the impact of the WWII on Britain and the creation of the Consensus

From world war II to Consensus

The situation in 1945 in Britain was marked by the end of the Second World War which was a catalyst for major social, economic and political change. Actually, the impact of the war on Britain was perceptible which paves the way for a post- war coalition setting the pillars of the British consensus as a remedy to the upshots of the war.

 Due to the German bombing, much of Britain was devastated. Casualties reached 400.000 people. It faced huge shortages of raw material as well as the shutdown of factories, communication networks and transportation systems. Britain’s economic position had deteriorated sharply, the devaluation of the pound against the dollar was a sombre evidence of Britain’s dependence on the US.

Yet , the war re- shaped the political scene. In fact, there was a growing awareness that there should be an active role for the state in social and economic management and that the welfare of society could not be achieved using techniques of laissez – faire and non – intervention. In essence, the war enhanced the power to control the economy and cure unemployment.

Indeed, the call for government intervention was approved when the Attlee Cabinet emerged from its 1945 election victory with a mandate for reconstruction and a determination to strengthen the work of the war – time coalition. It was shaped in a Consensus as an implicit informal agreement between political parties to carry out the government’s policies and reforms.

Its foremost pillars were the mixed economy, the welfare state and the conciliation of the trade unions.  

Mainly, the new economic policy was centred around the mixed economy. It advocated the public ownership of basic utilities and an active role for government in managing the economy. The government, thus, felt that the best way to modernize and restructure industry was to nationalize it. Namely , it consists of transferring the basic means of production to public ownership concerning mainly key industries such as coal , iron, steel , railways and the banking system. The idea behind the necessity of government was that a massive government spending could quickly remove unemployment. As a matter of fact , to run the economy at a level to provide full employment was part of the post war consensus .Adhering to this policy , the government accepted the duty of managing demand as a means of producing full employment . Keynesianism proved   that active government intervention in the marketplace and monetary policy is the best method of ensuring economic growth and stability.

Another key principle of the consensus was the welfare state . Indeed , the labour government of 1945- 1951 were given most of the credits for setting up such a system in Britain. Their social reform was essentially based on the Beveridge report of William Beveridge. It was the source of inspiration for much of the welfare legislation. Respectively, in 1945 and 1946 , legislation provided for family allowances , sickness , benefits and national assistance. In 1948 , the National Health Service was established to provide free medical treatment . in effect , these reforms were meant to meet the needs of people as well as fairer opportunities for all in the new society.

Eventually , there was a room for a conciliation of the trade unions in the post- war era. Their bargaining position was helped by full employment and the consultative status they were granted by Labour and by the succeeding Conservative government that accepted these policies believing that the post – war reconstruction of society and economy should be similarly planned and directed by the government. Not to mention that  Conservatives had no alternative but re-adjust their discourse to make it meet popular expectations. Their new discourse reveals a certain degree of maturity and a balance of realism as well as pragmatism to serve their own interests.

With the conservatives in power  , the general pattern remained a basic commitment to the mixed economy and Keynesian planning of budget. Churchill’s government  , indeed, confirmed the boundaries between the public and private sectors which remained intact for the next decades. They denationalized only the steel and road transport industries.

More importantly , Conservatives proved their loyalty to the Consensus claiming that housing , health care , education are the responsibilities of   the state. Actually , they increased spending on social services. Capital expenditure on the National Health Service almost doubled between 1951 and 1962.  Welfare state programs were not only maintained but rather enhanced.

As for the trade unions , they were brought closer to a conservative cabinet since Churchill was enthusiastic to pursue a policy of industrial appeasement and a conciliation. He devoted much energy to bring the two sides of industry together. Nevertheless  , the era of Conservatives was not that of a significant social policy change. Therefore , except for some denationalizations , the Conservatives kept the welfare state and its achievements after their victory in 1951.

In short , the consensus was seen as a mutual agreement between the two parties about the general direction of their policies. They attempted at fostering new measures for Britain to regain its position and overcome the devastating effects of the war.