Chapter 8

Evaluation and implications

The previous discussion has focused on what Labour did about productivity between 1945 and 1951. It has demonstrated that the Government remained very concerned about the issue throughout the whole period and was willing to intervene in a number of different ways to stimulate improvement. In this chapter, the aim is to provide some perspective on Labour's initiatives, by asking questions about what was actually achieved in terms of the central policy objective — the amelioration of productivity. Did the administration's policies have any real impact on British industry's efficiency? And what were the factors that determined the efficacy, one way or another, of the various Government measures?

An obvious way of assessing Labour's record at this time is to look at the various quantitative analyses that are available about Britain's productivity record. Yet, before turning to these studies, it is as well to note that their methodology makes them of rather more limited value than might be imagined, not least for the problem being considered here. First, it must be emphasised that most of the quantitative estimates rely on either labour or total factor calculations, in which the ratio of change in labour inputs on their own, or in combination with capital inputs, is measured relative to changes in output. This approach always yields a large element of the productivity variation which cannot be accounted for by changes in factor inputs. Such ‘residuals’ of course need to be explained, and often open the door to a wide variety of ad hoc hypotheses. The end product is, therefore, all too often speculation rather than substantiated argument.

Second, there is also a problem of timescale. Many of the estimates deal with the grand sweep of Britain's long-run performance in the post-war period, rather than the 1940s as a single decade. To attempt a more limited perspective is fraught with difficulties. Productivity estimates for short periods must always be treated with reserve because, given problems with the data, changes in apparent performance over a few years may easily be statistical artefacts. This is even more so in relation to the 1940s, since the available series for these years are highly deficient by current standards.

With these problems in mind, what do the quantitative studies suggest about productivity at the time of the Attlee Governments? Cairncross, the author of the most authoritative macroeconomic survey of the period, accepts Feinstein's conclusion that GDP per head rose 1.6 per cent per annum between 1945 and 1951, and 2.5 per cent per annum in the three years 1948–51. Labour productivity in manufacturing apparently followed a similar pattern, rising at an average rate of 2.6 per cent per annum across the six years, but accelerating to 3.5 per cent per annum between 1948 and 1951.¹

These recent calculations may be compared to those made at earlier dates. Rostas, writing in 1952, focused on labour productivity and measured output in physical terms. Using 1948 as a base year with value 100, he demonstrated that performance in large industries had been very variable, so that the index of output per head in 1951 ranged from 99 for cotton to 129 for steel tubes, with the (unweighted) average being 118.² Such estimates are broadly in line with those calculated by Nicholson and Gupta, who focused on the period 1948–54.³ Finally, there is the pioneering study of what would later be called total factory productivity, published by Reddaway and Smith in 1960. These authors suggest that (allowing for increased labour and capital inputs) the rate of productivity increase changed positively between 1948 and 1951, allowing an average of 3.3 per cent per annum. This performance compared well with that achieved over the following four years, when the comparative figure was only 1.1 per cent per annum.⁴

Taken together, therefore, the figures do at least imply that, by any standards, productivity was tending to improve quite appreciably in the late 1940s. Indeed, Rostas referred to a ‘general favourable development’ during this period, while Reddaway and Smith noted that their data might appear ‘too good to be true’. ⁵ But had this pattern been shaped in any way by Government policies? The latter authors felt that the acceleration of 1948–51 had reflected ‘recovery from wartime organisation’ and would prove unsustainable.6. Rostas accepted this point, but argued that an enhanced ‘productivity consciousness’ had also been important:

This meant that the large potentialities for an immediate improvement of productivity were realised, that ways and means to improve productivity were expected and that positive measures were adopted in many factories and workshops for this purpose.⁷

In this light, at least, the Government was to be congratulated for its various efforts.

Reviewing the quantitative evidence does not, to conclude, yield any easy answers. A reasonable hypothesis is that productivity did grow somewhat exceptionally in the late 1940s, and that this was connected in some ways to Labour's initiatives. Nevertheless, the case here remains essentially unproven. Can any further light be cast on the whole matter by adopting a rather more detailed focus? What, specifically, can be said about the effectiveness of the different Government measures, case by case?

Evaluating some of the initiatives is fairly straightforward. Hardly anybody felt that the Tizard Committee had achieved very much.⁸ By contrast, reactions to the Production Efficiency Service were generally favourable: in the words of an FBI source, the PES was not significant ‘in a national sense’, but nevertheless continued to undertake ‘useful activity’.⁹ However, as a brief review will demonstrate, reaching clear conclusions about many other of the developments that have been discussed in this book is much less easy.

Opinion about the impact that JPCs had made on productivity levels, to begin with, remained divided. The journal Future asked a sample of manufacturers about joint consultation in general during 1951, and found that only 6 per cent regarded it as ‘really valuable’, with the vast majority (57 per cent) stating only that it was useful ‘as evidence of desiring good relations’.¹⁰ The NIIP survey on JPCs, already referred to, also presented somewhat mixed evaluations. ‘The majority of senior managers interviewed’ supported JPCs, and the committees had clearly helped to solve a range of everyday problems, relating to questions such as ‘hours, breaks and shifts’ and holidays. Against this, discussion of, for example, ‘work tempo’ or ‘methods of production’ continued to be very much less successful. Moreover, even when good results were achieved on production questions, they usually involved only a small minority of the workforce:

It was found that worker representatives who actually came in contact with management in the discussion of production problems did, in a number of cases, become really ‘efficiency minded’, but such individuals frequently complained in interviews that it was very hard to get their constituents to show any real enthusiasm.¹¹

Opinion about the BIM was equally varied. Contemporary observers agreed that there was much to be proud of. The Manager, for example, noted in mid-1950 that ‘the degree to which the BIM has been accepted in national affairs already, is the measure of its success’. The monthly journal Business, in a similar vein, applauded the ‘un-doubted influence’ won by the new institution. Yet, alongside these plaudits, there was a more general sense of disappointment, a feeling that, in the widest perspective, the BIM had not really lived up to expectations. It was observed that, if the Institute had gained a reputation, its real authority nevertheless remained limited, confined to an all-too-familiar circle of civil servants, management movement experts and progressive manufacturers. The great majority of industrialists and managers, by contrast, continued to be apparently unenthusiastic and certainly uninvolved. Symptomatic of this, as The Economist amongst others pointed out, was the situation over the BIM's budget, since, after five years of operation, the Institute still needed extensive Treasury support, with business subscriptions accounting for only around half of annual expenditure.¹²

Circumstantial evidence on the BIM offers no clearer picture. Observers noted that British management was becoming more professional in the 1950s but argued that there still remained much scope for improvement. As Mary Stewart reported in 1953, a good number of the defects associated with traditional, stereotypical ‘captains of industry’ remained depressingly intact; ‘too many’ of the ‘old fashioned, mid-Victorian, high-handed backwoodsmen’ continued in control.¹³ Taken together, such evidence suggests that the conclusion reached by the 1960 Liverpool University study, Management in Britain, is probably about right. There could be no precise measure of the Government's various attempts to improve management standards, the Liverpool team decided, ‘but their effects appear to be mildly encouraging rather than startling’.¹⁴

What, finally, of the two large-scale exercises in spreading ‘know how’, the Working Parties and the Anglo-American Council on Productivity? As regards the Working Parties, it is worth recording, first, that some of their reports were read in considerable numbers. About 4,000 copies of the pottery document were printed and over 3,000 sold. The cotton report proved even more popular, with two-thirds of a 14,000 print-run being bought in the first few months of availability.¹⁵ Moreover, there can be no doubting the Government's resolve to ensure that Working Party recommendations were implemented. The Board of Trade, as has been noted, formed a special squad to check on progress here, and could provide the President with detailed lists of successes and failures, such as the one covering pottery that he produced in Parliament during late 1949.¹⁶ However, when it comes to assessing how many of the Working Party recommendations were actually implemented in each case, the situation is very much less clear. Harold Wilson, in the House of Commons statement already referred to, claimed that action had occurred on 12 of the 30 measures outlined in the pottery report. A feature in Business presented a rather less rosy picture. Progress had been made over some questions, with, for example, the industry's wage structure being revised as the Working Party wanted. Yet, at the same time, there was still clearly much to do: only about one-third of the manufacturers, Business claimed, kept accounts in such a form as to allow detailed costing, despite all of the admonitions.¹⁷ The fact that some of the issues discussed in the Working Party reports had to be raised once again during the British Productivity Council sector studies of the mid-1950s suggests that the impact of the earlier enquiries was at best uneven.¹⁸

The impact of the AACP proves equally hard to summarise simply. This organisation's reports were, once again, distributed in some numbers, with, for example, 300,000 of the first 20 documents being sold within a few months of publication.¹⁹ Moreover, AACP teams spent a considerable amount of time publicising their findings. Typical here were the activities of the two printing teams, who visited the USA in 1951. Their reports sold 11,400 and 9,000 copies, but this was only the beginning of the publicity effort. In fact, the teams addressed over 200 meetings between them, explaining the position to, amongst others, the British Federation of Master Printers Congress, the Joint Industrial Council of the Printing Industry, the Printers’ Managers and Overseers Association Conference, a Typographical Association delegate meeting and numerous print shops up and down the country.²⁰

Nevertheless, it is clear that the AACP message was not always received with either favour or enthusiasm. Many on the Left, to repeat, argued that the teams had spent too much time enthusing about ‘the American way of life’ and too little on what was really going on in that country.²¹ Less partisan commentators were equally uneasy, partly for the same reasons. The journal Engineering commented of one report: ‘clearly the team was impressed … but it is impossible to avoid the suspicion that they were impressed as much by the USA as by the diesel locomotive industry itself.²² Others felt that, anyway, the USA did not make a good point of comparison. The Manager could thus conclude of the AACP reports:

The results are demonstrably valuable and impressive. But it is not to decry them, and it is not to be churlishly unappreciative of a remarkably generous piece of international co-operation, if we say that some of the energy might have been spent in sending teams to countries whose problems are more nearly akin to our own.²³

In this climate, sober assessments of what was actually being achieved by the AACP efforts were relatively few and far between. Some press comment was favourable and specific, as the Business feature ‘Lancashire is Learning From Anglo-US Teams’. On the other hand, much was relatively cautious. Future felt that none of the reports was producing results ‘as speedily as the idealists … would wish’, though it added that this did not mean that the AACP had achieved nothing. The Times Review of Industry argued that the visits were ‘significant’ and their value ‘certainly not negligible’. Moreover, the whole exercise was undoubtedly encouraging ‘greater receptivity to fresh thinking on the subject’. Yet, in the end, it judged the effect on industry of all of the activity to be only ‘marginal’.²⁴

The AACP was, of course, keen to contribute to this debate itself, and produced a quantity of publicity material showing that team reports had changed attitudes and practices.²⁵ Some of this was of dubious value, aimed at maximising publicity, but there was also a series of more sober ‘Follow up Statements’, which tried to present a balanced and truthful reflection of what had been achieved. These were often cautious in tone. Thus, Statement 5, Streamlining Production: A Review of Productivity in the Internal Combustion Engine Industry, noted that the team report had encouraged ‘the reorganisation of factory lay-out and, often, production methods’, but it did not present the AACP document as the only agent of modernisation. What seemed to have happened was that ‘many companies’ had ‘incorporated the recommendations of the report in policies of expansion which were already underway’.²⁶ The review of action taken on the reports by the electricity supply teams was equally careful to avoid exaggeration. The original documents had been ‘accepted as a valuable contribution’. Moreover, there were examples, some spectacular, of new techniques being copied from the USA. But none of this was ‘the real and important result of the productivity team programme’. Rather ‘the dominant purpose’ had to be about the ‘fermentation of new ideas and the raising of keen interest to apply new ideas to British circumstances’. And measuring change here was a very much more intangible business:

Success can only be reflected in the increasing efficiency of the industry in the years ahead. The proof of productivity puddings lies in their eating and this particular pudding affects the taste of all others.²⁷

Taken together, the evidence on micro-performance offers no easy conclusion. Nevertheless, what seems to emerge from this and the quantitative data is a pattern of success and failure. In other words, it seems right to conclude that Labour's programme on productivity did produce some real gains. But it remains abundantly clear, too, that a number of the initiatives led only to cosmetic change, and that the overall impact of the Government's efforts was less than it might have been. What accounts for the gap between potential and reality?

Broadly speaking, three kinds of explanation have been produced on this point. Some have argued that Labour's policies were badly formulated, simply technically deficient. Others assert that the whole programme was poorly targeted, and therefore unsurprisingly ineffective. The barriers to efficient production in Britain largely originated with the unions, and took the form of restrictive practices. Labour should have been doing something about this, rather than tinkering with agencies such as the BIM. Finally, a third hypothesis contradicts the first two, and proposes that the seat of the problem was not in the strategy but rather in the party that was carrying out the strategy. Labour, in this view, simply lacked the will to enforce the modernisation that it perceived to be necessary. The Government capitulated before the employers, but it could and should have done better. Over the following pages an attempt will be made to assess whether any of these explanations is really consistent with the facts.

On the question of technical proficiency, it is quite evident that some of the initiatives were at least partly flawed. Taking the Working Party exercise as an example, a number of defects are immediately obvious. Individual enquiries rarely had access to current data, with the pottery team, for example, having to rely upon statistics from 1935.²⁸ On top of this, there was a noticeable lack of overall strategy. Indeed, The Economist noted, to repeat, that the Working Parties were ‘apparently being sent off into the wilderness of industrial policy without any course to steer or any compass to assist them in holding to it’.²⁹

There was, too, a range of more general problems with the whole programme. Translating recommendations emerging from the specific initiatives into practical steps that could be implemented by the ordinary employer or worker was never easy, as one observer found out:

Sometimes when I heard two managers from opposite ends of the scale conversing with each other on productivity, I had the impression that they were talking at cross purposes, speaking different languages. Very often an employer with bad experience simply cannot understand the flood of good advice and high sounding moral formulas which are showered on him.³⁰

At the same time, as the previous chapters have shown, policies on productivity were neither always consistent nor unaffected by other considerations. There was, for example, an obvious potential difficulty in trying to get industry to modernise and at the same time squeezing it for exports.³¹ Moreover, political requirements might easily cloud an issue or affect a productivity equation: as The Economist remarked of these years, there was sometimes ‘more industrial politics than industrial policy’.³² Indeed, the commitments to tripartism and voluntary collective bargaining continued to set very definite limits on the Government's room for manoeuvre.

Accordingly, it must be admitted that the creators of the efficiency programme were to some extent themselves responsible for its rather chequered impact. Pressure on Labour Ministers was no doubt very great at this time, but it would perhaps have made a difference if a little more thought had gone into some of the initiatives. Nevertheless, it is also clear that this explanation alone cannot account for the whole problem. Even accepting the defects and inconsistencies, there was still an overwhelming amount of good in the programme. Indeed, even critical contemporaries were struck by the reasonableness and pertinence of much of what Labour was doing on productivity, and this judgement has been repeated in later, more scholarly accounts.³³ Technical deficiency may have blighted execution and policy muddle blunted impact, but these factors alone are insufficient to explain the various disappointments in performance.

What of the second argument, that the whole strategy was poorly targeted? The suggestion here is that trade union and worker restrictive practices were the biggest obstacle to faster growth in post-war Britain. If the Government had been really serious about productivity, it would, as a consequence, have tried to do something about these issues. Yet Labour's hands were tied here, because the unions were its allies, and vital power brokers in the post-war consensus. The end product was a set of half-hearted policies to deal with issues that were only ever marginal. In this scenario, the results could only ever be disappointing.

At first sight, this is all certainly very persuasive, not least because it seems to fit into a much broader literature linking Britain's economic decline to the pernicious influence of trade unions.³⁴ In these circumstances, it is hardly surprising to find versions of the core argument appearing in recent work by authorities as diverse as Barnett, Broadberry and Crafts (separately and together) and Middlemas.³⁵ Nor is it remarkable to discover that Olson's much cited tour deforce also repeats a version of this thesis.³⁶ Is such endorsement sufficient to uphold the merit of arguments about restrictive practices?

This is not an easy question to answer. However, it is probable that what is being proposed here is much less plausible than its proponents would seem to believe, largely because the central proposition — that the unions were strangling the economy — is overexaggerated. This point can be established in two main ways. Firstly, it is worth noting that very few of the assertions about the prevalence of restrictive practices in the 1940s are actually grounded on hard facts. Broadberry, for example, cites work by Zweig and by Scott et al. in support of his argument, yet seems to have given these authors a highly perverse reading. Zweig, writing in 1951, offered a survey, largely based on interviews, of unions and productivity in five industries. He found that restrictive practices were prevalent in only one of these (printing) and he largely cleared the other four (iron and steel, building and civil engineering, cotton and engineering). Lest there be any mistake, he added a clear summary of his own viewpoint:

When I started my inquiry I was under the impression that restrictive practices were increasing, because of the strengthened power of the unions. But fortunately the reverse is true.³⁷

Scott and his co-authors produced a study of industrial relations and technical change in a Mersey side steel works during the early 1950s. The conclusion offered again contradicts Broadberry's reading, since it emphasises how smoothly technical change had occurred, and explains this partly in terms of the plant's high rate of union membership.³⁸ Neither case, certainly, gives much support to the view that labour's restrictive practices were immovable obstacles to changes in production.

This kind of muddle raises doubt, but a more damaging line of enquiry is opened up by simply returning to contemporary sources. What did observers and experts in the 1940s think about restrictive practices? Some, certainly, believed them to be prevalent.³⁹ Yet most of the evidence points to a rather different picture, as a brief review will demonstrate.

One kind of enquiry into restrictive practices at this time was carried out by journalists or academics and involved interviewing those in industry. Zweig's findings have already been referred to, but two other surveys are worthy of mention. The journal Future asked a sample of employers in 1951 whether trade union practices or trade customs restricted output or kept up costs, and found that neither was much of a problem. It commented:

In management's view, restrictive practices of all kinds have little effect on British industrial efficiency. Possibly economists of the Right and of the Left will join forces to protest that such replies cannot be honest. However that may be, only 19 per cent of those replying alleged that trade union practices impeded output or put up costs, and only 14 per cent admitted difficulties in connection with trade customs.⁴⁰

Also instructive is the work of the Oxford research group under R.F. Harrod.⁴¹ This held regular meetings with senior businessmen between 1947 and 1949 and asked them, amongst other things, about restrictive practices. A majority of those questioned felt that such restraints existed. On the other hand, ‘a number stressed how difficult it was to make a rational assessment of their effect’.⁴² Indeed, actual instances of damaging action appeared hard to pin down. Asked whether the ‘resistance of labour’ had prevented the introduction of new machinery, most replied that it had not, leaving the group to comment:

There was little evidence that resistance of labour to new machinery was important in preventing investment by a firm. Only 3 out of 18 who discussed this returned an affirmative answer, and only 2 felt it to be … an important factor.⁴³

A second group of enquiries which cast light on the situation were those carried out by industrialists themselves. Again, the findings of these investigations hardly support the pessimists’ case. Some of the Management Research Groups discussed restrictive practices in private during 1947, on the basis of a questionnaire answered by 22 firms. Again, the absence of problems was felt to be the most noteworthy feature of the situation. Thus, of the questionnaire, it was remarked:

Only one firm mentions ‘Trade Union restrictive practices’ as an adverse factor, and then ‘only in isolated instances’. This is surely most surprising in view of all that is being said on the subject today.⁴⁴

More significant, still, were the facts uncovered by the BEC at the end of the 1940s. This organisation first contacted its 66 members (all trade associations) about restrictive practices in 1947, and received 22 replies. Of these, half stated that trade union restrictive practices were either absent or so small as to be irrelevant in their industries, while half made a variety of complaints.⁴⁵ This led the BEC to compile a much more detailed form for its members to fill in, which was circulated over the following year. The new enquiry generated 35 replies and revealed that 23 trade associations could identify one or more restrictive practices in their industries. Yet only 18 of the 23 felt such problems to be serious. Moreover, even here distributions tended to be rather skewed. Thus, 8 of the 18 complained of only one or two of the 15 possible types of restrictive practice, which meant that some important sectors (for example, engineering) remained virtually trouble-free. Similarly, some kinds of restrictive practice were comparatively unknown: 8 of the 15 categories appeared four or fewer times in the 18 questionnaires. The picture revealed, in other words, was of a small number of trouble-hit industries (cotton, shipbuilding, bleaching and printing) and a relatively limited group of recurring restrictions.⁴⁶

Most of the available evidence, therefore, points in one direction. It is neither totally unambiguous nor fully comprehensive but it hardly supports a picture of rampant restrictive practices. This, in turn, makes the ‘wrong target’ thesis less than plausible. What of the third explanation for the gap between government effort and actual outcome, the view that the problem was really Labour itself?

There are a number of versions of this kind of thinking. Some would accuse the Government of simply lacking determination in its pursuit of reform. This was a point made by Labour left-wingers throughout the 1940s. Thus, Mikardo, in a debate about productivity policy during 1948, argued that:

The problem is not that we want some doctor to prescribe some new medicine. It is the problem of getting the patient to take the medicine which he has already got, and which, in fact, is jolly good medicine. The real problem which the Chancellor has to face, and which with great respect, I say he always funks, is how to get people to apply better methods.⁴⁷

On the other hand, there are those who would go further than this and suggest that the root of the Government's timidity lay in its ideological disposition. Social democracy, the argument runs, is always likely to compromise with private enterprise, perhaps even to the extent of allowing capitalists to set its real agenda. This is an interpretation favoured, for example, by Mercer, who draws on Miliband's wider work, The State in Capitalist Society, to understand how Labour failures on industrial policy in the 1940s came about. The central point for her is that the party and the Government shared a ‘commitment to the private enterprise system’. Actual policy was, as a consequence, always going to be insipid:

This [commitment] prompted an inevitable reliance on voluntary and co-operative methods of control, an inability to compel, and the necessity for retreat in the face of opposition.⁴⁸

Again, a clear cut assessment of this hypothesis is far from easy. However, two reflections can be offered on what is being argued. One element of this case against Labour is that the party was not really serious about reform. Yet, as has been shown in this book, this is simply incorrect. With Labour, industrial modernisation and socialism went hand in hand, neither possible without the other. Nevertheless, it is accurate to state that the party did accept the parliamentary system and the existing rule of law. Moreover, as the preceding narrative has often shown, Labour was wedded to introducing reform by consultation, using tripartite discussions to establish consensus.

Of course, standing outside history, it is quite legitimate to quarrel with these dispositions. Indeed, a whole host of commentators have written books on the party, wishing that it was not what it was. However, a more interesting line of enquiry is surely to take Labour at face value, and ask whether it could in fact have done more to prosecute industrial policy in the particular circumstances of the late 1940s. This approach is really about political realities. Did Labour have enough support for a more radical pursuit of its policies? On the other hand, were its opponents solid or might they have been fractured with a little more pressure? It is to these questions that the next section turns.

Labour's greatest ally on the industrial modernisation question was, of course, the General Council of the TUC. This body had accepted the need to increase productivity in an important document ('Production Under Full Employment') of 1946, ratified its view with Congress,⁴⁹ and then done everything possible to aid official initiatives. The TUC had its own priorities in the productivity debate, but in practice fully supported Working Parties, JPCs and the BIM, and embraced the idea of the AACP and tried to make it work.⁵⁰ At the same time, there were numerous TUC attempts to get member unions fully behind this policy. Of note here were the special conferences on the subject for the various executives; the establishment of an in-house Production Department in 1950; and the support provided for a mission to the USA, which concentrated on discovering how American unions were responding to the productivity question.⁵¹ Furthermore, all of this activity was conducted in a language which was both straightforward and uncompromising. The journal Future described some union officials’ comments in favour of the AACP as ‘remarkably outspoken’, while the Financial Times, reviewing a TUC statement on the unions and productivity, noted that it contained ‘a few home truths’.⁵²

Labour could, therefore, count on the TUC and various other trade union leaderships. However, it is quite clear that support for its policies amongst rank and file workers was very much less secure. Certainly, when issues were taken to ordinary branch meetings, little enthusiasm was in evidence, as was noted by a number of observers.⁵³ Moreover, wider public appreciation of, and sympathy for, what Labour was trying to do on industry was hardly impressive.

To start with, most people did not think that production was the most pressing issue facing Britain. Gallup surveys found that everyday matters to do with living and eating were always at the forefront of people's minds, with other topics attracting very much less attention. For example, an enquiry of May 1948, asking ‘What is the chief problem that the Government must solve during the next few months?’, discovered that the popular choices for action were the cost of living (38 per cent), housing (31 per cent) and the food situation (21 per cent). ‘Production’ was seen as the key issue by only one per cent of those replying.⁵⁴

Secondly, when people were asked specifically about productivity, their answers hardly indicated a yearning for more radical official measures. Government surveys revealed that many did not understand what the phrase ‘increased productivity’ meant. Indeed, of samples questioned between 1948 and 1951, only between 16 and 18 per cent provided unambiguously correct definitions.⁵⁵ On the other hand, when opinions were voiced about how productivity could be increased, the preferences which were revealed tended to encompass traditional solutions (for example, enhanced incentives) rather than imaginative departures.⁵⁶ This was partly because, for many, industrial under-performance was mostly a matter of personal laziness rather than systemic failure. A Gallup poll of July 1949⁵⁷ asked why Britain was not producing more and reported that answers could be ranked in the following way:

In fact, there seems to have been a general feeling that the Government had gone as far as it should in interfering with business. A majority accepted existing controls of every kind as necessary and only 10 per cent or fewer thought them ‘all bad’.⁵⁸ However, this did not imply a widespread belief that private enterprise was somehow failing the nation. Indeed, two comprehensive Future surveys of 1950 found that most people preferred to work for ordinary firms rather than nationalised industries; felt that business was generally efficient; and thought that their particular boss was ‘a good chap’. Some clearly wished to have a greater say in how private companies were run, but there was no great discontent with the capitalist system as such.⁵⁹

So much for those on, or potentially on, Labour's side. What of its enemies? Should the Government have been so circumspect with employers? Were they really as formidable an opposition as some of them liked to think?

This question has, of course, attracted a good deal of attention in the historiography, and remains somewhat controversial. Early commentators on the FBI's relationship with Labour asserted that business was sometimes not happy with what the Government was doing but never resorted to sabotage or unconstitutional opposition. Mercer argues that this kind of interpretation is entirely misleading, in that there were continuing attempts to derail official policy.⁶⁰ Reviewing the evidence that has become available suggests that Mercer is completely right on this point, though even she may have understated the problem. This conclusion can be supported by looking at various facets of business opinion about what Labour was trying to do during these years.

The first point to make is that in abstract terms few businessmen had very much sympathy even with the basic assumptions of the Government's approach. Thus, for example, most did not agree that management should be more professional. Indeed, there was a deeply ingrained belief that good managers were ‘born and not bred’ and that the only way to learn management was ‘in the school of hard knocks’. Experts needed to be found a place, it was generally conceded, but they must never be allowed to dominate; in the memorable epigram of the 1950 FBI President, Sir Robert Sinclair, ‘the specialist should be on tap but not on top’.⁶¹

Nor were many businessmen (as opposed to managers) really in favour of joint consultation. Some disliked the idea because they felt that it would open the door to union agitators. It was necessary, in this perspective, to reject ‘peevish feminine socialism’ and ‘keep forcing [the unions] back’.⁶² Elsewhere, the objection was that a consultative approach would compromise the manager's ability to manage.⁶³ Sinclair's views on this were, once again, very forthright:

he stressed that in any business the line of authority must be kept clear, and stigmatized the practice recently adopted in Germany of having one or more of the directors appointed as representatives of the workers as sheer nonsense.⁶⁴

Finally, there was, too, a more general dislike of the state's involving itself in business at any level. Examples of this have been referred to throughout the previous chapters, so that further elaboration is really unnecessary. The views of the managing director of a prominent Yorkshire firm were representative: ‘I am strongly of the opinion that the Government should leave Industry to run its own business without so much interference and advice.'⁶⁵

In these circumstances, when businessmen turned to address what Labour actually proposed for industry, it was inevitable that many would feel that the right course was outright opposition. Needless to say, this was expressed in different ways according to the precise issue at hand. One prevailing reaction was to seek methods of minimising change: to find out how little business could get away with in the face of Government pressure. The mentality at work here was captured by a disgruntled participant at a Conservative Party gathering for businessmen in Scotland during the Spring of 1947. His private account of the event included the following:

I am sorry to say that the general impression which the meeting left on my mind was rather along the following lines — We, the Unionists, and we, the Capitalists, know what we want and what we think would be best for the country, but instead of asking the willing co-operation of the working man, the attitude seems to be, what concessions must we make to him to get him to come along with us. In other words how can we bribe him.⁶⁶

On the other hand, if the situation was felt to merit it, the business community could take a very much more aggressive line. This occurred, most notoriously, in relation to Development Councils, where concerted action from manufacturers continued to frustrate Government intentions, as an anonymous civil servant's description of progress with the Hosiery Working Party's report of 1948 illustrated:

Consideration of (and opposition to) a Development Council has absorbed practically all the attention the manufacturers’ Associations have given to the Report. The Federation have gone ahead with certain work recommended… and have pointed to these activities as evidence that a Development Council is unnecessary. Apart from this it has not been possible to obtain their considered views on the recommendations or even on the production targets suggested by the Report.⁶⁷

But it was also evident in some less publicised cases. Looking at the BIM's early history, for example, it is hard not to conclude that a large section of industry wanted the institution either made ineffective or else actually wound up.⁶⁸ The FBI's position was one of public support but, in private, its officials admitted that their objective was to keep the whole initiative ‘in the hands of industry rather than of Government’.⁶⁹ Elsewhere, in confidential exchanges between firms, attitudes were expressed very much more bluntly; members of IMRA (Industrial Management Research Association, the new name of the old Management Research Group 1) were repeatedly advised, for example, that the Institute should be seen ‘as a political weapon of the present Government designed to facilitate the process of nationalization’.⁷⁰ Nor was hostility simply confined to gesture. The BIM's opponents were active enough to engineer the resignation of the Deputy Director ('Members are aware that he had written for Communist papers and were not happy about him'), frustrate the spread of Local Management Associations, which Russell thought vital; and maintain a long-running whispering campaign against the BIM which was certainly damaging.⁷¹

All of this left Labour in a very difficult position. The party had proposed a set of policies and received a popular mandate, but it was evident that Labour supporters were least concerned about industrial modernisation. Opposite stood a determined foe, willing to conduct a tenacious and wearing campaign to limit change. In these circumstances, the only real option had to be a strategy of negotiation and even compromise. Labour might have done more to publicise its case and broaden support, as Crofts argues, but, on industrial policy specifically, it is not really clear that this would have made much difference.⁷² A small but significant illustration sums up the Government's wider predicament. It relates, once again, to Development Councils. Industry argued vociferously in public that these were clearly a prelude to nationalisation — creeping and then outright state control. In 1951, Political and Economic Planning (PEP) examined this claim and reported that it was ‘impossible to find in any Government statement any justification for … [it]'; the industries for which Development Councils had been proposed were all, without exception, outside the categories ever talked about as suitable for appropriation. Nevertheless, as PEP had also to remark, even without a rational basis, the idea of back-door nationalisation still persisted.⁷³

It seems reasonable to opine, in the light of this discussion, that much thinking about Labour's problems over productivity policy in this period has been misleading. The Government cannot be accused of focusing on the wrong target or of lacking the will to pursue solutions. It certainly made mistakes and did not always harmonise objectives successfully. However, if the gap between effort and outcome is to be fully understood, due weight must be given to the actions of the employers; to repeat Mikardo's analogy, patients who remained unwilling to take their medicine, or even acknowledge the expertise of the doctor.

Four general observations may be offered as a conclusion to this study. The first concerns the Labour Party. Many historians have viewed Labour as essentially about redistribution. Typically, therefore, the Attlee years are described in terms of the creation of the welfare state. In this book, Labour has emerged in a rather different light, as a party which both considered the whole issue of production and attempted appropriate solutions to the manifold problems that existed in the area. The view presented here, therefore, confirms some recent scholarship on other periods, which suggests strongly that Labour's involvement with industrial modernisation throughout its history has been drastically underestimated.⁷⁴

The second point relates to the wider historiography of the immediate war and post-war years. A number of historians have viewed this period as one of consensus, which bore fruit in a long-lasting ‘post-war settlement’.⁷⁵ The evidence presented in the preceding pages, however, cannot be made to square with such an interpretation. Bluntly put, there was no general agreement on industrial policy during these years. In fact, dissonance and not harmony continued to be the most characteristic feature of discussion. Divisions existed between departments of state; between peak organisations; between management experts and industrialists; and, most importantly, between the main political parties. That this was the case must surely call into question the whole concept of ‘consensus’. There may be some justification for using the term to describe the position in the higher echelons of Whitehall, but little reason appears to exist for its deployment elsewhere.

Finally, two comments need to be made about the long-running debate on Britain's economic decline. The first is about theories of causation. As Chapter 1 indicated, writing about the economy's chronic under-performance has tended to move in cycles, often fuelled by current fashion. During the last few years two explanations have been in vogue. Many have subscribed to the view that the real problem for Britain has continued to be its trade unions — creators of an inflexible market, police officers enforcing restrictive practices, opponents of any kind of constructive change. Elsewhere, in more liberal circles, such a partisan judgement is taken to be vulgar and one-sided. Blame should instead be allocated, as in the Ealing comedy, The Man in the White Suit, to all of Britain's institutions. The ‘bolshie shop steward’ is joined by the reactionary, venal entrepreneur and the bungling civil servant in a role call of stage villains.

These kinds of propositions may make good political propaganda, but they cannot be accepted as fully accurate representations of what happened in the past, at least not that part of the past that is covered in this book. Critics of the unions or ‘big government’ will find little comfort in the evidence that has been presented here. Only the liberals’ stereotypical entrepreneur seems in any way grounded in fact. Indeed, it is, perhaps, ironic that the very group which in the end frustrated attempts at industrial modernisation in the Attlee years was also the one with most to gain from it. In some senses, more than a few of the nation's entrepreneurs gambled away their long-term commercial future after the war because of a pathological fear regarding state interference.

There is also an interconnected, if more general, point about the whole ‘decline’ literature, which relates to its common methodology. Many accounts about allegedly culpable institutions are presented with the political parties left out. The failures are explained by reference to ‘the British disease’, a peculiar culture, or even an unfinished revolution. Yet, as this book has shown, such an approach is really unjustifiable. Party politics did (and does) make a difference to industrial questions, as to many others.