Problems of Post-war Reconstruction, 1945–6

Abstract

Douglas Jay, the Prime Minister’s Economic Adviser from 1945 to 1946, has described in his memoirs his impression of the nature of the Prime Minister’s problems in his first months of office: so far from there being a ‘great man, sitting down in his office, pulling great levers, issuing edicts and shaping events’, Attlee was

hemmed in by relentless economic or physical forces, and faced with problems which had to be solved, but which could not be solved…The position of the PM [was] more that of a cornered animal, or a climber on a rock face unable to go up or down, than that of a general ordering his troops wherever he wished around the landscape.¹

Jay picks out three major economic strains that beset No. 10 in these early months: the dollar crisis, precipitated by the rapid termination of Lend-Lease in August 1945, the world food shortage which followed the war and the fuel shortage in Great Britain. The fuel shortage did not become acute until early 1947 and so this chapter discusses the financial and food problems of 1945–6, and also the pressures for early demobilisation, which had an important indirect bearing on the dollar crisis.