JIM TOMLINSON* Brunel University

The Decline of the Empire

and the Economic Decline
of Britain
Abstract
In the 1950s and 1960s, decolonization coincided with the golden age of British
capitalism, with record rises in popular living standards. Economic historians have
understandably used this coincidence to suggest that by this period the British
Empire was no longer offering substantial economic benefits to the mass of the
metropolitan population. Yet there were links between economic performance
and the decline of the Empire. First, despite the good performance, profoundly
pessimistic declinist accounts of British society and the economy abounded in
the early 1960s, and these had a major impact on policy formation. A key
underpinning for such accounts was the culture of decline intimately linked with
the loss of imperial status. Secondly, while it has become a commonplace of
discussion of post-war Britain to assume that reversing decline and modernizing
the economy required a re-orientation of policy away from the Empire and
Commonwealth towards Europe, such a reorientation was not a constant feature
of modernization strategies. Indeed, a central feature of the initial period of
Wilsonian modernization after 1964 was its attempt to use closer links with the
Commonwealth to achieve this objective.
Introduction
In a recent essay, Charles Feinstein has highlighted the fact that the 1950s
and 1960s saw the dissolution of the formal British Empire at the same
Twentieth Century British History, Vol. 14, No. 3, 2003, pp. 201221 OUP 2003, all rights reserved
* I amgrateful to participants in a seminar at the Institute of Contemporary British History
Summer Conference, July 2002, and especially to Peter Cain, for helpful comments.
time as Britain was enjoying an equally remarkable phase of successful
economic performance, the best ever achieved in more than two centuries
of modern economic growth.
1
He goes on to argue that this combination
reflected the fact that for the British economy as a whole (as opposed to
small groups of shareholders and landowners), colonial possessions did
not offer significant benefits; they did not offer expanding markets, cheap
imports, or returns on assets large enough to affect the living standards of
the mass of the population. In his view, while the Empire may have
imposed substantial costs on British possessions, after 1951 at least there
were no commensurate benefits to Britain lost by imperial decline. Links
with the White Dominions and India mattered more to Britain than those
with the colonies, but by this time the former were able to bargain with
Britain, so that any concessions to British interests were offset by
compensating advantages to themselves.
2
The perception of the 1950s and 1960s as the golden age for the British
economy is clearly accurate, but equally it is retrospective. While Harold
Macmillan may have suggested in 1957 that the British had never had it so
good, such positive views were soon to be drowned out by a wave of
negative assessments of British economic performance, so that to most
contemporary actors the golden age increasingly became seen as a period
of economic decline. By the early 1960s a discourse of declinism hadbeen
established, with profound effects on British society and politics that were
to last for much of the rest of the century.
3
The purpose of this paper is to explore the links between this discourse
and the economic policies associated with it, and imperial decline in the
post-war period. How far did contemporary perceptions of imperial issues
feed into belief in decline, and how did those who wanted to reverse
decline by modernization perceive the imperial connection? In other
words, how important was the Empire to British understandings of their
economy and the policy options available to British governments?
Examination of these questions may also provide a different perspective on
the long-argued view that British imperial decline had surprisingly little
impact on British politics.
4
1
C. Feinstein, The Endof Empire andthe GoldenAge, inP. Clarke andC. Trebilcock (eds),
Understanding Decline: Perceptions and Realities of British Economic Performance (Cambridge,
1997), 213.
2
Ibid., 2313.
3
A. Horne, Macmillan, Vol. 2. 195786 (London, 1989), 3; J. Tomlinson, The Politics of Decline
(Harlow, 2001); idem., Inventing Decline; the Falling Behind of the British Economy in the
Post-war Years, Economic History Review, 49 (1996), 73157.
4
J. Darwin, Fear of Falling: British Politics and Imperial Decline Since 1900, Transactions of
the Royal Historical Society, 36 (1986), 2743.
202 J I M TOML I NS ON
Declinism
While the debate on decline focused on the perceived failure in economic
performance, especially growth, that failure led to critiques of British
society that went much wider than strictly economic issues. A huge body
of literature was generated which linked decline to almost every facet of
British society, a body of literature which in retrospect appears extra-
ordinarily negative in proportion to the scale of the economic problems
even as they were calculated at this time. The culture of declinism was
arguably overblown, ill-focused, and quite often absurd, but there is no
doubt about the strength of feeling it signified, at least amongst the chatter-
ing classes.
5
What could explain the strength of these feelings? Stuart Ward
has persuasively argued that a key underpinning was the post-Suez sense
of declining global power, hinging on the decline of the Empire, which was
reaching a key phase, with the winds of change speech being made at
precisely the same time as the Whats Wrong with Britain literature was
getting into its stride.
6
At its most general, what linked the rhetoric of
declinism and imperial decline was the belief that Britain had lost its sense
of purpose, a key word in the declinist lexicon.
7
Ward quotes Anthony
Sampsons characteristic linking of these issues:
A loss of dynamic and purpose, and a general bewilderment, are felt by many
people, both at the top and bottom in Britain today . . . it is hardly surprising
that, in twenty years since the war, Britain should have felt confused about her
purposewith those acres of red on the map dwindling, the mission of the war
dissolving, and the whole imperial mythology of battleships, governors and
generals gone forever.
8
Those searching for culprits for decline commonly focused their anger on
the incapacity of Britains rulersthe Establishmentwhose whole
education and outlook was deemed inadequate to rule modern Britain.
This incapacity, it was alleged, derived in large part fromthe public schools
and Oxbridge, who produced a conservative, effete clique suited to be
pro-consuls of Empire but unfitted to the requirements of purposive
economic modernization.
9
Declinists, largely located on the centre-left
of the political spectrum, generally welcomed the formal process of
decolonization. But the virulence of their response reflected a politically
more ambiguous position; to some degree possession of an empire was, in
5
For the depths of declinism(in both senses) see, for example, A. Koestler (ed.), Suicide of a
Nation (London, 1963).
6
S. Ward (ed.), British Culture and the End of Empire (Manchester, 2001), 811.
7
For the importance of purpose, see, for example, M. Shanks, The Stagnant Society
(Harmondsworth, 1961), introduction; H. Wilson, Purpose in Politics (London, 1964); idem.,
Purpose in Power (London, 1966).
8
A. Sampson, Anatomy of Britain (1962), xiii and 620, quoted in Ward, British Culture, 9.
9
J. Vaizey, The Public Schools, in H. Thomas (ed.), The Establishment (London, 1959), 2437.
T HE DE CL I NE OF T HE B RI T I S H E MP I RE AND E CONOMY 203
economists terms, a status good, and so, as Feinstein puts it: The blow to
the countrys pride and sense of national greatness from the loss of status
associated with possession of a glorious empire may also have hadan effect
on morale and attitudes at all levels of British society, not excluding, one
might add, the progressive intelligentsia.
10
While the broad linkage between imperial decline and the breadth and
virulence of what might be called the culture of 1960s declinismneeds to be
stressed, a more specific, directly economic link was also very important in
accounts of Britains problems. This was articulated most clearly and
influentially by Andrew Shonfield in his British Economic Policy since the
War. This may stand alongside Michael Shankss The Stagnant Society to
form the foundation texts of most of the narratives of decline down to
the present day.
11
While Shanks focused on the attitudinal/cultural
deficiencies of British societys elites, including especially of trade union
leaders, Shonfield argued that the main reasons for economic decline
were errors of economic policy. These errors were fundamentally ones of
overstretch, of excessive overseas, primarily imperial, commitments that
the domestic economy could not afford. Hence the balance of payments
was burdened with too high a level of military expenditure, excessive
foreign investment and, above all, the costs of the sterling area. For
Shonfield these burdens linked directly to slow growth through the
creation of a vulnerable balance-of-payments position, requiring frequent
policies of restraint and deflation that inhibited investment.
12
The argument that Britains decline was the consequence of these
imperial hangovers has subsequently generated a huge body of literature,
which, until recently, had tended to elaboration and refinement rather than
fundamental critique. But recent work allows us to insert considerable
scepticism into any such account. In part, this is an effect of revaluations of
how much decline actually occurred in Britain in this period, with the
convergence and catch-up literature suggesting that while Britain could
undoubtedly have grown faster, the scope for this was much more limited
than much pessimistic literature suggests.
13
Linked to this has been a
growing attack on many of the broad suppositions of the declinist critique
of Britain; for example, the supposedly anti-technological character of
10
Feinstein, End of Empire, 215. As Ward shows, there was great deal of political
ambiguity in much of the satire that formed part of the declinist outpouring: No Nation
Could be Broker, in Ward, British Culture, esp. 1067.
11
A. Shonfield, British Economic PolicySince the War (Harmondsworth, 1958); M. Shanks, The
Stagnant Society (Harmondsworth, 1961).
12
Shonfield did not use the term stopgo, though the process he described was soon to
gain notoriety under that name.
13
N. Crafts, The GoldenAge andEconomic GrowthinWesternEurope, 195073, Economic
History Review, 48 (1995), 42947; C. Feinstein, Structural Change in the Developed Countries
During the Twentieth Century, Oxford Review of Economic Policy, 15 (1999), 3555.
204 J I M TOML I NS ON
British culture has been devastatingly criticizedby David Edgerton.
14
More
specifically, there has been powerful criticism of the imperial overhang
argument, especially the linking of Britains decline to the impact of the
sterling area.
The sterling area was formed of all those countries that held their
international reserves largely in sterling and fixed their exchange rate to
the pound. It was not coterminous with the Empire, Canada being a
notable absentee, while non-Empire counties like Kuwait were important
members. Nevertheless, as Miller argued, Although there was a clear
formal distinctionbetweenthe SterlingArea andthe Commonwealth, there
was no such distinction politically . . . Britains leadership of the economic
grouping helped to reinforce its traditional leadership of the political
grouping.
15
The idea that defence of the sterling area damaged Britains
economy did not originate with Shonfield; there had been a rising tide of
such criticism from the mid-1950s.
16
Shonfields contribution was to link
such criticisms to a general critique of British economic policy, but un-
doubtedly making defence of that area the cardinal error. His argument has
been most effectively criticized by Catherine Schenk.
17
She shows that from
the 1950s all four of the alleged deleterious effects of the area on Britain
were greatly exaggerated. First was the idea that accumulations of sterling
balances overseas were like a sword of Damocles hanging over the
reserves; in fact, a large part of these were remarkably stable, certainly from
the mid-1950s, acting as backing to colonial currencies. Secondly, she
disputes the view that sterling area markets were a soft touch for British
producers, thus weakening their competitive edge. Britain was losing
market share in the Commonwealth just as fast as elsewhere, the problem
being a general one of rising competition for British exports.
18
Thirdly,
while the sterling area did facilitate the outflow of capital as Shonfield
suggests, this outflow played a small part in Britains slow growth. Even if
it had all been invested at home, on any plausible calculations about rates
of return to investment it would not have raised growth more than a small
fraction of a percentage point. Finally, she attacks the idea that defence of
14
D. Edgerton, England and the Aeroplane (London, 1991); idem., Science, Technology and he
British Industrial Decline (Cambridge, 1996).
15
J. B. D. Miller, Survey of Commonwealth Affairs: Problems of Expansion and Contraction
19531969 (Oxford, 1974), 271.
16
For example, A. Day, The Future of Sterling (Oxford, 1954). That such discussions were
affecting policy debate is evident from the public records: for example, PRO, CAB 134/1675,
Problems of the SterlingArea, 25June 1956; PRO, CAB134/1674, Economic PolicyCommittee
Minutes, 20 February 1957.
17
C. Schenk, Britain and the Sterling Area: from Devaluation to Convertibility in the 1950s
(London, 1994).
18
D. K. Fieldhouse The Metropolitan Economics of Empire, in Oxford History of the British
Empire, Vol. 4. The Twentieth Century (Oxford, 1999), 88113; but see R. Major, Note on Britains
Share in World Trade in Manufactures, National Institute Economic Review, 44 (1968), 506.
T HE DE CL I NE OF T HE B RI T I S H E MP I RE AND E CONOMY 205
the sterling area was crucial to the failure of Britain to devalue the pound
more frequently or move to a floating exchange rate. There were many
other reasons why this was done, the views of the sterling area being but a
minor consideration.
This critique is wide ranging and powerful, undermining both the
specific case against the sterling area and the related suggestion by
Shonfield that excessive overseas investment was central to Britains
problems. This latter argument has continued be a particularly important
feature of declinist literature post-Shonfield, and has commonly been
joined to a broader thesis about the dominance of finance and the City in
Britain. This view can be found in such varied work as that of Elbaum and
Lazonick, Pollard, and Hutton.
19
More importantly in the context of
discussion of the Empire, it can be found in the highly important work of
Cain and Hopkins on British imperialism and gentlemanly capitalism.
Their thesis focuses on the links between financial interests and the
formation of imperial policy, with the key contention that throughout the
history of the British Empire it was gentlemanly capitalists who were
effectively in control.
20
Their argument as applied to the pre-1939 years has
been criticized by a number of reviewers who dispute the City dominance
thesis, arguing that both City and industry were commonly divided on
imperial issues, and that in any event state policy cannot be reduced to the
machinations of economic interest groups.
21
Cain and Hopkinss discussion of the post-1945 period is entitled
Aftermath, without the enormous depth and detail of their discussions of
the previous centuries. Nevertheless, in the account of this period they do
reiterate the main thrust of their overall argument. After the war, they
suggest, the central preoccupation of British policy . . . was the preser-
vation of sterlings role in financing international trade and investment,
and with it the maintenance of the earning power of the City of London.
However, the time of formal empire was running out, and by the late 1950s
policy-makers calculated that the City, and invisible earnings generally,
had more to gain from emerging opportunities in the wider world than
from remaining penned in the Sterling Area. As the value of the imperial
component of the Sterling Area diminished, so did the economic obstacles
to decolonisation. Cain and Hopkins clearly align their discussion of the
post-war period with the work of declinists like Shonfield, the link being
19
B. Elbaum and W. Lazonick (eds), The Decline of the British Economy (Oxford, 1986);
S. Pollard, The Wasting of the British Economy (London, 1982); W. Hutton, The State Were In
(London, 1995).
20
P. Cain and A. Hopkins, British Imperialism: Innovation and Expansion 16881914 (London,
1993); idem., British Imperialism: Crisis and Deconstruction 19141990 (London, 1993).
21
M. Daunton, Gentlemanly Capitalismand British Industry, 18201914, Past and Present,
122 (1989), 11958.
206 J I M TOML I NS ON
most obviously the assumption that financial interests largely dictated
policy, whether it be in relation to domestic, international, or empire
issues.
22
On the general character of British post-war policy, it should be
emphasized that we are only just beginning to see archivally based work on
this topic for the 1950s and1960s, andmuch remains unexplored. However,
it can be argued that while Cain and Hopkins rightly stress the importance
of the external orientation of much policy-making, this needs to be put
alongside an undoubtedly important concern with domestic economic
stability and living standards; indeed, policy-makers in the 1950s were
increasingly concerned with the reconciliation of these two ambitions.
23
Secondly, on the perceived domination of policy-making by financial
interests, it is sufficient to note here that the same kind of criticisms made
about Cain and Hopkinss treatment of the pre-1939 period have relevance
to the post-war decades. For example, the city was divided over policy at
crucial points e.g. over ROBOT in 1952, and the actual policy outcome was
not one that was dictated by the City.
24
Asimilar point can be made about
the debate over public spending in 19578, where again the more
financially conservative forces were defeated.
25
The problem with any
simple equation of City interests with support of the sterling area/defence
of the pound is also illustrated by policy after 1964. After Labour came to
power their dogged defence of sterling owed much more to political
calculation about the reputation of the Party and the realistic assessment of
the impact of devaluation on working-class living standards than to City
interests.
26
On the more specific issue of the demise of the sterling area as a motive
for decolonization, Hopkins has reiterated this linkage in recent work.
Undoubtedly, as he shows, Macmillans audit of the Empire was concerned
with the economic consequences of imperial dissolution; nobody would
suppose that would be a matter of indifference.
27
But to see this as the
defining issues seems implausible. As Hyam argues,
22
Cain and Hopkins, Crisis and Deconstruction, 2656, 283; also D. Kroweski, Money and the
End of Empire: British International Economic Policy and the Colonies, 194758 (Basingstoke, 2001);
A. Hinds, Britains Sterling Colonial Policy and Decolonization, 19391958 (Westport, CT, 2001).
23
R. Holland, The Pursuit of Greatness: Britain and the World Role, 19001970 (London, 1991),
ch. 8; N. Tiratsoo and J. Tomlinson, The Conservatives and Industrial Efficiency, 195164: Thirteen
Wasted Years? (London, 1998), ch. 2.
24
Schenk, Britain, 11419; A. Booth Inflation, Expectations and the Political Economy of
Conservative Britain, 19511964, Historical Journal, 43 (2000), 82747.
25
G. Peden, The Treasury and British Public Policy (Oxford, 2000), 48693.
26
R. Stones, Government-finance Relations in Britain, 196467: a Tale of Three Cities,
Economy and Society, 19 (1990), 3255; T. Bale, Dynamics of a Non-decision: the Failure to
Devalue the Pound, 19647, Twentieth Century British History, 10 (1999), 192217.
27
A. Hopkins, Macmillans Audit of Empire, in Clarke and Trebilcock, Understanding
Decline, 23460.
T HE DE CL I NE OF T HE B RI T I S H E MP I RE AND E CONOMY 207
political considerations were predominant in decolonization. Economic con-
siderations were in the nature of nihil obstat. Just as economic considerations
had once facilitated the acquisition of territory, so now they operated in reverse.
Territories could be given up when nothing essential seemed to be lost by
transfer of political power-a conclusion reached for India by the 1940s and
Africa by the 1960s.
28
One final strand of Shonfields original argument is that of overseas
military expenditure. Here the view that imperial and global political
ambition placed a damaging burden on the British economy seems better
founded. By the 1960s, overseas spending of this type was a significant
burden, running at 250m per annum at a time when this figure roughly
equated to the scale of the governments target for the current account
surplus.
29
But again, this problem needs to be kept in proportion. While
overseas military spending was a problem, and damaged overseas
confidence by suggesting that the British balance of payments was weaker
than the commercial accounts implied, it was not the key issue in Britains
growth performance. The key to the latter, as Feinstein argues, was not to
do with the Empire but with savings and capital, technological progress
and skilled labour, buoyant exports and a stable international economy.
30
Modernization and the Commonwealth
Declinism associated the Empire and Commonwealth with outdated-
ness, nostalgia, and lack of purpose. Unsurprisingly, this led many of its
adherents to regard entry into the European Economic Community (EEC)
as a key to reversing decline and modernizing the British economy. Shanks
and Shonfield, characteristically, were both pro-Europeans. From the
climate of ideas of the early 1960s arose that long-persistent centre-left
assumption that serious economic modernizers would necessarily be
enthusiasts for Britains membership of the EEC and, conversely, that
modernization would involve rejection of Commonwealth illusions.
31
Whatever the polemical and political force of this link, it is highly
misleading as an understanding of the ideas of many modernizers in
the mid-1960s. This can be seen if we look at Labours attitude to the
Commonwealth in the 1950s and 1960s.
28
R. Hyam, The Primacy of Geo-Politics: the Dynamics of British Imperial Policy,
17631963, Journal of Imperial and Commonwealth History, 27 (1999), 2752.
29
A. Manser, Britain in Balance (1971), ch. 9; R. Middleton, Struggling with the Impossible:
Sterling, the Balance of Payments and British Economic Policy, 194972, in W. Young and
A. Arnon (eds), The Open Economy Macro Model: Past Present and Future (Amsterdam, 2002),
20231.
30
Feinstein, End of Empire, 232.
31
For example, R. Denman, Missed Chances, Britain and Europe in the Twentieth Century
(London, 1996); R. Broad, Labours European Dilemmas from Bevin to Blair (London, 2001).
208 J I M TOML I NS ON
As is well known, Labour was enthusiastic about the Commonwealth in
the 1940s, undoubtedly helped by the clear economic benefits arising from
the use of Commonwealth exports to supply scarce dollars to the sterling
area.
32
But the link also fitted with Labours ideological predispositions to
see the Commonwealth as both an important arena for maintaining
Britains influence and an arena in which social democratic ideas might be
promulgated. In the long years in opposition that followed the Attlee
government, Labour worked to strengthen Commonwealth links. In 1958
the Commonwealth Advisory Committee of the Partys National Executive
Committee became a full Commonwealth Department, energetically led
by John Hatch. It held meetings of Commonwealth Socialist leaders, and
though the practical results of these are difficult to see, they did provide a
channel for articulating Labours allegiance to the Commonwealth, and in
the early 1960s for attacking the Conservatives betrayal in the Common
Market negotiations.
33
Some voices were raised against this posture, with,
for example, Roy Jenkins dismissing the idea of the Commonwealth as
a feasible tight economic unit in 1962.
34
But in the years running up to
the 1964 election, the main thrust of Labour policy was to present the
weakening economic link with the Commonwealth as an undesirable and
reversible consequence of Conservative policy. This stance flowed from a
number of factors. Doctrinally, the Commonwealth (along with the sterling
area) could be made to fit with long-held notions of planned trade and the
rejection of Tory laissez-faire and liberalization. Such views were still
strong in Labour circles into the 1960s, articulated most forcefully by
Thomas Balogh, a key economic adviser and long-term critic of post-war
mutilateralism.
35
Particularly on the left of the Party such views were often
allied to a growing concern with aiding the development of the poor
countries of the Commonwealth, who were seen as potential gainers from
greater exchanges of their exports of commodities for Britains manu-
factures. The establishment of Overseas Development Ministry under
Labour signalled the seriousness of this concern with development, but
how far such concerns were compatible with an emphasis on encouraging
32
Krozewski, Money, chs 4 and 5; Hinds, Britains Sterling Colonial Policy, chs 24; for a
contrary view, see T. Rooth, Economic Tensions and Conflict in the Commonwealth,
1945c.1951, Twentieth Century British History 13 (2002), 12143.
33
Labour Party Archives (Manchester), Conferences with Commonwealth Labour and
Socialist leaders, June 1957 and September 1962; P. Gupta, Imperialism and the British Labour
Movement 19141964 (London, 1975), ch. 11.
34
Roy Jenkins in Fabian International Bureau, The Common Market Debate (1962), 11.
35
T. Balogh, Unequal Partners, Vol. II (Oxford, 1963); K. Morgan, Imperialismat Bay: British
Labour and Decolonization, Journal of Imperial and Commonwealth History 27 (1990), 242, says
Labour saw the Commonwealth as an international laboratory of experiment for a broad
programme of economic advance, technological improvement andeducational change to raise
the skills of the third world.
T HE DE CL I NE OF T HE B RI T I S H E MP I RE AND E CONOMY 209
Commonwealth links was to prove a thorny issue for Labour whilst in
power.
36
Another economic aspect of the Commonwealth link was the access it
gave Britain to the cheap temperate food products of the developed
Commonwealth (grain fromCanada, butter andcheese fromNewZealand,
meat from Australia), products that could be seen as significant
contributors to the standard of life of the British worker. This was a key
concern of figures such as Douglas Jay, on the right of the Party.
37
Of course, these seeming economic attractions of the Commonwealth
issue were combined with political and electoral calculation. The
Conservative attempt to secure British entry into the EEC in 19613 (and
the hostility this approach aroused in the Commonwealth) provided
an opportunity for Labour to present itself as the champion of the
Commonwealth, a theme of Hugh Gaitskells famous anti-EEC speech of
1962.
38
Gaitskells successor, Harold Wilson, had been Trade Minister in the
1940s, when the Commonwealth economic link was at its peak, but
combined this potent memory with an only partly sentimental view that
the Commonwealth was a key to Britains status as a world power. It was
characteristic, therefore, that in a House of Commons debate in 1961 on the
EEC application he had acted as a defender of the Commonwealth: We
are not entitled to sell our friends and kinsmen down the river for a
problematical and marginal advantage in selling washing machines in
Dusseldorf. But Wilson and Labours concern with the Commonwealth
was not just opportunistic politics and high-flown words. In the pre-
election years a detailed programme aimed at reinvigorating the economic
links with the Commonwealth was developed, and this was central to
Labours approach to the economy in 1964, a fact obscured in most of the
accounts of the period by the subsequent turn away from the Common-
wealth and application for EEC entry.
39
In a debate in the Commons in 1964, Harold Wilson cited the figures on
the weakening of the Commonwealth trade link and attacked Tory defeat-
ism on the issue. This doctrine of the inevitability of Commonwealth
decline has become part of the tribal mythology of the party opposite.
In his speech, Wilson put forward a ten-point plan to encourage
Commonwealth trade. This included a proposal for preferences in the way
of capital contracts in publicly financed projects, guaranteed markets for
36
For an insider but critical account, see D. Seers and P. Streeten, Overseas Development
Policies, in W. Beckerman (ed.), The Labour Governments Economic Record 19641970 (London,
1972), 11856.
37
D. Jay, Change and Fortune: a Political Record (London, 1980), ch. 13.
38
P. Williams, Hugh Gaitskell (Oxford, 1982), 4068.
39
P. Ziegler, Wilson: The AuthorisedLife (London, 1993), 131, also64, 66, 219; B. Pimlott, Harold
Wilson(London, 1992), 4334; J. B. D. Miller, Survey of Commonwealth Affairs (Oxford, 1974), 291.
On the second application, see O. Daddow (ed.), Wilson and Europe 196467 (London, 2002).
210 J I M TOML I NS ON
Commonwealth products in Britain, development of industries in Britain
to supply Commonwealth investment needs, world-wide commodity
agreements to stabilize primary product prices, and the expansion of world
liquidity especially to favour underdeveloped countries. Most of these
proposals found their way into a prominent position in Labours election
manifesto, which asserted that the Labour Party is convinced that the first
responsibility of a British Government is still to the Commonwealth.
40
These were the main elements in a programme that was to be at the centre
of Labours economic discussions about the Commonwealth in the years
after 1964, but which was ultimately to prove largely unworkable.
The failure to find a plausible Commonwealth alternative in the early
years of the Wilson government was one important element in Labours
decision to apply for EEC membership, as analysed further below. But was
this immense change of direction simply a giving up of a sentimental
illusion in the face of the realism of policy-making in office, or was the
Commonwealth option ditched too easily for the sake of what was in some
respects an equally problematical and emotional attachment to Europe?
Governmental discussions of Labours programme for strengthen-
ing Commonwealth links was largely organized around major formal
Commonwealth meetings. The first of these following the 1964 election
was of Commonwealth Prime Ministers in June 1965. The agenda of this
meeting was dominated by the contentious issue of Rhodesia, which was
preparing to make a unilateral declaration of independence (in November
1965), but it provided a platform for Wilson to push the key items
of his plan, focusing especially on gaining an agreement to have a
Commonwealth Trade Ministers conference to encourage trade linksa
meeting to develop the idea of co-ordinating Commonwealth countries
plans as a basis for preference inpublic procurement.
41
The Trade Ministers
meeting was a key event in exposing doubts about the plan, the meeting
itself and the preparatory gathering of officials showing the difficulties of
reversing the trend away from close Commonwealth economic ties.
Much of the internal governmental discussion on Commonwealth
economic issues came together in the Official Committee on Commercial
Policy. A key initial paper was put to this committee in spring 1965 by
the Board of Trade, its disappointing conclusions being endorsed by
other departments.
42
This paper expressed scepticism on the prospects of
40
House of Commons, Hansard, 6 February 1964, reprinted in H. Wilson, The New Britain:
Selected Speeches 1964 (1964), ch. 8; manifesto statement in Craig, General Election Manifestos
195987 (Aldershot, 1970), 56.
41
H. Wilson, The Labour Government 196470: APersonal Record, (London, 1974), 161.
42
PRO, CAB 134/1470, Chairmans note, Britains Trade with the Commonwealth,
29 March 1965, covering Board of Trade, Britains Trade with the Commonwealth, 1 March
1965.
T HE DE CL I NE OF T HE B RI T I S H E MP I RE AND E CONOMY 211
realizing the governments ambitions on grounds which were to be largely
echoed in all discussions over the next few years. These grounds, though
overlapping and inter-related, may be summarized as fourfold: howfar the
Commonwealth was the key arena in which Britain should pursue its trade
policies; whether Britain could expect any reciprocal gains from any trade
concessions it might make to other Commonwealth countries; whether
there was any realistic scope for co-ordination of plans leading to
Commonwealth preference in public procurement; and whether there
could be closer links between British provision of finance to Common-
wealth countries and their trading decisions.
On the first point, the core aim of Labours international trade policy,
following that of the Conservatives, was to support liberalization through
the General Agreement on Tariffs and Trade (GATT) process, which meant
at this time pushing for tariff and quota reductions in the Kennedy
Round, which began in 1962 but was not concluded until 1967, with
implementation beginning in 1968.
43
This strategy reflected worries that
the world was developing a growing number of trading blocs which
threatened to restrict British trade opportunities. Such fears had, of course,
informed the Conservative approach to the EEC at a time when that body
was seen as likely to develop a forbidding Common External Tariff. As the
Board of Trade spelt out in frank terms, this focus clearly meant the
Commonwealth hadsecondplace inBritish policy: Since our main concern
in the Kennedy Round is to negotiate concessions with the major
non-Commonwealth developed countries (and we would not wish to
jeopardise an advantageous settlement with them merely in deference to
Commonwealth interests) . . .
44
(emphasis added). Officials at the pre-
paratory meeting in November 1965 endorsed this view, spelling out the
implications that: The world-wide reduction of tariffs and other barriers to
trade was likely to be the most successful and rapid method of developing
trade both within and between the Commonwealth and the rest of the
world, and Commonwealth trade has to be considered in the context of
world trade and a closed Commonwealth trading system would be neither
feasible nor desirable.
45
The practical implication of this perspective was that the primary arenas
for Britain and the other Commonwealth countries to pursue trade policy
43
D. Lee, Middle Powers and Commercial Diplomacy: British Influences at the Kennedy Trade
Round (New York, 1999); E. H. Preeg, Traders and Diplomats: An Analysis of the Kennedy Round
under the GATT (New York, 1970).
44
PRO, CAB 134/1472, Board of Trade, Commonwealth Preference and the Kennedy
Round, 13 May 1965.
45
PRO, CAB 134/1475, Board of Trade, Meeting of Commonwealth Trade Officials
Nov. 1965, 15 December 1965; also DO215/135, Note by Chairmanof Economic Development
(Official) Committee, Commonwealth PMs Conference June 1965, 7 April 1965.
212 J I M TOML I NS ON
aims should be global bodies like the GATT and the United Nations Con-
ference on Trade and Development (UNCTAD), not the Commonwealth.
Thus, when, for example, Ceylon suggested a revival of the Common-
wealth Shipping Committee, the Commercial Policy Committees view
was clear: the Commonwealth was not an economic unit nor a shipping
unit, and the issue should be pursued through UNCTAD. This meant that,
at best, Commonwealth trade discussions would be about co-ordinating
approaches to GATT and UNCTAD meetings.
46
But even this much
reduced aim was reliant on a belief in a commonality of interest within
the Commonwealth, which became an increasingly difficult view to
sustain. The result was that Commonwealth meetings became more of a
framework for bilateral bargaining than a basis for general discussion and
agreement.
47
This leads on to the second problem mentioned above, the degree of
likely reciprocal concessions between Britain and her Commonwealth
partners. As far as the underdeveloped countries of the Commonwealth
(the majority by the early 1960s) were concerned, any belief incommonality
of interest that might have existed was undermined by the deterioration in
their terms of trade from their Korean War peak, especially when this was
widely seen as a secular trend rather than a cyclical phenomena. This
pessimistic view was most ably articulated by Raul Prebisch, who became
the first Secretary-General of UNCTADin 1962, that body in turn becoming
a mouthpiece for the poor countries of the world in their search for more
favourable market conditions.
48
Because of the concern to be seen as
supporting the aims of the poor countries, Britain and other rich countries
accepted, at least in principle, the view articulated at UNCTAD that they
should grant trade concessions to underdeveloped countries without
seeking reciprocity.
49
Because it had adopted this role as advocate of the poor, UNCTAD had
obvious attractions to underdeveloped Commonwealth countries,
attractions superior to those of a body which contained both the rich and
the poor. Increased consciousness and articulation of the division between
rich and poor was unlikely to aid the coherence of the Commonwealth.
More practically, a concern with raising global primary product prices,
central to the politics of underdevelopment in this period, was bound to
leave the Commonwealth largely on the sidelines, as its main markets for
46
PRO, CAB 134/2626, Official Committee on Commercial Policy, Minutes, 2 May 1966;
PRO, CAB 134/1475, Meeting of Officials.
47
PRO, CAB134/1473, Boardof Trade ,UKObjectives at Meeting of CommonwealthTrade
Officials, 6 September 1965.
48
S. Dell, The Origins of UNCTAD, in M. Z. Cutajor (ed.), UNCTAD and the South North
Dialogue (Oxford,1985), 1032.
49
PRO, CAB 134/1472, Britains Trade with the Commonwealth.
T HE DE CL I NE OF T HE B RI T I S H E MP I RE AND E CONOMY 213
such products (within which Britain overwhelmingly predominated) were
simply not large enough to be able to seriously affect the world pricetea
being the one and only major exception to this generalization.
50
While the Labour governments concern with the conditions of the
worlds poor was genuine, it clearly had its limits. Trade concessions that
aided (mainly) poor countries, such as the Commonwealth Sugar
Agreement (CSA), were under scrutiny because of the perception of their
radical impact on import prices. The CSA, begun in 1951, was until 1967
rolled-over annually for a further period of six years. The stated reason
for ceasing to do so was the impending discussions with the EEC, but
there seems to have been a determination to restrict its scope and cost
irrespective of the EEC issue.
51
Poor countries were concerned to expand their exports of manufactured
goods as well as to get better prices for primary products. Here again, the
Commonwealth proved to be of limited benefit to them. While Britain was
more generous than other rich countries in allowing access to key products
such as textiles, for balance-of-payments and employment reasons the
trend in this period was towards a tightening not loosening of import
controls.
52
Britain under Wilson was, of course, seriously concerned with the
balance of payments and public expenditure, and this was bound to lead to
questioning of the amount of aid to poor countries. The establishment of
the Ministry of Overseas Development signalled Labours recognition of
the new agenda of world poverty, but the level of aid channelled through
it was constrained by these macroeconomic problems. This aid (most of
which went to Commonwealth countries) rose sharply in the early years of
the Wilson government, but then, after sharp internal disputes, fell back.
53
Conversely, the viewof poor members of the Commonwealth in this period
was increasingly that the purpose of belonging to that body and attending
its meetings was to increase economic aid, rather than to bargain over
mutual benefits.
54
This circle might have been squared by more aid tied to
purchases of British exports, but the results of investigations into the
possibility of this were uniformly negative. It was pointed out that Britain
was not and could not be a big enough aid giver to greatly affect trade
50
PRO, CAB 134/1474, Board of Trade, Commodities, 22 November 1965.
51
CSAprices were commonly asserted to be twice world prices, but world prices had very
little meaning in such a restricted market. Miller, Survey, 289; PRO, CAB 134/3036, Extension
of Commonwealth Sugar Agreement, 9 November 1967; Extension of Commonwealth Sugar
Agreement, 29 October 1968. Australia also benefited from the CSA.
52
A. D. Morgan, Commercial Policy, inF. T. Blackaby (ed.), British Economic Policy 196074
(Cambridge, 1978), 527.
53
Seers and Streeten, Overseas Development Policies; compare B. Tew, Policies Aimed at
Improving the Balance of Payments, in Blackaby, British Economic Policy, 31920.
54
Wilson, Labour Government, 161.
214 J I M TOML I NS ON
volumes; that in any event, tied aid was generally unpopular with its
recipients; and that tying might even worsen the situation, because
currently Britain did well in competing for orders from untied aid in
countries like India, whereas if more were tied we might end up with a
smaller share of the market.
55
Reciprocal trading agreements with the rich White Commonwealth
countries facedobstacles well knownsince the time of JosephChamberlain.
Australia, Canada, and New Zealand, while happy with any concessions
granted in the British market, were developing their own manufacturing
industries, and wanted protection against British manufactures. They were
not willing to play the role of simply suppliers of cheap food and raw
materials to Britain, and recognized that to develop their manufacturing
exports they had to look well beyond Britain and the Commonwealth. This
was well understood in Britain: they wish to build up their new industries
and would not wish to impair their relations with their other trading
partners who now do twice as much business with the Commonwealth as
we do, and offer more scope for increase. In addition, while some British
ministers emphasized the benefits to the consumer and to industrial costs
of cheap food and raw materials, the National Plan of 1965 had called for
further subsidized expansion of agricultural production.
56
The Wilsonian enthusiasm for domestic economic planning had its
reflection in debates about the Commonwealth. Wilsons idea was that
discussion of each others plans would enable market opportunities to be
identified, especially in capital goods, and governments would then
encourage Commonwealth preference in those areas where the state had
procurement responsibilities. Such a policy faced clear obstacles. First,
planning was not in vogue in all of the Commonwealth, especially
Australia and Canada, so there was often little to co-ordinate. On the other
hand, India, with much more planning than Britain, had to be reminded
that in a capitalist economy the amount of control exercisedby government
was strictly limited.
57
Secondly, all governments were wary of buying other
than on the basis of cost effectiveness. Somewhat embarrassingly, the
British government itself made little use of procurement as a domestic
55
PRO, CAB 134/2628, Treasury, Procurement by Public Authorities, 2 May 1966;
T312/1113, Treasury, Financial Advantages of Commonwealth Membership, 16 March 1965,
points out that the Franc zonewas not arelevant model for Commonweathrelations, consisting
of a small group of poor countries andone overwhelmingly dominant mother country. On this
see also DO 215/135, Commonwealth PMs Conference.
56
PRO, CAB134/1472, Britains Trade; Department of Economic Affairs, The National Plan
(London, 1965), 13541.
57
PRO, CAB 134/3038, Board of Trade, Imports of Butter, 24 January 1969; ibid., Board
of Trade, UK Objectives at Meeting of Commonwealth Trade Officials, 6 September 1965;
PRO, CAB 134/2626, Official Committee on Commercial Policy, Meeting, 2 May 1966;
PRO, CAB 134/2627, Three Indian Papers for Discussion by Commonwealth Trade Officials,
20 March 1966.
T HE DE CL I NE OF T HE B RI T I S H E MP I RE AND E CONOMY 215
policy instrument, the only example where this was done in the early years
of Labour being computers. Finally, even if the political will existed, key
countries such as Australia and Canada had federal constitutions, where
central government did not control the activities of state or provincial
governments. This meant the proposal was at best only plausible in areas
such as defence, where national governments were always the responsible
bodies. But here, Commonwealth governments had often developed
strong ties to American armaments suppliers that wouldbe hardfor Britain
to break. In sum, while pious declarations on this issue, such as the one
already secured at the Commonwealth meeting in Montreal in 1958, might
be endorsed, the idea of international planning remained largely empty
words.
58
All of the lines of argument outlined above tell a story of unrealistic
hopes being entertained by Labour at the time it entered office about the
prospect of developing closer economic ties with the Commonwealth.
Overwhelmingly, the advice fromwithin the official machine was that such
expectations were unrealizable. But was this a case of civil servants
articulating a Whitehall view and blocking more radical policies that
might otherwise have been pursued by a Labour government?
Three arguments tell against such a view. First, powerful ministerial
advocates of closer Commonwealth ties, most notably Douglas Jay at the
Board of Trade, were unable to find any arguments against those put
forward by the civil servants. He was reduced to making proposals
notably for Commonwealth free trade areaswhich he himself stated to be
unrealistic and purely gestural. This rather pathetic posturing was clearly a
recognition that there were no other serious proposals that could be put
forward, and that all Britain could offer was gestures.
59
Secondly, lack of enthusiasm was a feature not just of Whitehall in the
face of Wilsons Commonwealth ideas. Governments in other Common-
wealth countries reacted extremely cautiously to invitations to discuss
Britains initiatives; they were willing to discuss British proposals, but they
found little to engage their enthusiasm. Many were more concerned with
pursuing their own trade agendas, such as Nigerias search for a trade link
with the EEC, which was causing much annoyance in Whitehall at this
time.
60
Thirdly, the only persistent advocate of the Commonwealth idea was
58
PRO, CAB 134/2628, Treasury, Procurement by Public Authorities, 2 May 1966;
PRO, CAB 134/1473, Board of Trade, Proposals for Meetings on Commonwealth Trade
Agreements, 22 July 1965.
59
PRO, PREM 13/183, D. Jay to H. Wilson, 3 June 1965.
60
PRO, CAB 134/1746, Meeting of Commonwealth Trade Officials, 29 November 1965;
PRO, DO 162/37, Michael Stewart to Harold Wilson, 3 March 1965; PRO, CAB 134/1475,
Official Committee on Commercial Policy, Meeting, 23 March 1965.
216 J I M TOML I NS ON
Balogh, and apart from the general distrust he aroused, there was the clear
problem that he unashamedly saw the Commonwealth as a protective
block, which put him at odds with the general Labour as well as Whitehall
perception the such blocs were a danger to Britain. Akey reason for Labour
support for the Kennedy Round was the belief that it offered a defence
against the perceived threat of the growth of trade blocs; similarly, its
eventual approach to the EEC was based on fears of being left out of this
(initially) highly protected bloc. For these reasons, most senior figures in
the Labour Party had become noticeably more pro-free trade than in the
1950s. Balogh seems to have underestimated the strength of this tide of
opinion amongst Labours leaders, and this led him to focus too much
attention on official attitudes as the obstruction to his proposals. He was
also out of kilter with the increasingly consensual common sense view
that British industry needed more competition rather than protected
markets in order to become more efficient.
61
The failure of these ambitions for closer economic links with the
Commonwealth was evident soon after Labour took office. After the
Commonwealth Trade Ministers conference of 1965 it was clear to all
who looked that, as Wilson later put it: there was virtually no willingness
to improve intra-Commonwealth trading arrangements. The following
year he told the Commonwealth Secretary-General of a more a general
disillusion: The Commonwealth showed little disposition to help Britain
or to play a constructive part, for example, at the UN.
62
Part of the problem
was the souring of relations by political issuesmost importantly,
Rhodesia. But the economic obstacles were also immense. As noted above,
intra-Commonwealth trade had been declining from its post-war peak
since the early 1950s. This was not largely the result of what Wilson called
Conservative neglect, except in the sense that it followed from the general
Conservative encouragement of trade liberalization. This dismantling of
the discriminatory trade rules of the 1930s and 1940s allowed market forces
to exert themselves, and the resulting trade pattern reflected the new
dynamics of international trade emerging in the 1950s and 1960s. Britains
historic nineteenth-century role as overwhelmingly an importer of food
and raw materials was shifting as manufactured goods became increas-
ingly dominant in imports as well as exports, aided by support for
domestic agriculture (Table 1). This was a key part of the golden age of
capitalism, as the major Western European and North American economies
increasingly swapped manufactures for manufactures as the staple of
their trade. In this process, the Commonwealth outside Britain, consisting
61
PRO, PREM 13/182, Commonwealth Trade and Aid, 1 April 1967.
62
Wilson, Labour Government, 117; Miller, Survey, 293, 300; PRO, PREM 13/1367, Note of
Meeting of PM with Secretary General of Commonwealth, 5 April 1967.
T HE DE CL I NE OF T HE B RI T I S H E MP I RE AND E CONOMY 217
largely of rich but small or large but poor countries, was increasingly
marginal to Britain, and they themselves were also enthusiastically
developing trade links with non-Commonwealth countries.
Most Labour policy makers were reluctant to accept this trend. In part,
this related to a hostility to the trade liberalization, which was seen as
allowing this fragmentation of the Commonwealth. Such views were
most consistently aired by Balogh, long an advocate of retaining
discriminatory rules to encourage Commonwealth trade.
63
But even
those with more liberal economic views tended to believe that it was
Tory mis-management between 1951 and 1964 which was weakening
Commonwealth trading links, rather than this reflecting new patterns
of trade growth. A more sophisticated view recognized the growth of
intra-industry (and, by extension, largely non-Commonwealth) trade, but
argued that this was less advantageous than the Commonwealth pattern of
swapping manufactures for food and rawmaterials. In this view, swapping
Renault Dauphines for Morris Minors was less beneficial than swapping
cars for raw materials.
64
Even if one ignored the rising appetite of British
consumers for sophisticated imported manufactures made by other rich
countries, the obvious problem of the Commonwealth was that it con-
tainedtoo fewof the richof the worldto forma major expanding market for
the products of the poor. The degree of commonality of interest was limited
and declining.
The pro-Commonwealth attitudes of Labour around 1964 were in part a
reflection of Labours accurate perception that the Attlee government had
effectively encouraged Commonwealth trade, and that this had been to
Britains immediate advantage. Disillusion swiftly followed from Labour
63
T. Balogh, The Dollar Crisis, Causes and Cure (Oxford, 1949); Balogh Papers: PRO, CAB
147/5662, Import Policy, 19647.
64
P. Streeten and H. Corbet (eds), Commonwealth Policy in a Global Context (London, 1973).
Table 1
Composition of British Trade, 19469 to 19609 (percentages of total imports)
Period Manufactures Primary products
19469 17.2 82.8
19509 23.0 77.0
19609 40.8 58.0
Source: R. Rowthorn and J. Wells, De-Industrialization and Foreign Trade (Cambridge,
1987), 173.
218 J I M TOML I NS ON
bringing a 1951 approach to bear on a situation which fourteen years had
radically changed.
65
But, more specifically, the pro-Commonwealth
attitude was reinforced by Labours hostility to the first Conservative
application to join the EEC in 1961. The likely implications of this policy for
links with the Commonwealth provided an easily wielded stick for Labour
to beat the Tories withduringthe latters last years ingovernment.
66
Labour
presented itself as the defender of Commonwealth interests against Tory
betrayal. Yet such a stance became less politically attractive as relations
with much of the Commonwealth cooled after 1964, and simultaneously
Commonwealth countries became less vociferous in their concerns about
Britains possible entry. Whereas the Commonwealth had been portrayed
as a key obstacle to EECmembership in 1961, by 19667 Labour was willing
to treat the question as one of a limited number (New Zealand dairy
products, tropical produce) of negotiable problems.
67
Despite this eventual
downgrading of the Commonwealth, it is important to emphasize that it
was not just nostalgia for the 1940s that fuelled Labours initial Common-
wealth enthusiasm. Committed progressive internationalists such as Seers,
Streeten, and Lipton regarded the Commonwealth as the best mechanism
for Britain to fulfil its aims of tackling world poverty, and were bitterly
disappointed by the failure to use it in this way.
68
Economic Policy and the Empire
Because of the prevalence of teleological accounts of post-war Britain, in
which the country was inevitably led fighting and screaming into the EEC
as the only rational place to go, it is important to be clear why an alter-
native, Commonwealth path, though seriously considered in the 1960s,
was not viable. First must be the issue of trade. Douglas Jay and others tried
to resurrect the Edwardian cheap loaf argument in the 1960s, but this no
longer had much resonance. Far less working-class income was now spent
on food, and cheap refrigerators were now more politically important than
cheap bread.
69
Unlike food, manufactured goods were bought mainly from
countries at similar levels of income, hence Britains growing trade with
65
Miller, Survey, 293.
66
For Tory attempts to revive Commonwealth links after failure of the application for
Common Market entry in 1963, see PRO, T312/706, A. Douglas-Home to Commonwealth
Secretary-General, 31 January 1964; PRO, T312/1114, Proposals for Strengthening Economic,
Commercial and Cultural Links with the Commonwealth, 2 February 1964.
67
A. May (ed.), Britain, the Commonwealth and Europe: The Commonwealth and Britains
Applications to Join the European Communities (London, 2001); C. Schenk, Sterling, International
MonetaryReformandBritains Applications toJointheEuropeanCommunities, Contemporary
European History, 11 (2002), 34569.
68
M. Lipton, Labour andBritishEconomic Policy Towards Asia, inC. Jackson(ed.), Labour
in Asia (London, 1973), 415.
69
Tomlinson, Politics of Decline, 3, 512.
T HE DE CL I NE OF T HE B RI T I S H E MP I RE AND E CONOMY 219
Western Europe that accompanied the commodity composition changes
shown in Table 1.
But the change in trade patterns was not just about the changing
composition of British demand. Commonwealth countries were recog-
nizing the limited scope for expansion of Britain, and Canada was
developing her trade with the USA, Australia, with Japan. Only New
Zealand found it hard to find alternative customers for her lamb and dairy
products. For the poor countries of the Commonwealth the most obvious
problem was that Britain (along with other developed countries) was
increasingly unwilling to import the narrow range of relatively un-
sophisticated manufactured goods that they wanted to exportmost
obviously in the case of textiles. In addition, foreign exchange constraints
cut the possibility of providing a major expanding market for British
exports. In the 1960s Indias trade links declined not just proportionately,
but in absolute terms.
70
These trade patterns were not immutable. But the key issue for the more
rapid development of markets such as India was inward investment
(providing both capital for development and foreign exchange), and here
the problem was that Britain was simply not a large enough economy to
provide resources on the scale that would have made a large difference to
an economy like India. British capital did flow into India (though more
went to Australia and South Africa), but it was concentrated in a few
sectors, while India, with some success, played the USA off against the
USSR to obtain external investment funds on a scale Britain could not
match. As already noted, the addition of government aid to private
investment was quantitatively significant from a British point of view, but
relatively trivial for the Indian economy.
71
While trade and investment were the key components of imperial
economic relations, the attenuation of migration also symbolized the
limited common interests of much of the Commonwealth. While still
exporting over 100,000 people a year in the 1950s and 1960s, largely to the
White Commonwealth, tight controls were imposed on (Black and Asian)
immigration by the Immigration Acts of 1962 and 1968, though within this
regime Britain continued to denude poor Commonwealth countries of
significant numbers of skilled professionals.
72
70
M. Lipton and J. Firn, The Erosion of a Relationship: India and Britain since 1960 (London,
1975), appendix table 2.3. For the changing relations with other parts of the Commonwealth,
see J. B. D. Miller, Britainand the Old Dominions (London, 1966); Y. Bangura, Britainand Common-
wealth Africa: the Politics of Economic Relations (Manchester, 1983).
71
Lipton and Firn, Erosion of a Relationship, 11015.
72
Labour Party Archives, Study Group on Immigration, June 1969April 1971. For the
end of mass emigration from Britain, see S. Constantine, Waving Goodbye? Australia,
Assisted Passages and the Empire and Commonwealth Settlement Acts, 194572, Journal of
Imperial and Commonwealth History 26 (1998), 17695.
220 J I M TOML I NS ON
The declining economic links with the Commonwealth were then the
result of a wide array of forces, both metropolitan and centrifugal. How far
was this decline a result of British policy? The key policy decision here did
not relate directly to the Empire, but was one which led Britain, albeit
slowly and unevenly, down the road to international economic liberal-
ization. Once the effects of this were felt, it was evident that the close ties
of the 1940s were highly contingent, and that, above all else, the effect of
rising incomes would be an insatiable demand for manufactures that the
Commonwealth could not satisfy. In the new politics of the 1950s and
1960s, satisfying the demand for consumer prosperity became politically
imperative, and this condemned the Commonwealth link to growing in-
significance.
Feinsteins identification of a paradox, the coupling of the decline of the
Empire with unprecedented British prosperity, cannot be faulted. But in
this paper I have tried to suggest that the Empire did matter to British
economic policy in the 1950s and 1960s, both because of its links to the
declinist discourse and because (for a while at least) an alternative,
Commonwealth, path to the economic future provided a key part of the
attempt to modernize the British economy in the 1960s. This latter needs
to be rescued from the condescension of posterity if we are to understand
some of the tensions in economic policy in post-war Britain.
T HE DE CL I NE OF T HE B RI T I S H E MP I RE AND E CONOMY 221