With a drained economy, massive foreign debt, decimated industries and ruined cities, Britain was in a state of chaos. Thousands of demobbed servicemen flocked back from war to find one-third of all housing had been destroyed.
Meanwhile the massive programme of social reform was set into place. The birth of the National Health Service required the skill of Health Minister Nye Bevan and the determination of the Party to overcome the British Medical Association's fears of professional downgrading. The NHS was seen as the cornerstone of the new Socialist society. Equality of medical care had never been tried in Britain before; although a good example existed in New Zealand from the early years of the century.
After a compromise allowing doctors to take private patients as well as NHS patients, in 1946 the NHS began to treat patients. It was immediately confronted by massive demand and spiralling costs - but was nevertheless judged a massive success in providing healthcare "available to rich and poor alike in accordance with medical need and by no other criteria."(from In Place of Fear, 1952)
The Beveridge Scheme for social insurance was implemented along with family allowances and workers' injury compensation. The school-leaving age was raised to 15, fees were abolished in state schools and universities were expanded. Full employment was maintained throughout, with the result of a million new homes being built.
Labour set about dismantling the Empire with some relish, replacing it with a Commonwealth of free and independent states. India, secured by Nehru and Gandhi, was obviously the major convert to democracy, but Burma and Ceylon were also historically and geographically important.
In the first months of the peace following the Second World War, Britain was to come into conflict with Stalin's interests in a variety of areas and regions; firstly Persia and Greece, then Poland and Germany. Unsurprisingly, this led arch-pragmatist Ernest Bevin to adopt an Atlanticist approach, and an attitude increasingly aware of the danger of Stalin's communism.
The 'inner cabinet' of Attlee, Bevin and Morrison decided that Britain also needed the atomic bomb, and proceeded to order its atmospheric testing upon ancient Aboriginal territory in the Australian desert: with the residents only a few miles away. In Palestine, British attempts at diplomacy led to violent conflict.
Coming soon after coal nationalisation, the harsh winter of 1947 exacerbated food and fuel shortages, leading to high emigration and 'brain drain' to the USA and Australasia. The wartime controls over industry remained in place, with rationing even extended to include bread. Hugh Dalton exhorted all effort into exporting as many goods as possible. However, the 1947 crisis diminished the government, as previous planning arrangements, which had been thought to be foolproof, showed deficiencies and miscalculations. Now the USA had explicitly stepped in with aid to Britain, reforming socialist zeal became rather more subdued.
The stress upon nationalisation as the route to socialist common ownership had become slightly overstated; this was understandable as it had been proved to work, in the short-term at least. The Bank of England was the first enterprise to be taken over, followed by railways, canals, road haulage, airlines, cable and wireless companies, power suppliers and coalmines. At the time there seemed little alternative to this.
However, it could be argued that the wrong managers and directors were often chosen, few with practical industrial experience, whilst lines of accountability to customers and taxpayers were often far from clear. In an industry such as steel, the existing private managers were actually highly efficient and it is doubtful the change to public ownership in this case was constructive.
This approach owed quite a lot to Herbert Morrison's brand of top-down organisation, and would store potential problems for the future. More than ever, though, this was a time when politics was felt to be vitally important for everyone, as people were shown for the first time what practical benefits socialism could bring. This was only with the benefit of American financial assistance, which seems contradictory at first; yet at this time the attraction of Soviet communism was still far from dead. With a Cold War freezing up Europe, a simplistic problem for Labour was how to pick its way between the two.
Despite good success in the export drive and a government with a generally exemplary record, Britain in 1950 was still an austere, drab and grey place. The Conservatives acknowledged the success of many of the social and economic reforms but promised to end rationing quicker than Labour could. Despite winning more than 13 million votes, Attlee gained only a six-seat majority after an election in the winter of 1950. The new parliament saw Labour's problems mounting as some of the contradictions of Labour's post-war position became clearer.
The onset of the Korean War precipitated the crisis that brought a premature end to this great reforming government. Already weakened by the death of Ernest Bevin and Chancellor Stafford Cripps' illness, the Party descended into quarrelling. Hugh Gaitskell, Cripps' right-wing replacement as Chancellor, felt obliged by the Americans to embark upon a re-armament programme. Cuts had to be made elsewhere.
His decision to cut health spending and introduce charges for spectacles and dentures was derided by the Left, led by Bevan. The Cabinet saw Bevan and Harold Wilson resign as Attlee struggled to retain control of a situation that seemed to overcome his aloof, consensual leadership style.
The October 1951 election saw a split Labour Party attain nearly 14 million votes - an all-time record for any party. The Tories won 321 seats to Labour's 295. A new and talented left had emerged, centred around Bevan, including Crossman, Wilson and Castle. This posed a threat to the right wing union hierarchy which wielded the block votes at conference. The union bosses were to turn to the scholarly Hugh Gaitskell as a generally healthy Labour Party turned inwards.