Foreign Policy, Defence and the Colonial Empire, 1951–5

Abstract

On taking office in October 1951, the Conservative government under Churchill had little cause for satisfaction other than its modest victory in the general election. Having won a smaller percentage of the vote than Labour, it also had little more than a working majority in the House of Commons. The Cabinet’s principal inheritance, however, was a serious economic crisis. The cost of British imports in the wake of devaluation, and world commodity prices following the demands of post-war reconstruction and the Korean War, were rising far beyond the earnings generated by the UK’s own increasing output and exports. Stringent measures adopted since April 1951 by Attlee’s ministers, including increased taxes, credit restrictions, price controls, and selective public expenditure cuts, had so far failed either to check the rapid deterioration in the balance of payments or lift the threat to the country’s gold and dollar reserves. In October, cuts in food subsidies and imports and a rise in bank rate were immediately introduced, measures intended, so the Chancellor told his colleagues, to provide the breathing space for more fundamental reappraisals.¹