NOT A QUESTION OF IMPERIAL FLAG WAVING, BUT A MATTER OF THE UNITED KINGDOM’S ECONOMIC SURVIVAL: THE BRITISH LABOUR GOVERNMENT IN DISARRAY OVER THE OIL CRISIS IN IRAN: IDEOLOGY V. REALITY: 1948-1951.

NOT A QUESTION OF IMPERIAL FLAG WAVING, BUT A MATTER OF THE UNITED KINGDOM’S ECONOMIC SURVIVAL: THE BRITISH LABOUR GOVERNMENT IN DISARRAY OVER THE OIL CRISIS IN IRAN: IDEOLOGY V. REALITY: 1948-1951.

When Attlee used the word ‘humility’ he no doubt had in mind the British public and the impending general election. Financially, the British Government was under constraint to act generously, there was also too much pressure and goings on in the press and Parliament to act rationally. The Iranian oil crisis became a very serious issue. In the eyes of the British public, ‘a British possession had been stolen.’¹ In the October 1951 General Election the Conservative Party came to power, headed by Churchill. The Tories blamed the Labour Government for being shamefully weak in dealing with the Iranians. ‘If a strong Conservative Government had been in power the Persian crisis would never arisen in the way it did,’² said Churchill. ‘No intelligent government would have got into the position in which the government got itself,’³ added Anthony Eden. The New Statesman retorted:

 

If Mr. Churchill had been in power, and as bad as his word, we should have wasted our resources, our manpower and our credit on a war [in India and Asia generally] even more terrible, wrong and useless than the French struggle in Vietnam. India, like Vietnam, would now be in the hands of our bitter enemies; Indian nationalism, like that of Vietnam, would by now have turned into Communism.4

 

‘Whose finger is on the trigger?5 responded the Daily Mirror. The Labour manifesto for the 1951 election said, ‘the Tory still thinks in terms of Victorian Imperialism.’6 The Labour leader, Clement Attlee, had already been, even before the Second World War, speaking of Labour’s commitment to the ‘abandonment of imperialism’.

In 1945 the Labour Government inherited a huge and complex empire. It appeared that the British Empire had yet again emerged intact from a fundamental challenge, but in real terms this was not the case. The global war’s impact on Britain was massive debt, mainly to the United States. Additionally, estimates have shown that 10% of Britain’s pre-war wealth or no less than one-quarter if disinvestments were also included, had been lost. Most importantly, Britain was able to pay for only a fraction of the imports she needed both for current survival and for the reconstruction of her economic well being.

Through Lend-Lease and her ability to run up enormous debts to members of the sterling area it had been possible during the war to divert a large proportion of her former export industries to war production, so that at the of 1944 he exports stood at only about one-third of their pre-war volume.7

As for import needs, they remained the same as in 1938, in addition to the fact that terms of trade had also moved against Britain:

Invisible earnings had fallen through the loss of one-quarter of the merchant marine, and liquidation of over £1 billion in foreign investments. Britain’s external liabilities were nearing £3.5 billion by the middle of 1945 – a seven-fold increase – yet her reserves totalled less than £500 million.8

 

      1.  4 .B. LAPPING, op. cit., p. 264.
      2.  L.P. ELWELL-SUTTON, Persian Oil: A Study in Power Politics, (London: Lawrence and Wishart Ltd., 1955), p. 258.
      3. Ibid.
      4.  The New Statesman, 13th October 1951, in W.R LOUIS, The British Empire in the Middle East, 1945-1951, (Oxford: Oxford University Press, p. 738.
      5.  The Daily Mirror, (no date given), in ibid.
      6.  Ibid.
      7.  C.J. BARTLETT, A History of Post-War Britain, 1945-1974, (London: Longman, 1977) p. 24.
      8.  Ibid.

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