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Sir  (Howard) Kingsley Wood (1881–1943), by Walter Stoneman, c.1941Sir (Howard) Kingsley Wood (1881–1943), by Walter Stoneman, c.1941
Wood, Sir (Howard) Kingsley (1881–1943), politician, was born on 19 August 1881 in West Sculcoates, Hull, the eldest of the three children of the Revd Arthur Wood, a Wesleyan Methodist minister, and his wife, Harriett Siddons Howard (who was related to Sarah Siddons). He was educated at the Central Foundation Boys' School, Cowper Street, London, a Methodist institution, near Wesley's Chapel in the City Road, Finsbury, where his father was minister for nine years. Wood himself later became a prominent Methodist and served for many years as treasurer at the chapel.

Solicitor, Conservative MP, and the Ministry of Health

Wood was articled to a solicitor and qualified in 1903, having taken honours in his law finals and won the prestigious John Mackrell prize. In 1905 he married Agnes Lilian (d. 1955), daughter of Henry Frederick Fawcett, an artist; there were no children. Wood set up his own City practice—which subsequently became Kingsley Wood, Williams, Murphy, and Ross—specializing in industrial insurance law. As representative of the industrial insurance companies, he negotiated concessions in their favour from Lloyd George in the discussions leading to the National Insurance Act of 1911. He was chairman of the London Old Age Pension Authority in 1915 and chairman of the London Insurance Committee from 1917 to 1918. He was also a member of the National Insurance Advisory Committee from 1911 to 1919. From 1916 to 1919 he was chairman of the Faculty of Insurance, and served as its president in 1920, 1922, and 1923.

Wood was elected to the London county council in 1911 as Municipal Reform member for Woolwich, and served on committees on old-age pensions, housing, and insurance. In 1917 he presented a memorial to the government's food controller recommending that all bread should be sold by weight. However, it was in 1918 that he made his mark on national politics by organizing a memorial proposing the establishment of a ministry of health. The prime minister, Lloyd George, adopted the proposal, and Wood was knighted in the same year. At the general election of 1918 he was elected as Conservative MP for West Woolwich, a seat which he held until his death, and became parliamentary private secretary to successive ministers of health, Christopher Addison (1919–21) and Sir Alfred Mond (1921–2), both Coalition Liberals. Wood voted against the break-up of the coalition in 1922 and, although he agreed to follow Bonar Law after the Carlton Club meeting, he also said that he was prepared to co-operate ‘with men actuated by similar views of an anti-Socialist and constitutionalist nature’ (Kinnear, 148). He did not hold office under Law but he served Neville Chamberlain, the Conservative minister of health, as parliamentary secretary from 11 November 1924 to 4 June 1929, forming long-lasting political links with him. One important measure sponsored by Wood was the Summer Time Bill of 1924, and he worked closely with Chamberlain on local government reform. Wood's growing reputation in government circles was reflected in his appointment as a civil commissioner during the general strike of 1926, and as a privy councillor in 1928.

Postmaster-general and minister of health

Wood enhanced his reputation with his party by his effectiveness in opposition, following Labour's victory in the general election of 1929. In October 1930 he was elected first chairman of the executive committee of the National Union of Conservative and Unionist Associations, and in that position (which he held until 1932) he co-operated closely with Neville Chamberlain, who was then party chairman. When the National Government was formed under Ramsay MacDonald in 1931 the number of posts available for Conservatives was at first limited, and Wood had to be content with being appointed parliamentary secretary to the president of the Board of Education, Sir Donald Maclean, a Liberal, on 3 September. However, following the general election of that year, Wood achieved ministerial rank on 10 November 1931 when he became postmaster-general, in charge of the General Post Office (GPO), which was then a government department.

The Post Office had been much criticized for some years, especially on account of its telephone service. Wood appointed a committee on Post Office reform in 1932, and implemented its recommendations. These included the appointment in 1934 of a director-general—almost analogous to a managing director—in place of the secretary to the Post Office; the position had been filled by civil servants not noted for their commercial enterprise. Wood's own approach to the Post Office was very much that of a businessman. He established a new relationship with the Treasury whereby, instead of the whole of the Post Office's profits for a year being handed over to the chancellor, as hitherto, a fixed annual contribution was to be made to the exchequer and any surplus profit was to be used to improve the Post Office's services. Wood expanded the telephone service by improving efficiency, lowering charges, and making skilful use of publicity. The film unit and library of the Empire Marketing Board were taken over in 1933, and, as the GPO film unit, achieved a reputation for making documentaries of high quality. Wood's success in making the Post Office a source of pride rather than embarrassment for the government led to his entering the cabinet, at Chamberlain's suggestion, on 20 December 1933.

As postmaster-general Wood was the minister responsible for broadcasting, and he found himself at odds with Sir John Reith, the director-general of the BBC, over the renewal of the BBC's charter, which at the beginning of 1934 had only three more years to run. Reith felt that Wood had given the BBC insufficient protection from pressure from the cabinet to stop a broadcast in 1932 by a former German U-boat captain; Reith wanted a senior cabinet minister, such as the lord president (Baldwin), to be responsible for the BBC, rather than the postmaster-general, to ensure that the BBC's views would be adequately represented. Wood, for his part, was less inclined than his predecessors to agree with the director-general on every question, and Reith's diaries contain a number of uncomplimentary remarks about him. For example, Reith noted that it was ‘utterly damnable that the BBC should be made the political catspaw of a little bounder like K.W.’ (Reith Diaries, 110).

Wood's gifts as an organizer and publicist led to his being appointed chairman of the National Government propaganda committee in 1935, with responsibility for preparing for the forthcoming general election. When Baldwin became prime minister on 7 June 1935 Wood was put in charge of the Ministry of Health, which at that time was responsible for housing as well as the health services in England and Wales. Once more Wood's energy served the government well: the slum clearance programme was pursued with energy, and overcrowding was greatly reduced. There was also a marked improvement in maternal mortality, mainly due to the discovery of antibiotics able to counteract septicaemia, but also because a full-time, salaried midwifery service was created under the Midwives Act of 1936. Shortly after the government embarked upon a rearmament programme in 1936, Sir Thomas Inskip, the minister for co-ordination of defence, told the cabinet that a shortage of building labour threatened to cause delays; Wood said that the Ministry of Health would be prepared to slow down house-building to prevent a rise in prices. On the other hand, he told the cabinet that there was evidence of physical deterioration in the population of some of the special areas and asked that some of the factories which were to be built in connection with rearmament should be located in communities with high unemployment (cabinet minutes, 29 July and 14 Oct 1936, Cabinet Office papers, ser. 23, vol. 85).

Minister of air

Wood's standing in his party was recognized in February 1938 when he was unanimously elected grand master of the Primrose League in succession to Baldwin, who had held the office since 1925. By 1938 there was growing discontent in parliament and the aircraft industry with the Air Ministry on account of its failure to maintain parity with the German air force. The secretary of state for air, Viscount Swinton, sat in the House of Lords, and when the air estimates were debated in March, Chamberlain, who had succeeded Baldwin as prime minister, had to defend the Air Ministry from demands for an inquiry into its administration. It was clear that this situation could not continue, and on 16 May Wood was appointed to be Swinton's successor. The new secretary of state had no previous experience of a defence department, but he had shown himself to be a capable minister and he could be relied on to represent the government effectively in the Commons.

The cabinet had approved a new programme, known as Scheme L, for the expansion of the air force in April, when it had authorized the Air Ministry to accept as many aircraft as the British aircraft industry could produce—up to a maximum of 12,000 machines in the next two years. Finance was made freely available; it was in 1938 that the Air Ministry overtook the Admiralty as the major spender among the defence departments. But there were many technical problems to be overcome, and in August, on the eve of the Munich crisis, deliveries of aircraft in Britain were no higher than they had been in May. A more ambitious programme, known as Scheme M, was proposed by the Air Ministry after Munich, but Wood accepted the Treasury's argument that, if Scheme M were revised to concentrate more on fighters and to go slowly on bombers, the strain on the economy would be alleviated. Fighter production in 1939 was three-and-a-half times greater than in 1938, while bomber production was two-and-a-half times greater; overall, the gap between British and German aircraft production had been closed by the time war broke out.

Relations with the aircraft industry were not much easier under Wood than they had been under Swinton, partly because of the Air Ministry's repeated requests for modifications to types in production, but also because of Wood's need to respond to parliamentary criticism of the industry's profits. In 1939 the Air Ministry calculated that if its existing agreement with the Society of British Aircraft Constructors on pricing of contracts was not modified, the average rate of profit on private invested capital would be 21 per cent, whereas the official view was that the maximum should be 15 per cent. In March, Wood announced that the agreement was to be modified, with the effect that the industry agreed to forgo a third of its forecast profits for the year. Despite these difficulties, he appears to have established good personal relations with Sir Charles Bruce-Gardner, the chairman of the Society of British Aircraft Constructors, who served on the secretary of state for air's Industrial Advisory Panel and the Air Council's Committee on Supply.

Chancellor of the exchequer: war finance

By the spring of 1940 Wood felt exhausted by his efforts, and on 3 April he changed places with the lord privy seal, Sir Samuel Hoare, and had a brief period as a cabinet minister without departmental responsibility. However, British defeats in Norway later that month led to a debate in the House of Commons on 8 and 9 May, at the end of which the government majority decreased heavily. It fell to Wood, as a candid friend, as well as a senior member of the Conservative Party, to tell Chamberlain that resignation was inevitable. He also advised Churchill not to give way to pressure from those who wanted Lord Halifax to succeed Chamberlain. It is not possible to know if Wood's advice was decisive, but it certainly helped to produce the change of government on 10 May. Two days later, Wood was appointed to be chancellor of the exchequer. The new prime minister, Churchill, was by no means universally popular in the Conservative Party, and was doubtless glad to have the support of someone known to be a friend of Chamberlain.

Wood did not enjoy as prominent a position in the government as is normal for a chancellor of the exchequer. He was not at first a member of the war cabinet, although he was frequently in attendance at its meetings. He became a full member on 3 October 1940, but he was again excluded from its membership in a major reshuffle on 19 February 1942. As someone who had supported appeasement—he was believed to have advised calling a general election after Munich to take advantage of Chamberlain's popularity at the time—Wood was never likely to be close to Churchill. Indeed, he was treated with condescension by a number of Churchill's close associates, including Beaverbrook and Brendan Bracken (Colville, 232). However, the fundamental reason why the chancellor was not prominent in the war cabinet was that under Churchill the Treasury ceased to be the central department of government. Financial budgeting was replaced by the allocation of physical resources, especially manpower, as the means of establishing priorities in defence programmes. Non-military aspects of policy, including economic policy, were co-ordinated by a cabinet committee presided over by the lord president of the council: initially Chamberlain, subsequently Sir John Anderson, and then Clement Attlee. The Treasury's main jobs were to finance the war with as little inflation as possible, to conduct external financial policy so as to secure overseas supplies on the best possible terms, and to take part in planning for the post-war period.

Wood was no financial expert, but his capacity for hard work and his willingness to seek and act upon the best advice available were useful characteristics in a chancellor. At the beginning of July he set up a new consultative council to advise him, and was fortunate in securing the services of the economist John Maynard Keynes and of Lord Catto, a future governor of the Bank of England, as members. His first budget, on 23 July, was criticized, both at the time and subsequently by the official historian of financial policy, on the grounds that his proposals would not prevent an inflationary expansion of the government's short-term debt (Sayers, 56–7). In fact the extra taxation that Wood imposed was rather more than Keynes estimated at the time to be necessary to curb inflation. The standard rate of taxation was increased from 7s. 6d. to 8s. 6d., which, with a top rate of surtax of 9s. 6d. in the pound, gave a top marginal tax rate of 18s. in the pound. A new fiscal instrument, purchase tax, was introduced on articles regarded as luxuries or near-luxuries. In deference to the Labour members of Churchill's coalition, excess profits tax, which had been fixed at 60 per cent in September 1939, was raised to 100 per cent, despite advice from Treasury officials that such a rate would deny businessmen the incentive to economize on resources or take risks with new investment.

Subsequently Wood was won over to Keynes's conception of using national income accounting to estimate the additional revenue that must be raised if there was to be no inflation, rather than (as hitherto) confining the budget to central government revenue and expenditure. A white paper, An analysis of the sources of war finance and an estimate of the national income and expenditure in 1938 and 1940, was published in January 1941 and Wood's budget of 7 April 1941 was described by Keynes as ‘a revolution in public finance’ (Collected Writings, 22.354). There were still political limits on how far theory could be applied. Keynes thought that national income analysis showed that upwards of £300 million should be raised in additional taxation but, confronted by Churchill's hostility to what he considered to be severe tax proposals, Wood decided to aim at £250 million. The standard rate of income tax was raised to 10s. in the pound, giving a top marginal rate of 19s. 6d. in the pound, while income and personal allowances were reduced, greatly increasing the number of people liable to income tax. The extension of direct taxation was made politically more acceptable by the adoption of another of Keynes's ideas, post-war credits, so that part of the tax was a form of forced saving. In theory the post-war credits could be repaid to prevent a post-war slump, such as had occurred after the First World War, but in the event inflationary pressure after 1945 made repayments an inconvenient obligation for chancellors.

Also under Wood there began in 1940 the compulsory deduction of income tax at source from wages and salaries. He died on the morning of the day on which he was due to announce the scheme devised in 1943 for PAYE (pay as you earn), whereby tax liability was to be calculated on current, not past, earnings. His innovation was of lasting benefit to future chancellors. Wood's budgets in 1942 and 1943 followed the same lines as his budget of 1941, and overall he raised a significantly higher proportion of war finance through taxation rather than borrowing than his predecessors had done in the First World War.

Wood also sought to moderate wage claims by adopting a policy of subsidizing rationed goods that were within the cost-of-living index, while imposing heavy taxes on goods outside it. In his budget of 1941 he committed the government to stabilizing the index at its existing level, while warning that if wage rates continued to rise, the government would have to abandon this policy. The policy proved to be expensive, the cost of subsidies rising from £70 million in 1940 to £190 million in 1943, but it was thought justified from the industrial relations viewpoint, and was discontinued only gradually after the war.

Wood's period as chancellor saw Britain's external financial position greatly weakened, as gold and foreign exchange reserves were used, and overseas investments sold, to pay for essential imports, while industrial output was shifted from exports to war production. So when the Beveridge report was published at the beginning of December 1942, advocating a comprehensive scheme of social insurance, Wood warned the cabinet against taking on commitments that might exceed the country's resources. He pointed out that after the war it would be necessary to give priority first to maintaining defence forces sufficient to avoid a repetition of the events of 1914 and 1939, and then to reconstructing Britain's economy and export trade. He assumed that there would have to be cuts in tax rates, both to stimulate enterprise and to meet the expectations of the electorate. Beveridge's scheme of social insurance was only one of several reconstruction plans, and there were other pressing claims to financial assistance, such as those of housing, education, electricity, agriculture, forestry, and colonial development; Wood called upon the cabinet to determine priorities (‘The financial aspects of the social security plan’, memorandum by the chancellor of the exchequer, 11 Jan 1942, Cabinet Office papers, ser. 65, vol. 33). In that respect he was acting as an orthodox chancellor, but he faced a critical and restive House of Commons when, in an emotional debate on 17 February 1943, he emphasized the prevailing financial uncertainty and the need for caution in implementing the Beveridge plan (Hansard 5C, cols. 1825–38). Although the coalition government had declared that it had accepted the principles of the plan, Wood's speech tended to spread doubt about whether the Conservatives were as committed to them as Labour was.

Wood overcame considerable handicaps to rise as far as he did in politics. His modest, nonconformist background was very different from that of traditional Conservative leaders, but was useful at a time when the Conservatives were seeking to attract nonconformists who had previously supported the Liberal Party; for example, in the 1920s Wood organized nonconformist Unionist League luncheons at which Conservative leaders would speak. He was a far from imposing personality: short, plump, and bespectacled. One experienced observer described him as an ‘appalling speaker’ (Colville, 47); his voice was thin and high, and he often delivered speeches from manuscript notes. On the other hand, he was respected because he was efficient, and was generally liked because he was genial. His successes as a minister can be attributed to his thoroughness, energy, shrewd judgement, and willingness to listen to advice. He inspired loyalty among his staff, and could be relied upon to take whatever decision was necessary and to maintain it, both in cabinet, where his influence was considerable, and in parliament, where he was normally adept at handling criticism. He succeeded Chamberlain as chairman of the Conservative Research Department in 1940, and he was very much missed by the party after his death. He died suddenly at his home in London, 12 Buckingham Palace Mansions, Westminster, on 21 September 1943.

G. C. Peden

Sources  

DNB · The Times (22 Sept 1943) · R. Jenkins, The chancellors (1998), 393–400 · cabinet minutes, TNA: PRO, cabinet office papers, ser. 23, vols. 77–100 · war cabinet minutes, TNA: PRO, cabinet office papers, ser. 65, vols. 1–28, 32–5 · budget committee papers, TNA: PRO, treasury papers, ser. 171, files 355–6, 360, 363 · secretary of state's private office papers, TNA: PRO, Air Ministry papers, ser. 19, vols. 25, 26, 35, 36, 556 · Hansard 5C · R. Hawtrey, ‘Financial history of the war’, TNA: PRO, treasury papers, ser. 208, vol. 204 [unpublished] · R. S. Sayers, Financial policy, 1939–1945 (1956) · J. Colville, The fringes of power: Downing Street diaries, 1939–1955 (1985) · M. Gilbert, Winston S. Churchill, 6: Finest hour, 1939–1941 (1983), 300, 308–9 · The collected writings of John Maynard Keynes, ed. D. Moggridge and E. Johnson, 22 (1978), 212–15, 353–4 · W. J. Braithwaite, Lloyd George's ambulance wagon, ed. H. Bunbury (1957), 96, 168, 211–13 · J. C. W. Reith, Into the wind (1949) · The Reith diaries, ed. C. Stuart (1975) · J. Ramsden, The age of Balfour and Baldwin, 1902–1940 (1978) · J. Ramsden, The age of Churchill and Eden, 1940–1957 (1995) · M. Kinnear, The fall of Lloyd George (1973) · M. Cowling, The impact of labour, 1920–1924: the beginning of modern British politics (1971)

Archives  

TNA: PRO, corresp. and Air Ministry papers, AIR ser. 19 vols. 25–72, 566 |  BLPES, corresp. with Hugh Dalton · Bodl. Oxf., corresp. with Viscount Addison · Parl. Arch., corresp. with Lord Beaverbrook  

FILM

 

BFINA, ‘The Rt Hon. Sir Howard Kingsley Wood, MP, postmaster-general’, 1963 · BFINA, documentary footage · BFINA, news footage · IWM FVA, actuality footage · IWM FVA, news footage


Likenesses  

W. Stoneman, five photographs, 1921–c.1941, NPG [see illus.] · A. T. Nowell, oils, 1928; formerly in possession of the firm Kingsley Wood, Williams, Murphy, and Ross · photographs, 1936–43, Hult. Arch. · H. Coster, photographs, 1938, NPG

Wealth at death  

£63,981 9s. 3d.: probate, 20 June 1944, CGPLA Eng. & Wales