However, the NHS had many problems during its creation, the doctors and members of the British Medical Association had reservations about the new legislation. They feared that they would have their freedom removed from them and feared a major decrease in their annual salary. It took a great deal of talks between the BMA and the minister of healthcare Aneurin Bevan to come to a compromise. Bevan allowed doctors to continue with their own private practices whilst allocating private wards in hospitals their exclusive patients. This is seen as a criticism of the Labour party, they had the chance to remove some the class division that existed in 1950’s Britain, this damaged the parties’ idea that it supported the working classes and wanted equality for all. This view is shared by D. Coates, he states “ qualitative social transformation had not come – nor was it any nearer for the six years in office.” Coates also makes reference to the lack of social reform within schools, the Labour party had their chance to rule out private schools to create equality amongst children and throughout education, yet Labour did not put any pressure on to the private schools and universities but instead allowed them to flourish.
The NHS also cost much more than Bevan and Atlee had imagined, with growing economic debt to the U.S. the idealistic image of the NHS began to fade. Government spending was at its maximum with the final blow coming when war broke out in Korea. Britain was dependent upon loans from the U.S. during this period of financial hardship, this lead to the United States having a large proportion of control within Britain. On the 25th June 1950 the U.S. army asked for the British army to support their troops in the Korean War. The cost of war had major financial implications in Britain and lead to severe cuts within the NHS. Prescription charges had to be introduced to help reduce government spending within Britain. The NHS was no longer the beacon of labours’ New Jerusalem.
Post war Britain was heavily burdened with economic problems, during the war Britain had taken out heavy loans from countries, and now owed billions, the majority of Britain’s loans came from America. President Truman quickly ended the loans to Britain after the war had finished and started to collected the $3.5 billion that Britain owed them. This left Atlee’s New Jerusalem looking very unlikely, with the majority of money they would need going to finance their debts overbroad. Atlee sent economist John Maynard Keynes to the Federal Reserve in America to obtain either a cash gift or a interest free loan from them. After vigorous debates and 3 months of hard work Keynes left America with a loan of $4 billion, however with high interest. Keynes stated that the loan was only just ½ the amount that Britain needed vitally to rebuild post war Britain. It took until December 2006 for Britain to finally pay of their loan to America. This left America with a large amount of control with the parliamentary changes within Britain. Through this period of want, Britain found it very difficult to pay its debts to America. The majority of British goods were exported abroad and sold for a cheaper price leading to less money coming into the country. This lack of financial control lead to a period of austerity within Britain, families didn’t leave rationing until the mid 50’s with new items being rationed that had been freely available during the war such as bread. This period of austerity lead to a growing rebellion within Britain. Substitute foods such as horsemeat, whale , reindeer and snoek were introduced with a highly unsuccessful reaction by the public. People within Britain began to lose faith with Atlee, they were promised a land where everybody no matter what their social standing would have equal opportunities. During this time there were major cuts into government spending, with new taxes introduced and added to people’s salaries to help increase the money going into the government’s budget. It wasn’t until Britain threatened to pull its troops out of Greece and Turkey that the U.S. offered to help Britain with its financial difficulties through the European Recovery Plan otherwise known as the Marshall Plan. The Marshall Plan saved Britain from famine and economic disaster and enabled Atlee to create the NHS.
One of the major criticisms of the Labour government is that they spent the vast majority of their loans on the Welfare State and not enough on new industry in Britain which may have re-started the cycle of prosperity bringing the country more money and making Britain less reliant on the United States for help. If they had stabilised the economy at the end of the war before building their post war Britain perhaps they wouldn’t have faced as big economic problems later on during their stay in power.
Labour had several other major successes with their creation of the welfare state whilst they were in power, during the period 1948 – 1951 a total of 200,000 new house were built per annum, this is the highest recorded level of house built by any government still to this date. However, it still wasn’t enough houses to deal with the demand, people became rebellious and began to seize shelter in abandoned homes. The Great Squatting Revolt of 1946, saw roughly 1000 people converge on Kensington Street empty properties right down to Buckingham Palace were broken into and taken over. This shows the desperation of the people, and suggests that possibly the Labour party didn’t have their priorities straight.
With the ever growing burden of the economic problems the Labour party soon realised that they could no longer support the empire. It was becoming a universal fact the Britain was no longer the great world power that it had once been, so on the 15th August 1947 India, one of the first British colonies were given independence. However, this didn’t run as smoothly as the British government had hoped, divisions across India arised due to religion and culture and soon civil wars broke out, there is no official death count for the murders in India at the time but it is thought to be well over 1 million. The government passed the British Nationality Act which gave 800 million people the right to live in the Britain as a British citizen. This lead to a mass wave of immigration with people coming from all over including countries such as India and Africa. This change was one of the key steps in creating the culturally rich country that we live in today.
Overall, while the Labour party had some difficulties whilst in power they did succeed in creating the building blocks for the Britain we live in today. If it wasn’t for the work of Atlee and Bevan we may never have made such progress as we did. The major problem with the Labour party was the time that it was in power, there was also going to be massive economic debts to pay after war and the cost of rebuilding Britain after the war was inevitably going to costly. If the Labour party had spent their money on less economically demanding projects they may have had a better run in power, and perhaps been voted in again when they could have implemented the more costly projects such as the NHS. Other historians such as Hennessy also agree that they “laid the foundations for what is great about post-war Britain.”