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For many reasons, the post-war period from 1945 was an important time. It was a time when, after all the miseries of war, a great surge of hope looked forward to a new and better world. Expectations were high.  There was a determination that the pre-war world of poverty and privilege would not be allowed to return. In Britain, these hopes were placed in the Labour Party which against most forecasts in view of the popularity of Winston Churchill, the war leader, was swept to power with a massive parliamentary majority. It had campaigned on a programme of reform that included a National Health Service, large scale nationalisation, and management of the economy. The promise was to curb class privilege, sustain economic expansion and rising living standards, to overcome poverty and unemployment and to create a new society.

The spirit of optimism was international. Also in 1945, delegations from most countries met in San Francisco to sign the United Nations Charter. This was more than an undertaking to settle disputes by peaceful means; it was hoped that “nations could plan together so that everyone would have a fair share of the good things of life.”  

At the time, as the articles in this section show, the members of the Socialist Party were not just sceptical; they were convinced that in the circumstances the popular will for change could not be realised. They understood the limitations of political action under the capitalist system and set out the reasons why the policies of reformist governments were bound to fail. The great hopes for lasting peace and prosperity for all were based on the fact that world-wide the capitalist system would continue. This was self-defeating. It was inevitable that the problems inherent in the system would also continue.

The socialist criticism was that, regardless of its intentions, the Labour government would be compelled to work within the economic forces of capitalism and that this would mean upholding the capitalist system and confrontation with the working class. The Labour government was soon in conflict with many sections of the workforce including a most bitter dispute with dockers in 1948 in which the military were used against the strikers. Nationalisation was certainly no remedy for industrial strife, as the article from 1947 on the striking miners of Grimethorpe showed. Referring to the National Coal Board the Socialist Standard said, “the miners have indeed exchanged one hard master for another.”

The Labour government had inherited a crippling war debt, mainly to America, that was known as the “dollar gap.” The intention was to repay this debt through dollar earnings but with a downturn in the American economy there was a sharp fall in export earnings and a severe balance of payments crisis. In September 1949, the pound was devalued and the government introduced “austerity budgets.” Except on “defence” its spending was slashed, social services were cut, the housing budget was reduced by £35million, prescription charges were introduced together with charges for spectacles and dentures. A wage freeze brought it into further confrontation with striking workers. At the same time there was a slump in the cotton industry that left thousands of millworkers unemployed. Power cuts did nothing to relieve the cold of some severe winters.

Not all sections of society had to put up with austerity.  The manufacturing capitalists did fairly well. In 1948 the average annual wage in manufacture was £310 and the average annual profit per worker was £151. In 1951, wages were £340 whilst profits had gone up to £206, an increase in profits per worker as a percentage of the average wage from 50 percent to 61 percent.  At the same time, despite currency restrictions, the rich were still able to holiday in their luxury yachts on the Côte d’Azure.  Lord and Lady Docker became famous for their lavish parties and gold-plated Rolls Royce.

On the “peace” front, that Labour government launched a massive re-armament programme. In 1948 it raised the military budget from £770m to £1,110m and developed British nuclear weapons in secret. The war-time alliance of America, Britain and Russia had fallen apart. A massive air lift relieved a beleaguered West Berlin. The hopes for world unity were shattered when an “iron curtain” divided Europe into hostile camps in what became the cold war. In 1949 Britain became a main combatant in the Korean War.

In retrospect, the main outcome of the 1945 Labour government was to steer British capitalism through its post-war difficulties and prepare the ground for its expansion. In doing this it absorbed the popular demand for social change that had brought it to office and made it politically sterile. By 1951, the electorate had gone back to the Tories and voted them back into power for the next 13 years.

Capitalism in Britain then launched into the boom years of the 1950s. With relatively full employment, there was a massive extension of credit to workers through hire purchase and a strong demand for the household consumer goods that came on to the markets. One of these was television which also brought a change in social habits. The preoccupation with the “consumer” culture under the slogan “live now pay later,” perhaps aided by disillusion with the Labour Party and a need for entertainment following the dreary years of the 1940s resulted in deepening political apathy. A change to city scenes was the appearance of many black faces with immigrants from Jamaica and other places.

But the system could not stave off further crises. In 1956, in collusion with France and Israel, Britain invaded the Suez Canal zone. The withdrawal of British troops and the resignation of Anthony Eden, Churchill’s successor as Prime Minister, confirmed the emergence of the United States as the strongest Western power. At the same time Russian tanks invaded Hungary to quell a popular rebellion and a demand for democratic rights. This action and the execution of Imre Nagy destroyed any lingering illusions that state-capitalist Russia was anything other than an oppressive occupying power. One political cost was the damage done to the British Communist Party from which it never recovered.