31.10.1996

Attacking workers on all fronts

Linda Addison exposes the myth of the Labour Party’s ‘socialist’ heyday

As the Labour Party has moved further to the right, leftwing organisations which continue to support Labour have had to go through more and more contortions to justify this position.

Workers’ Liberty, journal of the Alliance for Workers’ Liberty, has for a long time been one of the saddest and most extreme apologists for Labour, determinedly sowing illusions in its potential as a stepping stone to workers’ power.

Its editorial (October 1996) tries rather desperately to hammer home the point. It twice repeats the strange formulation that a Blair Labour government “will not be a Labour government in any meaningful sense”. It chastises others for “building sects, and not an organisation that is fused with the labour movement”, clearly a side swipe at the Socialist Labour Party, which it has denounced from day one. Although Blair’s administration will be ‘non-meaningful’, we are told: “The reason for nevertheless wanting a Labour government is calculation that the road block can be broken and the working class begin to raise itself.”

Not convinced yet? Well there is more:

“The old aim of the labour movement in politics must be proclaimed anew: to achieve a workers’ government, a government prepared to serve the working class. Right now such a government would, minimally, work to ensure trade union rights, an adequate minimum wage, free education, a rebuilt health service and a restored welfare system. From that to the seizure of state power and the suppression of the bourgeoisie, a range of possible ‘workers’ governments’ are possible - from 1945 Labour to the Russian Soviet government of October 1917” (my emphasis).

Well, leaving aside the fact that precisely in the absence of independent working class political organisation Labour has absolutely no intention of introducing the reforms mentioned, since when did 1945 have anything to do with workers’ government?

Sir Stafford Cripps (at this time president of the board of trade) in his speech of October 1946 about industrial relations in the nationalised industries, was clear on this:

“There is not yet a very large number of workers in Britain capable of taking over large enterprises ... until there has been more experience by the workers of the managerial side of industry. I think it would be almost impossible to have worker-controlled industry in Britain, even if it were on the whole desirable” (Ralph Milliband Parliamentary socialism New York 1964, p289, original emphasis).

The myth making surrounding the 1945 government is not isolated to the AWL. It is one manufactured by the Labour left and their cheerleaders to justify voting Labour, rather than building the organisation we need to take us to genuine workers’ government.

In the post-war consensus of reconstruction around the nationalisation of basic industries, so often quoted as evidence for Labour’s ‘socialist’ heyday, was a policy recognised by many Tories as necessary for the benefit of the capitalist economy, as were social reforms such as the National Health Service, social insurance and welfare.

Much state control had already occurred as a direct result of the war, and to reconstruct the economy after the war many industries needed government aid.

In 1932 the Labour Party had a policy of nationalising the whole banking system. In the 1945 government this was reduced to the Bank of England.

Nationalisation of the coal industry was a policy even Churchill could agree with. Opposition from Conservatives as a whole was muted. In the process of nationalisation neither the governor nor deputy governor were changed. The board consisted of nine members, including only two trade unionists who resigned their union secretary posts to take up the new ones. The chairman was Lord Hyndley, who was the managing director of the Powell-Daffryn coal mining giant.

Nationalisation was met with full compensation. Ralph Milliband notes:

“One consequence of the government’s compensation policies was to realise vast financial resources for profitable investment in the ‘private sector’; another was to saddle the nationalised industries with a burden of debt which materially contributed to difficulties that were later ascribed to the immanent character of public ownership” (Ibid p288).

The vast majority of the nationalisation enacted by the Labour government had been recommended in committee reports of the 1944 coalition government, civil aviation being one example. The cable and wireless nationalisation was initiated by a meeting of commonwealth governments in 1944, which agreed to set up public utility corporations in each country.

Complicated bills were passed to nationalise rail, canals and long-distance road haulage of others’ goods, since transport was in dire need of new investment. Compensation was generous. There was little opposition to the nationalisation of electricity production and supply. Gas was nationalised in 1948, but the more controversial iron and steel nationalisation had to wait until 1951.

Regulation of private industry was minimal and rather more weighted the other way round, with many leading industrialists sitting in government ministries, continuing the wartime trend. The government relied heavily on businessmen, and the Supplies and Services (Transitional Powers) Act, introduced in the fear of economic chaos, did nothing to reverse this relationship. In 1948 controls were further relaxed. Government cooperated with industry, while introducing compulsory arbitration for workers in dispute.

Just as with nationalisation, the health and welfare reforms followed recommendations made in 1944, in this case of course the 1944 white paper on social insurance, which was based on the 1938 report of the Liberal, Beveridge.

Beveridge’s recommendations, though of huge importance, were none the less modest in comparison to the real needs of workers. He had recommended benefits at the level of subsistence, so as to discourage ‘idleness’. The insurance scheme continued Lloyd George’s system of regressive taxation which tied benefits to contributions made, meaning that many were not eligible. They would have to fall back on the means-tested national assistance scheme. Nor did benefits cover those in employment.

The National Insurance Act was passed in 1946 though the national assistance scheme was deferred until 1948. The rates of benefit were calculated by adding 31% to the very paltry figures Beveridge had calculated in 1938, though 1945 prices were 48% above 1938 levels. Benefits were therefore below even the subsistence level that Beveridge had calculated. The notion of continual payments was attacked and thus in the act unemployment benefit was limited to 30 weeks.

The drive to full employment was recommended in the 1944 white paper on employment policy. Although unemployment rose from 362,976 in December 1946 to 1,916,000 (plus 503,200 estimated unregistered) in February 1947, this increase represented only a small proportion of job losses caused by the run-down of war industry. The 1948 economic survey recommended an increase in unemployment of 50%, though this was never carried out.

Beveridge’s report had also recommended a national health service. In wartime Britain the state had already taken an increased role in the provision of medical services. Minister of health Aneurin Bevan entered negotiations with the British Medical Association and other health groups who were in opposition to many of the recommendations of the 1944 white paper. The resulting 1946 bill was a watered down version.

The failure to introduce a full salaried system meant that private practice was allowed to continue and private beds were allowed in hospitals. Regional boards reduced the power of local authorities.

A major concern of workers was housing, and in this area the Labour Party failed badly. The New Towns Bill incorporated the work of Lord Reith’s wartime New Towns Committee. A Housing Act was not passed until 1949. By May 1946 only 55,811 new houses had been built; 227,938 by 1948; 20,000 in 1949-50. The 1951 census reported 728,420 more households than homes. Squatting began on a major scale during the Labour government.

Austerity was a continual feature of the administration and the years 1948-50 were commonly known as ‘the age of austerity’. The economic survey of February 1947 boldly stated that: “The task of directing by democratic methods an economic system as large and complex as ours is far beyond the power of any government machine” (The 1945-1951 Labour governments Roger Eatwell, London 1979, p85). Prior to the statement the government had already announced the need to keep wages down.

Bevan did not try to hide the fact that he preferred cuts to an American loan, though the loan won the day in the cabinet. The first two Labour budgets meanwhile reduced income tax from 10 to nine shillings (45p) in the pound and the excess profits tax was abolished. In 1946 a bread crisis saw the introduction of rationing even on this basic food.

To try and ease the ailing economy cuts in food imports were increased in June 1947, while John Strachey, minister of food, announced “substantial deterioration in our diet, which was now physiologically inadequate for those sections of the population who had no access to canteens or differential rations” (Ibid p82).

In August an austerity programme was implemented with included miners working an extra half- day (the industry had been nationalised in January), food imports from hard currency areas were reduced by £12 million and the basic petrol ration reduced. A further programme later in the month included further cuts in the meat ration, the abolition of the basic petrol ration and the restriction of public dinners.

In 1948 the Labour government published the ‘Statement on personal incomes, costs and prices’, a policy of restraint on wage claims and dividend payments which heralded an era of austerity. A wage freeze was accepted by the Labour Party conference in 1948. The 1948 budget put a ceiling on food subsidies and social service expenditure. The 1949 budget imposed £250 million cuts.

Though one of the first acts of the government was to repeal the Trades Disputes and Trade Union Act of 1927, it expected industrial peace in return - if it did not get it there was no hesitation in using troops to break strikes. Wartime emergency measures banning official strikes remained in force until 1951. Labour sent troops to move supplies against dockers on unofficial strike twice in 1945 and again in 1947, ’48, ’49 and ’50.

In 1945 21,000 troops were sent to unload ships and to load export ships. In January 1947 the use of road transport workers against strikers was even discussed. In 1948 a state of emergency was declared, bringing into operation powers which had not been used since 1926. Its use was discussed again in 1949. At this time Sir Alexander Maxwell, permanent under-secretary at the home office from 1923 to 1948, chaired the Port Emergency Committee. He had learnt his trade by playing a prominent part in directing troops against the 1926 general strike. Around 13,000 troops were being used by the end of July. In 1950 the government discussed setting up tents in London parks so if necessary 20,000 soldiers could be used.

In 1950 the emergencies committee further discussed civil and criminal action against strikers. In a 10-day unofficial strike by North Thames gas board workers 10 were prosecuted under Order 1305 of the 1940 wartime emergency power provisions still in force and sentenced to a month’s imprisonment, later reduced to a £50 fine. In 1951 seven dockers were charged under the order with illegally conspiring to incite strike action in connection with a trade dispute. They were acquitted.

Some sections of the left today, incredibly, celebrate these domestic policies of the 1945 Labour government, whilst quietly trying to forget its more unambiguously imperialist foreign policy, which continued from where the wartime coalition left off. This first majority Labour government defended the imperial interests with vigour in the Middle East and continued British imperialism’s colonial policy, indistinguishable from that of the Tories. John Strachey commented in 1948 that ‘colonial development’ was “a life and death matter for the economy of this country” (Ibid p304). Apart from India the government announced a “planned progress” for the “colonial dependencies”.

It supported the US against the Soviet Union. Ernest Bevin as foreign secretary was vigorously hostile to the Soviet Union and responsible for the setting up of Nato. He commented at this time: “In parliament I usually followed him [Winston Churchill] in debate and I would publicly have agreed with him more, if I had not been anxious to embarrass him less” (Milliband, p 303).

Labour promoted the rightwing government in Greece against the Soviet Union. It encouraged US involvement in the eastern Mediterranean, which received its success in March 1947. President Truman asked congress for a $400 million grant to aid Turkey and Greece against the “communist threat”. This led to the Marshall Plan, championed by Bevin, which heralded the beginning of the cold war.

India was partitioned, causing massive population transfers and massacres. In 1948 withdrawal from Palestine followed the UN recommendation of partition. The government supported the US with troops in South Korea in 1950. Morrison, foreign secretary in Labour’s second term from 1950-51, is reported to have said: “Foreign policy would be OK except for bloody foreigners” (Eatwell,p137). Nothing here which remotely resembles working class internationalism.

In March 1947 national service was extended to 12 months and further in 1950 to two years. The 1951 austerity budget paid for imperialism’s rearmament programme with £1,110 million being spent on ‘defence’ and £810 million on health and insurance.

January 1948 saw the creation of a secret foreign office department to supply anti-communist propaganda. In the same year American atomic bombers were stationed in Britain to fly missions to the Soviet Union, should war break out.

The 1949 Ireland Act stated that the north of Ireland would remain a part of the United Kingdom until its parliament voted otherwise. Only 63 Labour MPs voted against this act.

The spirit of radicalism and the demands for reform from below certainly had its impact, and the working class made significant gains. But, given the complete record of the Labour government, this in no way should be confused with workers governing in the interests of society as a whole. Nor should it be seen as the socialist heart of Labour, to which we all might one day return. This was a particular period in history when the bourgeoisie as a whole saw the need to respond to working class radicalism with reforms and to reconstruct a war-torn capitalist economy through nationalisation, which went hand in hand with austerity.

Labour in 1945 was a thoroughly vicious, anti-worker, capitalist government, not something we want to aspire to. Neither should those who look back to the post-war consensus of reforms imagine that capitalism in its present state of decay will be willing to introduce reforms for the benefit of the working class again. We cannot continue to suffer the illusion that Labour can even begin to deliver workers’ government. We must take power into our own hands.