Why did the Labour government fail to renew

itself after it had enacted its 1945 manifesto?

The 1951 general election was an oddity. It did not need to take place when it
did, the winner got fewer votes than the loser and in historical terms the winner's
agenda was set by the loser. Nonetheless, in 1951 the Labour government failed
to renew its term in office; the Conservatives won 321 seats and Labour won
295, with the Liberals winning only 6. Labour managed to renew their mandate;
they received their highest ever share of the vote, at 48.8%, more than the
Conservatives 48%, but all the same, the Conservative Party took control of
Parliament.
Why did the Labour government that has been consistently voted the most
successful of the 20th century - led by a man who has consistently been voted
the best Prime Minister of the 20th century - lose office after only 6 years? There
are two questions to answer; why Labour called an election only a year after
winning a majority in 1950, and why they lost that election.
Why did Labour call the election in 1951? Part of the answer lies in the insecurity
of Labours parliamentary position after the 1950 election; their majority had
fallen from 146 seats to just 5. The government was exhausted, physically and in
terms of ideas; many leading ministers - including Attlee - were constantly in and
out of hospital, and were sometimes rushed from their beds to the House of
Commons to vote on particularly controversial issues.
It was against this backdrop that internal division within Labour - particularly
between the leadership and the left of the party - forced the government to call
an election. When the Bevanite rebellion occurred, MPs awoke to the possibility
of challenging government policy and using the tiny majority to exert pressure
on the leadership, and the governments position became untenable.
How did the leadership alienate the left of the party? Not because they were
seen to be implementing the wrong policies; Labours policies, at least in
principle, were viewed almost universally positively, and the post-war consensus
that lasted until the 1970s committed itself to the preservation and extension of
almost all of their reforms. The difficulty for Labour was the many on the left
believed they hadnt gone far enough.
The government had an unassailable majority of 146 in 1945, and, with no
possibility of being defeated in Parliament, was in a position to bring about a
genuine transformation of British society, away from the established Capitalist
model. No such transformation was forthcoming. Nationalisation was not an
attempt to take central control of the economy; with the exception of steel, it
was restricted to non-profit-making concerns, and the government made no
effort to take over private banks or insurance companies. The UK also committed
itself to US foreign policy - and symbolically tied itself to capitalism - through the
Marshall Plan, which locked it into Cold War hostilities. More generally, despite 5
years of a supposedly socialist government with a large majority, Britains class

structure remained largely unaltered, and social reform had not greatly raised
the conditions or status of women.
The catalyst for the Atlees decision to call an election was the Bevanite
rebellion. The governments need to fund the Korean war forced them to
implement cuts, which included the introduction of NHS prescription charges.
Bevans declaration that money ought not to stand in the way of obtaining an
efficient health service, and led a rebellion of several high-profile Ministers,
including Harold MacMillan. The loss of so many key supporters - particularly at a
time of such political instability - brought the King himself to urge Attlee to call
an election. The King wanted to go on a long foreign trip and didn't like leaving
Britain while the governments ability to rule remained in question. A tired and
beleaguered Attlee obliged.
And so the election took place, and for the first and only time in modern British
politics, the party with the most votes did not win the most seats. The
Conservatives took office with a majority of 16. The result seems even more
bizarre given the golden legacy of Atlees reforms. Why did the Conservatives
win?
The Conservatives had considerably strengthened their position. Their campaign
of 1945 had been famously half-hearted, and their 1950 campaign, while
considerably more committed, left much to be desired.
By 1951, the party had reorganised and modernised, and was now ready for a
term in office. A campaign was launched by Lord Woolton to bolster grassroots
support and raise party funds, and the funding raised was used to revamp both
Central Office and regional associations. Maxwell-Fyfe produced the Industrial
Charter, a document spelling out the Conservatives acceptance of many of
Labours reforms, and their commitment to the welfare state and a greater
degree of collectivism - as well as presenting a scathing attack on some of
Labours nationalisation policies. The Conservatives at last presented a credible
threat to Labour.
Labour, meanwhile, was ailing. It was struggling to find funding for its reforms,
some of which were themselves starting to come under attack from all corners,
and as the health and drive of senior ministers deteriorated the partys public
image wavered dangerously.
Labours first troubled reform was nationalisation of major British industries. In
Labours election manifesto, under the banner Let us Face the Future, Labour
had pledged to take over the fuel, power and transport industries. In reality the
takeovers were not about creating a centrally planned economy; nationalisation
was focused on inefficient, declining and generally loss-making industries - coal,
gas, electricity, public transport in particular - with the general aim of improving
production in those industries and associated industries, and hence improving
the quality of the nations essential services.

There was one notable exception to this rule; the iron and steel industry.
Nationalising iron and steel had not even been part of Labours original
manifesto; it had been imposed on the unwilling party leaders by the Labour
conference of 1944. The leaders reluctance was understandable; unlike the
other nationalised industries, the steel industry was profit-making, and had stout
defenders. As a result, the takeover was more expensive, and much messier.
When the government nationalised an industry, they compensated firms for their
losses. For firms in a declining industry like coal this came as a blessing, when
the government bought them out they cut their losses. In profit-making markets,
however, compensation was much more difficult to settle; it raised the question
of what was a fair settlement and, more importantly, the question of whether the
state had right to overrule the declared objections of owners and shareholders.
Opponents to the nationalisation objected on the grounds that the steel industry:
- Was not a public utility but a privately owned manufacturing
industry
- Was successfully run and making profits
- Had recently had large investments made in it
- Had an excellent record of employer-employee relations
The Conservatives declared in favour of iron and steel owners, and declared
nationalisation of a successful and non-essential industry an abuse of state
power. The government succeeded in pushing through nationalisation in 1950,
but at a considerable cost to their public image.
Labours second great policy worry was the very reform for which they are most
fondly remembered now; the NHS. Many felt that the NHS had failed to fulfil the
expectations invested in it; it was attacked from the left and right. The left
claimed that the NHS benefited the middle classes, rather than working classes;
the middle classes no longer had to pay for medical treatment but could now
visit the best-qualified GPs (whose practices were in prosperous areas), whereas
the working classes still lacked access to the best treatments.
The right, on the other hand, decried the extraordinary cost of NHS. Bevan was
said to have bought off the BMA, at great cost to the nation. The BMA [British
Medical Association] had been very resistant to the creation of the NHS, fearing
loss of privileges and income. The government eventually gave them a
guarantee that they would not lose financially and would be allowed to keep
private practices; Bevan remarked bitterly that he had stuffed their mouths with
gold.
The precipitous cost of the NHS was its own problem; the NHS budget rose from
128m in 1948 to 228m in 1949, to 356m in 1950. This was in large part the
cause of Labours decision to implement prescription charges in 1951, leading to
the Bevanite rebellion.
The NHS was not the governments only financial worry; with its finances were
running well out of hand by 1951, the government had been forced to begin

making much-resented cutbacks. This was made worse by the fact that the
financial difficulties of 1950/51 were in a very real way Labours fault: stemming,
in fact, from the Marshall Loans.
When it came to power, Labour inherited debts of 4.2bn and a balance of
payments deficit of 1bn. Exports of Manufactured goods were 60% below their
pre-war peak and the cost of maintaining Britains overseas military
commitments had quintupled between 1938 and 46. Hugh Dalton, Chancellor of
the Exchequer 1945-7 negotiated a $6bn loan from the US, and a another $1.5bn
funding in the Marshall Plan. The direct positive economic effects of the Marshall
Plan have been well documented, but the indirect effects proved exceptionally
costly to Labour and Britain.
When Britain accepted the USs money, it became obliged to meet its military
commitments with US: increasing military spending from 2.3bn to 4.7bn,
creating an Independent nuclear deterrent - in the words of a once-againdisgruntled Bevin, Weve got to have it and its got to have a bloody Union Jack
on it - and to support America in the Korean War. As a result, by 1950 Britain
was spending 14% of GDP on defence. This colossal commitment to defence
spending forced Britain to make cutbacks in other areas; an embarrassing climbdown for the government, as it was forced to curb its own welfare reforms to
fund its unwanted and (domestically) unpopular pledges to the USA.
And so Labours policy of austerity began. Labour was rightly seen as turning its
back on many of its founding principles; it asked the unions to implement wage
freeze, making thinly veiled threats that if wage freezes were not voluntarily
offered they would be legally imposed. Some unions grudgingly accepted, but
others were less eager to play ball; in the words of Deakin, General Secretary of
TGWU, We shall go forward building up our wage claims in conformity with our
understanding of the people we are representing Any attempt to interfere with
that position would have disastrous consequences.
Labour also implemented import restrictions, in a desperate attempt to maintain
Britains exchange rate. As a result, rationing continued until 1949 on clothes,
1950 on basic foods. The situation was helped by Cripps, who relaxed industrial
controls and devalued the pound in 1949 to help keep balance of payments
under control, with the result that, by 1951, exports were about 4 times their
1939 level. Nevertheless, wage freezes and rationing were both very unpopular.
But, crucially, before 1950 Labours austerity focused on cutbacks in areas other
than spending. Import restrictions and requesting wage freezes to keep inflation
down were both methods of improving the nations finances without restricting
welfare spending. Some cuts were made, but Labour won the election in 1950
with little question that they were losing steam in their commitment to welfare
spending.
By the time of the Korean War, however, when military spending soared to its
peak of 14% of GDP, the government had to make significant spending cuts including the much-discussed implementation of prescription fees.

Labours failure to continue funding its welfare state certainly damaged its public
image at the time. We must wonder, though, whether this truly represented a
failure; in the words of Bevan himself, Expectations must always exceed
capacity. The fact that the state implemented prescription fees may have been
nothing more than an attempt to limit the dandruff effect - by which
overdiagnosis and overtreatment are unmonitored in a system of free health
care.
Whatever Labours failures and the Conservatives successes, the outcome of the
1951 election was not a resounding defeat; Labour polled more than the
Conservatives. Why, then, did Labour manage to lose, despite polling more than
they had when they won a landslide in 1945?
For an answer we must look to the Representation of the People Acts of 1948 and
1949. These abolished plural voting (whereby the owners of business premises
outside their constituency of residence could vote twice) and separate university
seats, both of which would have been overwhelmingly Conservative. But they
also abolished two-member constituencies and redrew constituency boundaries
to take account of changing population patterns, much to Labours disadvantage.
The reforms also introduced postal voting for the first time, and according to
Herbert Morrison these were cast 10-1 in favour of the Conservatives.
Prime Minister Attlee could have postponed these reforms, which it was widely
recognised would harm Labours fortunes, but he was not tempted to do so.
There were, he said, three principles which he held dear in politics and from
which he would not depart: morality, morality and morality. The asset for which
Attlee is most fondly remembered - his scrupulous moral compass, and genuine
commitment to helping the nation - may have been the very thing that
consigned Labour to 13 years of opposition.