Labour’s Leveller

by Carl Rowlands

An astute and aggressive class traitor, who knew precisely how to rile his ex-classmates, Labour Chancellor Hugh Dalton was the Tories’ worst nightmare.

First published: 06 May, 2014 | Category: Book Review, History, Inequality, Politics

Ben Pimlott, Hugh Dalton – A Life (Cape, 1985).

Were it not for the late Ben Pimlott’s seminal biography, it isn’t clear that many people would know much about Hugh Dalton at all. His ministerial career mainly took place in the 1940s and, from today’s vantage point, lacks the radical allure of Nye Bevan or the photogenic, dignified statesmanship of Clement Attlee. Yet in many ways, his two years as Chancellor from 1945 to 1947 represent the high-water mark of Labourism. He was as much the architect of the NHS and the post-war welfare state as either Bevan or Attlee. Whereas commentators tend to stress his supposed personal disagreeability, more important, perhaps, was his role as chief engineer of Labour’s redirection of wartime state control into a social democratic, full-employment economy, the remnants of which continue to shape political aspirations today. He was the one who introduced free school milk.

Dalton has never been lionised by the Labour Left, mainly because he was organisationally on the Right of the Party in the pre-war years. He opposed the Popular Front, as suggested by Stafford Cripps in the late 1930s, which was seen by many as equivalent to Communist affiliation to Labour. Dalton was closer to the trade unions, at that time dominated by right-wing heavyweights. He generally preferred his local Labour branch to be docile, and to do what it was told.

Organisationally on the Right, there is little doubt that culturally and ideologically, Dalton was a committed socialist, focused on implementing radical change and effecting a deep redistribution of wealth and property. His background was upper-middle class—he graduated from Eton and Cambridge—but he strove restlessly to transcend it. As an MP for a constituency in the North East, Bishop Auckland, he was deeply committed to improving the lives of his constituents, many of whom suffered badly as a result of the Great Depression. His frosty relations with Ramsay McDonald, a Labour leader who he saw as corrupted and vain, led him to the view that only ‘gentlemen’ had sufficiently entrenched moral bearings to resist the temptations of wealth and office. When Bevan, Michael Foot and others on the radical left finally saw him in action as Chancellor in 1945, they were to quickly realise that Dalton was deadly serious about his goals, and left groupings were to become solid supporters of the Chancellor in this period. 

Psychologically, as Pimlott illustrates, this socialism was driven as much by the pleasure of stripping the privileged of their property as by the satisfaction of helping the poor. An astute and aggressive class traitor, who knew precisely how to rile his ex-classmates, Dalton was the Tories’ worst nightmare: a skilled mathematician and respected economist, who bore a set of deeply held personal grudges against Britain’s ruling class. As a Parliamentary performer, he could combine outrageous condescension with raw aggression—in one instance, after three hours of hammering on the dispatch box, his index finger turned septic.

As a contemporary and close friend of Rupert Brooke, there was also a cultural bohemianism about Dalton’s life. His emergence as a central figure in the 1930s labour movement gave him the chance to sponsor younger politicians from different wings of Labour, among them Tony Crosland, Hugh Gaitskell, Roy Jenkins, Tony Benn and Barbara Castle. These ‘Daltonites’ tended to be socially liberal in a country where death by hanging remained a punishment and homosexuality was a criminal offence. Dalton was never one of the beautiful young things of the Bloomsbury group, as he was perhaps not quite beautiful enough, but he was in close enough proximity for it to affect his social attitudes. He was an important figure in attempting to translate the pre-1914 elite idealisation of beauty into a political and economic system which aimed to address the ugliness of poverty and deprivation. Aesthetics were therefore crucial to his political sensibilities. Mere prosperity for the working class was not, for Dalton, sufficient. He wanted workers in his constituency to do more than imitate or adopt the habits of lower-middle-class bourgeoisie—an altogether trickier ambition, and one which arguably bore fruit only with the massive expansion of the universities and polytechnics in the 1960s.  He addressed middle-class audiences as one might address members of what is now described as the ‘precariat’, telling them that ‘you people who think you belong to the middle class are nearer to those on the Means Test than to those who are millionaires’.

There’s something admirably uncompromising about Dalton’s approach to politics, as it emerges from Pimlott’s account. Brendan Bracken, one of Winston Churchill’s closest colleagues and publisher of the Financial Times and Economist, described Dalton as ‘the biggest bloodiest shit I’ve ever met’—an indicator of the political and personal pressure under which Dalton worked. Decisions were made quickly. In a memorable wartime anecdote, Pimlott describes Dalton quickly tapping a map to indicate to his civil servants the future location of ICI’s chemical plants, forcing them to move into an already deprived area on Teeside. Yet, as someone who judged himself as harshly as he did others, it was not enough to extend the education system and to guarantee full employment with social insurance. Dalton wanted to open up the country to all, and created the National Land Trust (now English Heritage) as a memorial to those who died in the Second War. Dalton’s role in establishing the National Parks, towards the tail-end of the 1945 administration, was vital. Together with Bevan, he refused to compromise on the quality of post-war council housing, with the result that even the emergency pre-fabricated housing became popular and enduring. He never got to execute his final punishment upon the ruling class: his plan for a huge capital levy to put the nail in inherited wealth for once and for all, but he did begin to use death duties as a significant source of government revenue. All of this was done at a time when much of Britain was literally broken. 

It is difficult to now feel nostalgia for such a brutally difficult period. The stress of managing Britain’s post-war position essentially killed John Maynard Keynes, whilst Dalton suffered from boils and a host of other nervous disorders relating to overwork. But it does seem that there is little energy and passion in the modern Labour Party, that Dalton did so much to create from the 1920s onwards. A small, stuttering Labour ‘left’ notwithstanding, the Party is directed more centrally than it ever was in Dalton’s time, meaning that arguments for practical socialist policies tend to exist in a vacuum, on a lonely web forum or in a wonkish meeting. In contrast to the widespread discussions that underpinned Dalton’s economics cookbook for the post-1945 era, Practical Socialism for Britain, Labour policies are today barely exposed to the scrutiny necessary to assess their effectiveness. 

Labour’s current rhetoric on ‘living standards’ engages with only some of the symptoms and none of the causes of inequality. Addressing inequality has never been easy, but one  questions Labour’s current level of commitment to the kind of redistribution that would have an adverse effect upon the English propertied classes and raise eyebrows in trans-Atlantic ‘progressive’ circles. At the same time, it increasingly seems that massive redistribution might be essential in order to fend off crises affecting pensions, public finances and social care, and to achieve various urgent societal aims. The implication here is that a Levelling administration will create so many enemies so quickly, that it should not aspire to become the ‘party of government’—rather, it should attempt to quickly forge a radical transformation, generating a new political equilibrium.

The recent translation of Thomas Piketty’s Capital in the Twenty-First Century has perhaps reminded people that return on capital, left unchallenged, tends to exponentially exceed income. The concentration of wealth and widespread, increasing levels of inequality are revealed as a natural consequence of capitalism. Dalton’s work as an economist at the LSE in the 1920s was based upon a similar initial disposition, focusing on how inequality was damaging to the professed aims of economics as a social science and arguing that the productivity of an economy could be adversely impacted by unequal distributions of wealth. Both Dalton and Piketty  draw attention to the crucial role that inheritance plays in perpetuating inequalities. Both, too, have produced plans for redressing these imbalances.

Dalton’s plan for a capital levy, dating from the 1920s, bears some comparison with Piketty’s more recent proposal for a global wealth tax; the main difference being that one would be applied to unearned income on a national level, whilst Piketty’s tax would apply to assets on an international level. Dalton’s plan for a tax on unearned income and property rents was to be complimented by Eugenio Rignano’s plans to differentiate between lifetime accumulation and inheritance from that of an earlier generation: for example, assets inherited from a great-grandfather would be subject to more punitive rates of inheritance tax. The fact is, of course, that the capital levy never happened, and the global wealth tax looks unlikely to happen—all of which adds weight to those who argue that the circumstances of the Second World War and its aftermath were exceptional. Emergency taxation during wartime was extremely high; as Chancellor, Dalton was in the unusual situation of being able to reduce taxes, but to do this in a redistributive way. He didn’t have to suddenly hike up tax rates for the richest, but was able to cut taxes for the less wealthy. 

Despite this, there are aspects of Daltonomics which do seem applicable to 2014. Dalton differed, at first, from Keynes on the question of reflation, viewing deflation and low growth as posing no impediment to fundamental redistribution. His primary goal as an economist was to redress the balance of economic power, rather than provide for increases in generalised prosperity. This line of thinking may become increasingly relevant in a post-carbon world. In addition, if and when another financial crisis breaks and affects the banking sector, those in possession of large assets may find themselves involved in a ‘bail-in’ of struggling financial institutions—a type of emergency capital levy that would only further demonstrate the short-term nature of a system rendered increasingly unstable by a starkly unequal distribution of wealth. Dalton’s arguments for redistribution could, in theory, be adapted to apply to a post-capitalist politics.

Dalton had an aggressive commitment to regional development as President of the Board of Trade in the wartime coalition. Labour’s failure to adequately redress regional divides and sectoral imbalances between 1997 and 2010 may yet be brutally punished, if Scotland approves a referendum on independence. In fact, Labour’s compliance with the Thatcher settlement is at the heart of current politics in Britain; a settlement which is tilted to sustain an ongoing rightward shift in discourse. The revival of a ‘property economy’, with its preservation of inherited wealth and petit-bourgeois sensibilities, would have been an anathema to Dalton, who would have regarded huge mock-Tudor 1980s estates with horror. The imposition and subsequent escalation of tuition fees would have provoked a similar reaction.

It is easy to avoid romanticising Hugh Dalton. He could be an unattractive figure—patrician, but also possessing a remarkable ability to create enemies with his foul temper, plotting and paranoia. Pimlott’s impressive even-handedness amply balances Dalton’s political effectiveness with his human deficiencies. Yet this also asks us a question about society’s approach to modern politicians. Since the 1980s, politicians have been expected to be ‘nice’—to appear on comedy panel shows, and to convey a general air of approachable amiability. Can society accept that those equipped to take the most serious and detailed approaches to public service may lack these sociable qualities? In little more than two years as Chancellor, 1945 to 1947, Hugh Dalton changed Britain, by cleverly and assiduously constructing a robust political and economic base for the modern welfare state. Many of us, when recognising this legacy, would forgive him his faults.

Carl Rowlands is an activist and occasional writer based in Budapest.

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