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The golden age of the British
Labour Party was the 1945-51 Labour government. So it is worth noting some
little known aspects of its policies to cast some light on the political
background to the modern day resurgence of ‘Corbynism’. Highlights of this
administration in British popular consciousness are the introduction of the
welfare state, establishing the NHS and a pension system. While there were
economic problems in spending on welfare, since the UK was essentially bankrupt
in 1945, the Labour government rose to the challenge. How did they do this? By
using British imperial power!
One of the 1945-51 Labour
government’s priorities was to maintain Britain’s imperial role. For good
measure, this also included re-establishing French and Dutch colonial power in
Asia, as a sign that the status quo ante could be revived in Burma,
Malaya, Vietnam, Indonesia, etc. Using colonial Indian troops and Japanese
troops to bring this about highlighted British politicians’ pragmatism and flair.
Who else would have come up with the idea of defeating anti-colonial
nationalists with soldiers both from a colony and from a recently defeated
imperialist power? A stroke of imperial genius![1]
Although these events might seem to be
an unfortunate foreign policy to liberal souls, having nothing to do with
progressive social policies at home, in fact the two things were closely
linked. Just look at how the new welfare state was financed.
Britain’s finances in 1945
depended upon foreign loans in 1945 amounting to £2,100m, or a massive 20% of
GDP (note that £1 used to be worth something in those days). Of this sum,
£1,100m was from the US. It was not exactly enthusiastic about Labour’s
spending plans, but it was happy that the Brits were playing a necessary role worldwide
in suppressing ‘communism’. For example, apart from the colonial efforts, think
of Britain’s role in the defeat of Greek radicals and establishing a military
dictatorship after 1945. So, history will record that the US played a role in
funding the setting up of the UK welfare state! Another £250m was from Canada,
which was both politically close to the UK and had done well out of the Second
World War. Significantly, Britain’s colonies ‘lent’ £750m through the financial
mechanism of the Sterling Area that gave them no choice but to do so. These
were borrowings by Britain whose international value was reduced when
sterling’s exchange rate against the US dollar fell in later years.[2]
After 1945, the welfare system
quickly became unaffordable on the basis of Britain’s economy, especially when
Labour increased defence spending during the Korean War. Apart from charges for
prescriptions of medicines, something that led to ructions in Labour’s ranks
and the resignation from government of Labour saint Aneurin Bevan in 1951, it
also led to several years of rationing goods even more stringently than during
the war. Above all, it prompted ever more nefarious plans to milk the colonies
for economic resources in addition to the previous Sterling Area financial rip
offs. Details on the former are set out in my article on this blog, 'Labour's Colonial Policy', 7 December 2014.
That is some of the historical
background to typical Labour ‘progressive, alternative’ policies. It is based
on using Britain’s privileged position in the world economy to deliver benefits
to the British populace, completely consistent with Britain’s imperial role and
nothing that could be described as a socialist view of policy in the world
economy, far less anything that is anti-capitalist.
Jeremy Corbyn may know the
history, in which case being a longstanding, proud member of the Labour Party
raises a few questions. If he does not know the history, then it would reflect
the more widespread arrogance, all appearances to the contrary in his case, of
assuming that the rest of the world owes the Brits a living.
Tony Norfield, 8 October 2015
[1] I am not
making this up. See Christopher Bayley and Tim Harper’s book, Forgotten
Wars: the End of Britain’s Asian Empire, Allen Lane, London, 2007.
[2] There are
few studies of these embarrassing (for Labour loyalists) events. One
accessible source, written from a pro-capitalist market, although
strikingly critical, perspective, is Edmund Dell, A Strange Eventful
History: Democratic Socialism in Britain, Harper Collins, London, 1999,
especially Chapter 7.
