The Making of Modern Britain

by Andrew Marr

  Yet the aftermath of the war produced a more excited mood in the shipyards and the surrounding slums than before. Clyde workers wanted a shorter week, to spread the work around. The old worries about higher rents and vile housing were back with a vengeance. This, surely, was the revolutionaries’ moment. The months ahead would bring the most dramatic confrontation in Glasgow’s political history. But Maclean and other Marxists were barely involved. They squabbled about which parties should be formed to carry the communist flag, who should lead them and what could be done to help Russia. Less ideological men led the great ‘forty hours strike’ of January 1919. Using mass pickets, they soon had 70,000 men out and seemed threatening enough to the authorities. One, Manny Shinwell, promised to shut off Glasgow’s power stations and close down the trams. Using groups of up to 10,000 pickets at a time, many of them recently demobilized soldiers, he intended ‘to stop every tramcar, shut off every light, and generally paralyse the business of the city’. Ministers decided Britain was facing ‘a Bolshevist uprising’. By the time the leaders of the strike had gathered in the city’s main square, George Square, on Friday 31 January, to hear the government’s response, six tanks and a hundred motor lorries of troops had been sent north from England. Believing that the crowd of around 25,000 people was about to stop the trams, the police baton-charged, driving the protestors up a steep side-street, where they came under a hail of lemonade bottles. The Riot Act was read, ringleaders were arrested, many heads were broken and running battles continued across the city for the rest of the day. The Glasgow Herald declared ‘the battle of George Square’ to have been ‘the first step towards that squalid terrorism which the world now describes as Bolshevism’.

  Cabinet fears about a communist revolution were equally hysterical, fed by alarmist tittle-tattle from Scotland Yard’s director of intelligence, Sir Basil Thompson. On 2 February 1920 one cabinet observer reported that Churchill and Sir Henry Wilson, head of the Imperial General Staff (who would later be assassinated by the IRA), were painting ‘a very lurid picture of the country’s defenceless position’ to the rest of the cabinet. Lloyd George turned to Sir Hugh Trenchard, in charge of the RAF, and asked: ‘ “How many airmen are there available for [repressing] the revolution?” Trenchard replied that there were 20,000 mechanics and 2,000 pilots but only 100 machines which could be kept going in the air . . . The pilots had no weapons for ground fighting. The PM presumed they could use machine guns and drop bombs.’ It is a sobering thought that a British cabinet was seriously discussing plans to strafe the working classes not much more than a year after the Great War ended. By April 1921, when the miners were striking against wage cuts, the cabinet was debating how many battalions were available to fight the revolution. The answer was eighteen, but seven of them were Irish ‘and we were not sure of their temper’. There was much discussion about whether troops should be brought back from Silesia, where they were enforcing the peace terms in Germany, and Egypt and Malta. Yeomanry were to be recalled. Troops should even be brought back from Ireland, herself on the edge of revolution. ‘Yes’, said Lloyd George, according to the hurried notes – ‘if bigger trouble here . . . let Sinn Fein go’. How many battalions would be needed to hold London? F. E. Smith declared the cabinet ‘ought not to be shot without a fight, anyway’. Such talk seems insane now. But with a slump, high unemployment, bad housing and some dedicated revolutionary leaders, it seemed sensible back then. There were numerous references to a ‘revolutionary mood’ sweeping the country. So why did no revolution come?

  Unlike Russia, Britain had been victorious. There was still a strongly patriotic mood in the country, and its government was not blindly belligerent. Lloyd George’s War Cabinet official Thomas Jones was advising a programme of cutting working hours, introducing minimum wage deals for key industries and energetic house building by city authorities, as ‘the best antidote’ to revolution. The government would fall far short of this, but in 1919 Lloyd George still had just enough of a radical reputation, plus some solid advances on health insurance, for his promises to be heard. The trade unions were in the hands of moderate and conservative leaders, except for a few areas where local radicals had taken charge – Clydeside being the best example. The revolutionaries were so busy fighting one another they had little energy left for any uprising. Though the Communist Party of Great Britain was finally formed in 1920, many comrades, including Maclean, had been struggling to set up other parties. The left’s famous enthusiasm for splits and sects began from the very start. Finally, the Labour Party was on a rising curve, absorbing former revolutionaries as it went. Between 1918 and 1922 there was a sharp rise in the Labour vote, particularly in Glasgow, Sheffield and Manchester. Of the rebel leaders of ‘Red Clydeside’, Shinwell would end up as secretary of state for war, John Wheatley would become health minister in the first Labour government, responsible for a useful housing programme, Jimmy Maxton became an MP for the Independent Labour Party, much admired by Winston Churchill. William Gallacher remained a communist, though as MP for West Fife until 1950 he was never much threat to the British state. And John Maclean, with his Christlike readiness to give away his only coat, was on the way to romantic martyrdom as a postage stamp.

  Will the Bloody Duck Swim? Churchill, Tories and Gold

  If there is one man who symbolizes British capitalism in these years, it is the theatrical, bearded guru of high finance, Sir Montagu Norman, whose governorship of the Bank of England ran from 1920 to 1944. Norman looked more like a raffish painter than a banker. He liked to wear a cloak, travel incognito and, interested in spiritualism, apparently told a colleague he could walk through walls. Superbly connected across the old City of families of merchant bankers and Old Etonian stockbrokers, Norman awed Britain’s politicians (whom he detested). Described by other bankers as being charming, feminine, vain, unstable and prone to nervous breakdowns, Norman was, however, a steely and dominant figure. For much of this period he kept the Treasury at arm’s length and boasted to parliamentarians who had the cheek to question his judgement that he operated by instinct, not facts. He matters above all because he was a devoted believer in the gold standard, the pre-war financial system. The long boom in world trade from the 1880s onwards had been underpinned by this system, led by Britain, with the United States (plus most European countries, Japan, and the British possessions) an enthusiastic member. By fixing the price of each currency to a set amount of gold, which was then freely tradeable, it made trade easier and allowed real price changes to be exported and imported. But it left little hiding room for governments whose economies were in trouble.

  Gold-standard nations whose governments spent too much would be forced to raise interest rates, or see investors sell their currencies for gold. So the most successful countries accumulated the most gold. The shock of the Great War had destroyed the gold standard, and after it the United States, surging economically, had about 40 per cent of the world’s stock of gold. Britain, having had to borrow huge sums to pay for the war, was in a very weak position. But Norman, like most City opinion, was determined that the pound should return to the gold standard, thus re-establishing Britain and her Bank as standing at the heart of the international capitalist system. For him it was a matter of morality, deterring inflation, as well as common sense and ‘fidelity’. As we shall see, ‘going back to gold’ was one of the greatest controversies of the age and is generally reckoned now to have been economically catastrophic. It would entangle Churchill and damage his reputation permanently. This, however, was not the end of the Norman conquest, for the Bank also successfully championed a view of the economy that paid scant attention to British manufacturing. Critics complained that the City failed to back the country, one merchant banker finding himself ‘constantly struck by the peculiar lack of contact between the chief financial centre of the world and the industry of its own country’.99 This, it was argued, was why Germany was leaping ahead with new industrial techniques and why America’s steel industries were so advanced, compare
d to the creaking British plants. So the City would have a double effect on Britain, pressing for a financial straitjacket the country was too weak to wear comfortably, and failing to provide the capital her ageing industries needed. When the economic storm finally arrived, Montagu Norman would find himself in the middle of it; neither his famous cloak nor his alleged propensity for walking through walls would provide any hiding place.

  By the early 1920s in politics, the old battle line between protectionist Tories and free-trade Liberals was being replaced. Now it was pro-capitalist Conservatives against socialists. This would squeeze the Liberals into near oblivion. Before it did, Britain went through volatile three-party elections. After capitalizing on his war leadership in 1918 Lloyd George had been hammered in 1922. When Stanley Baldwin became Conservative prime minister, replacing the dying Bonar Law, he decided to call another general election for late 1923. Baldwin was trying to resurrect the old politics of imperial protection, partly because he had heard a rumour that Lloyd George was planning to do the same and, in Baldwin’s words, he would ‘dish the Goat’. Even traditionally strong industries such as the woollen manufacturers were calling for help, but the British public does not like unnecessary elections. So Baldwin got dished instead, allowing Labour its first brief chance in power as a minority. Then Baldwin brought Labour down and provoked yet another general election in 1924, which won the Tories a solid five years in power. Two great questions seemed to face the British political world: Could the Labour Party keep itself independent of Russia and of home-grown revolutionaries, to become a normal parliamentary governing force? And could the Conservatives govern properly in the interests of the whole country, rich and poor, in hard times? Baldwin might have been Conservative leader, but nobody would be more important in answering that second question than Winston Spencer Churchill.

  An ill Churchill had lost his seat in the parliamentary rout of 1922, and failed again the following year in Leicester. He was still attached to the collapsing Liberal cause, enough so to attack Baldwin with some vigour. But he had a new favourite enemy in socialism. Though genuine, this was also shrewd since it would offer him a way back to the Conservatives, and therefore power. In March 1924 he fought a by-election at Westminster as an ‘independent anti-Socialist candidate’. His main theme was Labour’s loan for Russia: ‘Our bread for the Bolshevist serpent; our aid for the foreigner of every country . . . but for our own daughter states across the oceans . . . only the cold stones of indifference, aversion and neglect.’100 Backed by a colourful array of political chums, he turned the by-election into a carnival. As he later recalled: ‘I began to receive all kinds of support. Dukes, jockeys, prize-fighters, courtiers, actors and business men all developed a keen partisanship. The chorus girls of Daly’s theatre sat up all night addressing the envelopes and despatching the election address.’ The Tories, suspicious and divided about Churchill, were equally divided about what to do in one of their safest seats. Around twenty-five MPs came out openly for him rather than their own man. In the end their candidate won by just forty-three votes, but Churchill had enjoyed a personal triumph. Later that year he formally rejoined the Tory Party, becoming Conservative MP for Epping in the general election of 1924. As he cheerfully put it, anyone could rat, but it took a special calibre to re-rat.

  Yet if Churchill’s twenty-year career as a Liberal was finally over, he had not lost his belief in social reform. From now until his great comeback in 1940, his politics were hamstrung. His views on social questions – insurance and the relief of unemployment – were particularly offensive to the very same diehard Tories with whom he most agreed when it came to the Empire and foreign policy. For mainstream Tories he was either too far to the left or too far to the right, an unsettling and flashy carnivore in the middle of the herd. That paradox would be resolved only after the rise of Hitler. Meanwhile, to his utter amazement, the new prime minister made him Chancellor of the Exchequer. Churchill had been mulling over which of the more minor appointments (if any) he would be offered and what he might accept. When Baldwin asked if he would go to the Treasury, ‘I should like to have answered, “Will the bloody duck swim?” but as it was a formal and important conversation I replied, “That fulfils my ambition. I still have my father’s robe as Chancellor. I shall be proud to serve you in this splendid office.” ’

  As chancellor, Churchill immediately had to confront the ugly truths about British power which were still hidden under the imperial gloss. He desperately wanted to introduce better unemployment insurance and to revive industry by cutting taxes for the middle classes. But the sums did not, and would not, add up – unless he also managed to impose deep cuts on military spending, particularly the Royal Navy. Churchill has received a severe kicking from some historians in recent years over his own ‘appeasement years’ when he was urging the abandonment or delay of major warship and military-base programmes which might have avoided later military humiliations such as the fall of Singapore to the Japanese. As chancellor he upheld a 1919 principle that military spending should be based on the assumption that no major conflict would occur for ten years. This ten-year rule, rolled on by later chancellors, is one reason Britain was so badly militarily prepared in 1940. Churchill, clearly no pacifist, thought that air power and new scientific weapons, still uninvented, would transform warfare. His mind was mostly elsewhere. He was talking about appeasement – but, in his phrase, ‘the appeasement of class bitterness’. Pensions for widows and orphans; earlier old-age pensions; health insurance – those were what he wanted much of the military savings to finance. Given that he believed socialism was the real enemy, that was hardly a foolish agenda.

  So why has Churchill been remembered as a hard-faced anti-Labour ranter? His rhetoric against all socialism was flaming and inflammatory. But nothing did his reputation more harm in domestic politics than his decision as chancellor to return Britain in 1925 to the gold standard, with sterling valued at the pre-war rate to the US dollar. Not only Norman and the City grandees but almost all serious opinion-formers in Britain in 1925 supported this as a return to traditional, well-tried disciplines and to a clear, predictable system of world trade. As Churchill put it, Britain would be less shackling herself to gold than shackling herself to reality. The question was how much trouble the British economy was in; and therefore how painful the shackles would be. During the war New York had become the rising centre of world capitalism. Going back at the old rate would be a defiant assertion of British willpower and importance, but it would also make British goods more expensive and further damage the creaking, now old-fashioned heavy industries on which so much employment depended. What had been comfortable in 1880 would not be in 1930.

  Churchill intuitively knew it. He challenged his Treasury advisers in long, detailed letters. On the one hand, he pointed out, there was a shortage of goods for British consumers, on the other hand a shortage of jobs: ‘the community lacks goods and a million and a quarter people lack work’. Proper economics, surely, would bring both into alignment. Would not going back on gold sharply raise unemployment? As he put it, ‘I would rather see Finance less proud and Industry more content.’ He did more. He brought together the best two anti-gold-standard thinkers, the radical young economist John Maynard Keynes and the old former Liberal chancellor Reginald McKenna, along with the pro-gold-standard Treasury men, and got them to argue it out over dinner. At the end McKenna, recognizing the huge political pressure on Churchill, gave in and told him there was no escape and that he would have to go back, adding, ‘but it will be hell’.

  It was hell; or at least, some kind of economic purgatory followed. Keynes turned the attack back with a famous pamphlet later that year, ‘The Economic Consequences of Mr Churchill’. But Keynes was a rare voice then. Britain was forced off the gold standard again in the economic crisis of 1931 and the experiment was blamed for causing slump and misery. It increased his reputation as a ruthless anti-worker Tory. But at the time Churchill had gone as far in challenging the economic
orthodoxy as any chancellor was likely to have done; and it is by no means clear that the gold standard was as decisive as was claimed. Britain had low-investment, poorly managed heavy industries, increasingly challenged by newly industrialized and larger nations. She was spending a disproportionate amount of money defending a vast empire that brought her little economic benefit. Those were fundamental problems, as much as a brief and ill-starred attempt to resurrect a world economic system which had greatly enriched the pre-war world but which ought to have been left for dead in Flanders.

  Dog Stars, Tramps and Superheroes

  In the early years of British cinema films were shown in travelling booths at fairgrounds, as brief interludes in variety performances and at the notorious ‘penny gaffs’ where a dozen or twenty people stood in a dark, smoky shack, sometimes seizing the chance of a squeeze and a snog. The country’s first public film-show had probably been at the Indian Exhibition of 1895. By the time Queen Victoria died there were many short, single-shot films – mostly showing national ceremonies, sporting events and parades. For the Edwardians they were novelties, yet the national character quickly asserted itself. Cecil Hepworth, one of the great pioneers, based himself at Walton-on-Thames and scored a particular hit in 1905 when he introduced the world to its first named star of the screen, Blair. Being Britain, the film star was a dog, appearing in Rescued by Rover. Early films were used in restaurants for ‘bioscope teas’ and dropped into operatic performances. Rather as it was not clear in the early days of the internet just what it would be used for – a research tool or a kind of library, perhaps? – so the early film-makers were unsure what they were up to. Were films for instruction, education or entertainment? There were films showing the Delhi durbar, and Peak Freans biscuit factory, and mountaineers and coal miners, and the Scottish Highlands, and Blackpool holidaymakers and exotic foreign rulers, as well as schoolgirl high jinks and exciting chases of robbers. But by 1910 the ‘penny gaffs’ were disappearing and longer films with sentimental stories, funny stories, even classic Shakespeare and Dickens stories were being made.