Clement Atlee

The economy

The Attlee government inherited the issue of Britain’s wartime debt, which was around £4198 million. In addition to this, there was an issue with the balance of payments. In the year 1945–46, Britain spent more abroad than it received. Added to its wartime debt, this became a difficult situation for the Attlee government.

To try and solve the issue, Chancellor Hugh Dalton negotiated a loan from the USA and Canada, in the hope that the loan would promote industrial growth enough to recover. However, industrial growth never did reach the levels he hoped.

The Marshall Plan

Britain’s post-war economic recovery could not have happened without American aid in the form of the Marshall Plan.

Worried that wartime debt and balance of payments issues were going to negatively affect world trade, the USA came up with a program that offered American financial aid to any country that wanted it, in return for trade concessions.

Named after US Secretary of State George Marshall, the Marshall Plan gave $15 billion in financial aid to Europe. Britain received 10% of that; its share was negotiated very successfully by Foreign Secretary Ernest Bevin.

Britain began to receive Marshall Plan aid in 1948 and it contributed massively to its economic recovery.

Clement Attlee and decolonisation

With the pressure put on Britain by the Second World War, it became very apparent during this time that the burden of retaining Britain’s overseas colonies was getting too much to bear.

During the Attlee government, several British colonies made moves towards independence. Attlee himself supported and orchestrated the independence of these colonies, supported by his Foreign Secretary, Ernest Bevin.

India

Attlee had served on the Indian Statutory Commission from 1928–34 and was regarded as something of an expert on the political situation of India in the Labour Party. He felt that India should be given the same dominion status that applied to countries such as Canada, New Zealand, and Australia.

Attlee and the Labour party also felt sympathy towards the Indian Congress Movement and its resistance to British rule that was led by Mahatma Gandhi and Jawaharlal Nehru.

However, it must be noted that a large reason for the independence of India was that Britain could not afford to keep it as a colony. Along with a huge rise in resistance to British rule, it was becoming more trouble than it was worth.

Attlee’s desire to give India its independence received a lot of opposition from the old Conservative imperialists led by Winston Churchill.

India gained its independence in 1947. However, the creation of the new states of India and Pakistan resulted in the resettlement of millions of people and a huge amount of violence. Estimates suggest that over a million people were killed during this period.

Burma (Myanmar)

In 1947, Attlee introduced the Burma Independence Bill to Parliament. It stated that Burma would cease to be part of the British Empire and would also leave the Commonwealth. Attlee expressed his regret that the country had not chosen to stay within the Commonwealth.

The bill received Royal Assent on 10 December 1947 and came into effect on 4 January 1948.

Once again, the handling of Burma’s independence gained Attlee a lot of criticism, notably from Winston Churchill.

Fig. 2 - Winston Churchill

Ceylon (Sri Lanka)

Ceylon entered the first stage of decolonisation in February 1948 when it became a British dominion within the Commonwealth. The transfer of power was said to be peaceful, presided over by Attlee.

In reality, Ceylon had a thriving independence movement that had not been afraid to show its strength. In addition to the usual social and cultural movements for independence, there had been strikes in British-owned plantations and even a mutiny on Cocos Islands during the Second World War.

Although the transfer of power was called ‘peaceful’, it was more of a case that the British jumped out of Ceylon before they were pushed out.

Palestine

The British Mandate in Palestine was a big issue for Attlee. The Mandate was becoming increasingly difficult to handle as there was a lot of resistance to British policy.

The Palestine Emergency was one such act of resistance. Zionist paramilitary groups pursued active resistance in an insurgency against the British, who had put many restrictions on the Jewish population of Palestine and seemed to favour the Arab population.

Attlee took the decision to withdraw British troops from Palestine and hand the situation over to the United Nations. The decision to pull out was a popular one in Britain but led to heightened anti-Semitism.

Jordan

Jordan had received a semi-independence in 1923 under the rule of Emir Abdullah, but the military, financial, and foreign affairs were still controlled by the British.

Full independence came in 1946 when the United Nations approved the end of the British Mandate and Jordan became an independent state under the rule of King Abdullah I and was known as the Hashemite Kingdom of Transjordan.

Clement Attlee and the Cold War

The Attlee government was key in the formation of the North Atlantic Treaty Organisation (NATO) in 1949. The organisation was formed out of the desires of Western European countries to foster better military and economic cooperation in addition to stopping the spread of communism and the rise of nationalism. The US eagerly joined, having left behind its traditional policy of diplomatic isolation.

The Korean War

In 1950–53, US-dominated UN forces fought against the takeover of South Korea by Chinese-backed Communists. Thanks to NATO and close US-UK partnership after the Second World War, Attlee offered Britain’s help.

The decision was not a popular one. On a public level, the British people did not relish the thought of getting into another war. After all, the Second World War had ended only five years earlier and the people were still very much feeling the effect of it.

On a political level, many within the Labour party disliked Britain’s involvement as they felt Attlee was pandering to the US by following them into conflict. They did not want Britain to be seen as subservient to America.

Fig. 3 - Clement Attlee, Harry Truman, and Joseph Stalin at the Potsdam Conference

Labour and the creation of the Welfare State

Attlee’s government is best remembered for its role in the creation of the Welfare State, a series of social reforms that aimed to provide support to all areas of society.

The Beveridge Report

The concern over post-war organisation led to the creation of an Interdepartmental Committee in 1941 to study the current systems of social security and make recommendations for their improvement.

William Beveridge was made the Chairman of this Committee, and the report he produced detailing recommendations for reform was central to the formation of the Welfare state under the Attlee government.

Beveridge believed that it was possible to create a minimum level of welfare without using extreme methods. He expressed the need to defeat the ‘Five Giants’: want, disease, ignorance, squalor, and idleness.

His foremost proposal was a system of national insurance that would help stabilise income, thereby abolishing material want. It aimed to replace the existing system, which was unregulated and unsystematic with a centrally funded and regulated system.

Social reforms

The National Health Service Act of 1946 nationalised hospitals and guaranteed free universal healthcare dramatically enlarging the welfare state. Adults received illness and unemployment payments, as well as retirement pensions, under the National Insurance Act of 1946.

The National Assistance Act of 1948 offered a safety net for those who were not covered by other programs. More council housing was created, and the New Towns Act of 1946 set out plans for the expansion of suburbs and the reduction of overpopulation in large cities like London and Glasgow.

Due to a lack of funds for detailed planning, the government adopted free-market capitalism, which allowed for strategising in the sense of overall deficit and surplus control. The Family Allowances Act 1945 and the Education Act of 1944, both written by Conservatives during the war, were expanded.

The British Transport Commission, founded by the Transport Act 1947, took control of the railways from the Big Four, the Great Western Railway, London, Midland and Scottish Railway, London and North Eastern Railway, and the Southern Railways, forming British Railways.

The National Health Service

The creation of a National Health Service aimed to defeat another of Beveridge’s Five Giants: disease.

Aneurin Bevan, Minister for Health under the Attlee government was responsible for the planning and implementation of the NHS. The service aimed to provide free healthcare to anyone who needed it.

Although the act for the creation of the NHS was passed in 1946, its introduction was delayed until 1948 due to the resistance it faced from those in the medical profession. A poll in March 1948 revealed that, of those who voted, only 4735 supported the NHS scheme while 40,814 were against it.

Despite resistance, the NHS came into effect on 5 July 1948. Its main features were:

• Primary care would be provided by General Practitioners (GPs) who would work as independent contractors.
• Dentists and opticians would provide NHS care but would be independent practitioners.
• Hospitals would be run by 14 regional boards which would appoint committees to deal with localised matters.
• Community services such as vaccinations, ambulances, and maternity care would be provided by local authorities.
• Medical prescriptions would be provided free of charge.

Fig. 4 - Health Service poster

Role of the Welfare State

The several acts that created the new system of social insurance were invaluable to the population of post-war Britain.

National Insurance and the Injuries Act, in particular, provided a safety net for those who had been injured or had lost their jobs. The Family Allowances Act and maternity benefits helped out the poorest families in society by giving them extra money for food, clothing, and supplies for their children.

Equally, the widows’ benefit was particularly useful after the war, as it had left many women widows after their husbands had been killed overseas. The new system of benefits ensured that they weren’t left without any recourse in this situation.

National Health Service

The creation of the National Health Service meant that anyone could receive care, no matter their background. This was particularly important in a post-war society as there had been many people injured in bombing raids such as the Blitz during the war. The NHS ensured that they could get treatment for long-term injuries. Additionally, veterans who had suffered long-lasting physical injuries could gain whatever help they needed.

The NHS helped rebuild Britain by ensuring a basic level of healthcare for all to fall back on without worrying about the cost.

Transport Act

The 1947 Transport Act nationalised several forms of transport: railways, canals, bus companies, shipping ports, and long-distance road haulage.

All these modes of transport were brought under the control of the newly-created British Transport Commission, which was part of the plan to create a centrally regulated and publicly-owned transport system.

The nationalisation of transport helped to ensure that transport was more well-regulated. It also allowed for government control over the rebuilding and reconstruction of transport systems, which was particularly key after the damage caused to Britain’s travel infrastructure during the Second World War.

Attlee’s downfall: why did Labour lose the 1951 General Election?

Britain's involvement in the Korean War had not been a popular decision. The thought of being involved in another war, let alone one happening thousands of miles away with no real impact on Britain, was not very palatable to the British public, who were still dealing with the effects of the Second World War.

On a political level, the Korean War angered people in Attlee's own party. Those towards the left in Labour objected on the grounds that they felt Attlee was pandering to the Americans by following them into a conflict. It was not the first time that concerns had been raised over Britain’s relationship with America: they did not want Britain to be seen as subservient and at the whims of the USA.

Of course, the situation with the Korean War gave the Conservative Party, Attlee’s opposition, a whole new round of ammunition with which to attack Attlee and his government.

Divisions in the Labour party

By 1951, the Labour Party was suffering from serious internal conflicts over economic, foreign and welfare policies, borne from being in government for six years.

Bevan and Gaitskell

A particularly serious conflict broke out between Health Minister Aneurin Bevan and Chancellor Hugh Gaitskell concerning prescription charges for the NHS.

Gaitskell argued that the charges were necessary to relieve some of the financial burdens on the government caused by the NHS. Bevan was very much against this and wanted healthcare to remain completely free.

When Gaitskell's 1951 budget introduced these charges, Aneurin Bevan led several other ministers in resigning from the cabinet.

This was a display of how unstable the Attlee government was becoming. It also meant that other members of the party started to voice doubts about the direction of the government’s policies. These divisions were also exploited by the Conservative Party to gain more support in the election.

Strength of the Conservatives

Although the Conservatives had been shocked by their defeat in 1945, by 1951 they were back on their feet, gaining an estimated four million more votes in those six years.

They used Attlee’s policy of nationalisation as a rallying point from which to attack him and his government. They also had ammunition in the form of the welfare state and the amount of money it cost.

Equally, the Liberal party decided to reduce the number of MPs who stood in the 1951 election. Many of the votes that would have gone to the Liberal party then went to the Conservative.

Clement Attlee: achievements and failures

The table below helps you quickly see the most important victories and failures of Attlee’s government.

Attlee's legacy

Clement Attlee has often lived in the shadow of Winston Churchill, failing to be considered in his own right. However, Clement Attlee’s legacy in the modern day is of being one of, if not the most successful Prime Ministers of the twentieth century.

It is the creation of the Welfare State that remains his greatest achievement. The system put in place by the Attlee government supported the British people during an incredibly difficult period. Attlee’s Welfare State has been the backbone of British society and a continuing point of pride for the British people ever since.

Policies decided by the Attlee government set the tone for British politics for the next 35 years: Pro-American and anti-Soviet foreign policy, economic policy based on Keynesian economics, and welfare policies based on the Beveridge report.