There were different types of restrictions and controls: price controls (especially on food); production controls (including the utility scheme for clothing); controls on consumption, which included food rationing; export and import licences; the centralized purchase of foodstuffs and raw materials; and a number of labour controls.71 This edifice provided the framework for much of Labour’s post-war planning. It was not, however, primarily a Labour creation. Most of the controlling departments, agencies and committees had been set up in the war, and were simply retained, along with the system of controls with which wartime civil servants (of whom Wilson himself had been one) had become familiar. Familiarity bred inertia, and there was a reluctance, among officials as well as politicians, to demolish a structure which had become the natural order of things.
Though Labour’s planning was largely the product of a Whitehall blueprint, it had a socialist flavour. To some extent, pre-war socialist theory had married, rather accidentally, with wartime administrative necessity. But the Government remained pragmatic in its approach, with the methods of planning subservient to the aims of reconstruction and what Cripps called ‘a Happy Country in which there is equality of opportunity and not too great a disparity of personal incomes’.72 The 1947 Economic Survey had underlined that in peacetime there should be no compulsion, and that there should be flexibility in order to maintain a competitive edge in production to build up exports.73
Under Cripps, first as Minister of Economic Affairs and then as Chancellor, planning was rationalized, while remaining indicative. From 1947, economic policy-making moved from the Lord President’s Committee (under Morrison) to the Economic Policy Committee, which became the most important Ministerial Committee (of which the President of the Board of Trade was not a permanent member) and to a subordinate body, the Production Committee, dealing with industrial matters, whose members included all the main economics ministers. This machinery remained virtually intact until Labour left office, and guided a system of planning which, but for the existence of shortages, might have been largely confined to the compilation of economic information and the making of forecasts by the expert agencies (the Economic Section, the Central Statistical Office, the Economic Planning Staff).74
But acute shortages did continue to exist, necessitating a degree of intervention in industrial affairs which sometimes clogged the machinery with inter-departmental negotiations. The confusion and inefficiency that resulted produced contradictory responses. Some people pressed for more planning, others for less. The ‘socialist’ solution was a single planning authority. The ‘capitalist’ or liberal one – advocated by bankers, industrialists, newspapers and professional economists, as well as by the Tory Opposition – was the removal of existing controls as quickly as possible. The general public, fed up with rationing and red tape, was believed to favour the second.
So, cautiously, did the Government. This was partly because of the growing scepticism in the economic community as a whole about the efficacy of planning and controls; partly because shortages were becoming much less severe; and partly because Cripps was persuaded that the aims of private industry – especially regarding exports – harmonized rather than conflicted with those of the Government. The Chancellor was therefore disposed to drop controls which caused ill-will. He did not, however, modify his firmly held belief in the desirability, even the moral correctness, of planning compared with the market system.
Wilson shared this outlook. His dilemma was that within the Labour Party there were many who saw a value in maintaining certain controls, both as a means of ensuring more equal distribution, and to retain a ‘socialist’ hold on the economy. On the other hand there was popularity to be gained by not appearing reluctant or kill-joy. ‘Wilson was a good operator,’ considers Sir Max Brown. ‘He was one of the first to see the political advantages of abandoning controls as soon as possible, though it went against the grain of the Labour Government.’75 To Wilson, and to other ministers, an early move offered a chance to steal the Tories’ clothes, and gain public credit for setting the people free.
This was the background to Wilson’s ‘bonfires’ of controls which began on Guy Fawkes Day 1948 with the abolition of restrictions that had required the issue of some 200,000 licences and permits per annum, and with the relaxation of controls on more than sixty industrial commodities together with many manufactured articles and household goods. Between November 1948 and the end of February 1949, hundreds of controls, covering consumer goods, industrial equipment and the purchase of foreign supplies were ‘consigned to the incinerator’ (as the Labour Party’s Research Department proudly put it) by the Minister of Supply and the President of the Board of Trade.76 At the end of January, Wilson declared himself ‘prepared to take risks, for if a control had to be reimposed a period of free trading would at least provide more up-to-date knowledge of the pattern of trade than the pre-war figures on which many controls are based’.77 He wanted to get rid of the timber control, and announced his intention to set up a working party to see how this might be done. In mid-February he announced that it was the Government’s policy to remove ‘every control that can be removed’, except for the main strategic controls which were essential for national recovery, such as the control over the location of industry.78
In March 1949, there was a further conflagration, and Wilson was photographed enthusiastically tearing up a clothes-ration book.79 ‘Any control that was irking the public which he could possibly get rid of, he was eager to remove,’ recalls Sir Max Brown.80 Nineteen fifty saw additional reductions, which included the relaxation of food rationing and price control, and the abolition of petrol rationing and steel licensing. The ‘bonfires’ which caused most celebration, and which Wilson ignited with the greatest exuberance, involved the derationing of consumer goods. To add to his newly acquired image as the housewife’s friend, Wilson set up a ‘consumers’ committee’ to report to him on controls and the public’s reaction to them. The former official responsible for this committee recalls being instructed by Wilson to find ‘real working-class women’, and bring them together for regular meetings. ‘It was window-dressing, successful PR – which civil servants wouldn’t have thought of,’ he comments. ‘Later this sort of thing, getting together ordinary cockney women, became very fashionable.’81
What delighted the press and public, however, received a mixed reception in key sections of the PLP. ‘Wilson’s bonfire of controls speech annoyed a lot of party opinion,’ says Denis Healey.82 Ian Mikardo, a left-winger, recalls that it was over the ‘bonfire’ that he first became suspicious of Wilson. Hitherto, in private conversation, Wilson had talked Left; now he was behaving Right. ‘What struck me was the glee with which he did it,’ Mikardo remembers, ‘the way he did it to seek the approval of the leader writers.’83 In itself, the abolition of rationing was a relatively minor measure. By 1948, the proportion of consumer spending covered by it had in any case fallen to 12 per cent.84 Symbolically, however, it was a turning-point in the life of the Government. To Conservatives, rationing was the most visible aspect of socialist bureaucracy; but to many socialists, it represented fair shares and equitable distribution, and its abandonment was symptomatic of the Government’s softening on doctrine. Wilson’s ‘bonfire’ – as much the style as the content – was something he took a long time to live down within the Labour Party.
Yet here was a paradox. Like Cripps, who favoured decontrol without displaying the same relish for it, Wilson was not antiplanning: on the contrary. The arsonist of controls continued to see them as valuable instruments of policy. Wilson had the best technical grasp of the economics of planning of any member of the Cabinet. It would be hard to describe him as a fervent believer, because fervour was not one of his characteristics. But his prejudice was, and remained, in favour of planning and controls, and against an over-dependence on the market mechanism.
Wilson’s