, is a land of free enterprise, where anybody can build a house if he so desires. Whereas the retail price rise over the years 1945 to 1950 was 21 per cent in the United Kingdom, it was 102 per cent in Italy and 369 per cent in France.

There is not the slightest doubt that full employment has been the decisive factor in the maintenance of the bargaining power and strength of the British working class movement.

No single factor has been decisive in making full employment a continued reality. Bulk buying, which has guaranteed markets for overseas producers and jobs for workers in Britain; price controls which have kept prices down and purchasing power up; economic controls generally, and a large scale development of the depressed areas which have to be visited to fully appreciate the transformation which has taken place. All this has constituted a socialistic direction of policy which has resulted in a greater understanding of the need for economic planning, and for the various techniques which can maintain mass purchasing power and full employment generally.

Since the Tories have been in power we have seen a policy which moves in the opposite direction. Dearer loans to local authorities mean dearer rents and prices. Less capital investment and cuts in governmental expenditure must inevitably lower purchasing power to the point where genuine unemployment begins to rear its head once again. Rearmament industries will absorb 500,000 workers, but that will be just a passing phase before we witness the emergence of genuine poverty again.

The Economist which can be relied upon to present the outright Tory solution without regard to popular opinion, stated in 1950: “When at last it is decided that the British people should again pay prices for their food that correspond to the real cost of producing or importing it; a large part of the present apparent demand for houses will disappear overnight.”

They recognize only too clearly that the housing shortage, the fuel shortage and electricity shortage, etc., arises from the success of Labor legislation and the only way to remedy this is by cutting the purchasing power and standard of life to the point where the working class will be unable to afford the post-war “luxuries.”

I think it is true to say that in a general way, domestic socialist policy should be in three directions:

  1. Extension of all forms of common ownership,
  2. Economic planning,
  3. Democratic control of our industries, etc.

It was not until a year before the 1950 election that these ideas began to take conscious shape and began to be widely discussed. Economic controls were seen more clearly as a form of planning and therefore very necessary. It was seen that a conscious intervention into the mechanics of the capitalist system can produce beneficial results, and there was clearly the evolution of a socialist policy in relation to the capitalist system generally.

What was more important was the growth of the idea that the structural alterations which had been carried out (nationalization, etc.) was a process which had to be continued, and, if carried sufficiently far would transform the economy.

Nobody would say that the Labor government has carried out any decisive socialist measures, or solved the problem of a future slump. A good deal of the ground was cleared, however, sufficient to imbue great confidence by the mass of Labor workers in the government and explained the continued increase in its support. Thus, the weakening of the capitalists plus the power of the Trades Union movement and the greater confidence and experience of the Labor movement as a whole, has resulted in a tremendous shift in class relationships in Great Britain. There is at the present time the element of a subtle and precarious form of dual power. Both the Tories and some of the more conservative Labor leaders are afraid of the “Proletarian Dictatorship,” which dictates their actions and makes them do things contrary to a good many of their own wishes.

Even in the field of foreign policy, which has been subject to more criticism than any other aspect of Labor policy, the growing economic independence of Britain in 1950 resulted in the growth of a more independent approach to international problems. The recognition of Mao Tse Tung in China, the policy toward Formosa, and the revelation of the MacArthur Tribunal which revealed the opposition of British Labor to the proposed bombing of Manchuria, can be seen as the glimmerings of a new approach to international problems, and together with the Bevan resignation was all part of a process which was symptomatic of a growing socialist consciousness far more developed than ever before.

A process of rethinking is taking place in which there is a great and growing discussion on how we are to affect a radical change in the economic structure of Britain. This discussion is taking place with a background of six years of valuable experience. The British workers are acting with a self-restraint born of confidence in their strength, and this finds its reflection in many of the utterances of their leaders.

The Co-operative Party has issued a pamphlet which discusses the merits of different forms of common ownership, and the manner by which the next Labor government must transfer whole industries and enterprises to common ownership.

Austin Albu, M.P., suggests that we tackle private companies by a form of joint control between workers and employers, with a government nominee as chairman. Others point to the need for socialists in the managerial positions in the nationalized industry if they are to develop in the right direction.

No longer does the movement discuss in general terms. It is a question of how it has to be carried out, with detailed plans and discussions. Nobody believes that the Tories will last the full term of five years (three is the absolute maximum) and plans are being made on that confident basis. Such is the change over the past decade.

There are of course, a few “Marxists” who refuse to see any progress at all. Acutely aware of their own failure, they are not going to see the virtues of others. To them, social revolution must observe the classic conditions of social upheaval, bolshevik principles and barricades. Marxism becomes a series of books, and quotations become a substitute for independent analysis.

No serious student of political and economic theory can, however, deny that the present and future situation in Britain is capable of pushing the movement forward again: of nationalizing fresh sectors of the economy; of developing the techniques of economic planning and controls which could effectively regulate the economy.

Even with a considerable private sector in existence, such an economy would not be predominantly capitalist, and would be more progressive than the Russian nationalized and totalitarian system. Only blind fools and incurable sectarians can shut their eyes to this possibility.

It is this breathtaking opportunity which provides British socialists with such a magnificent goal and purpose. Irrespective of the future, it is this approach which must become the focal point around which activities must center – for it is this perspective, during the present optimistic and confident stage of the movement, which will create the maximum influence, and therefore the best point of departure for the problems of the future.

February 1952

* * *

Reply and Rebuttal

The above article was submitted to one of Britain’sleading Labor periodicals, and a lengthy reply was received fromthe editor stating the reasons why it was unsuitable forpublication. Because the main arguments in the letter are veryrelevant, and are presented in a reasoned manner, they areincluded with my article, together with a brief reply to eachpoint. – J.H.


1.“You say that the present National Insurance Scheme still bases its contributions on the existence of 1½ million unemployed because the Labor government expected that they would be unable to make full employment. Actually, as far as we know, that is not correct. The calculation was made by the Beveridge Committee under the Coalition Government.”

I know the calculation was made by Beveridge, but the Labor government implemented it without alteration, although it altered many other features. It had six years to act, but did not do so. Also many government spokesmen referred continually to the possibility of unemployment.

2.“In the next paragraph you say that the workers’ increased share of the national income is almost entirely due to the efforts of the trade unions. Don’t you overlook the fact that trade unions find it very much easier to get increases for their members if there are more jobs looking for workers, than workers looking for jobs? The former was the case, of course, during the Labor government’s period of office. If there had been a considerable amount of unemployment, as there might well have been under a Tory government, it is obvious that the unions would not have been able to get an increase and therefore I think you will agree that it is not quite fair to suggest that all the increases the unions got were entirely due to union efforts. With regard to your suggestion that government taxation has redistributed only 1 per cent in favor of the working class, I don’t know what period you have in mind. Where did you get the 1 per cent from and does it take account of social security?”

These facts were obtained from a lengthy article in the Economist late last year. It is also stated quite clearly in the article that the T.U. strength and bargaining power was largely dependent on full employment.

3. “You suggest that there was little co-ordinated planning about Labor’s legislative work. We don’t quite see how you can make that out. There never was a government, so far as we know, that had such a co-ordinated plan for its legislation and carried it out – it was the plan that was set out in Let Us Face the Future, issued before the government took office.”

The difference between the partial planning of 1950, and the lack of it in 1946 is considerable. I do not wish to confuse the L.P. program with economic planning. It is clear they must go a lot further along these lines yet.

4. “You suggest that in the future we have got to look for great increases in unemployment and that, although rearmament will help to absorb some workers, it will only be a passing phase before the emergence of “genuine poverty again.” You don’t submit any evidence to support this statement. It could only happen if the Labor movement is weak enough to allow it to happen and there is no certainty that the movement is going to be as weak as that.”

This is happening NOW. The strength of the Labor movement has no DIRECT relationship with the economic policies of the Tories which must inevitably increase unemployment, and is doing so in practice.

5. “You suggest that domestic socialist policy should take three directions and that it was not until a year before the 1950 election that these ideas began to take conscious shape. These ideas have been accepted ideas in the Labor movement since at least the ’30’s, so far as we know. In fact I should go so far as to say that they have been essential ideas – especially I and 2 – since I was a boy and that was not yesterday morning, I am sorry to say.”

These were not accepted by the 1929 Labor government. (Bevans’ book is a revelation on this point) I know they have been essentials in terms of education for many years, but I am referring to the DEEDS and ACTIONS of the movement at various stages. The official attitude toward rearmament and the advocacy of “consolidation,” is in my opinion, a negation of those three principles. What the rank and file think is a different matter.

6. “You suggest that ‘both the Tories and some of the more conservative Labor leaders are afraid of the “Proletarian Dictatorship” which dictates their actions and makes them do things contrary to a good many of their own wishes’. We are not quite sure what this means. If it means that the active members of the rank-and- file sometimes support a policy to which the more right-wing Labor leaders object, they also have a habit of supporting policies to which the more left-wing leaders object. We are therefore not very sure what the sentence was intended to convey.”

In general it is the pressure of the members which force the leaders TO THE LEFT. Last year, Sam Watson, Durham miners’ leader, said the miners did not support Bevan – but it was Bevan they invited to their Gala this year, not Watson. This could be repeated many times, and explains the relative mildness of the Tory budget. It is a question of pressure of class forces in final analysis.

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