The Dismissal of British Labour: A Political Letter from London

The Dismissal of British Labour: A Political Letter from London

THE NIGHT WE LEARNED last June that the Labour party had been defeated, I tried to solve the puzzle of this unexpected slap in the face. It was, I thought, for two basic reasons. In today’s consumer society, what the working-class voters wanted from their leaders was not more socialism but more affluence. Moreover, the organized workers were sometimes revolutionary but unlike their leaders almost never liberal, so that Labour’s main achievement in liberalizing British society interested them little, if at all. On the whole, I now think these first reactions were broadly correct.

One has always to remember that when Harold Wilson won his narrow electoral victory in November 1964, it was at a harsh stage in the cruelly slow British readjustment to having lost an empire but not found a role. Like Churchill during the war, so the first postwar Labour government had still acted on the world stage, as in Attlee’s role in self-government for India, Ernest Bevin’s in the creation of Nato, and in the stirring international appeal of Aneurin Bevan’s National Health Service and other welfare-state innovations. By 1964, however, these had become dated and Britain’s whole status uncertain. The once empire-cushioned British economy needed urgent overhaul. It had become clear that at least part of the vast sums Britain had invested abroad, which had helped to create trading centers like Hong Kong, Singapore, and Johannesburg, should have been invested in Britain’s neglected home industries, which as a result were often undercapitalized and antiquated compared to the brand-new plants of German, Japanese, Swedish, or Swiss competitors. Now the need in British industry was to cut loose from reliance on captive imperial markets and from that entire amateur tradition, which had for so long provided titled nonentities with directorships in Britain’s blue-chip firms.

Modernization was needed above all to end the “stop-go” seesaw in British economic policy since the war. The cause of it was that whenever the British economy grew, lack of industrial competitiveness caused it to suck in imports on such a growing scale that the country’s balance of international payments, and so the pound, were put in danger. To avert this, sharp deflationary measures were introduced.