The Five Giants [New Edition]: A Biography of the Welfare State. Nicholas Timmins

The Five Giants [New Edition]: A Biography of the Welfare State

at key moments in life. People paid taxes in middle life when in work, and in return were helped with their children’s upbringing and education, were guaranteed help when sick, and were assisted in old age when earning ceased. There was therefore, and remained, a widespread vested interest – or, to put it more kindly, a mutual interest – in the welfare state, on top of the ‘never again’ revulsion felt over the effects of the 1930s depression.

That revulsion was far from confined to the Labour Party and those who voted for it. Harold Macmillan had written The Middle Way in 1938, with its advocacy of a mixed economy and far greater state intervention than was believed in by the Tory party of the 1930s. He would never forget the poverty and unemployment he had seen in his Stockton-on-Tees constituency. During the war The Middle Way became the creed for the burgeoning Tory Reform Group and once in opposition Churchill gave Butler, Macmillan, Eden and other increasingly senior figures in the party the position and influence to develop those ideas into a radical rethink of the Conservative position.

Needless to say, furious inter-party conflict remained. One of the ironies of politics can be that the closer Government and Opposition are to each other’s position, the louder any distinctions between them may have to be proclaimed. Thus it was over health and housing. The nationalisation of iron and steel, too, caused splenetic divisions, the industry over the years being nationalised, de-nationalised, re-nationalised and finally privatised. Yet even Sir John Anderson, the Treasury ‘dry’, to use modern parlance, who had helped enrage the Tory Reform Group back-benchers over Beveridge, acknowledged that: ‘In the case of the Bank of England, Transport, Cable and Wireless, Electricity and Coal the onus of proving the need for socialisation may not unreasonably be held to have been discharged.’⁶ It was in the main ailing but essential industries, and the public utilities which clearly played a social as well as commercial role, which Labour nationalised, not flourishing industries which would make large profits for the state to spend.

‘The overwhelming electoral defeat of 1945 shook the Conservative Party out of its lethargy and impelled it to re-think its philosophy and re-form its ranks with a thoroughness unmatched for a century,’ Butler has recorded.⁷ Indeed, for a time the party was so seared by its past that its Young Turks, including Macmillan, argued it should change its name.⁸ So large was Labour’s majority that the Tories even toyed with the idea of proportional representation as a road back to at least a share of power. Socialism, Butler says, had provided the electorate ‘with a vision and a doctrine to which we had no authoritative answer or articulated alternative’.⁹ And the Conservatives were faced, Butler was to judge in the mellowness of hindsight, not just with a new intake of the horny-handed sons of toil but with a significant body of new middle-class Labour MPs who ‘had little desire to subvert existing institutions: a moderate affluence was, in their view, respectable and their main (and legitimate) targets were the remaining extremes’.¹⁰ The Conservatives’ predicament was one of ‘magnitude and difficulty’. It was ‘our need to convince a broad spectrum of the electorate, whose minds were scarred by inter-war memories and myths, that we had an alternative policy to socialism which was viable, efficient and humane, which would release and reward enterprise and initiative but without abandoning social justice or reverting to mass unemployment’.¹¹ By the time of the next election the Conservatives had to show that they had ‘accommodated themselves to a social revolution’.¹²

It was Butler who was to lead what became a Tory revolution as, in Anthony Howard’s words, the Conservatives’ ‘philosopher-in-chief’. Churchill appointed him chairman of both the moribund Conservative Research Department and the cumbersomely named Advisory Committee on Policy and Political Education to which the Conservative Political Centre was answerable. Together they formed what Butler dubbed ‘a thinking machine’ – a precursor of the modern think-tanks. Into the research department came a galaxy of future stars: Reginald Maudling concentrating on economics, Iain Macleod on social policy, and Enoch Powell. Then in 1946, after a dispirited party conference had called for a new approach, Churchill appointed Butler chairman of what proved to be the most important body of them all, an industrial committee whose members included rising stars such as Macmillan, David Eccles, Peter Thorneycroft and Derrick Heathcoat-Amory, as well as more established names such as the two Olivers, Lyttelton and Stanley.

The outcome was the Industrial Charter, described by Anthony Howard as probably ‘the most memorable concession a free enterprise party ever made to the spirit of Keynesian economics’.¹³ It is not, as Butler himself was to confess, the most riveting of reads. He still had the powerful, free-market, laissez-faire right wing to deal with in the person of such wonderfully named back-benchers as Sir Waldron Smithers and Sir Herbert Williams, the latter convinced that the Conservatives in the war had been led to accept ‘pink Socialism’.¹⁴ There were other Tory MPs for whom, as Macmillan put it in 1947, ‘time does not merely stand still, it runs backwards’.¹⁵ They had on their side the might of the Beaverbrook press, notably the Daily Express, Sunday Express and Evening Standard, then in its heyday. Butler attempted to outflank his opponents by boring them. ‘Rarely in the field of political pamphleteering,’ he observed, ‘can a document so radical in effect have been written with such flatness of language and blandness of tone.’ The aim was to give the party ‘a painless but permanent face-lift; the more unflamboyant the changes, the less likely were the features to sag again. Our first purpose was to counter the charge and the fear that we were the party of industrial go-as-you-please and devil-take-the-hindmost, that full employment and the Welfare State were not safe in our hands.’¹⁶

So while the charter did have much on industry (accepting the nationalisation of the Bank of England, coal and the railways on a case by case basis) and on co-operation within industry (much of which now reads as rather idealistic and quaint), its core was the Keynesian duty of the government to regulate the economy. It was a remarkable revision of the party’s 1930s position. ‘Perhaps its [the government’s] greatest duty,’ the document said, ‘is to ensure that such main priorities as the maintenance of employment and our well-developed social services are fulfilled before subsidiary objectives are sought and that the tasks set are not beyond the capacity of the resources available.’¹⁷

There was a healthy Conservative qualification at the end of that sentence – in effect, ‘we have to be able to afford it’. But equally, the first duties of government were clearly spelt out. The charter was thus, in Butler’s words, ‘first and foremost an assurance that, in the interests of efficiency, full employment and social security, modern Conservatism would maintain strong central guidance over the operation of the economy’. The charter contained plenty to mark Conservatism out from Socialism. Indeed, its objective was to state a clear alternative. There were themes which were to recur endlessly over the years: the improvement of incentives via lower taxation, the removal of controls, the shrinking of the civil service, the sharpening of competition.¹⁸ But it finally defined what Lord Woolton was to call the ‘shandy gaff’ of Labour/Tory centralism which was to be the core of British politics for the next thirty years.

For all the charter’s bland language it was far from certain the right would acquiesce, and the admittedly partisan Tribune predicted it would ‘split the Tory party as it has not been divided for a half a century’. The prediction proved no better than the grammar and at a carefully stage-managed Conservative Party conference in Brighton in 1947 the right was routed by this renewal of ‘One Nation’ Conservatism. The charter went through despite a hiccup recorded by Maudling, who was asked by Churchill to provide a five-line summary for his winding-up speech. Churchill read it slowly, only to declare: ‘But I don’t agree with a word of this.’ ‘But, sir,’ Maudling was forced to protest, ‘this is what the conference adopted.’¹⁹

Anthony Howard’s judgement is that the charter ‘ended up virtually sealing the party off from its pre-war past’. Butler, more grandiloquently, echoed the Spectator’s view that it destroyed ‘the last excuse for labelling the Conservative party as reactionary’.²⁰ That may have been true internally in 1947. But The Right Road for Britain, a document produced two years later which formed the basis for the 1950 and 1951 manifestos, shows how far the party knew it had still to go to convince the public.

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