ABSTRACT
The history of the Labour Government after the Second World War was governed by a significant paradox. At a time of great radicalism and optimism, Britain’s wealth had slumped to its lowest point since the Napoleonic wars.1 From 1939 to 1945 Britain had pursued what Churchill described as an economic policy of ‘reckless abandon’: she had sold £1,118 million of overseas investments and other capital assets and had accumulated an uncovered external debt of £2,879 million.2 Britain’s current reserves equalled only one-sixth of her short-term foreign debts, while in the final year of war she had spent £2,000 million while earning only £800 million.3 Britain was now dependent on American help. On 14 August, 1945, the Treasury warned that the country faced a ‘financial Dunkirk’ and that without American aid it would be ‘virtually bankrupt’.2 Three days later American aid was abruptly stopped. Britain’s economic straits provided the situation in which Labour Ministers planned a new course. Throughout their period in office the economy, despite renegotiated American help under the Marshall Plan, remained precariously weak. In July 1946 bread rationing was introduced, though this had not been necessary during the war itself.4 The savage winter of ‘46-’47 brought the country almost to a standstill, and the Tory jibe became ‘Shiver with Shinwell and Starve with Strachey’.5 The ‘dollar shortage’, and later the need for increased armaments in view of the Cold War and hostilities in Korea, bedevilled the plans of the Labour Government. Britain’s economic weakness now gave a new significance to the development of African resources, while at the same time it meant that Britain could not afford possibly expensive attempts to coerce rebellious subjects in the colonies. The immersion of politicians in the problems of Britain also led many of them to forget or ignore their imperial trust.
