The general election preserved the Government, but also effectively immobilized it. In some ways, indeed, Labour’s position in the new Parliament was even more precarious than in 1929 because of the absence of an adequate number of Liberal or other non-major party MPs to act as a cushion on whipped votes. For the next twenty months the Government stood in constant danger of sudden defeat, and of a new contest at a moment not of its own choosing. There was a sense of transition, even of interregnum: of old men moving on, and new men seeking their places. Cripps and Bevin, both terminally ill, soon left politics; other leaders had lost their élan. ‘Austerity’ remained, but the dire emergency had passed, and with it any easy justification for socialist planning. Because of the parliamentary tightrope, the Government’s agenda was largely restricted to noncontroversial legislation. Meanwhile, political attention shifted away from domestic to foreign affairs, and to a developing conflict in the Far East. Fear of a Third World War, which began even before the Second War had ended, had never been more intense.
On the home front, pre-war socialist aims had either been achieved or abandoned. What remained was a broad acceptance of a theory which, though harnessed to socialist beliefs, had little to do with Labour Movement rhetoric. A Fabian–Keynesian amalgam, anticipated by Douglas Jay before the war, was now close to an orthodoxy not just among politicians but among many of their advisers as well. Although there were some differences of emphasis, until the summer of 1949 and the debate over devaluation, there had been few areas of major disagreement between ministers and civil servants on economic policy. Attlee’s choice of former wartime temporary civil servants for key political posts was one reason for this. Here was a tight and homogeneous world, in which officials and politicians – who owed their power to a political organization largely oblivious of its existence – conducted their arguments in a private language with others of their own kind.
But the consensus was a pretty fragile one. Harmony among economic ministers had been maintained by the powerful leadership of Sir Stafford Cripps, whose intellect and zeal were an inspiration to junior and satellite ministers, as to officials. The devaluation crisis and its bitter aftermath ended the era, and provided the ingredients of strife. Even if Cripps had remained physically robust, his authority would still have been challenged. Growing evidence of his frailty created an atmosphere of uncertainty and anxiety, exacerbating policy differences.
As we have seen, both Wilson and Bevan had suggested a splitting of the Chancellor’s responsibilities, partly as a way of reducing the burden on Cripps. By the beginning of 1950, Dalton supported this argument – and he also had a candidate for the new post, if it was created. At the end of January he had a significant conversation with the Prime Minister about the disposition of economic posts, should Labour stave off defeat in the election. Cripps was irreplaceable as Chancellor, Dalton told Attlee. No one else could do the work, ‘until, in due course, one came down the line to the “young economists’”. However, Cripps had too much to do, and a Minister of State was needed to help him:
I thought Gaitskell was the man for this job. He agreed. Generally, he said he was already discussing this with Bridges. But the new minister must have a defined sphere of responsibility – mainly perhaps in the ‘old Treasury’ field. We agreed that Gaitskell was better for this than Wilson (though he was doing very well), or Jay, who, though very able, had not always good judgement, and wasn’t very personable.
Dalton went on to recommend that, in due course, Gaitskell ‘probably should be Chancellor of the Exchequer’.1
Events turned out much as Dalton had proposed. After the election, Gaitskell was appointed Minister of State at the Treasury. Wilson remained at the Board of Trade. His reaction to Gaitskell’s appointment is not known. It is unlikely, however, that it was one of pleasure.
There were only two Board of Trade measures of importance in the new Parliament – a Distribution of Industry Bill, and the establishment of the National Film Finance Corporation, both of which were welcomed by the Opposition.2 Wilson remained much preoccupied with films. In November, before the election, he had flown to New York to attend the FAC Conference, meeting the Hollywood administrator, Eric Johnson, while he was there.3 There was growing pressure to ease restrictions on imported American films. Wilson continued to take a close personal interest in the problem. In May, during Anglo–American talks on the film industry in London, he gained a good deal of attention in the popular press, which was interested in the link with the world of show business. Meanwhile, his role as minister of rationing and red tape made him a butt of the decontrolling Opposition’s guerrilla warfare.
Dollar-earning continued to be his main preoccupation as President. In May he called for better productivity, new designs and new products, to beat the fast-moving Germans and Japanese.4 In June he announced that the production of nylon stockings was six times what it had been eighteen months earlier, and was now the equivalent of a pair a year for every woman in Britain.5 In July, following the discussion by colleagues of his paper, ‘The State and Private Industry’, he expounded the new doctrine of the mixed economy. Free enterprise plus planning equalled freedom, he declared. This simple equation constituted ‘a living and virile faith which alone will fight the menace of Communism’.6 In September, he announced a rapidly increasing output of cars and a booming, dollar-catching tourist trade.7
But the Board’s production-and-export campaign could not insulate the economy against world events. In June, a crisis in Asia suddenly transformed the economic outlook: the North Korean Communist invasion of the South brought an immediate British promise of military assistance to the Southern army. In August, the Cabinet agreed a greatly increased defence programme, with only Aneurin Bevan voicing his dissent. Though in the Cabinet majority, Wilson was more aware than most ministers of the implications at home. Production targets had to be revised, and he had to deny rumours of a possible extension of rationing.8
The direction of economic and financial policy remained uncertain because of the health of the Chancellor. This uncertainty was about to be resolved. As in 1949, Sir Stafford Cripps took a long summer break from his duties. This time he left one minister, not three, to deputize for him. There was no doubt about who that minister should be: Hugh Gaitskell, the recently appointed Minister of State. The temporary arrangement soon became permanent. In October, Cripps resigned and Gaitskell, increasingly authoritative as ‘Vice-Chancellor of the Exchequer’, succeeded to his office, the appointment taking effect on 19 October.
It caused little surprise. Gaitskell was already in charge. He was technically equipped for the job and had a good reputation. Nevertheless there was resentment among older, better established leaders who regarded the recently elected new Chancellor as an upstart. Emanuel Shinwell was piqued at the rapid promotion of a minister who had already displaced him at Fuel and Power. Aneurin Bevan, who – as the successful head of a major department – had a claim himself, wrote the Prime Minister a furious letter of protest.9 Bevan’s reaction stemmed partly from a sense of humiliation at being passed over by a middle-class intellectual. But there was also a political aspect, of which the post-devaluation row had been a foretaste. Bevan took a sharply different view from Gaitskell about public expenditure and, in particular, the need to protect spending on the social services.10 Personal grievance now fuelled ideological anger, and for days the Health Minister complained bitterly to anybody who would give him a hearing.11
Did Wilson also feel bitter about Gaitskell’s appointment? Gaitskell believed so. In his hour of victory, the Chancellor recorded that ‘HW, and others confirm, is inordinately jealous.’12 Jay thought the same,13 and so did Pakenham.14