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How the spectre of the UK in the 1930s haunted Michael Gove’s lecture

Neville Chamberlain stayed too close to inherited, dying ideas. Which way will Boris Johnson’s administration turn?

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Until the past few years, if you knew one soundbite from the long-dead Italian communist Antonio Gramsci, it was probably “pessimism of the intellect, optimism of the will”. But in more recent times, as British politics has sunk ever deeper into ideological flux, another line of Gramsci’s has come to the fore: “The crisis consists precisely of the fact that the inherited is dying – and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.”

This observation applies so well to the present that it is often used without invoking the era Gramsci was actually writing about. But in his lecture on Saturday (27 June) at Ditchley Park, Michael Gove did just that. He used Gramsci’s line to frame a detailed comparison between our own age of upheaval and the period from 1929 to 1935. Back then, in Gove’s account: 

“Economic depression had undermined faith in Western democracy. Traditional political and party structures broke down while protectionist trade barriers went up. Ideological polarisation divided families and societies, competition for resources generated international conflicts and new technologies offered expanded realms of opportunity but also unsettled traditional patterns of working, and threatened new and horrific means of destruction.”

The conclusion Gove draws from this is that the UK today should follow the example of the radical reformers of the 1930s who, he says, reshaped government, fostered solidarity and addressed the plight of the poor. Specifically, the administration of the US Democratic president, Franklin D. Roosevelt.

Admiration for FDR on the right is not new: I once interviewed the ex-newspaper proprietor Conrad Black about why he had chosen to write a large biography of him, for a radio piece on the popularity of the “Champion of Freedom” among neoconservative thinkers. President Reagan used to remind reporters that he voted for Roosevelt four times, and that his objection was to Lyndon Johnson’s “Great Society”, rather than the New Deal. Nor is this the first time Gove has deployed a progressive US icon: I can’t have been the only visitor to his office at the Department of Education who was startled by his poster of Malcolm X.

Nevertheless, the choice of FDR leaves a rather striking absence at the heart of Gove’s lecture. The problems he credits Roosevelt with tackling – particularly an ebbing of faith in free markets and the capitalist economy – were also prevalent in the UK in the 1930s. The situation was never as bad as in the US, but it was serious enough: in 1932 unemployment neared three million. Here, though, the impact of the Great Depression was tackled by a Conservative-led national government, which ruled with huge majorities all the way from 1931 to 1940.

But while the New Deal remains a resonant political slogan, recycled by Tony Blair in 1997 and green activists today, fewer people seem keen to revive the national government’s attempts to tackle the crisis of capitalism in the 1930s.

This is not, contrary to post-war myth, because it did not make any effort to address the situation. Both ministers and Treasury mandarins were prepared to discard key elements of  the old Gladstonian orthodoxy. But only cautiously: they dared do nothing on the scale of the New Deal (which represented 40 per cent of the US’s 1929 GDP). 

So what did the governments led by Conservative prime ministers Stanley Baldwin and Neville Chamberlain do to tackle the crisis? And why might they be less worth remembering, in Gove’s view, than Roosevelt?

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In 1932, the national government did make a break with orthodoxy, by embracing the great cause that many Conservatives, mainly on the right of the party, had championed for decades: a fundamental change in how Britain traded, which they believed could transform the country’s fortunes. Ending free trade and returning to tariffs had long been a rallying cry for “little England” Conservatives. Press barons had even set up and backed a single-issue party, the “United Empire Party”, seeking to embarrass the Conservative leadership on the issue. Now, in the wake of a financial crisis, with the economy struggling, their moment arrived. 

Yet when tariffs on imports were at last introduced, it was a damp squib. “For thirty years,” writes the historian Peter Clarke, in Hope and Glory: Britain 1900-2000 (2004) the protectionist cause “had caused one political crisis after another; yet as soon as tariffs were implemented they appeared less important, either for good or ill.” Britain’s struggling core industries remained stubbornly unstimulated; the policy did little if anything for farmers, or for the unemployed. This government heralds a post-Brexit return to free trade; we shall have to see if it makes more difference than the opposite move 88 years ago.

The economic sectors in greatest trouble in the 1930s, were the old heavy industries: coal, iron and steel, cotton, shipbuilding. The national government was prepared to intervene to try to manage the economy, developing a tentative agricultural and industrial policy, which involved setting up marketing boards for milk and potatoes, and cajoling companies to amalgamate and rationalise to reduce excess capacity. This did some good – but it also led to the closure of some local areas’ main source of employment, such as Palmer’s shipyard in Jarrow, Tyneside. This approach drew criticism from Labour that the government was readier to intervene to help capitalists than their workers.

In part, that was because of the remaining orthodox imperative to balance the budget – even if that meant millions of unemployed people and their families were forced to survive on means-tested benefits. As Daniel Todman argues in Britain’s War: Into Battle 1937-1941 (2016), the government’s claim to power was based on its determination “not to allow the plight of the jobless to endanger the interests of the nation”.  As chancellor, Chamberlain rejected calls for public works programmes, particularly if they entailed government borrowing. His officials contended it was more important to stop spending getting out of hand; Chamberlain told MPs complaining about his 1934 Budget that he “had yet to be convinced that prosperity came from mere spending of large sums of money”. In 1935, the former Liberal prime minister, David Lloyd George, then the father of the House of Commons, presented his Keynesian plans for a British version of the New Deal to the cabinet, but they were politely declined. 

Instead, Chamberlain tried to neutralise the issue by reforming the administration of long-term unemployment benefit. This was taken out of the hands of local Public Assistance Committees, who had allegedly let it fall into chaos, and awarded to a single, powerful new Unemployment Assistance Board. But when the board set rates so tightly that many unemployed people endured a cut in their benefits, protests erupted across the political spectrum. Some 300,000 unemployed miners marched through the south Wales valleys. In Sheffield on 6 February, 12,000 unemployed protesters attacked police with rocks and poles. Even Conservative backbenchers, anxious about their marginal seats, objected. The board was put on hold until after a fresh general election victory.

Perhaps the nearest Chamberlain came to a Rooseveltian intervention to help the unemployed was the declaration of Scotland (excluding Glasgow), south Wales, west Cumberland and north-east England as “Special Areas”, with commissioners appointed to help revive their economies. Chamberlain’s biographer Robert Self points out that, in order to bounce his cautious cabinet colleagues into backing the scheme, Chamberlain felt he had to play a trick on them. He had a staffer from the Conservative Research Department, Henry Brooke, masquerade as an anonymous Times “special correspondent” to write a series of articles highlighting the plight of the Durham unemployed. This ruse worked well enough – but Chamberlain was still wary of this sort of intervention himself. The Commissioners were hemmed in by such tightly restricted budgets and rules that one of them, an industrialist-philanthropist called Malcolm Stewart, resigned after less than two years. The policy was, as much as anything, a way of funding voluntary projects: a pre-echo, perhaps, of David Cameron’s “Big Society”. It produced much publicity but few new jobs. While Roosevelt set up the Tennessee Valley Authority; Chamberlain funded allotments.

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In the end, it was that other consequence of the depression, Nazi Germany, that compelled the national government to begin to break with orthodoxy on balanced budgets, a move that Roosevelt had taken years before in his bid to stimulate the US economy. In the late 1930s, cranking up arms production did bolster the British economy, though even then it was constrained by concerns over inflation, investor confidence, and the balance of payments.

What boosted recovery throughout the decade was the early abandonment of an old totem: the gold standard (which pegged the pound to the value of gold). When the national government was forced off gold in September 1931, the prophesied ruin, chaos and starvation failed to appear. Instead, the reform allowed for lower interest rates, turbo-charging the housing boom which did much to revive the economy, at least in the Midlands and the South. It is a myth that the 1930s was one dark valley of poverty and despair; for many, it was a sunlit upland where wages rose faster than prices, and you could fill your new home with consumer goods, your first car parked outside. 

But the national government ended not by leading the country to the brink of victory in the Second World War, as Roosevelt did, but by being thrown ignominiously from office in 1940, in favour of the Churchill-Attlee coalition. The new government was prepared to be more activist and daring: the kind of experimenters Gove praises. In a ferocious polemic, published 80 years ago this Sunday (5 July), Chamberlain and co. were famously denounced as “Guilty Men”. The book’s primary accusation, made in the immediate wake of Dunkirk, was that they had failed to arm the UK sufficiently for the struggle with Hitler – a claim long disputed by historians. But as the historian Alan Allport, author of the forthcoming Britain at Bay, argues, Guilty Men helped to turn the near-disaster of 1940 into “a national reckoning” with the failures of the 1930s. It portrayed the leaders of the national government as indecisive and complacent – not just on defence, but on the economy. It pointed out that at the time of Dunkirk, there were still a million people unemployed. Fairly or not, viewed from 1940, the “safety-first” approach of the 1930s now looked positively dangerous.

So perhaps it is not altogether surprising that having declared that today’s ideological flux is similar to that of the 1930s, the government aspires to emulate Roosevelt, not Chamberlain. In Gramsci’s terms, Roosevelt can be seen as helping the new struggle to be born, laying the foundations for the US’s postwar settlement. Chamberlain stayed too close to inherited, dying ideas, on the rejection of which Britain’s post-1945 consensus rested. Which way will Boris Johnson’s administration turn? The response to Covid-19 shows signs of pointing both ways. Many have accused the government of dither and delay in declaring lockdown and quarantine, and noted the impact of underfunding on care homes. By contrast, Chancellor Rishi Sunak’s vast borrowing to keep the economy alive is reminiscent of Roosevelt’s early taboo-breaking.

We shall have to see how Gove’s lecture reads on 4 March 2023, 90 years on from the start of his new role model’s presidency. Either way, and whatever one thinks of the New Deal, it is striking that Global Britain has chosen to look for inspiration to a social democratic, foreign exemplar.

Phil Tinline’s documentary “Guilty Men” is on BBC Radio 4 at 11am on Friday 3 July. He is writing a book called The Death of Consensus: Britain’s Political Nightmares (Hurst)