British War Economy/Chapter V

 (i) The First Phase

 It is the purpose of the present section to summarise the main movements of British manpower, both military and industrial during the first nine months of the war. The next section will discuss the main problems of manpower policy during the same period.

The bare numerical outline of military mobilisation up to the fall of France is sketched in the following table:

There are one or two features of the table (apart from the comparatively small matters referred to in the footnote) which invite comment. To begin with, the table shows some marked fluctuations in the rate of intake. Between the outbreak of war and 31st December 1939, gross intake—thanks chiefly to the immediate calling-up of reservists and auxiliaries—had amounted to more than a million men; but after that, the rate fell to about 350,000 men in the first quarter of 1940. Heavy recruitments of May and June raised the total for the second quarter of 1940 to above 400,000. The figures of net intake, as reflected in the table, were considerably affected by  the abnormal wastage that accompanied each of the two periods of abnormal recruitment: in the autumn and winter of 1939, a considerable number of skilled workers was returned to industry, and in the early summer of 1940, after the losses in the Dunkirk campaign, still more men were returned to industry, either temporarily or permanently.

The totals shown by the table are reasonably impressive—an increase of Service establishments between the eve of war and June 1940 from approximately half a million to nearly 2¼ million men. Moreover, the Ministry of Labour was ready at need to build up still more rapidly the strength of the armed forces. By 22nd June 1940, registration for military service had reached the 1910 class (men of thirty years of age) and the total of men already registered by that date was above three million. Of these, about half a million were available for immediate call-up.

However, the strength of a nation’s fighting forces has to be judged not merely by autonomous national figures, but by realistic comparison with the enemy’s strength. After all, it was not until the beginning of 1939 that the British Government had finally discarded the concept of a war of ‘limited liability’; even if its preparations since then had achieved maximum efficiency, they would not have had time enough to bring all three Services to the strength required in the battles of 1940. It was the Army that had suffered most severely from the late start. After Dunkirk, there were nominally available in Britain about 1½ million soldiers to fight the invading German armies, if Hitler should succeed in getting them across the Channel. But of this total, a full quarter were trained for air defence or coastal defence or other static warfare, while another quarter, including men in the R.A.M.C. and R.A.S.C., were not trained at all for actual fighting. Of the rest, 150,000 had received no more than two months’ training, while many of the others, including the 275,000 veterans from Dunkirk, had a sufficiency of training but an insufficiency, if not an absolute lack, of weapons. Including 22,000 Canadians and 16,000 Australians and New Zealanders, there were in Britain barely half a million men who had both the training and the equipment for violent fighting against the more heavily equipped enemy forces.

Equipment, not recruitment, was the urgent problem of that summer. There would have been no sense in choking the armed forces with zealous men for whom there were no weapons. Nor would there have been any sense in turning men out of their jobs in the so-called ‘unessential’ industries before the munitions factories were ready to employ them on new jobs. What needs now to be investigated is the pace of industrial mobilisation during the first nine months of war.  A word needs first to be said about the balance between the Services and industry. The nation had roughly nine million men in the age group 16–40: of this total, approximately 5.3 millions or fifty-nine percent, would be retained for industry under the Schedule of Reserved Occupations or excluded from the Forces through age, health, hardship or conscientious objections, while 3.7 millions or forty-one percent would be available for service in the armed forces. Later in the war, the growing stringency of military manpower led to a progressive tightening of the tests of reservation until in the end the Schedule itself became obsolete; but in the first nine months the Services were able to get within its framework as many men as they could absorb. By 1st July 1940 they had absorbed more than half the male population in the age group 20–25 and more than one fifth in the age-group 26–30, with smaller intakes for the various groups below twenty and above thirty years of age. In total, they had received nearly a quarter (22.6 percent) of the male population between sixteen and forty years of age, and rather more than one-half of the full number allocated to them in the pre-war division of British manpower in to a group of fighters and a group of workers.

Looking at these figures from the other angle, we see that industry had as yet made little more than half the sacrifice required from it under the Schedule. Industry was still enjoying days of grave. How was it using them? Was it drawing fully upon the supplies of labour available to it? Was it regrouping its labour force in the way best calculated to serve the nation’s war needs?

Although the armed forces increased by over 1¾ millions and the civil defence forces by over a quarter of a million between mid-1939 and mid-1940, the total number of men and women employed in industry only fell by half a million. There were several reasons for this encouraging fact. During the period the total population of working age in Great Britain increased by some 159,000: of this increase about 100,000 was due to net immigration from overseas, including the return of British subjects from abroad and the influx of refugees from the Continent. Much more important, the percentage of the total population of working age in the labour force showed a substantial rise for both men and women, as increased numbers were drawn into employment from the ‘non-industrial’ sector—boys and girls leaving school, retired people, students, private domestic servants and women working in their homes. As a result, the country’s total labour force increased by about 926,000 between mid-1939 and mid-1940. In addition, the number of unemployed fell by more than 600,000 in the same period—that is, by nearly a half. Added together, these changes meant that the total number actually in employment  in the Forces, civil defence and industry rose by about 1,551,000 (1,027,000 men and 524,000 women).

Nevertheless, the numbers employed in industry alone were falling. Within industry there had not been enough regrouping to satisfy either the Government’s experts or informed public opinion. The simplest way of indicating the salient trends of movement is to set down the percentage changes from June 1939 to June 1940 in each of the three large war-time groups of industries—Group I, the engineering and chemical industries; Group II, the chief basic industries such as shipping, land transport, coal agriculture and the public services; Group III, the industries and services such as building, distribution, the food trades and textiles, which normally were chiefly employed on production for civilian consumers.

These trends were all in the right direction—a decline of employment in Group III in relation to the other two Groups. In Group III there had been only a small net change in the employment of women; but the heavy loss of men to the Services had not been compensated by new entries and reabsorption of the unemployed. The percentage share of Group II employment had appreciably risen—a healthy sign. A larger percentage increase was shown by Group I: the outflow from this group (whose male workers were well protected by the Schedule) had been proportionately smaller and there had been besides a measurable inflow. The numerical net gain, in the numbers employed in the Group I industries between June 1939 and June 1940, was about 453,000.

So far as they had gone, all the changes indicated above were of the right kind; but they had not gone far enough. As will be shown a little later, the net increase of employment in the munitions industries fell far below the requirements of manpower as calculated by the official experts. There was, however, one other test of industrial mobilisation which could be applied with rather more encouraging results—not, this time, the migration of workers from one Group to another, but the reorientation of their energies within the particular  Group to which they originally belonged. Even within the industries of Group III, many workers were shifting over from peace tasks to war tasks, stimulated by the restriction of materials for civilian contracts or, more probably, by the direct increase of government demand—for example, demand upon the textile industries for uniforms and other clothing, or upon the building industry for hutments and factories. Among the industries of Group II, the effect of government war demand was felt still more strongly; it is sufficient to specify land transport and the staffs (industrial and non-industrial) employed directly in the national government service. It was, however, in Group I that the shift from private orders to government orders reached its highest level. According to figures which became available for the first time in June 1940, aircraft and motor vehicles had just over ninety percent of their total labour force employed on government contracts. This industry topped the list; the average for the engineering and allied industries as a whole was about seventy-five per cent. When it is remembered that some of these industries were also engaged on production for export—at the time a cardinal element of the British war plan—the transfer of labour from peace tasks to war tasks begins to look more encouraging.

Nevertheless, it fell far below the level that had to be achieved if the production targets set by the War Cabinet were to be reached, or even approached. Against the actual modest increase that has been recorded above for the Group I industries must now be set official calculations of the immense expansion required in the same industries. The calculations had been made in December 1939 for the purpose of aiding the War Cabinet in its decisions upon the war production programmes. It will be recalled that the final collapse of the ‘limited liability’ concept, a bare six months before the war, had entailed a sudden and sensational jump of the Army programme to thirty-two divisions. At the beginning of the war, a Land Forces Committee of the War Cabinet met to determine the number of divisions which should be assumed as a basis for the production arrangements of the Ministry of Supply. On top of the thirty-two United Kingdom divisions they reckoned on eighteen divisions from the Dominions and India; it was hoped then to place fifty divisions in the field. As a basis for production arrangements a margin of ten percent was added, making fifty-five divisions altogether, in order to cover supplies for Britain’s Allies. The supply of equipment for twenty divisions was fixed as the minimum for the first year of war and the supply of fifty-five divisions within two years was stated much more vaguely as an ‘aim’. But not even the first year’s programme could be considered really firm until the production requirements of the three Services had been considered as a whole, and until two much-discussed impediments to expansion, the  shortages of hard currency and of skilled labour, had been further investigated.

Study of the labour situation was remitted to an inter-departmental committee representing the Ministry of Supply, the Air Ministry, the Admiralty, the Board of Trade, and the Ministry of Labour with a chairman provided by the last named. The Committee did not produce arithmetic covering the whole field of Service supply; it limited its enquiries to the metal and engineering industries including shipyards and aircraft engines. Translating the existing production policies (including the fifty-five divisions proposal) into demands for labour, and adding to them a fairly generous estimate of demand for the export and home civilian markets, it reached the following conclusions:

The rates of expansion corresponding to these totals were seventy percent by the autumn of 1940 and 117 percent by the summer of 1941. This meant that British war industry would have to achieve in two years of war an expansion three times as great as that which it had achieved in the four years from 1914–18. How was it to be done?

Perhaps the Committee believed that it could not be done. Perhaps its intimidating forecasts of manpower requirements were meant to suggest that the authorised programmes of war production would have to be cut down. Be this as it may, it did not explicitly make the suggestion. It assumed that the whole of British industry, with the exception of agriculture, mining, raw materials and the mercantile marine, would be available as a pool of reinforcements for the munitions industries. It did not deny that a sufficiency of unskilled labour might be fished out of the pool. But it pointed out that the war industries would be unable to absorb the unskilled workers theoretically available to them unless they first succeeded in satisfying their formidable demand for skilled workers

The Committee offered some suggestions about dilution and training but was unable to show how the requirements of skilled labour could be met. Indeed, it did not conceal its conviction that they could not be met.

These sobering calculations were endorsed and emphasised by the Stamp Survey. There seemed no escape from the conclusion that the  Government would be compelled to lower its sights. The fifty-five division scheme was adjourned to an indefinite future, and doubts were expressed about the possibility of equipping even twenty divisions by September 1940. It was suggested that the targets of achievement might be brought nearer if the scales of British equipment were lowered, possibly to the French level. Yet the chances of achieving even these more modest objectives soon began to seem very doubtful. The Stamp Survey estimated in May 1940 that the total increase of labour in the engineering industries was likely to be, at most, twenty percent for the first twelve months of war, in contrast with the seventy percent postulated by the inter-departmental committee as necessary to fulfil the war programmes. This failure was only one side of a sad story, which Lord Stamp summarised as follows: ‘The essence of the present labour situation is that a disappointingly small transference of labour to the armaments industry is being attained at the cost of a large amount of damage to the production of other industries that are essential to the war effort.’

It would be a mistake to set a high value upon the numerical and percentage estimates that have been quoted in the three preceding paragraphs. There was much guess-work in them. The estimated requirements of engineering labour were not a precise statement of actual or forthcoming vacancies, an enumeration of the jobs for which men were wanted now, or would be wanted within the stated periods; government statistics at that time were not good enough for realistic forecasting of the effective demand for labour, skilled and unskilled, over the whole range of industry or even in the munitions zone. The supply departments were very slipshod in their arithmetic when they calculated that such and such a programme of war production would necessitate such and such reinforcements of industrial labour. In consequence, there was not necessarily any real cause for alarm and despondency when the actual figures of labour intake proved to be lower than the estimated figures for labour requirements. When all this has been said, the calculations of labour requirements that were made in 1939 still retain considerable historical importance. Imperfect though they were, they were the first shaky step in the general direction of manpower budgeting. They did moreover give a general impression of the enormous demands upon labour that must eventually be met if the war were to be fought whole-heartedly. And their effect was salutary if they made people feel that the immediate achievement was falling short of the nation’s need.

The conviction that economic mobilisation was moving too slowly was not by any means confined to the Government’s arithmeticians. To the ordinary citizen, the most discouraging feature of the situation was the continuing unemployment. Until April 1940, the month of Hitler’s opening bid for total victory in the first year of the war, the  figure was still above the million mark, despite the large number of places—nearly 1½ million by the end of March—left vacant by withdrawals of men for the Services.

The total of unemployment, as reckoned in Great Britain at this time, was of course inflated by including within it workers who were only temporarily and transitionally out of jobs. What was really disappointing in the first six months of the war was the persistence of the ‘hard core’ of unemployment. However, improving economic activity began to make a real dent in this hard core in the very months when British and Allied forces were suffering disaster on the battle fields of Norway, the Low Countries, and France. From April onwards, the expansion of war work began steadily and progressively to take up the slack of unemployment. Moreover, the political upheaval of early May gave Britain a Government with enough determination and enough popular support to carry through the new manpower policies that national survival demanded.

 (ii) Manpower Policy

The studies pursued by the Committee of Imperial Defence between the two world wars had identified three salient problems of manpower policy: recruitment for the Services, maintenance of a balance between the Services and industry, enlargement and redistribution of the industrial labour force. Under the first two heads, the lessons of previous experience had been well digested and realistically translated into policies for the future; but under the third head there was still, as the Stamp Survey and other critical observers believed, something of a ‘gap’.

For the supply of Service manpower, the instrument was military conscription; it was operating even before the war broke out. For maintaining a just equilibrium between the Services and industry the instrument was the Schedule of Reserved Occupations. Both these instruments were controlled by the Ministry of Labour: how workmanlike its control of them was during the first phase of the war has already been shown. But for the third great task there was, up to the very eve of war, no controlling ministry and no instrument of control. Far back in 1922, when the waste and loss of the First World  War were still freshly remembered, a committee of manpower experts had dared to recommend legal powers of compulsion whereby the Government could ‘control and transfer civilian labour according to national needs’; but, at the beginning of the Second World War, nobody who was well-informed thought that organised labour was ready to accept industrial conscription. Some people, as has been shown earlier, argued that drastic administrative control was unnecessary. ‘Individualism’ would do the job.

What were the motives of this individualism, and how would they work? There would be ‘the carrot and the stick’, the ‘push and the pull’, the expulsive force of reduced demand in the ‘less essential’ industries and the attractive force of enhanced demand in the munitions industries. Direct limitation of raw materials supplies would doubtless give some extra power to the ‘push’ of reduced demand. Unfortunately, the ‘pull’ of enhanced demand would be limited by the requirements of the Government’s anti-inflation policy. Although differential wage rates were attracting labour into Group I industries even before the war, and although differential earnings were operating on top of the wage rates, it was contrary to the Government’s policy to permit money incentives to exercise their full natural force. Moreover, the dimensions of the required industrial migration were vast while the time available for carrying it through was short. The administrators and economist who tried, early in the war, to measure the task ahead had no faith that individualism—the uncontrolled personal decisions of millions of British men and women—would be able to perform it.

For the historian, these speculative estimates and general reflections are not enough; he must examine the problem of industrial mobilisation in a specific chronological content. While the Government’s experts were producing their frightening calculations of future manpower requirements in the munitions industries and emphasising the insufficiencies of supply in the labour market, the immediate effective demand for labour remained disappointingly weak. As has already been seen, industrial unemployment did not sink below the million mark before April 1940. Up to the fall of France, the main immediate cause of anxiety among economists was the deficient absorptive capacity of industry, not the scarcity of labour.

To this statement there is, however, one important exception. Skilled labour was scarce. This, at any rate, was the constant and urgent cry of the supply departments. they argued that shortage of skilled labour was the main cause of the disappointing expansion of war industry: if only they could find a few tens of thousands of skilled men to fill their urgent vacancies, they would be able to  absorb unskilled workers by the hundreds of thousands. It is possible that they overstated their case. Skilled labour was not always the one missing factor of production. Sometimes there were scarcities of manufactured materials, for example, light alloys for airframe construction. Sometimes there were shortages of machine tools and other essential plant. Sometimes there were shortages of floor space: up to the summer of 1940, no more than two of the large new ordnance factories were ready to begin production. Managerial capacity and administrative direction must also have been very frequently scarce; it takes time to build up a vast administrative machine and link if effectively with the industrial machine. When all these additional difficulties have been admitted, it still remains true that there was a real difficulty in securing adequate supplies of skilled labour. Proof of the shortage may be found in the misplaced zeal with which departments and firms ‘poached’ each others’ supplies. The Air Ministry confessed and even boasted that it was a poacher. The Admiralty, which believed itself to be most unfairly put upon, denounced the ‘stage army of skilled men’ which, so it said, was marching about from firm to firm in search of higher earnings. Resentful departments and aggrieved employers called on the Ministry of Labour to do them right.

Poaching is only a symptom; before discussing the palliatives that might have alleviated it, there will be advantage in considering the remedies that might have made it disappear. One remedy would have been to bring about, so far as might be possible, an increase in the total supply of skilled workers. The most direct contribution of the Government towards this end would have been a rapid expansion in the numbers of men passing through its training centres This needs was more than once emphasised in War Cabinet discussion. Nevertheless, as late as April 1940, the training centres were still more than half empty and the Ministry of Labour was still regarding them as institutions for the rehabilitation of such unemployed workers as could be inveigled into them. It was not until the summer crisis had produced a new Government and a new national mood that the Ministry set itself strenuously to develop the training centres as instruments, not of a peace-time social policy, but of a war-time production policy.

It still remained true that the demand for skilled workers must be met in the main from within industry itself. Employers, labour leaders and the Government were all agreed upon the need for hastening the processes of dilution and substitution of labour, whereby existing skills could be spread more widely and new ‘semi-skills’ could be employed in mass production technique. To achieve this end, it was necessary to persuade the trade unions to accept a  relaxation of the customary practices whereby they protected the market value of the skills their members possessed. Thanks largely to the benevolent intervention of the Ministry of Labour, a Relaxation of Customs Agreement had been negotiated in August 1939 between the Amalgamated Engineering Union and the Engineering and Allied Employers’ National Federation. However, the Ministry of Labour was cautious about taking positive steps to bring into active operation this agreement and any others that might subsequently be modelled upon it. The Ministry declared itself willing to intervene if it were invited to do so; but it was unwilling to jeopardise its good relations with employers or workers by thrusting itself forward into the affairs of industry. It considered that, if any department had to thrust itself forward, it was the Ministry of Supply, which ought to take responsibility for all production problems inside factories. But the Ministry of Supply refused to take the responsibility. The consequence was that until May 1940 no government authority had been found willing to shoulder the duty of administering a policy which the War Cabinet had explicitly adopted. Yet it was a duty which some authority would have to undertake, sooner or later; for the experience of the previous war had proved that a dilution policy would not work with speed or efficiency unless it were supervised by pertinacious labour inspectors exercising right of entry into the factories.

Skilled labour needed to be redistributed, not only between the factories, but between geographical areas. Here again there were disputes between the Ministries of Labour and Supply; here again in consequence, government action was irresolute. The Ministry of Supply and the other war production departments called upon the Ministry of Labour to institute a vigorous policy of transfer, to shift skilled workers not only from factory to factory but from region to region; in short, to bring the men to the jobs. But the Ministry of Labour called upon the war production departments to bring the jobs to the men. It maintained that transfers of labour on a large scale would prove to be unnecessary if only the production departments would make a serious attempt to do two things: first—though it was rather late in the day—to locate the maximum number of new factories in areas where labour was surplus; and secondly, to make all possible use of sub-contracting and contract-spreading. The Ministry of Labour wanted the Ministry of Supply to use its Area Boards to seek out the little firms which, it believed, would be able to make available for war production not only a lot of useful plant but also a large aggregate supply of skilled labour.

In principle, there was a good deal to be said for these suggestions; but in practice there was no chance of making them effective on such a scale and at such a speed as to do away with the need for a vigorous labour transfer policy. For reasons whose explanation lies outside the scope of this book, the Ministry of Supply was slow in getting the Area Boards to work (not one of them was working effectively when France fell) and was concentrating most of its orders upon the larger firms; it had, moreover, located some of its new factories in districts where labour was scarce. But even if the Ministry of Supply, the Air Ministry and the Admiralty had all been willing to do all the things the Ministry of Labour wanted, there still would have been need for energetic redistribution of skilled labour. To consider one example: no action that the Admiralty could have taken would have altered the location of the shipyards and the manpower problems of the shipbuilding industry. This industry had been particularly hard-hit during the depression. It needed a high proportion of skilled men and under normal conditions it secured them through the apprenticeship system; but during the lean years its inflow of apprentices had dwindled. In consequence, the industry in 1939 had in its skilled labour force an exceptionally large number of very recent entrants, men in the younger age groups which, under the Schedule of Reserved Occupations, were par excellence the source of supply for the fighting services. And while it thus stood to lose too many of the skilled men already at work in the yards, the men whom it would need to put in their places—the older skilled workers who had left the shipbuilding districts during the depression and had for the most part secured remunerative employment in the building industry or elsewhere—would not be easily recoverable. The Admiralty and the shipbuilding firms hoped that the Ministry of Labour, after tracing them through the Employment Exchanges, would help to get them back by paying their travelling expenses and giving them subsistence allowances. The Ministry of Labour refused to give this help; it would do what it could by way of persuasion, but it said that the shipbuilding firms ought themselves to supply the incentives for getting the men back and carry any exceptional costs arising from the process, recouping themselves if they could from the Admiralty. Perhaps the ministry was afraid that small concessions, such as the payment of railway fares, might lead later on to large demands. If it committed itself even mildly to a government-promoted scheme of labour transfer, and the scheme broke  down, it might find itself called upon to apply compulsion. Neither the Ministry of Labour nor the War Cabinet was ready for that.

It was because private incentive and public policy were achieving too scant success in increasing the supply and improving the distribution of skilled labour that departments and firms began their competitive scramble against each other. Poaching, it was said earlier, is only a symptom of the deeper sickness of labour shortage; but perhaps it would be better, if the medical metaphor is retained, to label it a ‘complication’, and one hardly less troublesome than the original disease. Poaching is a national danger because it encourages the inflationary spiral and creates anarchical conditions in the industrial labour force. If mobility of labour is necessary in time of war, so also is stability; it is important that workers should be got into the right places but it is also important that they should thereafter stay put. In the war of 1914–18, excessive labour turnover had been if anything an even greater menace than insufficient mobility had been to industrial productivity. Departments and firms had poached on their neighbours labour supply by much-advertised enticements of higher earning, special bonuses and concessions, special amenities in the factories and any other inducements that could be thought of. This game of snatch did not always delight even the successful players, for the triumphant poacher of today was always afraid that he would tomorrow be poached upon himself. The Ministry of Munitions had attempted to cure the anarchy by its system of ‘leaving certificates’, which curtailed the freedom of workmen to sell their labour to the highest and most unscrupulous bidder; but the attempt broke down under pressure from the resentful workmen. From this unhappy experience two contradictory lessons had been deduced: poaching was so great an evil that it must be prevented: prevention was so unpopular that its cost in labour troubles might be prohibitive.

The nearer the Second World War approached, the more did the Ministry of Labour emphasise the second danger. In the middle nineteen-thirties it had seemed ready to sponsor a fairly drastic Control of Employment Bill; but the bill it brought forward in September 1939 was a much milder measure. The Minister asked Parliament to give him power to forbid employers to advertise for labour or engage it without official consent; but he explained that the power would be used only in special cases on a clear demonstration of need.Even these gentle protestations failed to placate Labour M.P.s and the trade unions—although the latter had been consulted in advance. The Control of Employment Act which finally emerged from a stormy debate contained additional clauses which prevented  the Ministry from instituting the control in any industry until it had set going a cumbrous mechanism of consultation, to be followed, in all probability, by a frustrating sequence of individual guarantees, appeals and awards of compensation.

The Ministry of Labour issued only one order under the Control of Employment Act. This order referred to certain occupations in the building industry, where the anarchic struggle for labour in the new, and very often remote aerodromes, camps and munitions factories had been recognised even before the war as an evil that would have to be dealt with. The scramble for skilled engineering labour in the munitions industries was not effectively dealt with at this time. The competitors who were coming out worst in the scramble called upon the Ministry of Labour to take action under the Control of Employment Act; but the Ministry’s answer was once again to call upon the supply departments to iron out the discrepancies in their terms of contract and to press ahead the sub-contracting, contract-spreading and all the other measures for bringing work to labour.

Underlying all these departmental hesitations was the deeply rooted fear of stirring up labour troubles of the kind that had been so dangerous during the First World War. That is why responsibility for the really urgent problems of poaching and dilution of labour transfer was  often passed from one department to another and was in the end, more often than not, refused by all. That is why the Ministry of Labour, which was more closely in touch than any other department with the temper of organised labour, so stubbornly resisted every proposal that seemed to tend even indirectly and remotely in the direction of industrial conscription. The Ministry, in its efforts to understand and to influence industrial opinion and feeling, maintained close contact with the National Joint Advisory Council set up early in the war. In this Council was enshrined the principle of consultation between Government, employers and trade unions—an excellent principle, if only the consultation had produced policies adequate to the nation’s need. Of that there were few signs prior to the critical summer of 1940.

Reflecting upon this first period of the war, the historian finds himself oppressed by a feeling of lost opportunity. The training and dilution of labour, for example: how much easier it should have been to find the men and the time for those tasks in the early months of military inaction and sluggish industrial expansion than in the hectic months after Dunkirk, when the B.E.F. had lost all its equipment in France and the R.A.F. was fighting sky battles with its aircraft straight from  the factories! Yet the tasks were shirked when they were easy and tackled after they had become hard. So it would seem—but perhaps there is something wrong with the implied definitions of difficulty and opportunity? The consciousness of a million workers still unemployed remained an incubus upon the will to undertake radical action involving co-operation between organised labour, the employers and Government. Problems that seemed easy so long as they were stated merely in material terms proved too difficult for solution when the will to attack them was still lacking. A few months later Mr. Ernest Bevin, as Minister of Labour and National Service in Mr. Churchill’s Government of national unity, had the opportunity to do things which his predecessor in the Chamberlain Government, Mr. Ernest Brown, dared not attempt—if only for fear of Mr. Ernest Bevin, the trade union leader. In that first period of the war, Government and people were out of tune with each other, the nation was divided within itself, men and women were divided within their own minds. The nation did not as yet understand its own danger and need.

To these simple reflections the historian finds himself continually returning. If he were to attempt a purely economic interpretation of British economic history in this decisive year, it would break down. By May, when the new Government took office, the graphs of material progress had already become more encouraging: this was important but it was not the most important thing. It was the lifting up of hearts among the people, the miracle of resurgent patriotism and the magic of inspired leadership that made everything different.

The Ministry of Labour now took with both hands all the specific responsibilities which hitherto it had been trying to fob off upon other departments. And on 22nd May 1940 it received, by Act of Parliament and by will of the people, the ultimate, all-embracing power of industrial conscription. The Emergency Powers Act passed on that day entrusted to the Government unrestricted power ‘for requiring persons to place themselves, their services and their property at the disposal of His Majesty’.