Suez Crisis

When President Nasser of Egypt nationalized the Suez Canal, the French and British response was to plot with Israel to got to war against Egypt. American threats to sell their sterling reserves, and Arab threats of oil embargo, forced a hasty and shamefaced British withdrawal, and a rethink about Britain's imperial future.

The newsreel used in class:


Further images and information, from a recent BBC documentary:

The Fifties

Most of the notes for class 4 seem to have vanished into cyberspace, leaving only the powerpoint slides (on icampus). Fortunately, this is a period extremely well covered by Andrew Marr (as you will all be aware, but here it is again).

The main events outlined in class were:

• the coronation: a moment of jubilation, the first mass ceremony of the television age (Princess Diana's funeral, at the end of our period, makes a nice complement), and a time for new hopes of British "greatness" emerging from wartime deprivation and postwar austerity.
• British achievements in science and technology (the first jetliner, the first nuclear facility for non-military purposes, an independent atomic bomb, describing the structure of DNA, etc.), giving science-fiction writers the impression that Britain would stand at the forefront of the future
• the attempts to maintain some independent standing in world affairs, and to reassert British power in Malaya and Kenya
• the Suez Crisis, for which follow this link (it's important, so do click), revealing the illusory nature of any hopes for Britain being an independent world force; two of the films used in class are here
• a long period of economic growth and prosperity, despite on-going inefficiencies in British industry
• the "Profumo Affair" (covered in detail by Marr)
  

Scotland

At its union with England, Scotland retained

• its own legal system (based on principles of civil law rather than common law),
• its own educational system (with far higher literacy rates than elsewhere in Britain, and a proud claim to be "the first country in the world with universal education"),
• a separate established church (the Church of Scotland),
• and its own aristocracy and gentry.

All this was accompanied by all the heraldry and symbolism of legal, academic, ecclesiastical and noble life.

Scotland is more sparsely inhabited than England, but contains a number of impressive cities. The largest is Glasgow, a major centre of industry and ship-building in the 19th century, "the second city of the Empire", with all the social problems attendant on industrialization and postwar industrial decline.

Edinburgh, Scotland's capital, is a centre of administration, law, banking, learning and culture.

Aberdeen, anciently important in North Sea shipping and fisheries, and a minor centre of 19th-century industry, became the energy capital of the U.K., and to some extent of Europe, after the discovery of North Sea oil.

Geographically and culturally, the Highlands of Scotland are set apart from the Lowlands. Much of the romantic imagery of glens, lochs, castles, crofts, kilts, bagpipes, etc. derives from the Scottish Highlands.

The Thatcher Years, 1979-1990

Margaret Thatcher’s first term as Prime Minister was marked by two things: a determination to bring down inflation by a rigid application of "monetarist" policy (restricting the supply of money), and a small but costly war fought against Argentina for control of the Falkland Islands in the South Atlantic.

The determination to bring down inflation whatever the short-term cost meant the death of much of Britain's traditional industry. The refusal to subsidise industry or to compromise with trade unions was the end of a long postwar consensus. It was clear from the beginning that the social cost in terms of unemployment would be high, but "fixing the fundamentals" of the economy (that is, bringing down inflation) was given priority. This was despite the Conservatives having run an election campaign in 1979 that was critical of high unemployment, with the slogan "Labour isn't working". In 1977 there were 1.3 million unemployed in Britain; by 1981 2.7 million.

In 1981 there was rioting in several major cities: in Brixton (London), Chapeltown (Leeds), Handsworth (Birmingham), Toxteth (Liverpool), and Moss Side (Manchester). In each case there was an element of racial conflict in the rioting, as well as a sense of grievance relating to unemployment and urban decay.

Victory in the Falklands meant that the social and industrial cost of monetarist economics could be overlooked by the electorate. There was also, in the early Eighties, no real political alternative: the Labour Party had fallen under the sway of a Trotskyist-infiltrated left wing, and made itself unelectable. Four senior members of the more moderate wing of the party - including Roy Jenkins - broke away to form the Social Democratic Party (SDP). In terms of policy the SDP presented an attractive alternative to the two main parties, but it lacked the party machinery and established mass base to win power. The SDP formed an electoral pact with the Liberal Party, and in 1988 the two parties merged under the name Liberal Democrats.

It was in her second term that Margaret Thatcher began to change the British economy in ways that were soon copied in other countries, by a commitment to the privatisation of state-owned companies. Together with the sale of council houses, this created a new "popular capitalism" of home ownership and share ownership. At the same time, the deregulation of financial markets meant that speculation was producing massive new wealth, and London was becoming the most active financial market in the world. A Labour government had begun the exploitation of oil fields in the North Sea in 1975, but it was Thatcher who reaped the benefit of growing revenues and a measure of energy self-sufficiency, subsidising her economic reforms.

It was during her third term that Thatcher began to lose popularity in the country, as her policies to make the rich richer came to seem equally calculated to make the poor poorer (income tax cuts, sales tax increases, the "poll tax"). At the same time, she was becoming increasingly unacceptable to other leading figures within the Conservative Party through her populist anti-Europeanism, wrecking their attempts to gain Britain a "leading role" in the European Union.

The Mini

The Arab oil embargo at the time of the Suez Crisis had stimulated demand for small cars that were economical to run, such as the Citroën 2CV and the Volkswagen Beetle. British manufacturers had not previously considered the market for cars with low fuel consumption, so were in a hurry to build something to compete.

The most successful design for a low cost car was the mini, designed by Alec Issigonis and produced by the British Motor Corporation. Like the miniskirt, pop music, and buses that passengers could hop in and out of at will, the mini became an icon of the new, young, stylish Britain. In 2009 it was one of the "British Design Classics" celebrated on a special stamp issue.

Foreign manufacturers could not understand how Morris was making the Mini so cheaply, but in fact poor costing meant that the mini was initially being sold at a loss. This is bleak testimony to the general inefficiency of postwar British industry.

Nationalisation

The second major plank of the Labour platform, next to social welfare, was national ownership of key sectors of the economy. Clause IV, part 4 of the constitution of the Labour Party stated the aim:

To secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service.

This was put into practice by the Attlee government primarily with regard to energy, heavy industry, and transport.

Attlee’s government opted not for the “Post Office model” of state ownership (an organisation run by a government department, with the Post Master General a political appointment), but for “State-owned Corporations” (the government bought up private companies, amalgamated them, and turned them over to a board of directors, the government taking the place of shareholders rather than of management). Attlee called this “a mixed economy developing toward socialism”. The policy was not entirely new: immediately prior to the First World War Winston Churchill, as First Lord of the Admiralty, had talked the government into acquiring a 51% stake in the Anglo-Persian Oil Company (renamed British Petroleum in 1954, now BP), in order to ensure the supply of oil for the needs of the Royal Navy. The British Overseas Airways Corporation (BOAC) was a state-owned company established in 1939 to control civil air communication between Britain and the Empire overseas. Attlee's government adopted the policy on a new scale.

The state became the major shareholder in key national industries but appointed a board that in its daily decisions was supposedly free of political control, and to some extent was expected to run the companies profitably and efficiently much like the board of any other company. When the Bank of England was nationalised in 1946, the directors already in place were simply appointed as the new board. The Labour government did not by any means consider the "best obtainable system of popular administration and control" to be a workers' co-operative.

For the government to take these steps required a raft of new legislation.

• The Coal Industry Nationalisation Act 1946 empowered the government to buy out the numerous private mine owners (for a total of £164 million) and amalgamate the mines under the National Coal Board (established 1 January 1947).
• The Electricity Act 1947 merged over 600 private electricity companies, municipal electricity departments, and the Central Electricity Board under the auspices of the British Electricity Authority (established 1947). In the following years electrification reached many rural areas that had not previously received electricity because it would have been unprofitable for private companies and prohibitively expensive for local authorities.
  
• The Gas Act 1948 merged over 1000 private and municipal gas companies into twelve regional, state-owned corporations, the “Area Gas Boards” under a Gas Council (established 1948), what later became British Gas.
• The Iron and Steel Act 1949 merged 80 of the main iron and steel companies under the Iron and Steel Corporation of Great Britain (established 1951), leaving around 2000 smaller companies in private ownership operating under a system of licences and government oversight. This was the first target for denationalisation after the Conservatives returned to power in 1951.
• The Transport Act 1947 gave the government the authority to bring the railways, road haulage companies and ports under state ownership and control through the British Transport Commission. It amalgamated the existing, privately-owned railway companies - the Great Western Railway (GWR), the London, Midland and Scottish Railway (LMS), the London and North Eastern Railway (LNER) and the Southern Railway (SR) - under the control of the Railway Executive of the British Transport Commission. From 1948 the railways operated under the name British Railways (eventually shortened to British Rail).
• The Civil Aviation Act 1946 established government control of commercial flights within the British Isles and to Europe and North Africa through British European Airways (BEA). BEA was eventually merged with BOAC to form British Airways (in 1974).
  

To provide modern management for these massive state-owned corporations, the government also set up the British Institute of Management (1947), which in 1951 began to award the Diploma in Management Studies, the first accreditation for professional managers available from a British institution.

A useful study (in French) of the nationalisation policy pursued by Attlee's government is Kenneth O. Morgan, "La politique de nationalisation en Grande-Bretagne", Le Mouvement social 134 (1986), pp. 37-54, which for those on the university network can be accessed on JSTOR.