Wasted opportunities? the 1950s rearmament programme and the failure of British economic policy

Journal of Contemporary History

Volumn 32, Issue 3, 1997, Pages 357-379

  Park, Jihang ^a  

^a Seoul National University   (South Korea)

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EID: 34248112005     PISSN: 00220094     EISSN: None     Source Type: Journal    
DOI: 10.1177/002200949703200305     Document Type: Article

References (91)

1. Kenneth Harris, Attlee (London 1984), 454
2. Some of the literature that discusses the issue includes Peter Hennessy, Never Again (London 1993)
3. Edwin Plowden, An Industrialist in the Treasury (London 1989), 164
4. Sidney Pollard, The Wasting of the British Economy (London 1984), 36
5. A. Shonfield, British Economic Policy since the War (London 1959). Alec Cairncross is probably the only sympathetic commentator. Cairncross, Years of Recovery: British Economic Policy 1945-51 (London 1985)
6. idem, The British Economy since 1945 (Oxford 1992)
7. idem, 'Economic Policy and Performance, 1945-1964' in R. Floud and D. McCloskey (eds), The Economic History of Britain since 1700, vol. 3: 1939-1992 (Cambridge 1994)
8. The most recent survey of the topic is presented by M.W. Kirby, 'Institutional Rigidities and Economic Decline: Reflections on the British Experience', Economic History Review, XLV, 4 (1992)
9. See also D. Coates, The Question of UK Decline (Hertfordshire 1994)
10. The CEPS was integrated into the Treasury in 1949 and the ES in 1953. See M. Cunningham, '"From the Ground Up?": The Labour Governments and Economic Planning' in Jim Fyrth (ed.) The Government and the Economy 1945-51 (London 1993). For further details of the ES, see Alec Cairncross and Nita Watts, The Economic Section 1939-1961: A Study in Economic Advising (London 1989)
11. I.M.D. Little, 'The Economist in Whitehall', Lloyds Bank Review, new series, no. 44 (April 1957);
12. Samuel Brittan, Steering the Economy: The Treasury under the Tories, 1951-64 (Middlesex 1969), 187
13. A recent study on the Labour governments finds them exerting a similarly conservative influence. Helen Mercer, Neil Rollings and Jim Tomlinson, Labour Governments and Private Industry (Edinburgh 1992), 9
14. T 229/443 EPB(51)3 'First Draft of the Economic Survey for 1951', 12 March 1951. All the declassified government files cited in this paper are located in the PRO
15. Even after this, the Attlee government continued hoping for other sources of assistance, the so-called 'burden-sharing' under NATO
16. T 229/704 'Further Increase in Defence Expenditure', 18 December 1950
17. Lord Roberthall, The Robert Hall Diaries 1947-53, 16 January 1951, ed. by A. Cairncross (London 1989)
18. T 230/305 'Mr Downie on Economic Policy', Hall, 21 January 1957; Hall Diaries, 24 January 1951
19. Hall Diaries, 18 July 1950
20. T 229/443 EPB(51)10 'Urgent Economic Problems', 13 December 1951
21. Hall Diaries, 5 July 1950; T 229/846 'The Priority Guidance to be given to firms in conflict between dollar export and defence orders', 23 August 1950; T 230/323 'Current Economic Situation', 27 September 1950
22. T 230/194 Committee on Productive Capacity(51)10 [also E.S.(51)31] 'Limitation of civil output in the metal-using industries', 26 April 1951
23. BT 190/8 NPACI(52)474 memorandum of the President of the Board of Trade, 17 July 1952. Of the total output in engineering industries in 1950, for instance, about two-fifths was exported, over one-third was used for investment at home, and the remainder was divided between defence, consumption and other domestic uses. Cmd. 8195, Economic Survey for 1951 (April 1951), 19; Cairncross, Years of Recovery, op. cit., 228
24. T 229/846 'The Priority Guidance', 23 August 1950
25. T 229/465 IPC(W.P.)(50)18 'Investment criteria for manufacturing industry', 29 November 1950. Officials rather anticipated British exporters taking advantage of shortages in the USA if supplies permitted
26. T 229/438 EPB(51)14 'Defence production and the general economic situation', 20 July 1951. The Economic Survey for 1951 assumed a 30 per cent increase in export prices
27. T 229/846 'Arrangements for minimising the impact of the defence production', 23 August 1950
28. The Ministry of Labour originally estimated that the programme might need a quarter of a million extra men in metal-using industries, but eventually some 650,000 men were mobilized for the rearmament programme. T 229/443 EPB(50)15 'Economic Prospect for 1951', 14 December 1950; T 229/443 EPB(51)8th Meeting Minutes, 26 July 1951; T 230/194 CPC [also E.S.(51)31] 'Limitation of civil output in the metal-using industries', 26 April 1951
29. T 229/704 'Progress and Defence Production', memorandum of the Minister of Defence, 28 September 1951; T 229/443 EPB(51)8, 26 July 1951
30. T 229/846 'Draft Ministerial Statement on Priority for the Rearmament Programme', 10 May 1951
31. J.C.R. Dow, Management of the British Economy (Cambridge 1964), 63, 71;
32. Plowden, An Industrialist, op. cit., 139
33. The increasing cost of British forces in Germany and in the Middle East also contributed to the deterioration of the balance of payments. T 229/649 EPB(52)4 'Defence and the Balance of Payments', 15 May 1952
34. T 229/705 'Urgent Economic Problems', 29 November 1951.
35. Interestingly, in each year of this alleged shortage, the UK exported more than 2.5 million tons of steel to avoid the situation in which Commonwealth countries would spend dollars for steel imports and thus put greater strain on the sterling-area reserves. Alan S. Milward, The European Rescue of the Nation-State (London 1992), 414
36. T 229/649 EPB(52)2nd Meeting Minutes, 7 February 1952
37. T 229/861, 25 July 1952
38. Hall Diaries, 27 July 1951
39. See also R.L. Marris, 'The Position of Economics and Economists in the Government Machine' in Economic Journal, vol. 64 (December 1954), 781
40. Hall Diaries, 6 August 1952
41. Pollard, Wasting of the British Economy, op. cit., 36
42. T 229/441 EPB(53)29, 16 September 1953
43. Cairncross, Years of Recovery, op. cit., 228, 231;
44. idem, 'Economic Policy and Performance', op. cit., 43
45. CAB 134/851 EPC EA(54)1 'Conflict between Defence and Export Claims on UK Engineering Capacity', joint memorandum by the President of the Board of Trade and Minister of Supply, 5 January 1954. A similar observation was made the previous year. CAB 134/847 EPC EA(53)14, 24 January 1953
46. CAB 134/846 EA(53)11th Meeting Minutes, 'Termination of the steel distribution', 25 March 1953; Dow, Management of the British Economy, op. cit., 57; CAB 134/847 EPC EA(53)14 'Exports and Defence Requirements', memorandum by the President of the Board of Trade, 24 January 1953. The CEPS had already predicted in May 1952 a difficulty to find export markets to absorb the capacity released in the metal-using industry. T 229/649 EPB(52)4 'Defence and the balance of payments', 10 May 1952
47. Dow, Management of the British Economy, op. cit., 64.
48. Shonfield also believed that 'the defence programme effectively shackled the British economy for a couple of years'. Andrew Shonfield, Modern Capitalism (Oxford 1969), 56
49. T 229/441 EPB(53)29 'UK Export Trends', 16 September 1953; T 230/403 C.R. Ross to D. Butt, May 1955
50. T 230/194 Committee on Productive Capacity(51)10 [also E.S.(51)31] 'Limitation of civil output in the metal using industries', 26 April 1951; T 273/247 'Balance of Payments in 1951/52', 18 June 1951; T 229/704 F. Turnbull to Chancellor, 18 December 1950; T 229/465 IPC 'Industrial Investment in Manufacturing Industry', G.R. Strauss to Gaitskell, 31 July 1950; T 229/443 EPB(51)6, 7 April 1951
51. Jim Tomlinson, Public Policy and the Economy since 1900 (Oxford 1990), 229
52. Robert A. Brady, Crisis in Britain (London 1950), 642. According to Shonfield, Labour chancellors Cripps and Gaitskell were ignoring investment while Butler was promoting it. Shonfield, British Economic Policy since the War, op. cit., 175
53. T 229/705 'Defence budget for 1952/55', A.M. Jenkins to Shillito, 16 November 1951
54. T 230/284 'Long-Term Economic Survey', Hall to Sir Bernard Gilbert, 16 December 1954; T 230/305 'Notes on Economic Policy', J. Downie, 13 December 1956; T 230/305 'Mr Downie on Economic Policy', Hall, 21 January 1957
55. T 229/842 UK Permanent Delegation, Paris, to Foreign Office, 25 August 1954; T 230/403 'The General Economic Situation 1954', December 1954
56. B.W.E. Alford, British Economic Performance 1945-1975 (London 1988), 38
57. Barry Supple, 'British Economic Decline since 1945', Economic History of Britain, vol. 3, 344
58. Jim Tomlinson, 'British Economic Policy since 1945', Economic History of Britain, vol. 3, 265
59. CAB 134/885 ES(53)12th Meeting Minutes, 18 September 1953
60. T 230/305 'Notes on Economic Policy', Downie, 13 December 1956;
61. 'Economic Policy', W.S. Scammell, 21 December 1956; G.W. Troup, 29 January 1957
62. Milward, The European Rescue, op. cit., 408, 420
63. See Downie's 'Notes on Economic Policy' and officials' comments on it. T 230/305 December 1956 and January 1957. T 230/322 'Economic Controls', Sir Bernard Gilbert, 2 April 1956
64. Marris, 'The Position of Economics and Economists', op.cit., 780
65. Many books and articles have been devoted to this issue. See especially Pollard, The Development of the British Economy 1914-1980 (London 1985);
66. Scott Newton and Dilwyn Porter, Modernization Frustrated (London 1988). For a different interpretation of the causal relationship between economic growth and the balance of payments, see Charles Feinstein, 'Success and Failure: British Economic Growth since 1948' in Economic History of Britain since 1700, vol. 3
67. T 230/523 'Economic Growth and the Balance of Payments', F.R.P. Vinter to Atkinson, 23 March 1961
68. Shonfield, Modern Capitalism, op.cit., 93
69. T 230/305 'Notes on Economic Policy', Downie, 13 December 1956
70. Brittan, Steering the Economy, op.cit., 195
71. Keith Middlemas, Power, Competition and the State, Vol I., Britain in Search of Balance, 1940-1961 (Stanford 1986), chaps 7 and 8
72. BT 213/88 UK(E)(57)13 'UK Export Trends 1951-56', 'Industrialists' Comments', Board of Trade, 1 October 1957
73. T 230/323 'Economic Planning', Henley, 10 June 1953
74. Sir Frank Lee, The Stamp Memorial Lecture (London 1958), 29;
75. Reginald Maudling, Memoirs (London 1978), 80
76. T 233/1121 'The TUC and the 1954 Budget', 2 March 1954
77. T 230/493 'Notes for Incoming Chancellor', 22 August 1960
78. T 230/305 'Economic Policy', Hall and Troup, December 1956 and January 1957
79. Hall Diaries, 1 April 1952. Harold Macmillan, Tides of Fortune 1945-55 (London 1969), 388. Corelli Barnett's The Audit of War (London 1986) pinpointed Labour's preoccupation with building the 'New Jerusalem' as militating against an adequate strategy for industrial regeneration. Most recently, Martin Pugh's account also finds housing responsible for much of the balance of payments and the drift of investment at the expense of manufacturing industry. Pugh, State and Society (London 1994)
80. In July 1951, the raw materials responsibilities of the Ministry of Supply and the Board of Trade were merged into a new Ministry of Materials. David Edgerton, 'Whatever Happened to the British Warfare State? The Ministry of Supply, 1945-1951' in H. Mercer et al., Labour Governments and Private Industry, op.cit
81. T 234/88 Frank Lee to R. Makins, 24 April 1957
82. T 273/315 to Armstrong, 22 April 1952
83. T 229/593 Hall to Henley, 27 July 1953. The Robert Hall who emerges from the PRO documents does not appear as Keynsian as he has been portrayed. He abhorred the idea of political forces distorting market forces and constantly warned against the political decision to implement a policy of full employment
84. T 230/323 'Economic Planning, Research, and Fiscal Policy', Henley, 10 June 1953
85. Marris, 'Position of Economics and Economists', op.cit., 780.
86. Coates estimates that there were 17 economists in the British civil service in 1954. A.W. Coates, 'Britain: The Rise of the Specialists' in Coates (ed.), Economists in Government (Durham, NC 1981), 33
87. T 229/593 A.A. Jarratt and Caulcott to Strath, 23 February 1955; T 230/305 'Comment on Notes on Economic Policy', December 1956 and January 1957. See also Shonfield, Modern Capitalism, op.cit., 94
88. T 230/266 to R. Powell, 12 April 1949
89. T 230/267 'Long-term Planning and the CEPS', Dow to Hall, 30 June 1954
90. T 230/521 'Remedies for adverse balance of payments', C.C. Lucas to R.L. Workman, 9 June 1961
91. For a more positive assessment of the Conservative government in the 1950s, see Anthony Seldon, 'The Churchill Administration 1951-55' in P. Hennessy and A. Seldon (eds), Ruling Performance (Oxford 1989)