The Chancellors (16): Hugh Gaitskell

Hugh Gaitskell, 1950-51

Labour, under Attlee

Like Cripps, Gaitskell was educated at Winchester and New College, Oxford (winning a first in PPE): Winchester thus became the third school to provide two chancellors in the 20^th century. He was the son of a member of the Indian Civil Service. He joined Labour at the time of the General Strike. He was an academic economist at UCL, taking a role in formulating Labour policy (notably in Labour’s Immediate Programme, in 1937): he had influence over Dalton at that time. He worked in the civil service in the war (as did his successor as Labour leader, Harold Wilson), before entering parliament in the 1945 landslide. Having recovered from illness, he worked for Manny Shinwell in the ministry of fuel and power, where he tried to convince his boss of the dangers of a fuel shortage. When Shinwell was sacked after the fuel crisis, Gaitskell succeeded him in 1947 (though he was outside the cabinet). However, when Cripps was ill, Gaitskell was the central figure in persuading Attlee to devalue sterling in 1949. He was now a major player.

In 1950, he was made minister for economic affairs and was, de facto, Cripps’ minder; when Cripps resigned, he was the natural successor. The big issue facing him was the Korean War and the cost of rearmament. Retrenchment and a deflationary budget was required. His one budget is now only remembered for the introduction of NHS charges for dentures and spectacles, which saw Bevan, Wilson and Freeman resign. In truth, Gaitskell need not have picked that fight. Morrison tried to broker a solution, but Gaitskell wasn’t minded to back down. He did like to pick fights, though he was convinced that Bevan was looking for a reason to walk out and set himself up as the standard-bearer of the left. Gaitskell increasing saw himself as the standard-bearer of the mainstream and as Attlee’s natural successor. He told Dalton that it was a fight for the soul of the Labour Party, and George Brown that it was a political battle between the two  men. If Gaitskell won the battle, the resultant factionalism opened out a split in Labour, which would bedevil Labour through the ‘fifties and, arguably, well beyond.

Just as importantly, the budget was deflationary and certainly didn’t help Labour win votes (as Attlee observed at the time). Probably more important was Attlee’s timing. Gaitskell had thought Attlee had the timing of the 1950 general election wrong; had he gone later than 1951, he may well have won the second election. Attlee’s poor timing, along with the disunity and deflation Gaitskell was in part responsible for, certainly did Labour little good. The irony was that, had they won, Gaitskell may well have gone on to be prime minister after all.

It is certainly striking that neither Cripps nor Gaitskell were willing to introduce pre-election windfall budgets. They were far more responsible than, say, Butler, Maudling or Barber; in this era it was Tory chancellors who tended to be careless with public finances. After Labour’s election defeat, the Economist coined the term Bustkellism, a backhanded compliment to the way in which the Labour chancellors under Attlee set the basic terms of post-war economic policy. Gaitskell did go on to become Labour leader in 1955, thus being one of the twelve chancellors also to lead their party. His untimely death, in 1963, robbed him of the chance to win in 1964: for many, he remains Labour’s lost leader.