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7

BONFIRE

After Cripps became Chancellor, there was a sense of teamwork on the economic front, with ministers working in harmony under a revered chief. Early in 1948 Gaitskell described in his diary a dinner which he had attended together with Cripps, Strauss, Strachey, Jay, Marquand, Bevan and Wilson. ‘I could not help feeling’, he recorded, ‘that Stafford was surveying his future Cabinet.’¹ Yet the sense of unity was partly an illusion. Outside the charmed circle there was resentment, especially among Cripps’s rivals at the top of the Government, and their retainers. Each key figure was surrounded by a clique. ‘They were all conspiring against the other cliques,’ recalls Denis Healey, then at Transport House. ‘There was a feeling that Cripps’s clique was the least rooted in the Party.’² It was also, for the time being, the most powerful. Membership of it carried great prestige, but ran the long-term risk of incurring the displeasure of Herbert Morrison, whose armies had been forced into retreat by the Red Squire’s triumphant advance.

Cripps was now at his zenith, but he was not – despite his own, and the Treasury’s, intentions – an absolute monarch. The 1947 Economic Survey, published early in the year, had anticipated a switch from a ‘system of co-ordination’ to ‘direct economic administration by one leading Minister’.³ The switch did not happen. The Treasury provided chairmen of the Import Programmes Committee, the Overseas Negotiations Committee and the Committee dealing with the Marshall Plan and proposals for West European economic integration. There was also the influential new planning staff, now part of the Treasury, and the Economic Section of the Cabinet Secretariat. According to Cairncross, control of these bodies enabled Cripps to ‘weld together economics and finance and at the same time keep an eye, as a former President of the Board of Trade, on industrial and commercial policy’.⁴ Yet, even with Cripps as Chancellor, ‘direct economic administration’ was never imposed. According to the Prime Minister, the Chancellor’s position remained one of co-ordination, and there was ‘no question of interfering with the departmental responsibilities of Ministers’. Though the combination of the MEA and the Treasury under one head strengthened planning, the Chancellor remained no more than primus inter pares?⁵ Thus the new President of the Board of Trade, despite Cripps’s moral power and standing within the Government, kept a degree of independence.

Wilson’s role in the post-1947 arrangements was as a link between high politics and the world of technical economics. His promotion coincided with a revival of the influence of professional economists, heralded by the setting up of Sir Edwin Plowden’s Planning Group and a strengthening of the Economic Section.⁶ Part of Wilson’s value to his colleagues was as a minister – the only one in the Cabinet until Dalton’s return in 1948 – who was able to talk to the economists in their own language. This meant that he could command attention. Yet there was also a down side to being a minister who was an economist. While laymen were easily impressed by any competent handler of the alchemy, the Government’s own economists were harder to manage. They tended to have high – sometimes unrealistically high – expectations of members of their own fraternity who, in the words of Lionel Robbins (applied not to Wilson but to Dalton) had succumbed to an ‘infatuation with politics’.⁷ They wished to be deferred to by a fellow economist who understood what they were saying, and were annoyed when they were not. Such an attitude was also tinged with jealousy towards a colleague who had the good fortune not merely to advise, but to make decisions.

That Wilson had himself been a member of the Economic Section added to the irritation he easily aroused. The feeling that a junior economist, even one who happened to be in the Cabinet, ought to defer to his seniors, helped to turn Robert Hall, director of the Economic Section, against him. It greatly annoyed Hall that Wilson seldom, if ever, consulted him.⁸ There were also other reasons why the economists in Whitehall became lukewarm, if not actively hostile. In particular, there was a developing suspicion (A. J. Ryan had had it at the Mines Department) that, in making decisions, Wilson was often more concerned with presentation than with substance. ‘The feeling was that Harold tried to do the clever thing,’ says Cairncross, once Wilson’s colleague in the wartime Economic Section, who had become an economic adviser to the Board. ‘He pretended his visits to Moscow were very important for British trade. In fact, they weren’t. He got the reputation at the Board of Trade for being more clever than statesmanlike.’⁹

From the first, Wilson was better regarded by his own civil servants than by economists. In some ways, Wilson was a familiar type. The Board’s permanent staff had become used to brilliant young men from the universities, such as Oliver Franks, Richard Pares, Richard Kahn, Douglas Jay, Hugh Gaitskell and W. B. Reddaway, who had served the department as temporaries and left their creative mark. Wilson, who had himself briefly served in one of the department’s outposts and knew the civil service ropes, seemed to belong to the same breed. Naturally friendly and approachable, he was able to establish a relationship of easy formality with his advisers. There was admiration for his ability to understand complex problems. ‘You felt he could do your job,’ says one former official.¹⁰ He had a sparring relationship with his heavyweight permanent secretary, Sir John Henry Woods, and a good intellectual rapport with the deputy secretary, Sir James Helmore.

Wilson was lucky in his principal private secretary Max (now Sir Max) Brown, a New Zealander and former wartime temporary with a similar professional background, as an economist and statistician. Brown had previously worked in Cripps’s private office. He was struck by the contrast. ‘Cripps tried to be human, but couldn’t quite manage it,’ Brown recalls. ‘He was kindly, felt his politics deeply, but wasn’t too involved in departmental affairs. Compared with Wilson he was a much more formidable character and much more committed. By contrast, Wilson was almost one of the lads. He was very quick, with a photographic memory.’ Brown saw Wilson as a ‘North of England Radical’, whose commitment to the Labour Party did not seem to go far beneath the surface. Wilson’s own instincts, as befitted a disciple of Lord Beveridge, were ‘pressing him towards welfare state reforms’. Unlike the economists, he did not think of Wilson as excessively political. On the contrary, he saw him almost as a crypto-official, who ‘had more of a civil service than a political background and, in these early days, he was happiest with civil servants’.

What most struck Brown, at the time, was his master’s acuteness rather than his depth. ‘Some people think fast and stop,’ he says. ‘Others think three or four times, but not fast. Wilson belonged in the first category.’¹¹ Raymond Streat felt much the same. ‘Harold Wilson reacts too quickly, too smoothly and readily for an impression of particular purpose to emerge,’ he noted just before Cripps became Chancellor. The young President seemed to concentrate more on the trees than the wood. ‘He is nice enough as an open-hearted sort of young man and a fond father of a young family,’ wrote the Cotton Board Chairman, ‘to be all right if he does not entirely forget big things by allowing himself to be preoccupied with a million small ones.’¹²

This was not quite fair. For ‘a million small things’ was precisely the business of the post-war Board of Trade, an enormous, sprawling giant, with disparate powers and little uniting them. By 1949, the Board had a total staff of 12,694 organized in nineteen major departments, requiring two Parliamentary Secretaries beneath the President, and twelve regional offices, to help carry out its wide-ranging tasks.¹³ It was, as one writer later pointed out, both a paradise and a deathtrap – giving limitless scope for Wilson’s administrative flair, but distracting him, because there was so much to be done, from the wider implications.¹⁴ Yet it was better to be master of detail than to be swamped by it, and Wilson gained a reputation on both sides of the House for his ability to find his way through the labyrinth. One Tory MP who had been in the Commons since 1921 paid Wilson the compliment that ‘he had never known a President of the Board of Trade with a greater technical grasp of his subject, more verve, more foresight and greater courage.’¹⁵

Wilson left the running of the department, and liaison with the Treasury, to Sir John Henry Woods. He himself took a close interest in regional policy (which meant implementing parts of Dalton’s 1945 Distribution of Industry Act); in the creation of a new Monopolies Commission; and in high-profile overseas work, including necessary adaptations to international trade brought about by the General Agreement on Tariffs and Trade (GATT). The aspect of his work which required his immediate attention, however – and the one which aroused his greatest interest – was the continuing prospect of a trade agreement with the Soviet Union.

By late 1947, relations between the USSR and the West had deteriorated sharply although – as it appeared – not yet irretrievably. The prospect of an arrangement which would meet Soviet needs for machinery while also alleviating the British need for grain therefore appealed both on economic and on political grounds, as a means of keeping lines to Moscow open. ‘The Government was ready and anxious to reopen trade negotiations with Russia and had sent repeated messages to Moscow to that effect,’ the new President of the Board of Trade told a meeting in Liverpool within days of his appointment.¹⁶

Against this background, Wilson flew to Moscow for the third time – exuberant and happy at his promotion, and greeting Mikoyan, whom he had contacted before setting out, like an old friend. Everything in Russia excited him. ‘As soon as the door opened’, reported a fellow negotiator, ‘it was like showing the ideal pond to a very vigorous duck.’¹⁷ Moscow in the late 1940s was an impoverished, drab and oppressive place: but Wilson thoroughly enjoyed it. In his new mood of limitless possibility, he threw himself into the negotiations, taking pleasure in the fortress-like atmosphere of Stalin’s Kremlin, where soldiers with fixed bayonets paced the corridors. Faced with the cautious Russians, Wilson believed himself to be master – swapping jokes with Mikoyan and cajoling (as he saw it) the Soviet negotiators towards a settlement. A favourite Wilson story, repeated in many a later speech, described how – while he was bargaining with Mikoyan over the price of coarse grain – he instructed the British aircrew to go to Vnukovo Airport and run up the engines of the plane for the return journey, to show that the British delegation meant business. ‘Wilson was fascinated by the dealings with the Russians,’ recalls Brown, who went with him. ‘He liked the art of trade negotiating, dealing with state buying and selling, and he also felt he was establishing a preserve of his own.’ There were several all-night sessions, which added to the sense of drama. So did the belief, probably accurate, that the British were under secret surveillance. In his hotel bedroom between meetings, the young minister would make loud provocative remarks, on the assumption that hidden microphones would pick them up.¹⁸

A settlement was finally reached at the end of a gruelling session that continued until 5 a.m. This provided for the exchange of 750 tons of Russian grain during 1948 in return for British machinery and equipment, and was intended to leave the door open for a longer-term treaty.¹⁹ The British press reported that Mikoyan and Wilson remained fresh and collected at the end of this marathon, ‘but several of their followers were stretched out on the chairs and sofas, and the agreement was initialled to a chorus of approving whistles and snores.’²⁰

Wilson often boasted of his own role in these negotiations. Cairn-cross, however, is not the only person to have doubted their importance. There was a difference of opinion at the time. Wilson himself argued publicly that the settlement meant ‘the resumption, after the long interference with Anglo-Soviet trade due to the war, of trading between the two countries, which have almost completely complementary economies’.²¹ Britain needed grain and raw materials, East Europe needed industrial products: Wilson believed that the short-term agreement could pave the way to a wider one in May 1948. ‘I have often been asked why we don’t do more to develop trade with Eastern Europe’, he told his own constituents in Ormskirk, ‘and I say that no man could have done more than I.’²² The Observer was prepared to back this self-praise, enthusing about Wilson’s negotiating technique and his refusal to cable home for instructions at a critical stage. ‘Courage and strength of character’, it concluded, ‘must be added to his proven gift of a quick and brilliant mind.’²³ The Financial Times was more sceptical. ‘Few politicians have made it so plain as Mr Wilson has that he considers himself one of Britain’s best negotiators,’ it laconically observed. The benefits, however, were far from obvious. ‘No perceptible advantage to Britain has yet resulted from Mr Wilson’s wassailling with the Commissars.’²⁴

Such criticisms did little to deflate Wilson’s rapidly expanding ego. At an age when, under slightly different circumstances, he might have been a junior lecturer, publishing articles which nobody read, he was bestriding the globe, talking on equal terms to national leaders who had been household names when he was in the Scouts. At home or abroad, he had ceased to be overawed by any occasion. When the Russians tried to bribe him to stay longer, by offering dinner with Comrade Stalin at the Kremlin, Harold declined, with regret, on the grounds of a pressing engagement the same evening at Buckingham Palace, to meet HRH Princess Elizabeth and her fiancé.²⁵ (A few months later he met the heir to the throne and Prince Philip again, at a small prime ministerial dinner party. While waiting with fellow ministers to be presented, he enlivened the occasion, as Gaitskell records, by archly reminding colleagues ‘that it was still a capital offence to rape a Royal Princess’.²⁶)

All this was, of course, a very long way from Wirral Grammar School and Brotherton’s tennis club. In the thirteen years since he first met Gladys Baldwin, he had done everything he planned, and much more. It would have been surprising if public life at such a pace had not entailed a private cost. Gladys thought she had married a don; she had adjusted to the role of wife of a peripatetic wartime civil servant; then to the wife of a streamlined professional politician. At first, it felt like a temporary, fragile, change. Harold kept some of his University College pupils, tutoring them at weekends in Oxford where Gladys and Robin continued to live, and maintained a triangular existence between the Richmond flat, Oxford and Ormskirk. Gladys accepted it as part of the uncertainty and dislocation of a topsy-turvy decade. ‘When the war started, you just took things as they came,’ she says. ‘You did not think of your lives or whatever happened as being extraordinary. For years and years you felt shaken up in a bag. Things just happened – you had nothing to compare it with.’²⁷ But the stress was undeniable.

One advantage of continuing to teach was that it enabled Harold to retain his rooms in College, and to postpone the arduous task of finding somewhere else for Gladys and Robin to live. There was an irony here, for the minister responsible for the public building programme. Harold used it to make a political point. ‘I know something of the housing position in London,’ he told a reporter a fortnight after he had been appointed Parliamentary Secretary at Works. ‘My wife and I and Robin the baby are still living in college in Oxford because we cannot get a place down here.’²⁸ The Richmond flat, which had been occupied by Harold’s parents since Herbert had taken a temporary wartime job at the Ministry of Supply, provided a week-time base, but not a family home.²⁹ At first, no very strenuous efforts were made to find one. Gladys was content to stay at University College, and then – when they had to move out – in a flat in the Banbury Road. She remembers Oxford at this time affectionately, as ‘very much like Beverley Nichols’s description of Oxford after the First World War’, with the junior common room full of undergraduates of eighteen alongside hardened warriors who had come back from active service.³⁰ Since, however, she seldom accompanied Harold to Ormskirk, or on his trips abroad, they were often apart.

The separations took their toll, and the Wilsons’ marriage came under serious strain during Harold’s three-month visit to Washington from October 1946, as their worlds increasingly diverged. A break seemed close; but did not happen.³¹ When Harold went back to the United States in 1947, he took Gladys with him, leaving Robin with his parents. In the summer Gladys became pregnant, just before the announcement of Harold’s appointment as Chairman of the Export Targets Committee. In the circumstances, the news of Harold’s added responsibility was not entirely welcome. ‘That means I shall see less of him than ever,’ Gladys unguardedly told a reporter. ‘He works a sixteen-hour day already. I saw him for two weekends only during the summer.’³²

At the end of the university year, Harold finally cut the academic umbilical, and ceased to be the only member of the Government who was both a minister and a tutor. ‘He had been keeping too many balls in the air,’ says Mary.³³ It was a hectic, difficult time. The life of semi-lodging with his parents in Richmond, and quick dashes to see his wife and son, could no longer be sustained. There was now no reason, other than Gladys’s preference, to stay in Oxford. When Harold became President of the Board of Trade that autumn, with a ministerial salary increased to £5,000, they decided to buy a house in London. With the help of an £800 loan from Herbert (who had just sold their old house in Milnsbridge, rented out ever since they moved to Bromborough)³⁴ the Wilsons put down the deposit for a mortgage, paying £5,100 for a long lease on a three-bedroomed house in a tree-lined road called Southway, in Hampstead Garden Suburb.³⁵ The move took place on 1 January 1948, their wedding anniversary. Before they left the Banbury Road flat, they had a ‘house-cooling’ party, built round a tin of caviar which Harold had brought back from Russia.

It was the start of an important new phase in their lives together. Harold and Gladys had known each other for thirteen and a half years and had been married for eight: yet they had never settled down in one place, and for long periods they had not shared the same roof, or even the same town. Some politicians lived all their lives without a fixed address, camping both in London and their constituency. Gladys, however, was determined not to repeat the unsettled pattern of her childhood. The Southway house provided the fixed base she wanted, helping to bring her to terms with the now established reality of her husband’s political career. ‘I tried to bring up the children in a proper family home,’ she says. ‘I had been at boarding-school from the age of twelve. Before that I had travelled around a great deal with my father. I was so pleased that the boys lived in the same house until they were sixteen.’³⁶ Gladys came to love the Southway house and neighbourhood. Socially and psychologically, Hampstead Garden Suburb and North Oxford were closely akin, with the same kind of unpretentious professional and literary inhabitants. She became attached to the neatly planned, inward-looking Suburb and its schools and networks, which she built into a protective barrier against Harold’s alien and, to her, increasingly distasteful political world.

Harold respected, and perhaps even liked, the barbed-wire fence erected by Gladys around her home and family life, a barrier which few political colleagues ever crossed. Fellow MPs, especially middle-class ones who lived in the locality, were variously puzzled, hurt or contemptuous at the Wilsons’ failure to join in the dinner party rituals which oiled the wheels of political intercourse amongst Labour intellectuals.³⁷ Neither Harold, who valued his own time too highly to wish to use any of it unproductively, nor Gladys, who hated the hypocrisy, felt any loss. Instead, Harold fitted comfortably into the life of the suburban family man, as he fitted most roles he chose to adopt, and was content to recreate Milnsbridge in so far as this was possible, joining the local Free Church, and patronizing the local Boy Scouts. Gladys Baldwin, meanwhile, began her metamorphosis into Mary Wilson: the strong-willed, single-minded housewife, whose personal mission was the welfare of her family, yet who had interests of her own quite separate from her husband’s career.

She came to tolerate, but never learnt to like, Harold’s governmental life. He was never able to take her into it as a comrade-in-arms. ‘I am not’, she once firmly told an interviewer, ‘an ambitious person.’ She might have added: either for herself or for her husband. In the mid-1950s, after Harold had left the Government, she made it clear that ‘she evidently has little regret for her husband’s days as a Minister – he brought too much work home, and quite simply hadn’t time to see enough of the children.’³⁸ Many political marriages seemed to work as a psychic continuum, the goals of one partner underpinning the actions of the other. In this sense, Harold travelled alone. Nevertheless, Gladys got on well with some of his political associates, who were often charmed by her straightforwardness, a rare quality in their world. A few old friends – Thomas Balogh, for instance, who had first known Harold at Oxford, early in the war – were allowed to cross the threshold She became especially fond of Nye Bevan and Jennie Lee, whom she treated as family friends and invited to children’s parties.

Gladys gave birth to her second child, another boy, on 7 May 1948. The creation of a well-structured family was now complete: both she and Harold came from two-children homes. The Prime Minister took a kindly interest in the event, and sent his congratulations. The proud father’s reply, informal yet stilted, with an uneasy attempt at humour, captures a flavour of Wilson’s relationship with his boss and benefactor:

My dear Clem,

On Gladys’ behalf I do thank you most sincerely for your very kind thought in sending a telegram of good wishes to her on Saturday. She very much appreciated it and will be writing herself.

You will be glad to know that she & the baby are both very fit. He for his part, although about the size and general appearance of a small trout, would, if he were capable of it, wish to be associated with me in writing to thank you for your message.

Yours ever,

Harold.³⁹

The Wilsons asked the Attlees to be godparents, and they accepted. Harold was pleased that the almost equally apolitical Vi Attlee, who also believed that families were the first priority, liked and approved of Gladys. The baby, called Giles – after Giles Alington, a friend and colleague who shared their staircase at University College (and who happened to be a brother-in-law of Alec Dunglass, later Lord Home) – was christened in the Crypt of the House of Commons in September. Gladys now directed her attention to her home, her husband and her children. Nine years later, she told a reporter she hoped to ‘stay forever’ in the Suburb.⁴⁰ She was as happy there as she could be in her married life.

There remained, meanwhile, a possibility that Harold’s political career would be brief, and that he would shortly return to academic life. Despite a sizeable majority in Ormskirk, his foothold in the constituency was by no means secure. If the next election was fought on existing boundaries, he would face a single Conservative candidate and, in all probability, a national swing against Labour; if (as seemed likely) boundary changes preceded the election, his future in Parliament was seriously in doubt. It was therefore important that he should maintain his reputation, not just as a minister, but as an assiduous Lancashire MP. He visited the constituency regularly, dealt efficiently with local complaints, delivered long and fact-filled addresses to appreciative and uncomprehending audiences, and swiftly lost the reputation of a carpet-bagger. By the beginning of 1948, however, it had become clear that Ormskirk was to be divided up as part of a major redistribution, losing two large industrial areas and becoming mainly rural. Wilson therefore had to look for another seat, just as he assumed the burdens of the Presidency of the Board of Trade. This pressure – the nightmare of any British politician – dogged him for most of the first year of his new office.

At first, he merely let it be known that he was on the market. Reports in January that he ‘may not contest Ormskirk at the next general election’ were not denied.⁴¹ In Ormskirk, there was some irritation, publicly expressed, by local officers whom he had neglected to inform.⁴² By now, however, he was mainly concerned to cast his line, and see what he could catch. Fortunately, the new constituency of Huyton held out a reasonably good prospect. It was composed partly of a section of the Widnes Division (represented by Hartley Shawcross’s brother Christopher, who was standing down). As it also contained part of Ormskirk, it was a natural seat for Wilson to seek to represent. Yet the effects of major boundary changes are always hard to predict, and the new Huyton division was far from a Labour certainty. Peter Longworth, a docker and Huyton councillor for more than thirty years, recalls meeting Wilson in 1948 to discuss the likely impact of redistribution. Fears were expressed that Huyton might not be safe because of the inclusion of Ecclestone and Windle, seen as Tory areas. It also included Tory-inclined Prescot and Knowsley, together with middle-class Huyton itself.

Wilson did not have the time to search for an alternative; neither was he politically strong enough or sufficiently well known to be sure of finding one. After anxious months, he decided that Huyton was his best bet. At the selection conference in November, he impressed the delegates with what he would do for them. ‘We only chose him because we wanted to be included in the Merseyside Development Area,’ says Longworth.⁴³ Afterwards, Wilson told the press he had decided to move ‘because he felt that owing to the intense work involved in his ministerial duties and party claims throughout the country he was unable to give so large and scattered a division as Ormskirk the time and work required’,⁴⁴ a disingenuous explanation which suggests a degree of embarrassment.

A poll was expected in the autumn of 1949. Until the actual month of the election in February 1950, Labour’s position in the national opinion polls did not give grounds for local optimism. For the remainder of the Parliament, Wilson had the possibility of defeat in his mind, influencing his political and private calculations. It was several years before he could be sure that he had made the right decision.

One significant intervention by the Board of Trade during Wilson’s Presidency affected films. During the late 1940s, films were at the peak of their entertaining importance in Britain: in 1946, a third of the population went to the cinema at least once a week. Consequently, measures directed at films were not just of great financial importance. They also had major social and cultural effects. Wilson’s interest was a direct product of the 1947 economic crisis: measures taken, almost casually, before his arrival in an attempt to alleviate the dollar shortage had thrown the industry into turmoil.

Part of Hugh Dalton’s summer 1947 package as Chancellor of the Exchequer had been a 75 per cent levy on imported American films. The immediate result was a trade war. Hollywood refused to export any of its productions to Britain, a move which threatened to put distributors and cinema owners – heavily dependent on a steady supply of American titles – out of business. Dalton’s tax turned out to be directly counter-productive. It had been intended to save Britain £57 million of the £70 million per annum which American films had been making in Britain. Because of the Hollywood boycott, however, desperate British owners resorted to re-showing American films stock-piled in this country, which then had to be paid for, adding to the dollar drain. Consequently, as Wilson pointed out, ‘we were actually paying out not 17 but 50 million dollars for the privilege of seeing Hellzapoppin’ for the third time and Ben Hur for the twenty-third.’⁴⁵

The Hollywood boycott was lifted after negotiations with Eric Johnson, Hollywood’s chief administrator, and an agreement was signed in March 1948 ending the 75 per cent levy. Yet the dollar problem remained. Wilson sought to meet it, and at the same time (as he hoped) to boost the British film industry, by announcing shortly afterwards that the quota of British-made films to be shown in this country was to be raised from 30 per cent to 45 per cent. Such an ingeniously simple move, however, had an unpredicted outcome.

Wilson’s new regulation certainly ensured that the British public saw more British films at the end of the 1940s than ever before or since, and that British films were produced in quantity. The casualty was quality. The enfeebled British industry had neither the resources, nor the incentive, adequately to meet the demand. The Rank Organization was already over-extended, and reacted to the new situation by producing poor films on low budgets and showing them in its own cinemas in order to cut losses, while elsewhere stock-piled American films were shown, and British studios fell idle. Rank promised forty-seven feature films: it soon abandoned this target. Instead, it concentrated on seeking to rival Hollywood with movie spectaculars in order to recoup cash in the American market.

Hence Wilson was forced into ignominious retreat. Just as Dalton’s 75 per cent levy had been discarded, so now was Wilson’s 45 per cent quota – reduced to 40 per cent in March 1949, and a year later to 30 per cent, the original figure. The quota, however, was not Wilson’s only initiative. Also in 1948, he set up the National Film Finance Corporation, with funds to subsidize independent producers. This was a Labour Government’s response to the dominating position of Rank: as one account puts it, ‘new-style Socialism was in collision with old-fashioned capitalism.’⁴⁶

Notable successes could be claimed for the NFFC. A number of celebrated films were financed by it, including The Third Man, State Secret and Seven Days to Noon. In May 1950, Wilson boasted at the Conference of the National Association of Theatrical and Kine Employees that the Corporation ‘had undoubtedly prevented a breakdown over a wide section of the industry’. As a result of its assistance, he claimed, more than fifty films had been produced.⁴⁷ But – as with other measures – there was a snag: though the Government could provide the incentive or the subsidy, it could not or would not preside over the industry’s own internal economy. Because the Government had prescribed that NFFC loans should be made through distributors, there was little control over the nature of films produced. Consequently much money was wasted, in particular by Rank’s rival, Alexander Korda (whom Wilson had first met during his visit to the United States on a civil service mission in 1943). It was against this uneasy background that the ‘Eady’ Plan emerged (so-called after the Treasury official principally involved, Sir Wilfred Eady). The Eady levy consisted of a tax on cinema tickets, which raised revenue to pay the producers, and subsidized films on application from individual companies. Wilson himself has claimed the levy as his own idea.

Opinions differ about the effectiveness of both the Corporation and the Eady levy. Some considered that the NFFC ‘saved what’s left of British films’.⁴⁸ Others have suggested that the episode was a missed opportunity and have criticized the Government for failing to create a British film industry to compare in confidence and creativity with the industries of other countries. Yet even those who have taken Wilson to task admit that the Corporation (which continued to exist for four decades) was better than nothing and that the Conservatives would not have set it up.⁴⁹

Whatever the impact of Harold Wilson on the film industry, however, there is no doubt that his involvement in the problems of film greatly affected Wilson. In his memoirs, he accuses Cripps of having been a ‘soft touch’ where film magnates were concerned.⁵⁰ Perhaps all politicians are susceptible to the glamour of the movies, which provide a distorting image of instant fame. Harold was fascinated, not just by the problems, but also by the people of the opulent, open-hearted world of the cinema, with its transitory stars and clever impresarios. ‘He accepted more social engagements from the film world than from elsewhere,’ his former principal private secretary recalls.⁵¹

‘I hear … Mr Harold Wilson … has bought himself a little black book – and is busy scribbling the names of film stars in it,’ the Daily Express film critic sniped in May 1950. Wilson replied that he had seen only seven films (five British, two American) in the preceding year.⁵² His taste was predictably catholic. ‘Speaking now as an ordinary cinema goer …’, he told the House in June 1948, ‘I should like to see more films which genuinely show our way of life.’ He was tired of ‘some of the gangster, sadistic and psychological films of which we seem to have so many, of diseased minds, schizophrenia, amnesia and diseases which occupy so much of our screen time … I should like the screen writers to go up to the North of England, Scotland, Wales and the rest of the country, and to all the parts of London which are not so frequently portrayed in our films.’⁵³ Most British directors ignored his advice. Wilson, however, was not discouraged from maintaining a friendly contact with film people in the years after he had left the Board of Trade.

*

Harold, and Herbert, savoured the historical associations of the Board of Trade: both Lloyd George and Churchill had been President early in their careers. Yet – as we have already seen – Wilson was essentially a departmental minister, in contrast to his illustrious predecessors, rather than a political personality. His ministerial speeches notoriously emptied the House. Those who endured his performances found them technical, repetitive, excessively detailed, over-prepared and lacking in humour.⁵⁴ Very gradually, this began to change. It was as though, having established himself administratively, he was beginning to discover himself in other ways. ‘It was a developing period, before Wilson became a real politician,’ considers Sir Max Brown. ‘It was a time of learning and adapting. He tended to concentrate on subjects where he could do his own thing – he didn’t want to cross Cabinet colleagues. At first, he was feeling his way, as he got into a stronger position. By 1949 he was much more involved in central political issues.’⁵⁵ He was also beginning to approach all issues in a more political way. This development did not please all observers. The Financial Times (which found much about the Labour Government to dislike) accused him of ‘shallow smartness’.⁵⁶ Raymond Streat, who had privately applauded him in 1947 for not coming from a political stable, began to chide him a few months later for behaving too politically. Streat told the young President ‘that I thought he sometimes overdid the line of scoring off the Opposition. I felt it gained him little in the country at large.’ Wilson replied simply that ‘the Party liked it.’⁵⁷

A tendency to make what the Opposition regarded as cheap points began to cause ripples of irritation on the Tory benches. Cairncross recalls meeting Oliver Lyttelton just after Wilson had made a speech which had ridiculed the other side without taking seriously any of its criticisms. ‘Clever young puppy’, Lyttelton remarked with contempt.⁵⁸ Some opponents were even more disdainful. When the journalist and diplomat Sir Robert Bruce Lockhart remarked to Anthony Eden in August 1948 that the President of the Board of Trade ‘did not seem a bad fellow’, the Shadow Foreign Secretary flared up: ‘Most unpopular minister in the House. Conceited and arrogant.’ Eden then told a story about how he had offered his services in the Middle East to help the dollar shortage, and had received from Wilson ‘a pompous letter explaining why this or that could not be done and, not knowing Anthony at all, had addressed him as “Dear Anthony’”.⁵⁹

There were other signs that Wilson’s ‘transition’ to politics was moving apace: and of his appreciation that, as head of a powerful department, politics was something he could not avoid. As the ministry responsible for rationing and controls, the Board of Trade inevitably aroused public resentment, which the President himself could not entirely escape. It was a question of style. The austerity of Cripps’s personality had been well suited to the privations he was required to impose. Wilson, ‘chubbily friendly and human, with a taste for double-breasted waistcoats’, did not carry the same conviction.⁶⁰ At first, the press did not know how to place the unknown and extremely juvenile President, whose lectures on national morality had a whiff of sixth-form priggishness about them. In politics, it is often a seemingly innocent remark that crystallizes a sentiment which, hitherto, nobody has yet openly expressed: in Wilson’s case, the public sentiment was one of rebellious frustration.

Speaking in Birmingham in July 1948 about a decision he had recently made to take children’s shoes off the ration, Wilson declared that the Government had promised shoes for all. Looking back at his own schooldays (which, compared with those of most politicians, were not so far distant) he unwisely reminisced. He was reported as saying – there was to be controversy over what his words really were – that children in Northern cities had gone barefoot before the war, and were now well clad. One particular passage ricocheted for weeks, if not decades:

The school I went to in the North was a school where more than half the children in my class never had boots and shoes on their feet. I have been up there again, and the children of my old school are now running about with decent shoes because their fathers are in safe jobs and have got the social security which we promised our people.⁶¹

What came to be known as Wilson’s ‘barefoot’ speech gave him his first, sharp lesson on the need to avoid giving the press hostages to fortune. The President’s remark – apart from its political message – contained an implied boast about his own ascent from humble origins. What school was he referring to? Attention focused on the small establishment attended by Harold in Milnsbridge. One of the first to react to the contrast between pre-war destitution and post-war socialist plenty was the Mayor of Huddersfield, who emphatically denied that children at New Street Council School had, in his memory, ever gone barefoot.

Wilson had made a gaffe. In the circumstances, he would have been wise to have backed down, with an apology. He did not do so. Instead he gave the press rope, by embarking on a complicated amplification. He insisted that, whatever the facts about Milnsbridge, thousands of children before the war did lack shoes in major cities during the depression:

First, there were thousands of children who actually went barefoot during the war. I referred to this in terms of the slums of Liverpool and other big cities, which I can certainly confirm from my own experience. I did not say or suggest that that was at all the case in Huddersfield; my only reference to barefoot children was in Liverpool, Manchester and Birmingham … in fact I never suggested that my school friends had to go to school barefoot, as was the case in many more depressed areas. Such a suggestion would have been quite incorrect, I agree.⁶²

His reference to ‘half the children in my class’ never having boots or shoes was not intended, he maintained, to imply that their feet were naked. What he had meant was that more than half of the children in his class were forced to wear clogs, rather than shoes, whereas since the war all parents could afford decent boots and shoes for their children. A reference to clogs in his speech, it was claimed, went unreported.⁶³

Such an explanation merely kept the controversy alive, and annoyed more people. In Ormskirk, which included part of Liverpool, the MP’s remark about Liverpool produced a sharp denial from the Medical Officer of Health.⁶⁴ Tory papers began to demand: ‘Where are the barefoot children?’ In self-defence, Wilson referred to ‘the “Boots for Bairns” funds run by many Northern newspapers in those days’,⁶⁵ and quoted a letter he had received from a Birmingham man about the humiliations he had suffered because of ‘being called out of class and given a “free issue” ticket’.⁶⁶ Naturally, the more tart the minister’s answers, the more delighted the press became. The issue was widened. Soon, and forever, Wilson became the Cabinet minister ‘not indissolubly wedded to the truth’.⁶⁷ After the furore had died down, Wilson’s speech became part of the lore of Fleet Street, often to be resurrected in later years, and nearly always evoking a reaction. In 1956, the William Hickey column of the Daily Express could still touch a raw nerve by calling him ‘a connoisseur of fiction’ because of the ‘barefoot’ affair. ‘To put the record straight, I say, once and for all’, Wilson wrote in protest, ‘that I have never said, suggested or implied, much less “spread the tale”, that I ever went to school barefoot.’⁶⁸ It made no difference. Even when he was Prime Minister, journalists raking through cuttings would teasingly repeat the story, or refer to it by innuendo. It was, of course, unfair. But it exposed a weakness that later became chronic: a tendency to overreact to media criticism, to take it personally, and to feel the need to argue down his critics in rational terms, which seldom worked. In all his dealings with a frequently vindictive press, he never learnt the art of riding with the punch.

Yet if Wilson made himself ridiculous over his ‘barefoot’ speech, he remained honourably – indeed almost miraculously – untouched by a scandal which broke that autumn, implicating a junior minister in his own department. The affair concerned the activities of a fantasist and confidence trickster called Sidney Stanley, who was accused of seeking to influence government departments by bribery, flattery, and the bestowal of gifts upon ministers and other prominent persons. If the ‘barefoot’ rumpus was really an attack on an officious young minister who symbolized the sanctimoniousness (as the public saw it) of the whole administration, the Stanley scandal caused excitement because of a public willingness to be fed stories about hypocrisy and corruption among those responsible for licences, permits, coupons and allocations. The main focus was the Board of Trade, and the accusations landed in the President’s lap.

It was a police investigation into the Board, at the request of the Lord Chancellor, which precipitated the scandal. Early in the inquiries, Wilson gave the police full scope to examine people and papers at the Board. He also made an immediate report to the Prime Minister, which induced Attlee to set up a tribunal under Mr Justice Lynskey to clear the air. It was the lurid, and often comic, public proceedings of this tribunal which resulted in the resignation of John Belcher, Parliamentary Secretary at the Board of Trade, after admitting that he had received small gifts. There was a witch-hunt aspect to the affair, and all those with the most trivial contact with the notorious (and ludicrous) Stanley, who specialized in buttering up the great, were briefly smeared: Dalton, Cripps and Bevin each suffered moments of indignity. Wilson, however – the Cabinet minister closest to the scandal departmentally, and Belcher’s immediate boss – had had no contact with Stanley, and his name, in consequence, was scarcely mentioned.⁶⁹

As President of the Board of Trade, Wilson was conscious enough of what lay behind the Lynskey affair, as behind the ‘barefoot’ row – a growing public restlessness at the continued imposition of controls which had been accepted as necessary in war, but were regarded as irksome and irrelevant three years after the arrival of peace. The question the Government had to face – part economic, part ideological and political – was when, and where, controls might be reduced. Since Wilson’s department was responsible for many of them, it fell to him to decide on the selection of controls for abolition, and on the way any such process of de-control should be presented. It was a further sign of his growing political awareness that he turned his ‘bonfire of controls’ into a publicity stunt.

In one respect, Wilson had been particularly lucky in the timing of his appointment. He had arrived at the Board of Trade during an acute economic crisis, but just as the tide was turning. The months that followed were a period of rapid recovery, and the year 1948 was one of success, with a massive revival of industry, and an enormous improvement in exports, which reached a level 150 per cent higher than in 1938. Wilson could not be credited personally with this achievement but, like the Chancellor of the Exchequer, he naturally received some of the glory. In Parliament, he became the herald of good news, his pronouncements on the latest export and foreign trade figures ‘almost triumphant’.⁷⁰ By the second half of 1948, the previous heavy deficit had been wiped out, and at the end of the year there was a narrow surplus. This improvement in the economy, assisted from the summer by the injection of Marshall Aid under the European Recovery Programme, increased the agitation for removing controls.

There were different types of restrictions and controls: price controls (especially on food); production controls (including the utility scheme for clothing); controls on consumption, which included food rationing; export and import licences; the centralized purchase of foodstuffs and raw materials; and a number of labour controls.⁷¹ This edifice provided the framework for much of Labour’s post-war planning. It was not, however, primarily a Labour creation. Most of the controlling departments, agencies and committees had been set up in the war, and were simply retained, along with the system of controls with which wartime civil servants (of whom Wilson himself had been one) had become familiar. Familiarity bred inertia, and there was a reluctance, among officials as well as politicians, to demolish a structure which had become the natural order of things.

Though Labour’s planning was largely the product of a Whitehall blueprint, it had a socialist flavour. To some extent, pre-war socialist theory had married, rather accidentally, with wartime administrative necessity. But the Government remained pragmatic in its approach, with the methods of planning subservient to the aims of reconstruction and what Cripps called ‘a Happy Country in which there is equality of opportunity and not too great a disparity of personal incomes’.⁷² The 1947 Economic Survey had underlined that in peacetime there should be no compulsion, and that there should be flexibility in order to maintain a competitive edge in production to build up exports.⁷³

Under Cripps, first as Minister of Economic Affairs and then as Chancellor, planning was rationalized, while remaining indicative. From 1947, economic policy-making moved from the Lord President’s Committee (under Morrison) to the Economic Policy Committee, which became the most important Ministerial Committee (of which the President of the Board of Trade was not a permanent member) and to a subordinate body, the Production Committee, dealing with industrial matters, whose members included all the main economics ministers. This machinery remained virtually intact until Labour left office, and guided a system of planning which, but for the existence of shortages, might have been largely confined to the compilation of economic information and the making of forecasts by the expert agencies (the Economic Section, the Central Statistical Office, the Economic Planning Staff).⁷⁴

But acute shortages did continue to exist, necessitating a degree of intervention in industrial affairs which sometimes clogged the machinery with inter-departmental negotiations. The confusion and inefficiency that resulted produced contradictory responses. Some people pressed for more planning, others for less. The ‘socialist’ solution was a single planning authority. The ‘capitalist’ or liberal one – advocated by bankers, industrialists, newspapers and professional economists, as well as by the Tory Opposition – was the removal of existing controls as quickly as possible. The general public, fed up with rationing and red tape, was believed to favour the second.

So, cautiously, did the Government. This was partly because of the growing scepticism in the economic community as a whole about the efficacy of planning and controls; partly because shortages were becoming much less severe; and partly because Cripps was persuaded that the aims of private industry – especially regarding exports – harmonized rather than conflicted with those of the Government. The Chancellor was therefore disposed to drop controls which caused ill-will. He did not, however, modify his firmly held belief in the desirability, even the moral correctness, of planning compared with the market system.

Wilson shared this outlook. His dilemma was that within the Labour Party there were many who saw a value in maintaining certain controls, both as a means of ensuring more equal distribution, and to retain a ‘socialist’ hold on the economy. On the other hand there was popularity to be gained by not appearing reluctant or kill-joy. ‘Wilson was a good operator,’ considers Sir Max Brown. ‘He was one of the first to see the political advantages of abandoning controls as soon as possible, though it went against the grain of the Labour Government.’⁷⁵ To Wilson, and to other ministers, an early move offered a chance to steal the Tories’ clothes, and gain public credit for setting the people free.

This was the background to Wilson’s ‘bonfires’ of controls which began on Guy Fawkes Day 1948 with the abolition of restrictions that had required the issue of some 200,000 licences and permits per annum, and with the relaxation of controls on more than sixty industrial commodities together with many manufactured articles and household goods. Between November 1948 and the end of February 1949, hundreds of controls, covering consumer goods, industrial equipment and the purchase of foreign supplies were ‘consigned to the incinerator’ (as the Labour Party’s Research Department proudly put it) by the Minister of Supply and the President of the Board of Trade.⁷⁶ At the end of January, Wilson declared himself ‘prepared to take risks, for if a control had to be reimposed a period of free trading would at least provide more up-to-date knowledge of the pattern of trade than the pre-war figures on which many controls are based’.⁷⁷ He wanted to get rid of the timber control, and announced his intention to set up a working party to see how this might be done. In mid-February he announced that it was the Government’s policy to remove ‘every control that can be removed’, except for the main strategic controls which were essential for national recovery, such as the control over the location of industry.⁷⁸

In March 1949, there was a further conflagration, and Wilson was photographed enthusiastically tearing up a clothes-ration book.⁷⁹ ‘Any control that was irking the public which he could possibly get rid of, he was eager to remove,’ recalls Sir Max Brown.⁸⁰ Nineteen fifty saw additional reductions, which included the relaxation of food rationing and price control, and the abolition of petrol rationing and steel licensing. The ‘bonfires’ which caused most celebration, and which Wilson ignited with the greatest exuberance, involved the derationing of consumer goods. To add to his newly acquired image as the housewife’s friend, Wilson set up a ‘consumers’ committee’ to report to him on controls and the public’s reaction to them. The former official responsible for this committee recalls being instructed by Wilson to find ‘real working-class women’, and bring them together for regular meetings. ‘It was window-dressing, successful PR – which civil servants wouldn’t have thought of,’ he comments. ‘Later this sort of thing, getting together ordinary cockney women, became very fashionable.’⁸¹

What delighted the press and public, however, received a mixed reception in key sections of the PLP. ‘Wilson’s bonfire of controls speech annoyed a lot of party opinion,’ says Denis Healey.⁸² Ian Mikardo, a left-winger, recalls that it was over the ‘bonfire’ that he first became suspicious of Wilson. Hitherto, in private conversation, Wilson had talked Left; now he was behaving Right. ‘What struck me was the glee with which he did it,’ Mikardo remembers, ‘the way he did it to seek the approval of the leader writers.’⁸³ In itself, the abolition of rationing was a relatively minor measure. By 1948, the proportion of consumer spending covered by it had in any case fallen to 12 per cent.⁸⁴ Symbolically, however, it was a turning-point in the life of the Government. To Conservatives, rationing was the most visible aspect of socialist bureaucracy; but to many socialists, it represented fair shares and equitable distribution, and its abandonment was symptomatic of the Government’s softening on doctrine. Wilson’s ‘bonfire’ – as much the style as the content – was something he took a long time to live down within the Labour Party.

Yet here was a paradox. Like Cripps, who favoured decontrol without displaying the same relish for it, Wilson was not antiplanning: on the contrary. The arsonist of controls continued to see them as valuable instruments of policy. Wilson had the best technical grasp of the economics of planning of any member of the Cabinet. It would be hard to describe him as a fervent believer, because fervour was not one of his characteristics. But his prejudice was, and remained, in favour of planning and controls, and against an over-dependence on the market mechanism.

Wilson’s attitude owed something to the now distant influence of Beveridge, who had been attracted to the idea of state planning. However, Cairncross thinks that it was the Chancellor who had the biggest impact. ‘Wilson acquired from Cripps the belief that you could do by controls anything you could do by market mechanisms,’ he maintains. ‘He came to believe in planning, organizing, controlling, rather than in seeing the way markets are moving and giving them a push.’⁸⁵ Wilson was not part of the progressive vanguard that was beginning to believe that capitalism should be harnessed, and neither tamed nor destroyed. His announcement of the abolition of some controls included commitments to the retention of others. ‘Certain controls over the location of industry and other things necessary for a policy of full employment’, he declared in March 1949, ‘and over certain aspects of foreign exchange dealings and those controls which are necessary for keeping the national economy on an even keel, should be a permanent feature of our system.’⁸⁶

Wilson’s instinctive sympathy for the principles of planning was important for the future. The fundamental dilemma and divide of the 1950s, as the economic writer Sir Andrew Schonfield put it towards the end of that decade, was: ‘What did Labour propose to do when the shortages were over?’ This question hovered over the Labour Party, not just in the 1950s, but in the 1960s and 1970s as well. Different answers to it – to plan or not to plan, and varying interpretations of what ‘socialist’ planning might entail – continued to divide Labour opinion for the next forty years. After Labour left office in 1951, the distinction between a belief in the centrality of state planning as the essence of socialism, and a belief in the key importance of the international market mechanism, helped to split the Labour Left from Labour’s ‘revisionist’ Right.

From the start, Wilson kept a foot in both camps. He did not take the uncompromising position of Aneurin Bevan, that the ideal continued to be close control by the Government over the whole range of goods produced by industry.⁸⁷ Nor did he share the ruthlessly liberalizing views of the ardent Keynesians. His own answer to the question of what kind of policy Labour should pursue, now that the emergency had ended, was given in a long memorandum, ‘The State and Private Industry’, which he wrote primarily as a party document and presented to a meeting of senior ministers in May 1950, after the general election and several months after the Government had been forced to devalue sterling. This offered a middle route – between the old Left, which advocated a simple extension of public ownership, and the emerging new Right, led by Gaitskell and Jay, which saw a more limited role for the state.

‘The State and Private Industry’ is a formidably clear, intelligent and carefully written paper. It shows how firm Wilson’s grasp of economic policy issues had become after two and a half years as President of the Board of Trade, and how misleading by this stage was the impression he sometimes gave of quickness without depth. The memorandum took a short-term and long-term view, with proposals both for immediate implementation, and for inclusion in the next Election Programme, or even in the one after that: it looked ahead over ten years at least. It was based on Wilson’s own conviction that in the problem of the relation between Government and private industry, ‘we have what is almost a vacuum in Socialist thought.’⁸⁸ It sought to analyse the difficulties of managing a mixed economy, and to outline future ways of doing so. Much of it was devoted to a detailed critique of existing or recently abolished controls, and their inappropriateness. The remainder concentrated on new controls that needed to be put in their place.

‘It will be noticed that the memorandum shows a certain aggressiveness,’ wrote Wilson in a covering note.⁸⁹ It did. It argued that in relation to socialist planning, offence was the best form of defence: that it was desirable ‘to turn the attack we are now getting on our nationalized industries back to appropriate sections of private industry’. Although he advocated some extension of nationalization – in particular, to parts of the chemical industry – he was more concerned with the firms that would not be nationalized, and the controls that should be used as an alternative. The private sector still represented by far the greater part of the economy; yet, he argued, ‘very little fundamental thinking has been done on the ways in which the Government can influence its actions.’ He maintained that there existed ‘a duty on private industry, no less than on socialized industries, to conform to the national interest’, but that the existing structure of private firms meant that ‘patriotism and exhortation’ alone were insufficient to ensure that the national interest was served.⁹⁰

The danger of a new trade depression was one that particularly concerned him. ‘I am personally greatly apprehensive about our dependence on the decisions of private industry, over which we have no control’, he wrote, ‘for the maintenance of full employment.’ He said little about financial instruments, but stressed (to the annoyance of keen Keynesians) ‘the danger of an undue reliance on finance’.⁹¹ Disagreeing with the proposal, put forward in the left-wing manifesto Keeping Left, for powerful Development Councils for each industry, he advocated, instead, the placing of government directors on the boards of the largest 2–9,000 companies. He proposed that wartime powers to take over the management and ownership of inefficient firms should be reinforced.⁹² He emphasized that basic controls such as those on the location of industry, foreign exchange, import licensing and capital issues ‘are essential to our success, but manifestly not enough’, and he argued that an ‘essential instrument’ in government-industry relations would be price control on a permanent basis, ‘over the widest possible field of necessary goods’.⁹³

Wilson sent a copy of this bold paper to the Prime Minister who reacted with an enthusiasm which was the more remarkable because enthusiasm was not, for him, a common emotion, ‘It raises important issues both for the Party and the Government,’ Attlee replied, ‘In the nature of things, the men of my generation will before long be passing out, and the responsibility will be passing to the younger generation.’ The Prime Minister proposed a series of meetings, including one involving senior, and another junior ministers; it should also be discussed, he suggested, at a forthcoming weekend conference, after which ‘we can consider how the subject should be handled by a Cabinet Committee.’ Wilson could not have hoped for better.

Attlee had in mind to restrict the ‘senior’ discussion to himself, the Lord President (Morrison) and the Chancellor, but at Wilson’s suggestion agreed to include other Cabinet ministers with an economic brief and – though not in the Cabinet – Hugh Gaitskell.⁹⁴ The two meetings were held in the afternoon and evening of 17 May. At the meeting of the ‘senior’ group, ministers rejected the proposal for government directors, and expressed concern at the electoral impact of the whole document. At the subsequent ‘junior’ meeting, which Gaitskell also attended, scepticism was expressed by Douglas Jay, who complained that the document ‘made little reference to what would be achieved by persuasion as opposed to control’. Gaitskell felt that the memorandum tended to exaggerate the danger of an early depression, declared that he did not believe in controls on the private sector for the sake of control, and – summing up what was later to become the established Gaitskellite position – indicated that in general, ‘his view was that we should get rid of monopoly practices and let competition work.’⁹⁵

There were further discussions of the paper at a weekend meeting of ministers, and with a group of MPs at a Fabian weekend conference at Oxford.⁹⁶ After reading the memorandum in June, G. D. H. Cole wrote to Wilson that he found himself ‘on the whole in pretty close agreement with your approach’, and supported the government directors’ idea, with his own modifications.⁹⁷ Defending a version of the paper before Fabians in July, Wilson made much of the ‘government directors’ proposal, while admitting that his Cabinet colleagues had rejected it. Two and half thousand firms would be officially designated under his scheme, encompassing half of national production, in order to provide ‘strategic control’. He pointed to the limitations of what he called the ‘half-Keynesian approach’ – that is, a reliance on monetary instruments – and insisted that government directors on the two and a half thousand boards would ‘prevent panic reaction to a slump. They will have a steadying influence.’⁹⁸

The paper was never adopted, nor was it even made public. However, its carefully formed proposals, many of which found their way into party policy statements, retained a philosophical importance. Not only did they set the mould of Wilson’s own future approach, they played an implicit part in Labour’s internal debate in the 1950s, giving early substance to the emerging ‘ideological’ element in the Labour Party, and constituting the Left and Centre-Left brake on what was to become the revisionist Right. ‘This was not a trivial conflict’, maintains the historian Keith Middlemas, who suggests that the theme of the Board of Trade’s 1950 paper ‘explains why Wilson found himself increasingly in the Bevanite camp.’⁹⁹

We are moving ahead here: ‘The State and Private Industry’ followed the trauma of devaluation, in which Gaitskell, Jay and Wilson were all involved. Until that crisis, which will be discussed in the next chapter, Wilson had no discernible conflict with Gaitskell on policy or anything else. Wilson’s paper is discussed here because of the evidence it provides of the young President’s commitment to the powers of his department and the extent to which he had gone native on them. As we shall also see, Wilson foresaw a modernizing role for state intervention which other Labour economists were beginning to question. Far more than Douglas Jay (who was credited with the famous remark), Wilson had come to believe that the gentleman in Whitehall, with suitable direction, was usually right.