Domestic Policies (AQA A-Level History): Revision Notes

Domestic Policies

Churchill's approach and continuity

When the Conservatives returned to power in 1951 under Winston Churchill, the most striking aspect of their domestic programme was continuity rather than radical change. Despite Labour's election campaign warnings that a Conservative victory would lead to wholesale dismantling of the welfare state and nationalisation programme, Churchill had no intention of becoming the same kind of dynamic wartime leader in peacetime. His cabinet selections were therefore of particular importance, with three figures proving especially influential: R.A. Butler, Harold Macmillan, and Walter Monckton.

R.A. Butler and One Nation Conservatism

Churchill appointed R.A. Butler ('Rab Butler') as Chancellor of the Exchequer, a position Butler would hold throughout the Conservatives' 13 years in power. Butler was Conservative MP for Saffron Walden from 1929 to 1965 and enjoyed one of the longest ministerial careers of the 20th century. An unapologetic appeaser during the 1930s, he survived Neville Chamberlain's fall in 1940 and served as President of the Board of Education from 1941 to 1945, where he was responsible for the Education Act of 1944. This legislation formed the foundation of post-war schools policy, including the introduction of selection at age 11. Butler had led the modernisation of Conservative policy between 1945 and 1951 and was rewarded with the Exchequer when the Tories returned to government.

Butler had played a leading role in the modernisation of party policy during the opposition years and was prepared to accept much of the programme enacted by the post-war Labour government. He had no intention of creating the full-blooded socialist economy that critics had anticipated and that was eagerly awaited by figures on the Tory right.

The economic circumstances Butler inherited were challenging. In 1952, Treasury officials developed a scheme code-named 'Robot', which proposed abandoning the pound's fixed exchange rate and allowing it to find its own level in the markets. This plan would certainly have led to substantial unemployment increases. However, facing strong opposition from other cabinet ministers, the proposal was dropped. This decision was a defining moment in setting the tone of 1950s Conservatism.

When unemployment did show signs of rising later in the decade, the government prepared interventionist schemes to control it. Such measures had previously been associated with the political left. By 1955, the monthly average figure of registered unemployed had dropped to just 232,000, around 1% of the workforce. Despite occasional fluctuations, the Conservatives generally managed to contain unemployment within acceptable limits during their time in office.

Economic policy and Butskellism

The rejection of the 'Robot' plan demonstrated that the Conservative leadership now accepted the notion of the 'mixed economy'. This concept held that alongside a flourishing private sector, government should retain responsibility for running other industries, particularly utilities and natural monopolies which might struggle to generate profits in the marketplace but were essential to national life.

In 1954, sensing an essential continuity between Butler and his Labour predecessor Hugh Gaitskell, The Economist invented the composite name 'Butskell', combining the names of the two chancellors. The concept of Butskellism has been at the heart of historiographical debate over the existence at this time of political consensus between the leading parties. Political consensus refers to noticeable overlap or similarity in the policies of the leading parties (or their leaders), producing continuity in governmental practice.

Butler and Gaitskell were not identical in their policies and philosophies. The two men had different long-term visions of how wealth should be distributed. Some writers have argued that pragmatism and suggestion, rather than conviction, underlay the move towards consensus. The Conservative reluctance to initiate major changes was probably due to their narrow 1951 victory, their realisation that they had made few inroads into Labour's core working-class vote, and their determination to dispel fears of any wholesale reversal of the popular achievements Labour had highlighted in their 1951 campaign.

However, if 'consensus' is taken to imply broad agreement about how Britain should be run, based on a mixed economy and Keynesian demand management, it remains a useful analytical tool. Keynesian economics, based on the writings of Cambridge economist J.M. Keynes, dominated thinking from the Second World War until the 1970s. In essence, it involves the belief that government should use economic policy to iron out market fluctuations, controlling employment levels and maximising productive efficiency. Regulating demand can encourage growth when necessary or restrain it when the economy risks overheating.

There is certainly a marked contrast between the relatively consensual approach of the 1950s and 1960s and the far more polarised stances taken up by Labour and the Conservatives in the 1970s and 1980s.

Nationalisation and the mixed economy

One of the major changes enacted by Attlee's government had related to the state's role in running British industry. A large number of public service organisations had come into public ownership, including the Bank of England (1946), coal (1947), electricity, gas and the railways (1948), and steel (1951). Tory governments of the 1980s and 1990s would return such activities to the private sector, but the Conservatives of 1951-64 only tinkered with the dividing line between state and private ownership laid down by Labour.

Steel, which had been included in Labour's nationalisation agenda at the behest of the party conference but against the advice of the leadership, was denationalised (or privatised as we would say today). Returning steel to private hands proved relatively uncontroversial, and the Conservatives also managed to find buyers for part of the road haulage industry. However, denationalisation went no further.

This limited approach provides strong evidence that the Conservative leadership now accepted the notion of the 'mixed economy'. The government should retain responsibility for running other industries, particularly utilities and natural monopolies which were essential to the nation. The acceptance of this principle marked an important shift in Conservative thinking about the state's role in the economy.

Housing policy

Churchill installed Harold Macmillan at the Ministry of Housing, giving him what was described as a poisoned chalice. Churchill had ambitiously promised that a Tory administration would build 300,000 houses in a single year. If Macmillan fulfilled this target, his standing in the party would be considerably strengthened; if he failed, his political career might be over. The target was eventually reached in 1953, leaving Macmillan set fair for ministerial promotion. Churchill later reminded Macmillan about the initial disappointment at this appointment, remarking "You were disappointed at the time [of appointment]; I made you P.M."

Conservative and Labour housing policies were not identical. The former emphasised the private sector's role in building the required homes; the latter favoured public provision and wanted to protect tenants from exploitation in the private rented sector. The Tories' Rents Act (1957) showed this clear division of purpose in lifting controls over the rents of 400,000 houses, provoking angry Labour opposition.

Industrial relations

Churchill's third important appointment in 1951 was Walter Monckton to the Ministry of Labour (a government department more recently known as Employment and, currently, Work and Pensions). In opposition, the Conservative spokesman David Maxwell-Fyfe had hinted that the party would introduce legislation limiting union power. Such a confrontational stance was not, however, part of Monckton's brief.

Instead, Monckton consistently tried to bring the two sides of industry together and to avoid strike action. The price of such harmony was often paid by granting inflationary pay awards. Later Conservatives would be highly critical of Monckton's non-confrontational approach to addressing major industrial problems. Nevertheless, Monckton's ability to maintain industrial peace won him the nickname of the 'oilcan', lubricating away potential strife. Those who feared that his conciliatory approach would create economic decline by allowing excessive wage increases were, as yet, a minority.

Monckton's strategy reflected the government's broader commitment to consensus politics and its desire to avoid the kind of industrial conflict that might damage economic recovery or alienate working-class voters.

Health and education

Labour's creation of the National Health Service (NHS) in 1948 had probably been its single most important domestic achievement. The institution remains the country's most popular creation, and its founding principle—that healthcare should be available to all, free at the point of use—is deeply entrenched in the national psyche.

Labour had argued that a Conservative government would lead to the erosion, if not the dismantling, of what Labour had built. In his first budget, Butler was obliged to introduce some health service charges, but the 'free at the point of use' principle had already been breached by Labour in 1951 in relation to false teeth and spectacles. By 1956, the Guillebaud Committee concluded that the NHS provided good value for money and urged additional funding. The government accepted these findings.

Education appeared likely to be a further illustration of broad consensus between the parties, as the Tories continued to implement the provisions of the wartime Butler Education Act (1944). Gradually, however, the divisive effects of segregation at age 11 and the poor performance of many secondary modern schools persuaded many in the Labour Party that a comprehensive system was the way forward. This would become a source of increasing controversy in subsequent years.