British History 1945-1951
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B R I T I S H H I S T O R Y 1 9 4 5 – 1 9 5 1
July 26th 1945. The war still raged in the Pacific, where thousands of British soldiers were still fighting the Japanese army. In Britain, now freed from the dangers of bombings and air raids, a nation had been to the polls. Churchill had broken off talks with the American and Russian leaders at the Potsdam Conference to return to Britain. The results of this General Election surprised the whole nation, not in the least Clement Attlee, the modest leader of the Labour party and now in his way to Buckingham Palace to receive instructions from the King to form a new government. The people of Britain had always gathered behind Winston Churchill as wartime leader, who, in those dark years, mobilised and encouraged an entire nation. He was still considered a war hero by many and this landslide victory by the Labour party came as a shock, not only to Churchill himself, who at the last moment claimed to have had a foreboding feeling of dread, but to Attlee, to most of the people of Britain, and indeed to international leaders such as the American president Truman and the Russian dictator Stalin. Less than 3 months earlier the crowds had poured onto the streets of London to cheer their wartime leader.
The main reasons why now many people had voted for Labour’s Clement Attlee, and not for war hero Winston Churchill, were the promises by the Labour party of implementing the Beveridge Report and its plans to create a welfare state. The Beveridge Report aimed to bring down the 5 giant evils of idleness, ignorance, disease, squalor and want. The report recommended the establishment of a National Health Service, National Insurance and assistance, family allowances, and stressed the importance of full-employment. All these created the welfare state, the core of which we still have today.
After the General Election clement Attlee busied himself to implement the Beveridge Report, but there were dark clouds on the horizon. Within weeks the war with Japan came to an end, triggering a series of events. Britain had fought the war with American guns, survived on American loans and eaten American food and now America presented the bill. Attlee sent the economist John Maynard Keynes to Washington to negotiate an interest-free loan of 8 billion dollars. After three months he came away with a loan of nearly 4 billion dollars, plus interest, which was finally paid off in December 2006. The Americans stipulated a condition: certain exchange controls, which had protected the British pound and the economy, had to cease 12 months after the start of the loan.
The government was by now struggling to pay off the country’s debts and tried to solve this by exporting most of its products, which meant consumer goods were becoming more and more scarce. Food items were being severely rationed, including bread, which even in the war years had never been rationed. The other big cost-cutting exercise by the Labour government was giving up the empire and it started with India being granted its independence in 1947. The sun was setting on an empire, which many had sought to defend. Clement Attlee’s government also passed the British Nationality Act, which granted unlimited access to all citizens of the British Commonwealth (around a quarter of the world population at the time), a piece of legislation which would transform modern Britain in years to come.
The government also intended to nationalise the coal industry and rebuild Britain’s rail network. The coal industry was so important because 90% of the country’s energy came from coal. The European Coal and Steel Community, the forerunner of the European Union, invited Britain to join, but the government declined and thus ruined its chances of being a leading factor in re-shaping modern Europe. It would take another generation to bring that about.
In January 1947, the onset of the coldest winter of the century caused massive disruption of road and rail transport and coal would remain at the pits. Power stations had to be shut down and 2 million people were laid off, because factories were left without energy supplies. People faced cold and hunger and the black markets flourished. The government encouraged people to tighten their belts and abstain from life’s little luxuries, which the British people found hard to stomach. They felt they were being pushed too far.
The next event was catastrophic. The condition attached to the American loan came into force. The exchange controls, which prevented anybody to take more than ÐЈ5 out of the country, were suspended by Hugh Dalton, the chancellor of the exchequer. This led to