Dalton, (Edward) Hugh Neale
, Baron Dalton (18871962), politician
, was born at The Gnoll, near Neath, Glamorgan, on 26 August 1887, the eldest child of and his wife, Catherine Alicia Evan-Thomas (18631944). The descendant of Welsh landowners on his mother's side and Anglican clergy on his father's, Hugh Dalton was not obviously destined for a career as a socialist politician. Yet he became one of the best known Labour leaders of the inter-war and early post-Second World War period, and one of the most influential intellectuals in politics of his generation.
Upbringing, Cambridge friendships, and Fabianism
Key to Dalton's early development was a childhood in The Cloisters at Windsor Castle, where his father was a member of the St George's Chapel chapter, having spent much of his adult life as tutor and companion to the two sons of the prince of Wales, Eddie and George (later George V). Hugh's adult radicalism can be seen, at least in part, as a rebellion against a childhood environment of aristocratic snobbery and monarchical opulence. His education was conventional. In 1895 Hugh entered St George's choir school at Windsor, which his father had helped to set up. In 1898 he was sent to Summer Fields, a boarding preparatory school in Oxford and crammer for the most famous public schools, and thence, in 1901, to Luxmoore's House at Eton College, where (by his own description) he was rather bored and indifferent and acquired the political views of a Joe Chamberlainite, a Tory Democrat, a self-confessed Imperialist (Pimlott, 29). In 1906 he entered King's College, Cambridge, with a closed exhibition, to read mathematics. Here he became a close friend of Rupert Brooke, who started at King's the same term. Both were part of a glittering circle of undergraduates and younger dons that included Arthur Schloss (later Arthur Waley, the Sinologist), Ben Keeling, Francis Birrell, Gerald Shove, Maynard Keynes, and Goldsworthy Lowes Dickinson.
Dalton's association with Brooke coloured the rest of his life. No Cambridge friendship of mine meant more to me than this, Dalton wrote later, and the radiance of his memory still lights my path (Call Back Yesterday
, 38). Brooke died in 1915. Dalton felt his loss and that of other Cambridge contemporaries during the First World War very deeply. His political commitment to preventing war, and his generous habit of befriending much younger men and giving them encouragement, were consciously linked to memories of this phase in his life. Meanwhile he had been attracted to socialism as an undergraduate. Following the election of a reforming Liberal administration early in 1906, advanced political theories were in the air. Infected by the mood, Dalton exchanged Chamberlain for Keir Hardie and Sidney Webb: at the end of his first term, he and Brooke joined the Fabian Society, an intellectual discussion and pressure group set up in 1884 that had already profoundly influenced progressive opinion. From the start Dalton took the society's activities and preoccupations seriously, acquiring a Fabian outlook that characterized his future career. A keen participant in the society's activities, he quickly came to the attention of Beatrice Webb, who perceptively described the 21-year-old undergraduate in 1908 as one of the most astute and thoughtful of our younger membersby nature an ecclesiastica sort of lay Jesuitpreparing for political life (Pimlott, 50).
Marriage, war service, and academic economics
At Cambridge Dalton abandoned mathematics, and in 1910 he was awarded an upper second-class degree in the new discipline of economics. Although he moved to London the same autumn to read for the bar at the Middle Temple, he had little interest in the law, and in the following year began work on a doctorate, supervised by Professor Edwin Cannan at the London School of Economics (LSE), on the inequality of incomes. In May 1914 he was called to the bar. Later the same month he married Ruth Fox (18901966) [see
], a fellow Fabian and former student at the LSE. When the First World War broke out in August, he joined up and was placed in the Army Service Corps. Sent to France, he witnessedat a safe distancethe battle of the Somme. At his own request he transferred to the Royal Artillery, and in 1917 he was sent to the Italian front, where he commanded a 6 inch howitzer, and was decorated by the Italian government (medaglio al valore militare) for his part in the retreat following the battle of Caporetto. His experiences during the rapid withdrawal to the River Tagliamento provided material for his first book, With British Guns in Italy
, published in 1919.
Dalton's experience of war spurred him politically. By the time of his return to England following the armistice, he had a firm ambition to enter parliament as a Labour MP. Other jobs and activities were seen as stepping-stones. It took six years to achieve his aim. Meanwhile he built a career as an academic economist. After a brief experience working at the Ministry of Labour and as a teaching assistant, he was appointed Sir Ernest Cassel reader in economics at the LSE in 1920. The same year he published Some Aspects of the Inequality of Incomes in Modern Communities
, based on his doctoral thesis. This was a theoretical work with a practical purpose, and developed the ideas of A. C. Pigou and Edwin Cannan, offering an intellectual justification for economic socialism. The case against large inequalities of income, he argued, is that the less urgent needs of the rich are satisfied, while the more urgent needs of the poor are left unsatisfied. Dalton wrote other books on economics, including a celebrated textbook, Principles of Public Finance
(1922), which was translated into many languages and continued to be prescribed reading for economics students until the 1960s. He also published a polemical call for a wealth tax, The Capital Levy Explained
However, the bases of Dalton's economic thinking and of his political outlook on economic questions are to be found in Inequality of Incomes
, a book that has had a wide influence and has been described by the economist Amartya Sen as a classic contribution (Pimlott, 138). It was his first, and effectively his last, such contribution. Dalton scarcely remained at the forefront of his discipline, and a personal coolness between him and his friend and former tutor, Maynard Keynes, reduced the interest he might have shown in new doctrines. After the early 1920s, and especially after he entered parliament, Dalton regarded academic economics as a second string. Indeed, his self-image was that of a man of action: he tended to pour scorn on other academic socialists who wrote and campaigned from the security of the ivory tower. Instead of cultivating economists, he sought the attention of leading figures in the Labour worldespecially Arthur Hendersonand he made himself available to the emerging Labour Party as a policy expert.
Although Labour increased its parliamentary representation rapidly in the early 1920s, Dalton at first found it hard to get a seat. Public frustration was compounded by private tragedy. In 1922 the Daltons' only child, Helen, died at the age of four. The impact of this catastrophe never left them. In the short run it seems to have encouraged Hugh to pursue his career with heightened ferocity. In 1924, following four unsuccessful contests in different constituencies, he was elected MP for Camberwell (Peckham division). However, a dispute with the local party led him to switch seats during his first parliamentary term. After a period of uncertainty he was adopted as candidate for the Bishop Auckland division, a mining constituency in co. Durham, which he represented from 1929 to 1931 and from 1935 to 1959.
In parliament, as one of the few Labour MPs with a solid professional or academic background, Dalton quickly made his mark, building an almost unassailable position as a member of the Labour establishment. In 1925 he was elected to Labour's parliamentary executive (shadow cabinet), a position he retained until his voluntary retirement from it thirty years later. The following year trade union backing ensured his election to the Labour Party national executive committee (NEC). Although he was defeated in the NEC election the following year, he regained his place the year after. A busy political life did not interrupt his writing. Increasingly his interests had moved from economics to foreign policy. In 1928 he published another book, Towards the Peace of Nations
. In this he advocated a strong League of Nations policy, andin notable contrast to other radical writers on war and peace at the timecalled for a league equipped with the economic and military weapons necessary to police the world and punish transgressors. Following the election of a second minority Labour government in 1929, Dalton was given the post of under-secretary at the Foreign Office. The job appealed to him, even if his bombastic style did not entirely appeal to Foreign Office officials, who found him difficult to handle. Nevertheless, as deputy to the foreign secretary, Arthur Henderson, he played an important part in negotiations aimed at providing an international disarmament treaty.
Labour's programme: practical socialism
The episode was short-lived: when the government collapsed in 1931 and Ramsay MacDonald formed the National Government, Dalton forfeited his office and joined most of his Labour colleagues on the opposition benches. At first his position within the Labour Party was strengthened by defections which made him one of the leading figures on the NEC. The moment did not last. In the general election of October 1931 he lost his seat, and for a time seemed politically marginalized. Fortunately he was able to return to a full-time post at the LSE. There followed a period of reflection and travel. Since, however, most of the other Labour leaders had also been defeated, he was not out of the limelight for long. His position on the NEC, together with his academic income and Ruth's private means, provided a solid basewhich many other former ministers lackedfor a political recovery. There were obstacles. The much-reduced Parliamentary Labour Party, under the leadership of George Lansbury, had responded to the 1931 electoral disaster by moving sharply to the left. Dalton had to deal with a party in the Commons that supported near-pacifism in foreign affairs, and advocated the socialization of the banks at home. Over the next few years Dalton's mission was to restore reason to Labour's counsels. He became the party's most articulate and persuasive voice in favour of policies that took account of the world as it really was, and which sought to secure Labour's re-election.
In 1935 Dalton published his own bold assessment of a future Labour government's policy options, Practical Socialism for Britain
. If Inequality of Incomes
was intellectually Dalton's most ambitious work, Practical Socialism
later described by Roy Jenkins as the first swallow of the post-1935 summer of socialist reformismwas politically the most influential. In it Dalton revived and updated nuts-and-bolts Fabianism, a doctrine that in the 1920s had sunk in a sea of sentimental rhetoric, and in the early 1930s had been dismissed by impatient communists and fellow-travellers. Dalton's message was defiantly pragmatic: if our concern is with practical politics, the author declared, we do better to decide the direction of advance than to debate the detail of Utopia (Pimlott, 217). The essence of practical politics was practical planning. Much of the book was devoted to this topic, linking Labour Party ideas to those of non-Labour planning enthusiasts, and providing what eventually became a virtual blueprint for the first post-war Labour administration. Dalton did not write the book in a vacuum: many of the key ideas came out of discussions with a group of younger political aspirants with economic interests, including Douglas Jay, Hugh Gaitskell, and Evan Durbin. Over the next few years the same group refined Dalton's political approach, and married it to a Keynesian economic one.
Rejection of appeasement and Churchill's coalition
Domestic policy was one of Dalton's main concerns in the 1930s. The other was the threat of continental fascism. A visit to Germany in April 1933 brought home to him the danger of Nazism. Germany is horrible, he wrote privately on his return, at a time when Labour's official policy favoured unilateral disarmament. A European war must be counted now among the probabilities of the next ten years (Pimlott, 227). After regaining his Bishop Auckland seat in the 1935 election, he was appointed Labour foreign affairs spokesman, and set about changing the party's international policy. In 19367 he served as chairman of the Labour NEC, and made maximum possible use of a hitherto largely titular office. By the end of 1937, with help from sympathetic trade union leaders, Dalton had moved the party from semi-pacifism to a policy of armed deterrence and rejection of appeasement. This change had an important effect in the months before the declaration of war in September 1939, making it possible for Labourthough still in oppositionto stiffen the dithering National Government in its post-Munich resolve to stand up to Hitler. It also facilitated the cross-party alliance that succeeded in bringing down Neville Chamberlain in May 1940.
Dalton was still writing. During the so-called phoney war, he published Hitler's War: before and after
, a short tract in which he looked ahead to the end of hostilities, once again stressing the need for a strong system of collective security, and advocating a post-war federal union of European states, including post-Nazi Germany. In the meantime he urged a warmonger policy, and favoured taking the war onto the enemy's home ground at the earliest possible moment. When Winston Churchill became prime minister at the head of a wide-ranging war coalition, Dalton was appointed minister of economic warfare, with responsibility for depriving the enemy of supplies. Churchill also placed him in command of the Special Operations Executive (SOE)a secret organization charged with carrying out clandestine warfare.
At first, the importance of SOE seemed small. When Churchill asked Dalton in July 1940 to set Europe ablaze with anti-German partisan and terrorist activity (Pimlott, 298), the words sounded almost ironic, and may have been intended to be so. With the threat of Nazi invasion of Britain imminent, Europe did not seem the most likely place for a conflagration. However, Dalton threw himself into the secret aspect of his new duties with characteristic energy. With the diplomatist Gladwyn Jebb as his chief executive officer, Dr Dynamoas he was nicknamedsucceeded in turning SOE into the co-ordinator of resistance activity across the occupied territories of the continent. There is still disagreement over the precise extent of SOE's impact. During Dalton's period as responsible minister, however, it could claim several successful operations. Thus it seems to have played a key part in engineering a coup d'état
in Yugoslavia, and it also helped to bring about a temporary blocking of the Danube.
In February 1942, as part of a ministerial reshuffle, Dalton was shifted from the Ministry of Economic Warfare to the Board of Trade, where he was placed in charge of a wide empire that included consumer rationing and other wartime controls, with an increasing responsibilityas the end of the war approachedfor post-war planning and reconstruction. A major legislative landmark was Dalton's 1945 Distribution of Industry Act
, inspired by the minister's own experience of poverty in his north-east constituency. This particular measure set the pattern for subsequent post-war regional policies, aimed at mopping up pockets of unemployment.
Socialist chancellor of the exchequer
Like most of his contemporaries Dalton did not expect Labour to win the July 1945 general election. Howeverjust in case it didhe made a point of telling Clement Attlee that he would like to be foreign secretary in any possible Labour administration. Attlee did not commit himself. However, following Labour's landslide victory the incoming prime minister told his colleague that he would almost certainly get the Foreign Office, and even encouraged him to pack his bags for the journey to Potsdam. Dalton's excitement at this prospect was short-lived. Within hours Attleepossibly influenced by an audience with the king, who urged him to think againhad changed his mind, and appointed Ernest Bevin foreign secretary, sending Dalton to the Treasury instead. When told that I was not to be foreign secretary, but chancellor of the exchequer, I was not unhappy, or disappointed, for more than half an hour, Dalton later recalled. I swallowed my fate in one gulp (High Tide
, 4). The decision had profound implications, both for Britain and for the world. It also determined what was to be the climaxand crisisof Dalton's career.
Dalton's period at the Treasury was greatly affected, for good and ill, by his own background as an expert in economics and public finance. The new chancellor brought enthusiasm, socialist commitment, and expert knowledge to his post, which had been reduced in authority by the heavy wartime emphasis on physical planning, but which now rapidly acquired a vital strategic importance, partly because of the political status of its holder. Over the next couple of years Dalton was able to play a vital role as one of the government's big five, together with Attlee, Bevin, Herbert Morrison (lord president), and Sir Stafford Cripps (Board of Trade), who provided a directive inner core to the administration during its most energetic and radical phase.
Later Dalton wrote that he faced six urgent problems at the Treasury when he arrived there: the re-conversion of industry, manpower, and expenditure to peaceful purposes; a smooth transition from war to peace, avoiding unemployment, industrial unrest, and inflation; honouring Labour's pledge to extend the social services; altering taxation so as to cut the total, while reducing the gap between rich and poor; the carrying out of nationalization pledges; and, finally, finding a way to pay for the imports needed to maintain employment and prevent starvation. Dalton's first challenge was to tackle the consequences of the announcement in Washington of an abrupt end to the wartime lend-lease arrangement with the United States, on which Britain had depended heavily. Dalton sent his former tutor, Maynard (now Lord) Keynes, to the American capital to negotiate a large North American loan. The success of these negotiations bought time for domestic reform, though at high risk. At home the new chancellor set the pace for the new administration, dominating parliament with his oratory and intellectual power. He bestrode the world, Lord Callaghan later recalled. At the time Michael Footwho became a fierce left-wing criticwrote that the chancellor's stature was increased by every speech he made (Pimlott, 441). This was Dalton's zenith. Physically he was imposing. He curves his towering, six-foot-three inch frame far over the Dispatch Box, one newspaper reported in March 1947, screws his bald domed head sideways and upwards and, from time to time, rolls his pale blue eyes so that the whites blaze and flash with an almost Mephistophelian effect (ibid., 442).
Dalton introduced four budgetsin October 1945, April 1946, April 1947, and November 1947. The measures these contained justify describing him as the most socialistor at any rate, the most levellingchancellor ever to have held office. In some ways he was old-fashioned. In particular he did not follow the new practice of relating budget proposals to a detailed survey of the whole economy. His budgetary approach was described by observers as Gladstonian in style. Though he accepted the principle that fiscal policy could be used as a long-run full-employment weapon, he can be described as Keynesian only in a broad sense. At the same time he did not forget his own sermons in Inequality of Incomes
. The redistributive aim of his budgets was to some extent disguised because of the need to reduce the total of tax compared with high wartime levels. Nevertheless tax cuts in his budgets were heavily in favour of the worst off. As his future protégé Anthony Crosland put it later, Dalton maintained, and even extended, the great advance towards income-equality that was made during the war (Pimlott, 454).
One of Dalton's most creative schemes was the setting up of a special National Land Fund, to be used to reimburse the Inland Revenue for land offered by executors to meet the obligations of deceased owners. As a result of this measure many important houses and lands passed to the National Trust. Dalton also provided money for development areas. In the City he became the most detested chancellor since Lloyd George, especially when he spoketoo gleefullyof fulfilling the pledge to banish unemployment, and of his own determination to find, with a song in my heart, all the money necessary for sound constructive schemes (Pimlott, 457). The phrase with a song in my heart became a trademark, and when the tide turned against him it was used by cartoonists and tory enemies as evidence of his devil-may-care treatment of the nation's finances.
Financial crisis and resignation
It took time, however, for the hostility to crystallize. Dalton's first major enactment as chancellor, nationalizing the Bank of England, aroused remarkably little opposition in the financial world, partly because the act did not in practice provide the degree of control over other banks that had been anticipated in Labour's pre-war proposals. More controversial (though not initially) were Dalton's cheap money policies, designed to speed reconstruction through increased local authority borrowing. At first cheap money seemed to work. However, the floating in January 1947 of a new stock, notoriously known as Daltons, turned the tide against him. The undated stock quickly plummeted, taking with it much of the chancellor's reputation. Faced with what has been described as a gigantic bear raid of institutional sellers, Dalton's efforts to find support from public funds failed, and many purchasers suffered severe losses. This set-back was accompanied by a wave of criticism across a wider front, just as the government faced serious difficulties as a result of a fuel shortage triggered by the coldest winter in living memory. Suddenly annus mirabilis had become annus horrendus, and Dalton faced a major financial crisis. During the middle months of 1947 a dollar drain became a torrent, forcing the suspension, in August 1947, of the free convertibility of dollars and pounds which had been a key aspect of the North American loan agreement. For the administration this was a turning point, and Dalton was widely blamed.
Worse was to come. On 12 November 1947 the chancellor opened his fourth budget, seen as an emergency measure against inflation. Ironically, this final Dalton budget has come to be regarded as a pioneering initiative, which for the first time fully incorporated Keynesian principles, providing a model for the subsequent austerity budgets of Sir Stafford Cripps. As it turned out, Dalton was not at the Treasury to see the effects of the new approach. Walking through the lobby on his way to deliver the budget speech, he was approached by a reporter on the London evening Star
who stopped him and asked a question. The chancellor replied precisely, giving details of the main tax changes he was about to announce. The reporter immediately telephoned his editor, and copies of the Star
containing the information in the stop-press section were on sale before the chancellor had reached the relevant part of his speech. There was no movement on the stock exchange attributable to this leak, which the opposition accepted was no more than a regrettable accident. However, Dalton's position had been weakened over preceding months. Some colleagues had come to regard him as a liability, and he had unwisely become involved in a Cripps-led manoeuvre aimed at persuading the prime minister to stand down. Dalton's offer of resignation was accepted, and his career as a front-line minister came to an end. Cripps became chancellor, and the big five became the big four.
From Dalton's own point of view, the disaster was doubly unlucky. Not only were the circumstances of his resignation humiliating in themselves. The timingin the aftermath of a financial collapse, when his own reputation was at its lowest pointmeant that he got little credit when the economy began to show signs of recovery a few months later. Instead, the myth that the country had been saved by an ascetic chancellor taking over from a profligate one became firmly established.
Brief return to office, retirement, and death
Nevertheless, there was a comeback of sorts. In June 1948 Attlee brought the former chancellor back into the cabinet as chancellor of the duchy of Lancaster and effectively minister without portfolio. In November Dalton became head of the British delegation to the Committee of Western European Powers, a new body charged with looking at ways of increasing European unity. Negotiations led eventually to the Statute of the Council of Europe
, signed in London in May 1949, following the acceptance of Dalton's own proposal that the new European assembly should be established in Strasbourg, as a symbol of Franco-German amity. After the general election of 1950 Dalton was at first made minister of town and country planning. In February 1951 his responsibilities were extended to include housing, and he became minister of local government and planning. With the retirement of Sir Stafford Cripps through ill health and the death of Bevin, Dalton's star seemed once more to be risingespecially as the new chancellor of the exchequer, Hugh Gaitskell, was a personal friend and protégé. Labour's election defeat at the end of the year, however, ended Dalton's ministerial career, and in 1952 he lost his seat on Labour's national executive.
After the 1955 election Dalton retired from the shadow cabinet and in 1959 he stood down as an MP. In January 1960 he accepted a life peerage. Meanwhile he had caused a stir with the publication of the first two volumes of his autobiography, Call Back Yesterday
(1953) and The Fateful Years
(1957), based on private diaries, which set a new fashion for confessional memoirs. A third volume, High Tide and After
, was published early in February 1962. A week later, on 13 February, Lord Dalton died at St Pancras Hospital in London. His wife survived him by four years. Two volumes of his diaries have been published posthumously (The Second World War Diary
, 1986, and The Political Diary
Hugh Dalton's legacy was diffuse and controversial. Though he had devoted friends, he made many enemies, often in his own party. Renowned for his booming voice and mischievous enjoyment of gossip, he was often seen as an arch-conspirator who (as Harold Wilson once put it) was apt to meet himself coming back. There were other insults: tories called him a class traitor, left-wingers a bully. Critically, his platform style, though powerful, could seem contrived, and did not convey the moral authority and sincerity of purpose that other, equally ambitious, politicians achieved. At times he did not seem to take himself entirely seriously, and even caricatured his own faults and eccentricities. Partly for these reasons, he did not acquire a position in the socialist pantheon. Nevertheless his influence on British political history and Labour Party ideas bears comparison with that of any other Labour politician who did not become prime minister. As an intellectual he was important in developing Fabian thought, and in helping to give it a hard economic edge. As a politician he was both a powerful and determined advocate and a back-room expert, who was personally responsible for many of the key Labour Party documents of the 1930s and war period, setting the scene for the post-war Attlee government. As chancellor of the exchequer his policies helped to facilitate an ambitious domestic reform programme, in the most adverse conditions. Meanwhile, he talent-spotted and nurtured several generations of young political aspirants. The grouping later known as the Gaitskellites emerged from the circle of his younger friends. In addition to Hugh Gaitskell himself, Anthony Crosland, Roy Jenkins, Denis Healey, George Brown, and James Callaghan were among those who learned from him and benefited from his practical help.
Dalton's political beliefs, rooted in early twentieth-century socialist thought and the ethical philosophy of G. E. Moore, were in many ways typical of his generation of left-of-centre intellectuals. He firmly believed in the state as the instrument of social betterment. He also believed in planning as a means to achieve greater economic equality. Yet he was not a doctrinaire. Unlike some contemporaries he was never tempted by the Marxist certainties in vogue in the 1930s; and he was slow to accept the Keynesian ideas which his own group of friends enthusiastically (and sometimes uncritically) endorsed. Some of his opinions were maverick. Though an early advocate of versions of European federalism, he had an emotional dislike of Germans, whom he blamedsomewhat indiscriminatelyfor the human tragedy of two world wars. On the other hand, he was one of the few British politicians who early on recognized the danger posed by the Nazi dictatorship. More than many political leaders, he was consistent in his thinking. More than most, he took a close, professional interest both in political ideas and in the details of the policies he supported. A member of the second generation of Labour leaders, he played an important part in giving his party the intellectual confidence not only to make it electable, but also to make it effective.