. 9
( 14)


˜Defence policy and global strategy™, D (52) 26, CAB 131/12, TNA.
232 Arms, economics and British strategy

Cabinet™s Defence Committee was not kept regularly informed of the
atomic programme and was not asked to take a decision on it until 1950,
and then only because the Chiefs of Staff had recommended some delay
in the interests of accelerating other weapons projects.8 It was not, of
course, unprecedented for a prime minister to reserve sensitive defence
matters to himself and an inner circle of ministers and advisers.
Churchill had excluded the Cabinet from important discussions on the
atomic bomb, and much else, during the war.
Attlee did not long follow Churchill™s example of being his own
minister of defence. His experience as under-secretary of state for war in
1924 had led him to believe that there should be a single defence doc-
trine, not one for each service, and in 1936 he had proposed that there
should be a minister of defence with authority to establish priorities and
allocate resources between the three services.9 Nevertheless the changes
outlined in the 1946 White Paper Statement Relating to Defence were
hardly revolutionary. Drawing upon war-time and pre-war experience,
an informal group including General Ismay, Churchill™s war-time chief
of staff, General Sir Ian Jacob, Ismay™s chief staff of¬cer during the war,
and Sir Edward Bridges, the Cabinet secretary, had recommended that
the three independent service departments retain responsibility for plans
and operations, with co-ordination through numerous inter-service
committees. The minister of defence, advised by the Chiefs of Staff, was
to decide the balance of resources going to each department before the
estimates were sent to the Treasury, but in practice it was dif¬cult for
him to do so if the Chiefs of Staff could not agree where cuts necessary
to bring defence expenditure within its budget were to be found. The
possibility of a powerful chairman of the Chiefs of Staff Committee
giving independent, inter-service advice had been considered and
rejected, and a chief of the defence staff was not appointed until 1959.10
The Treasury, therefore, continued to have an active role in discussions
on defence policy from the point of view of securing economies. The
minister of defence represented all three services in Cabinet, and was the
prime minister™s deputy on the Defence Committee, but neither of
the ministers of defence who held of¬ce between December 1946 and
October 1951, A. V. Alexander and Emmanuel Shinwell, was a leading
member of the government. The Chiefs of Staff enjoyed considerable

Margaret Gowing, Independence and Deterrence: Britain and Atomic Energy, 2 vols.
(London: Macmillan, 1974), vol. I, pp. 19“31, 231.
308 HC Deb., 5s, 1936, cc. 1317“21.
Franklyn A. Johnson, Defence by Ministry: The British Ministry of Defence 1944“1974
(New York: Holmes and Meir Publishers, 1980), pp. 17“28; Peden, Treasury and British
Public Policy, pp. 420“1.
The impacts of the atomic bomb and the Cold War 233

autonomy, being individuals of considerable prestige, including
Viscount Montgomery of Alamein, the CIGS from 1946 to 1948; his
successor, Slim, the victor in Burma; and two exceptionally able CASs,
Tedder (1946“50) and Slessor (1950“3). The ¬rst sea lords had the
con¬dence that came from representing the senior service. Defence policy
was still very much the product of compromise between independent
Labour ministers inherited many war-time controls over the econ-
omy, and spoke a lot about economic planning, but few “ perhaps only
Cripps and Hugh Gaitskell “ had a clear idea of how planning defence
production might be related to the wider economy. As it happened,
Cripps was chancellor of the exchequer from November 1947 to
October 1950, when he was succeeded by Gaitskell, and the Treasury
became the focus of economic planning. At ¬rst ministers seem to have
thought in terms of manpower planning, as in the war, but without the
political will to direct labour into munitions or other key economic
activities, such as agriculture or exports, manpower planning could only
reveal the extent of shortages.11 When rearmament began in 1950 raw
materials were in short supply, and a Ministry of Materials was created
in 1951 with a view to making allocations, but it was not easy to dis-
entangle its responsibilities from those of the Board of Trade for
industry or of the Ministry of Supply for munitions, aviation and atomic
energy. By 1952 the raw materials shortage was abating and a Con-
servative government that did not share Labour™s commitment to
planning was in of¬ce. The only surprising thing is that it was not until
1954 that the Ministry of Materials was abolished.
Churchill kept the existing arrangements for the Ministry of Defence
and the defence departments, but held the portfolio of minister of
defence himself until 28 February 1952. As his successor, he appointed
the distinguished soldier, Earl Alexander of Tunis, who, however, made
no attempt to exert his own authority, leaving the service ministers to
run their departments, while the Prime Minister retained effective
control of defence policy. Churchill was a month short of his seventy-
seventh birthday when he took of¬ce, and was in indifferent health. He
was interested in the new strategic problems posed by the atomic bomb
but, in the words of the of¬cial historian, Margaret Gowing, ˜for the
most part [his] minutes on atomic energy in the months after his return
to of¬ce show the deterioration of his powers™.12 Churchill continued to

Alec Cairncross, Years of Recovery: British Economic Policy 1945“51 (London: Methuen,
1985), pp. 299“314, 384“99.
Gowing, Independence and Deterrence, vol. I, p. 407.
234 Arms, economics and British strategy

rely a great deal on Cherwell for guidance on scienti¬c and other
technical questions. Cherwell was an enthusiastic supporter of an
independent nuclear deterrent, but he was also determined that the
aggregate level of defence expenditure should not exceed what the
economy would bear.

Atomic weapons13
The atomic bomb was one of the ¬rst problems that Attlee had to deal
with on taking of¬ce on 26 July 1945. In the wake of the destruction of
Hiroshima and Nagasaki, he raised with President Truman on 25
September the question of how international relations could be changed
to ensure that mutual annihilation would not result from this new
weapon. However, relations between the United States and the Soviet
Union made it unlikely that Washington would agree to share technical
information through the United Nations Atomic Energy Commission.
British hopes of bilateral collaboration rested initially on the Hyde Park
Aide-Memoire, signed by Churchill and Roosevelt in September 1944,
which had promised post-war collaboration in atomic research for
military and commercial purposes, unless terminated by mutual agree-
ment. However, the Truman administration did not consider itself
bound by the Aide-Memoire, which was not a formal diplomatic docu-
ment, and although on 15 November 1945 Truman signed another
informal declaration that there would be ˜full and effective co-operation
in the ¬eld of atomic energy™ between the United States, the United
Kingdom and Canada, there was little exchange of scienti¬c information
after the war even before the McMahon Act of 1 August 1946 formally
terminated collaboration. Moreover, the Quebec Agreement, whereby
the United States and the United Kingdom would not use the atomic
bomb without each other™s consent, was replaced on 16 November 1945
by the Groves“Anderson memorandum, whereby the United States, the
United Kingdom and Canada agreed that they would not use atomic
weapons against other countries without prior consultation with each

It is worth mentioning that research was undertaken in this period on weapons of mass
destruction other than the atomic bomb. The 1952 Global Strategy paper noted that
˜research in Bacteriological Warfare has not yet gone far enough to enable us to decide
whether or not it would be advantageous to the Allies to use it. The new nerve gases
can, however, be used tactically to great advantage and would provide the Allies with
weapons of real value against an enemy who relies on massed formations. The moral
objections to Chemical Warfare can surely be no greater than to atomic warfare . . . We
consider that the Allies should be prepared to use these weapons in war if they consider
it advantageous to do so.™ (D (52) 26, CAB 131/12, TNA).
The impacts of the atomic bomb and the Cold War 235

other.14 The change from Britain having a veto, at least in principle, to
only having the right to be consulted was indicative of the extent to
which Britain had been marginalised in Washington™s world view.
The atomic bomb was rightly regarded as a fearful weapon. The
United States Strategic Bombing Survey estimated the casualties at
Hiroshima at between 70,000 and 80,000 dead and about as many
injured. Comparable casualties had been in¬‚icted by conventional
weapons: about 84,000 people were killed and 41,000 wounded in the
Tokyo ¬re-raid of 9“10 March 1945, when ¬res started by 334 USAAF
bombers using incendiary bombs were spread by a strong wind.15
However, the atomic bomb enabled one aircraft to wreak destruction on
a scale that had previously required hundreds, and there were also the
uncertain after-effects of radiation. A British mission of scientists sent to
Japan to study the effects of the atomic bomb concluded that the stan-
dard ¬gure in British conditions would be approximately 50,000 dead.16
In July 1946 the Joint Technical Warfare Committee of the Chiefs of
Staff estimated that between 30 and 120 atomic bombs, accurately tar-
geted, would knock out the United Kingdom.17 In June 1952 the Chief
Scienti¬c Of¬cer at the Home Of¬ce advised that, outside the area of
complete devastation within half to three-quarters of a mile from where
an atomic bomb fell, it should be possible to take civil defence measures
to deal with ¬res and to rescue trapped casualties, and that shelters could
provide protection for the public.18 However, the Chiefs of Staff Global
Strategy paper advised the same month that, given that there was no
effective defence against atomic attack, civil defence should be restricted
to preparations needed to carry out essential activities in London and the
chief ports during an attack, and that there should be no policy of
building shelters for the general population.19
The United States™ monopoly of the atomic bomb did not last for
long. Aided by information gained by the naturalised British scientist,
Klaus Fuchs, who had worked on the Manhattan Project, the Soviets
tested their ¬rst atomic bomb in August 1949, earlier than expected.20
Gowing, Independence and Deterrence, vol. I, pp. 6“7, 21, 65“7, 75“88, 92“111. The
declaration of 15 November and the Groves“Anderson memorandum are reproduced
in DBPO, series I, vol. II (1985), pp. 618“20, 630“2.
Craven and Cate (eds.), Army Air Forces in World War II, vol. V, pp. 614“17, 722.
British Mission to Japan, The Effects of the Atomic Bombs at Hiroshima and Nagasaki
(London: HMSO, 1946).
Gowing, Independence and Deterrence, vol. I, pp. 174“5.
David Maxwell Fyfe (home secretary) to Prime Minister, 4 June 1952, and enclosure,
PREM 11/294, TNA.
D (52) 26, para. 105, CAB 131/12, TNA.
David Holloway, Stalin and the Bomb: The Soviet Union and Atomic Energy (New Haven:
Yale University Press, 1994), pp. 83, 104“8, 138, 222“3. British estimates of the date
236 Arms, economics and British strategy

The British had proceeded less expeditiously. The Chiefs of Staff
advised in October 1945 that the best defence against atomic bombs was
likely to be the deterrent effect that the possession of the means of
retaliation would have on a potential aggressor, and in January 1946
they said that a stock in the order of hundreds rather than scores would
be necessary to deter a country with widely dispersed industries and
population (like the Soviet Union). In December 1945, ministers in the
Gen 75 committee approved the construction of the ¬rst reactor capable
of producing plutonium, and in August 1946 the CAS sent the ¬rst
requisition for an atomic bomb to the Ministry of Supply.21 The
McMahon Act was amended in October 1950 to allow rather more co-
operation between American and British scientists but the ¬rst British
test did not take place until 3 October 1952, in the hold of a ship off
Australia. The ¬rst test of a British atomic bomb dropped by an aircraft
did not occur until 11 October 1956.
Until then the only atomic bombs that could be used to deter Soviet
aggression were under the control of the Americans, including those
equipping USAF bombers based in Britain since July 1948. It was
realised in Whitehall that acceptance of the bombers was necessary in
order to keep the United States ¬rmly committed to the defence of
Western Europe, but there was concern about the lack of clarity about
prior consultation about the use of atomic bombs by aircraft based in
Britain. The matter was raised on a number of occasions between 1950
and 1952, but the American view was that, constitutionally, there could
be no restraint on the President™s power to use atomic weapons if he
believed that they were necessary for the defence of the United States.
Britain was thus likely to be a target, if not the prime target, for Soviet
forces; yet she could not rely on American forces to strike at targets that
were of most concern to her, such as air and naval bases from which
Soviet attacks might be launched.22 This situation led to successive
British governments and their service advisers to seek not so much an
independent deterrent, as an interdependent deterrent by means of
which Britain would have some in¬‚uence on American strategy.
The effort required to make a British atomic bomb had an opportu-
nity cost in terms of the development of other weapons systems. Tizard,

by which the Soviet Union would have an atomic bomb varied from mid-1950 to 1957
(see Gowing, Independence and Deterrence, vol. I, p. 222).
Gowing, Independence and Deterrence, vol. I, pp. 164, 168“9, 174; Humphrey Wynn, The
RAF Strategic Nuclear Deterrent Forces: Their Origins, Roles and Deployment 1946“1969
(London: HMSO, 1994), pp. 9“10, 18.
Simon Duke, US Defence Bases in the United Kingdom: A Matter for Joint Decision?
(Basingstoke: Macmillan, 1987), pp. 50, 55“6, 59“85.
The impacts of the atomic bomb and the Cold War 237

the chief scienti¬c adviser to the Ministry of Defence, pointed out in
February 1949 that, as more and more of the country™s resources for
research went into atomic energy, other projects would suffer. The
Defence Research Policy Committee, of which he was chairman, drew
attention to the possibility that Britain might have atomic bombs before
she had the aircraft required to use them, and to the need to develop
guided missiles for effective air defence. Following the ¬rst Soviet
nuclear test, Tizard came to the conclusion that it was a mistake for
Britain to develop her own atomic weapons; she should, instead, rely on
the Americans for strategic bombing and focus her own efforts on
measures for the defence of the United Kingdom and for preventing the
Soviet forces from securing bases west of the Rhine. His ideas had a
good deal of support in the Ministry of Defence, but not from the Chiefs
of Staff. The furthest the Chiefs went was to recommend in April 1950
that higher priority be given to research on guided missiles, electronics
for warships, tactical aircraft and anti-tank defence than to atomic
energy. In the event ministers did not take the advice, but they gave
guided missiles joint priority with the atomic programme.23

Air weapons
Strategic bombers in squadron service in the late 1940s were still piston-
engined machines, vulnerable to interception by jet ¬ghters. The Soviet
air force lacked an effective long-range heavy bomber of indigenous
design when the war ended. However, three Boeing B-29s “ the type
used to drop atomic bombs on Japan “ had landed in Soviet territory in
1944 and the Russian designer A. N. Tupolev adapted the American
aircraft to Soviet production methods. Designated Tu-4, these bombers
¬rst entered service in 1947, and by 1953 the Soviet air force had 1,000
of them. The ¬rst production Soviet medium bomber powered by jet
engines, the Tu-16, did not begin to enter service until 1954.24 The
response of the RAF to the threat posed by the Tu-4 was to equip ¬ghter
squadrons with the jet ¬ghters that were available in 1947“8. All piston-
engined ¬ghters, even those that had entered service at the end of the
war, had been replaced by 1951, representing a high rate of obsoles-
cence. Another response, already noted, was to give the highest priority

Gowing, Independence and Deterrence, vol. I, pp. 202, 225“33. For need for new
government approach to management of science and technology, see Stephen Twigge,
The Early Development of Guided Weapons in the United Kingdom, 1940“1960 (Chur,
Switzerland: Harwood Academic, 1993), ch. 5.
William Green, ˜Russia™s strategic bombing arm™, RAF Flying Review, 13 (June 1958),
238 Arms, economics and British strategy

in 1950 to the development of guided missiles, but no British surface-to-air
missile was ready for service until 1958.
The Lancaster heavy bombers and Mosquito light bombers with
which Bomber Command was equipped in 1945 were designed for war
against Germany and lacked the range to reach targets in the Soviet
Union. The Lincoln heavy bomber, deliveries of which were beginning
as the war ended, was a slight improvement in this respect, but it was
decided to equip some Bomber Command squadrons with longer-range
American B-29s from March 1950. There were problems in securing
spare parts for the RAF™s B-29s, most of which were unserviceable by
the autumn of 1953, and the type was withdrawn from squadrons in the
spring of 1954, over a year before the Lincoln.25
Bomber Command received its ¬rst jet aircraft, the English Electric
Canberra light bomber, in May 1951, six years after the Air Ministry
had issued the speci¬cation, and a year after the Russians had put their
¬rst jet light bomber into service. At this stage the Canberra carried only
conventional bombs. A ballistic missile was considered as a means of
delivering atomic bombs, but tests showed that the only large rocket in
existence, the German V2, had a maximum payload of only 2,150
pounds, whereas the bomb used at Hiroshima had weighed 9,000
pounds. The Air Ministry therefore issued speci¬cation B.35/46 on 1
January 1947 for a strategic bomber capable of carrying a 10,000-pound
bomb 3,350 miles and able to ¬‚y high enough to evade an enemy™s
defences. It was not, however, expected that such an advanced aircraft
would be in service for about ten years. An interim strategic jet bomber,
the Vickers Valiant, which ¬rst ¬‚ew in 1951, was adopted, but it did not
enter service until 1955, only one year before the ¬rst of the more
advanced designs.26
The pace of aircraft development was such that even Fighter Com-
mand was confronted with a serious problem of obsolescence in 1950.
The RAF™s jet ¬ghters in service at that date, the Gloster Meteor and the
de Havilland Vampire, had straight wings, which were aerodynamically
less ef¬cient than swept-back ones. The earliest versions of the Meteor
and Vampire had entered service in 1944 and 1946 respectively, but
plans for their replacement were related to an assumption that a major
war would be unlikely to occur until about 1957. Resources for research
and development had been drastically reduced at the end of the war and
it was decided to take a risk in concentrating on really big advances in
Lord De Lisle and Dudley (secretary of state for air) to Prime Minister, 28 Oct. 1953,
PREM 11/371, TNA.
Andrew Brookes, V Force: The History of Britain™s Airborne Deterrent (London: Jane™s
Publishing Company, 1982), pp. 13, 21“32.
The impacts of the atomic bomb and the Cold War 239

aerodynamic design and engines, with a view to having a commanding
lead by the mid-1950s. Accordingly, the Hawker ¬ghter to meet the Air
Ministry speci¬cation F.3/48 was not intended to be introduced into
service until 1953/4, and the prototype did not ¬‚y until July 1951. It was
known by May 1950 that the Soviet air force had jet ¬ghters with swept-
back wings, but it was the appearance of the MiG-15 jet ¬ghter over
Korea that shocked the Air Staff into looking for ways in which to
accelerate the replacement of the Meteor and Vampire. The CAS,
Slessor, advised the Chiefs of Staff Committee in September 1950 that
the MiG-15 was faster than any British ¬ghter in production and that
the situation regarding both Fighter Command and the 2nd Tactical Air
Force in Germany was serious. The Russians had established a four-year
lead over the British in ¬ghter development; ironically, the MiG-15 was
powered by a copy of the Rolls-Royce Nene jet engine that had been
exported to the Soviet Union in 1947.27
One way in which to bring the RAF™s ¬ghter squadrons up to date was
to adopt the North American F-86 Sabre, which had swept-back wings
and which, Slessor noted, had outclassed the MiG-15 in Korea. Canada
was producing the Sabre under licence but in September 1950 he did
not recommend adopting it unless there was no other way to meet RAF
requirements. There were disadvantages, he thought, in adopting an
interim ¬ghter, and there would be dif¬culty in ¬nancing the purchase
in dollars. By November dollar aid was available from Canada for
Canadian-produced Sabres, which eventually saw service with the RAF
from 1953 to 1956.28
Meanwhile, in September 1950, the Air Staff had decided to speed up
the development of British swept-wing ¬ghters by every possible means,
including placing orders for aircraft that had not yet ¬‚own. Slessor pre-
dicted, accurately enough, that the Hawker F3 (later known as the
Hunter) would be superior in speed and ¬re-power to the MiG-15.
However, deliveries of the Hunter fell badly behind in 1953 and, although
they were back on schedule by the end of 1954, there was a problem with
its armament, the ¬ring of the guns interfering with the ¬‚ow of air into the
engine, causing it to stall at high altitudes, and modi¬cations were
required in the design. As a second string to the Hunter, the Ministry of

˜Soviet interceptor ¬ghter development™, note by the Chief of Air Staff, COS (50) 357,
13 Sep. 1950; Minister of Defence to Prime Minister, 17 Nov. 1950; Minister of
Supply to Prime Minister, 22 Nov. 1950, PREM 8/1357, TNA. This ¬le also contains a
report, dated 16 May 1950, by the Joint Intelligence Bureau on production of Russian
aircraft, including jet ¬ghters with swept-back wings and twin-jet bombers.
COS (50) 357, and ˜Production of jet aircraft™, Gen 344, 1st meeting, 23 Nov. 1950,
PREM 8/1357, TNA.
240 Arms, economics and British strategy

Supply also ordered the Supermarine Swift, which was based on a research
aircraft and was believed in 1950 to be slightly further ahead in develop-
ment, although in the event the prototype did not ¬‚y until August 1951, a
month after the Hunter. Much worse, the Swift proved to be aero-
dynamically unsatisfactory and had to be withdrawn from service after
having been issued to one squadron in 1954. The government made no
attempt to conceal its disappointment at the delays which had occurred
and, in the case of the Swift, the failure of the aircraft in its designed role as
a high-altitude interceptor. Decisions to place orders for hundreds of the
Hunter and Swift prior to their ¬rst test ¬‚ights seemed to be justi¬ed at the
time, as tooling up was required for early mass production, but early
production Hunters were of limited value until they had been been
modi¬ed. Most of the Swifts that were built turned out to be worthless,
and later production models were employed only in the restricted role of
medium-altitude ¬ghter-reconnaissance.29
British aircraft development was out of step with the rapidly changing
Cold War. Nevertheless, some British designs were competitive on
international markets. The Meteor, Vampire and Canberra were widely
exported; the Vampire was produced under licence in France, Swit-
zerland and India; and the Canberra was adopted by the USAF and
produced under licence by the Martin company. The problem was that
the pace of technical change was so great that Britain could not afford to
produce a new type of ¬ghter or bomber to match every new develop-
ment in the United States or the Soviet Union. The solution of using
American designs, the B-29 and the Sabre, as interim aircraft while
exporting successful British aircraft was sensible and foreshadowed
greater international technological interdependence.
The FAA had been particularly reliant upon American aircraft during
the war, but once Lend-Lease was terminated, spare parts had to be
paid for in scarce dollars. Consequently all American aircraft had been
removed from ¬rst-line service by August 1946. Their British replace-
ments were all, for various reasons, unsuitable for the navy™s aircraft
carriers. Some aircraft were too wide and heavy for the lifts, some were
too high for hangars, some had high landing speeds and some had poor
handling qualities. As Eric Grove has remarked, the immediate post-war
period was ˜perhaps the all-time low point of naval aviation™.30 On the

˜Soviet interceptor ¬ghter development™, note by Chief of Air Staff, COS (50) 357, 13
Sep. 1950, PREM 8/1357, TNA; 535 HC Deb., 5s, 1954“55, cc. 2749“51; Ministry of
Supply and Ministry of Defence, The Supply of Military Aircraft (Cmd 9388), PP 1954“
55, x. 511“22; Select Committee on Estimates, The Supply of Military Aircraft, PP
1956“57, v. 351“702, at paras. 39“45.
Grove, Vanguard to Trident, p. 17.
The impacts of the atomic bomb and the Cold War 241

other hand, the FAA was a pioneer of carrier-borne jet aircraft: the Sea
Vampire was an adaptation of the land-based ¬ghter, and the Super-
marine Attacker was an entirely new aircraft that entered service in
¬ghter and ¬ghter-bomber versions in 1951. More advanced types
which followed passed the test of being exportable: the Hawker Sea
Hawk, which began to replace the Attacker in 1953, was later ordered
by the German navy, and the Sea Venom, which was the navy™s ¬rst jet
night and all-weather ¬ghter when it entered service in 1954, was built
under licence in France as well as being adopted by the Australian navy.
Once more, the story is one of periodicity in successful aircraft, as
Britain™s limited research and development resources could not sustain a
steady ¬‚ow of advanced designs.

Naval weapons
The navy had a very large building programme at the end of the war.
Under construction, on order, or projected in October 1945 were three
battleships, seven ¬‚eet carriers, seventeen light ¬‚eet carriers, eleven
cruisers, ninety destroyers, thirty-four submarines and thirty-four escort
vessels. In December 1944 Cherwell, as scienti¬c adviser to the prime
minister, had argued unsuccessfully for the replacement of the battleship
by the aircraft carrier and land-based strike aircraft, pointing to the
Germans™ development of guided bombs (which had sunk an Italian
battleship on its way to surrender in 1943). The Admiralty, however,
still believed that the battleship was ˜the basis of strength of the ¬‚eet™.
Two ˜Lion™-class battleships, which had been cancelled earlier in the
war, were reordered, to be added to HMS Vanguard, construction of
which had proceeded slowly during the war. With peace came
retrenchment and the ˜Lions™ were ¬nally cancelled in October 1945.31
Vanguard was completed in April 1946, the largest warship ever built in
Britain at 44,500 tons, and costing £9 million, exclusive of guns and
mountings, which had been taken from reserve stock. It was simply not
possible to afford more such ships in post-war budgets. Manpower
shortages also meant that Vanguard rarely had a full crew. Nevertheless,
continued faith in the battleship was indicated by the retention of
the four surviving ˜King George Vs™ in reserve. It would be easy to
denounce such conservative attachment to an outmoded category of
warship, were it not for the fact that other navies, including those of the
United States, the Soviet Union, France and Italy, as well as some minor
naval powers, also retained battleships into the 1950s. Nor were

Ibid., pp. 8, 10“11.
242 Arms, economics and British strategy

Admiralty views on future battleship design unduly conservative: an
Admiralty paper for the Cabinet in July 1945 stated that it was likely that
the ˜battleship™ of the future would bear little resemblance to capital
ships of the Second World War; for example, if the rocket replaced the
gun it might be possible to build a smaller ship to ful¬l the function of
destroying the most powerful surface ships of the enemy.32
Aircraft carriers were in reality the most powerful ships, whether for
attacking enemy vessels or bases, or for protecting convoys from air and
submarine attack. Fleet carriers capable of operating the most advanced
aircraft were intended to be able to operate against land-based aircraft.
Light ¬‚eet carriers, with low-performance aircraft, would operate mainly
in the Atlantic. In practice, until piston-engined aircraft were replaced
by jets, the light ¬‚eet carriers, which were economical in manpower,
were widely used, including in active service in the Korean War. The
¬rst of the post-war ¬‚eet carriers, Eagle, was operational in 1952, and its
sister ship, Ark Royal, was undergoing sea trials in 1954. These vessels
incorporated a major innovation, the angled deck, which revolutionised
carrier operations and which was copied by the US Navy. Hitherto there
had been a danger that an aircraft that failed to engage arrester wires
would collide with aircraft parked at the forward end of the deck; now
recovery and launch operations could be carried out much more quickly
and safely without affecting the deck park. Britain had not lost its ability
to take a technical lead in naval warfare.
The main threat from the Soviet navy was to Britain™s sea commu-
nications with North America and Europe, and to her trade routes.
Although the Soviet navy had only four cruisers in 1945, another seven
whose construction had been suspended during the war were completed
soon afterwards. About twelve ˜Sverdlov™-class cruisers, which were
broadly the same size as, but much newer than, British cruisers, were
launched between 1950 and 1954, with six more under construction.
Prior to their appearance, the main threat from the Soviet navy was
expected to be from submarines and mines. The Russians had been able
to take over U-boats of the latest type in 1945, with long cruising ranges
and high underwater speeds; the same types that had caused the
Admiralty so much anxiety in the last months of the war. It could be
assumed that the large numbers of Soviet post-war submarines would be
similar in design and would be dif¬cult to deal with. Consequently, as
table 5.1 shows, the post-war Royal Navy gave a high priority to trade
defence by retaining what by international standards were large numbers
of cruisers and escorts.

˜Battleships versus aircraft™, CP (45) 57, 2 July 1945, CAB 66/67, TNA.
The impacts of the atomic bomb and the Cold War 243
Table 5.1. Navies in 1954: numbers of ships (with numbers completed since war in brackets)

USA Britain USSR France

27a (11) 7b (4)
Fleet aircraft carriers 0 0
8c (2) 8d (3)
Light ¬‚eet carriers 0 3
Escort carriers 66 (8) 0 0 1
16e 5 f(1)
Capital ships 3 2
Cruisers 73 (18) 23 (1) 24 (18) 6
Destroyers 346 (55) 82 (45) 128 (73) 15 (5)
Escortsg 265 175 (19) 38 27
Submarines 183 (17) 57 (19) 14 (5)

Notes: a Including vessels undergoing modernisation.
Including two reduced to reserve in 1954 and one under reconstruction.
Including one laid up in reserve.
Including three in use for training and one used for transporting troops and aircraft.
Including two ˜large cruisers™ of 27,500 tons with nine 12-inch guns. Ten of the older
battleships were in reserve.
Including four in reserve.
Excluding vessels under 1,000 tons.
Precise numbers unknown. About half were ocean-going types.
Source: Jane™s Fighting Ships 1954“55 (1955).

Table 5.1 also shows that, although much smaller than the US Navy,
the British ¬‚eet was still the second largest in the world in terms of
surface vessels and the third largest overall. The Royal Navy had more
major ships built in the ten years down to 1945 than it could use. Apart
from HMS Superb, which was almost complete when Japan surrendered,
no new cruisers entered service until 1959. There was no urgent need
for replacements and the new automatic 6-inch guns and ¬re-control
system planned for the next generation of cruisers would not be ready
until the mid-1950s. Likewise, it was more economical to convert
existing destroyers for anti-submarine warfare by adding new long-range
depth-charge mortars when these became available and to improve
Sonar and radar systems than to embark on a large new construction
programme. As it became clear that there would never be enough funds
to meet the numerical requirements of another Battle of the Atlantic, the
emphasis on new designs for escorts was on economy with just suf¬cient
speed to deal with Soviet submarines. Quantity became more important
than quality. When the Admiralty proposed in April 1950 to scrap
thirty-eight old escort vessels, the newly appointed Parliamentary
Secretary to the Board, James Callaghan, who had served in the navy,
took the unusual step for a junior minister of arguing successfully the
case for modernisation, citing the use made of the ¬fty old American
244 Arms, economics and British strategy

destroyers in the Second World War. A further threat was mine-warfare,
of which the Soviet navy had considerable experience. By 1949“50 it
was clear that the Royal Navy™s equipment to deal with mines was out of
date and new coastal minesweepers with advanced Sonar were designed
to meet the threat.33 The shape of the Royal Navy, and the design of its
equipment, was as good a response to the Soviet threat as budgetary
constraints and shortage of manpower permitted.

Army weapons
In 1950 the army still held about 5,000 tanks built during the Second
World War, but about half were unserviceable. Only 300 were selected
after the outbreak of the Korean War to be given more powerful guns to
make them more suitable for use in modern warfare.34 On the other
hand, the army bene¬ted from the renaissance in British tank design
that had begun during the war. In 1943 the Department of Tank Design
had been asked to start work on a new heavy cruiser tank, with good
armour protection and a 17-pounder (76.2-mm) gun. Some 350 of
these Centurion medium tanks (as they were classed in the post-war
period) were produced in 1946“8, before an improved version, the Mark
3, with a 20-pounder (83.4-mm) replaced it. The Mark 3 was used
successfully by the British army in Korea and was widely exported,
2,833 being produced between 1948 and 1955/6.35 This success story is
hard to ¬t into a story of British decline, and suggests that when design
and production capacity was concentrated on a single model, instead of
a multiplicity of models, as in the 1930s and during the war, Britain was
competitive in tank design.
On the other hand, the army did suffer from ¬nancial restraint after
1945. Wartime artillery “ the 5.5-inch medium gun, the 25-pounder
¬eld gun, and the 6-pounder and 17-pounder anti-tank guns “ con-
tinued to serve in the post-war period. More modern weapons, the 3.5-
inch rocket launcher and the 120-mm recoilless gun, were introduced
into service in 1951/2. As in the Second World War, the infantry lacked
¬repower. Experience in Korea, particularly in the Battle of the Imjin
River in April 1951, when a battalion of the Gloucestershire Regiment
serving in the Commonwealth division was overrun, showed the short-
comings of the bolt-operated magazine ri¬‚e when dealing with attacks

Grove, Vanguard to Trident, pp. 39“40, 58“64, 68“78.
˜The Defence production programme™, memorandum by the Minister of Defence, 6
Jan. 1951, PREM 8/1357, TNA.
Christopher Foss (ed.), Jane™s Armour and Artillery 1984“85 (London: Jane™s Publishing
Company, n.d.), pp. 95“9.
The impacts of the atomic bomb and the Cold War 245

by mass formations at night. From the mid-1950s the Lee-En¬eld,
which had been used in both world wars, began to be replaced by a
semi-automatic ri¬‚e of Belgian design.36

The economy: searching for stability, 1945“50
Financial restraint was inevitable after the war when, in Keynes™ words,
Britain faced a ˜¬nancial Dunkirk™. Lend-Lease had enabled Britain to
concentrate on munitions production but ended with the surrender of
Japan. In 1945 British exports were only 46 per cent of the 1938
volume, yet Britain would have to export more than before the war in
order to avoid a balance-of-payments de¬cit on current account. Net
income from abroad had been reduced between 1938 and 1945 from
£168 million to £50 million, as a result of the sale between September
1939 and June 1945 of £1,118 million of overseas assets, and an
increase in external liabilities of £2,879 million, mainly sterling bal-
ances. Under the Anglo-American Loan Agreement of December 1945,
Britain became liable for a further $650 million (£161 million) in
respect of Lend-Lease supplies unconsumed or in transit at the date of
Japan™s surrender, and was granted a line of credit of $3,750 million
(£930.5 million) to help to cover an estimated balance-of-payments
de¬cit of £1,250 million while she was converting her economy from
war to peace. Britain was to repay the principal of the loan plus interest
at 2 per cent over ¬fty years, starting in 1951. More important, Britain
had to undertake to make sterling convertible for current transactions a
year after rati¬cation of the loan by Congress and to remove dis-
crimination against imports from the United States. British Treasury
of¬cials believed that it would be necessary to control dollar imports
during a longer transitional period than one year and the secret re¬‚ec-
tion of the Chancellor of the Exchequer, Hugh Dalton, was that it was
quite certain that the conditions attached to the loan would have to be
revised later. The Labour government acquiesced in the American
demands because, as Keynes had advised, the alternative to borrowing
would not only be greater austerity than during the war and a delay in
implementing welfare measures, but also rapid and humiliating with-
drawal from overseas commitments and acceptance for the time being of
the position of a second-class power.37

Michael Hickey, The Korean War: The West Confronts Communism (London: John
Murray, 1999), pp. 220“33, 361.
Collected Writings of John Maynard Keynes, vol. XXIV, p. 410; Hugh Dalton, Memoirs
1945“1960: High Tide and After (London: Frederick Muller, 1962), p. 89; G. C. Peden,
˜Economic aspects of British perceptions of power on the eve of the Cold War™, in Josef
246 Arms, economics and British strategy

The fact that colonial produce could earn dollars for the sterling area
led the Labour government to pursue colonial development more
energetically than any pre-war government had done. African colonies
were expected to progress to self-rule over a longer period than actually
occurred, and continued association with Britain through the Com-
monwealth was assumed.38 Communist insurgency in Malaya threa-
tened production of dollar-earning rubber and tin, and was dealt with
¬rmly following a declaration of an emergency on 18 June 1948. The
natural resources of the Commonwealth and Empire were seen in the
Treasury as a major advantage in regaining ˜viability™, that is indepen-
dence of American economic aid.39 A complicating factor was the
pooling of Britain™s dollars with those of the rest of the sterling area;
whereas the colonies were net contributors to the pool, as a result of
strict controls on their imports, the dominions were normally in heavy
de¬cit with the dollar area. Moreover, while the sterling area maintained
controls on expenditure or investment in foreign currencies, there were
no controls within the area, allowing unplanned capital movements from
Britain to the dominions to occur and placing pressure on sterling.
Another problem was that over £3,000 million of Britain™s external
liabilities were in the form of sterling balances, and while much of this
sum was tied up in the form of currency reserves, holders naturally
wanted to use some sterling to pay for imports from Britain. However,
Britain required her limited supply of exportable goods to earn dollars,
so as to be able to ¬nance her trade with the United States. The
Treasury had to conduct dif¬cult negotiations with Argentina, Egypt,
India and Pakistan in 1946 and 1947 to secure the agreement of these
countries to accept phased releases of sterling balances, and by 1949
political pressures made it impossible to keep releases as low as had been
The full weakness of Britain™s external position was exposed when,
under the Anglo-American Loan Agreement, current earnings of ster-
ling “ but not the war-time sterling balances “ became convertible into
dollars on 15 July 1947. There was a sharp increase in the rest of the

Becker and Franz Knipping (eds.), Power in Europe? Great Britain, France, Italy and
Germany in a Postwar World (Berlin: Walter de Gruyter, 1986), pp. 237“61.
D. K. Fieldhouse, ˜The Labour governments and the Empire-Commonwealth, 1945“
51™, in Ritchie Ovendale (ed.), The Foreign Policy of the British Labour Governments,
1945“1951 (Leicester University Press, 1984), pp. 83“120, at pp. 95“102.
Sir Richard Clarke, Anglo-American Economic Collaboration in War and Peace 1942“1949,
ed. Alec Cairncross (Oxford: Clarendon Press, 1982), pp. 191, 204.
John Fforde, The Bank of England and Public Policy 1941“1958 (Cambridge University
Press, 1992), pp. 95“124, 249“67; Pressnell, External Economic Policy, vol. I, pp. 247,
347“52, 365“6.
The impacts of the atomic bomb and the Cold War 247

sterling area™s de¬cit with the dollar area, and capital movements from
Britain to the rest of the sterling area ¬nanced this de¬cit. Britain was
unable to maintain sterling convertibility after ¬ve weeks.41 There was a
general shortage of dollars in Western Europe, owing to the costs of
imports from the United States of food and of capital equipment for
industrial reconstruction, and already by July 1947 the American
administration was planning what became Marshall aid, which provided
a fresh source of dollars from mid-1948 to the end of 1950.42 Deva-
luation of sterling in September 1949 encouraged British exporters to
look to American markets, but it would only bring Britain™s external
account into balance if the volume of exports earning dollars increased,
and with the economy at full employment, an increase in exports
implied diversion of output from home markets and defence. The
government™s Economic Survey for 1950 rightly anticipated that the
balance of payments would remain the central economic problem for
many years ahead.43
In contrast to the 1930s, there was a general labour shortage, which
was made worse by the increased size of the armed forces. Numbers had
peaked at 4,653,000 in mid-1945 and even in November 1946 the ¬gure
was 1,510,000, compared with 385,000 in 1938.44 Given Britain™s
foreign policy commitments, Bevin was a powerful opponent of a more
rapid demobilisation, and he also gave his support to universal con-
scription in peace and to the Ministry of Defence™s plans to retain
industrial capacity and design staffs for munitions. Consequently, the
Minister for Defence, Alexander, was able to resist Treasury demands
for a greater reduction in the size of the armed forces and in their
expenditure down to the convertibility crisis. Dalton, the chancellor,
simply carried less weight in Cabinet than Bevin did. In the light of the
suspension of convertibility, and the likely delay before further Amer-
ican aid would become available (Congress did not approve the
appropriations for Marshall aid until June 1948), Dalton tried again,
and in August 1947 Bevin agreed that reorganisation of the armed forces
ought to allow more rapid demobilisation. The Chiefs of Staff were
instructed to review policy on the assumption that it would not
be possible to contemplate undertaking a major war until Britain™s

Cairncross, Years of Recovery, pp. 79“80, 153“63.
See Alan Milward, The Reconstruction of Western Europe 1945“51 (London: Methuen,
Economic Survey for 1950 (Cmd 7915), PP 1950, xix. 577“628, paras. 40 and 48“50.
Central Statistical Of¬ce, Statistical Digest of the War, pp. 8“9; Statement on the Economic
Considerations Affecting Relations between Employers and Workers (Cmd 7018), PP 1946“
47, xix. p. 1195.
248 Arms, economics and British strategy

economic strength had recovered, and that the risk of a major war must
be ruled out over the next ¬ve years. On 29 September the Defence
Committee agreed that the strength of the armed forces should be
reduced from 1,227,000 in September 1947 to 713,000 by the end
of March 1949, while accepting that ˜serious risks and political
consequences™ were involved.45
Balance-of-payments dif¬culties were only partly relieved by Marshall
aid, since recipients were expected to become ¬nancially independent
after the American ¬scal year 1950/1. The Treasury was now repre-
sented in Cabinet by the formidable Cripps, who had replaced Dalton in
November 1947. The Chancellor took a stand in November 1948 on
£700 million as a maximum for expenditure on the armed forces, and
the Inter-service Working Party on the Size and Shape of the Armed
Forces was set up, with a representative of each of the services, and a
neutral chairman, Edmund Harwood, a civil servant from the Ministry
of Food, to see what could be ¬nanced with that ¬gure. The report
produced in February 1949 was guided by three requirements set out by
the Chiefs of Staff: ¬rst, suf¬cient provision for waging the Cold War
effectively; second, limited insurance against the threat of unpremedi-
tated war; third, maximum insurance against the more likely threat of
premeditated Soviet aggression in 1957 or later. It concluded that
existing priority for research and development should be maintained, to
ensure that equipment would be up to date in 1957, with special
reference to defence against attacks by aircraft or missiles carrying
atomic weapons. Consequently the Working Party™s proposed econo-
mies focused on reducing the size of forces to be maintained over the
period 1950“3.46 The Chiefs of Staff believed that the report showed
that £700 million was too low a ¬gure to meet the requirements that
they had set.47 This view was endorsed by the Minister of Defence,
Alexander, who told ministerial colleagues in June 1949 that the ques-
tion was one of whether Britain still had the resources to maintain the
forces equipped to modern standards required to allow her to play the
role of a great power and maintain her overseas commitments.48
The outcome in July 1949, after discussion over four meetings of the
Defence Committee at which Cripps was unable to hold the line at £700
Dalton to Attlee, 11 Aug., and Bevin to Attlee, 15 Aug. 1947, PREM 8/833; Cabinet
Defence Committee minutes, 29 Sep. 1947, CAB 131/5, TNA.
˜Size and shape of the armed forces: report of the Harwood Working Party™, DO (49)
47, 21 June 1949, CAB 131/7, TNA.
˜Size and shape of the armed forces 1950“53™, report by the Chiefs of Staff, COS (49)
50, 22 June 1949, CAB 131/7, TNA.
˜Size and shape of the armed forces 1950“53™, memorandum by the Minister of
Defence, DO (49) 51, 27 June 1949, CAB 131/7, TNA.
The impacts of the atomic bomb and the Cold War 249

million, was yet another working party, this time chaired by Sir Harold
Parker, permanent secretary of the Ministry of Defence, with instruc-
tions that the total defence burden was not to exceed £810 million.49
Even in a period of severe economic dif¬culties, and with devaluation
only a few weeks away, the Treasury was unable to dictate what the
limits on defence expenditure should be.
Although post-war industrial policy gave priority to the civil economy,
considerable efforts were made to retain capacity for designing and
producing weapons. The Ministry of Aircraft Production was merged
with the Ministry of Supply and the combined department was given
responsibility for the needs of the RAF and army as well as oversight of
engineering and atomic energy. Research and development contracts,
orders for jet aircraft, and repair work kept nineteen airframe and aero-
engine design teams in business, more than the volume of work justi¬ed.
In July 1950 the Defence Committee approved rationalisation plans that
would have reduced the number to thirteen, but rearmament associated
with the Korean War delayed restructuring of the industry. The Min-
istry of Supply hoped to keep four independent tank design teams in
being, but army contacts were too limited to persuade motor vehicle
¬rms to stay in the ¬eld and even Vickers experienced ¬nancial pro-
blems on account of surplus capacity. More royal ordnance factories
were kept in being than were required for current service requirements.
The problem facing all defence contractors until 1950 was the low level
of government expenditure on research and development and pro-
curement compared with what planners had assumed: only about half in
1948, for example. Overall defence expenditure was not much below
what had been expected, but the cost of maintaining forces large enough
for Britain™s global responsibilities made it necessary to economise on
research and development and procurement.50

The economy and rearmament, 1950“4
Manpower in the armed forces and defence expenditure as a proportion
of GDP were reduced until 1950 (see tables 5.2 and 5.3). The fears
provoked by the outbreak of the Korean War reversed these trends. On
26 July 1950 the United States asked NATO governments what addi-
tional expenditure they intended to carry out on their own, and how

Interdepartmental Committee on the Defence Estimates, DE/M (49) 1st meeting, 14
July 1949, DEFE 10/65, TNA.
Till Geiger, Britain and the Economic Problem of the Cold War: The Political Economy and
the Economic Effect of the British Defence Effort, 1945“1955 (Aldershot: Ashgate, 2004),
pp. 38“9, 124“8, 132“3.
250 Arms, economics and British strategy

Table 5.2. Strength of armed forces and women™s services, 1945“54

(™000, at June each year)

1945 5,120
1946 2,055
1947 1,312
1948 847
1949 770
1950 690
1951 827
1952 872
1953 866
1954 839

Source: Central Statistical Of¬ce, Annual Abstract of Statistics.

Table 5.3. Defence expenditure as a percentage of GDP, 1946/7“

Financial year

1946/7 18.6
1947/8 9.0
1948/9 7.2
1949/50 6.7
1950/1 6.6
1951/2 8.6
1952/3 10.0
1953/4 9.2

Source: Central Statistical Of¬ce, Annual Abstract of Statistics;
Mitchell, British Historical Statistics p. 830.

much more would be physically possible with American help. In
Britain™s case, programmed defence expenditure in the three ¬nancial
years 1951/2 to 1953/4 prior to the outbreak of the war in June had been
£2,340 million, and by the end of July various approved additions had
raised this ¬gure to £2,590 million. The Economic Section of the
Cabinet Of¬ce and the Central Statistical Of¬ce calculated that it would
be physically possible to add a further £800 million over that period,
making a total of £3,400 million, and the Chancellor, Cripps, thought
that the United States should be asked to ¬nance half the total increase
of about £1,100 million on the pre-July programme. The new pro-
gramme was prepared and approved in about a week at the beginning of
August, without waiting for any formal agreement on aid. In the event,
the Americans made clear in September that they had no intention of
The impacts of the atomic bomb and the Cold War 251

supplying dollars to help Britain deal with the consequences of re-
armament for her balance of payments. Aid was to be primarily in the
form of equipment and materials, with limited ¬nancial aid allocated
according to a formula for fair sharing of the burden of defence by all
NATO countries, including the United States. Meanwhile, the defence
departments, realising that the ¬nancial brakes were off, sought further
additions to their individual programmes, and the total defence
programme for 1951/2 to 1953/4 was revised to £3,600 million at the
end of August, this ¬gure representing what Attlee called the maximum
that could be done without resorting to a war economy. When the
Chinese intervened in Korea in November, the Americans asked for
greater efforts, and on 25 January 1951 the Cabinet agreed a new
programme for 1951/2 to 1953/4 of £4,700 million, although the scale
of diversion of labour from civil production, including exports, would be
considerable.51 Even the new Chancellor of the Exchequer, Gaitskell,
felt that failure to support the Americans would have serious con-
sequences for NATO, and two of his principal economic advisers, Sir
Robert Hall, head of the Economic Section, and Edwin Plowden, head
of the Central Economic Planning Staff, both believed that the Second
World War could have been avoided if Britain had reacted more quickly
to the Nazi menace.52
Nevertheless, how could the government decide to increase a pro-
gramme for £3,600 million, which was supposed to be the maximum
physically possible with a peace-time economy, to £4,700 million?
When announcing the latter programme in January 1951, Attlee
admitted that it might not be possible to spend all the money within the
three-year period; that would depend on prompt delivery of machine
tools and materials from the United States. He also claimed that far-
reaching measures were being taken to secure increased production,
but, although there was a partial reversion to war-time controls to
allocate raw materials, the government did not restore the key war-time
power to direct labour.53 Instead employment exchanges took informal
steps to guide workers to key jobs, but with the economy at full
employment, not many workers were applying to employment exchan-
ges. The crucial element in the programme was the demand to be placed

Cairncross, Years of Recovery, pp. 214“21.
Philip Williams (ed.), The Diary of Hugh Gaitskell 1945“1956 (London: Jonathan Cape,
1983), p. 226; Edwin Plowden, An Industrialist in the Treasury: The Post-War Years
(London: Andre Deutsch, 1989), pp. 97“8.
483 HC Deb., 5s, cc. 582“7. For reimposition of controls, see J. C. R. Dow, The
Management of the British Economy 1945“60 (Cambridge University Press, 1964),
pp. 57, 159“62, 168.
252 Arms, economics and British strategy

Table 5.4. Planned and actual rearmament expenditure on products of metal and
engineering industries, 1950/1“1953/4a


Plannedb Actualc
Financial year

1950/1 170 170
1951/2 360 275
1952/3 590 470
1953/4 700 510

Notes: a Civil defence excluded.
March 1951 prices.
Current prices.
Source: Cairncross, Years of Recovery, p. 223.

on metal and engineering industries, collectively known as the metal-using
industries, which included the motor industry, electrical goods, machine
tools and shipbuilding, and which accounted for over 40 per cent of
British exports.54 Under the £4,700 million programme for 1951/2 to
1953/4, production by the metal-using industries directly for defence
would have to increase from about £170 million in 1950/1 to about £360
million in 1951/2. One-third of the latter ¬gure would be on aircraft,
one-sixth on shipbuilding and marine engineering, and one-sixth on
vehicles. There would have to be a large increase in employment in
existing aircraft factories, and substantial new industrial capacity would
be required for making aero-engines and tanks.55 As table 5.4 shows, it
did not prove to be possible to carry out the programme in full.
The ¬gures in table 5.4 are approximate: the planned ¬gures for 1951/
2 to 1953/4 were ¬‚exible as between years, although the ¬gure of £360
million for 1951/2 did appear in the Economic Survey for 1951. The gap
between planned and actual output was greater than appears in the table
because prices were rising. Production was held up by shortages of
skilled labour and materials, and by delays in designing new equipment
and in the delivery of machine tools and components. In the case of the
Canberra bomber, production in 1951“2 was only about half of the
planned level, and development of tail warning equipment was delayed,
so that aircraft produced before 1953 lacked that important item of
equipment. There were other examples of electronic equipment being
delivered later than the aircraft for which it had been designed,
including the Doppler Drift navigation device for the Valiant and the

Cairncross, Years of Recovery, p. 222.
Economic Survey for 1951 (Cmd 8195), PP 1950“51, xxvii. 73“118.
The impacts of the atomic bomb and the Cold War 253

Canberra.56 Delays in production of the Hunter and Swift were pri-
marily due to development problems. In the view of one insider, the
aircraft industry had more projects than it could cope with.57 Certainly
rearmament brought about a boom: Ministry of Defence and Ministry
of Supply expenditure on aircraft, including research and development,
rose from about £200 million in the late 1940s to £570 million in 1954
and employment in the aircraft industry increased by 55 per cent
between 1950 and 1954.58 Such rapid expansion is rarely problem-free.
Machine tools were kept in short supply for the defence programme as a
whole because of the need to retain export markets. As the Ministry of
Supply warned, ˜curtailment of exports would involve the breaking of
contractual delivery dates, and could not fail to be damaging in the long
term™. In particular, the Canadian market, which had been lost during
the war, and where a special effort was being made to recover lost
ground, might be lost forever.59
When the Conservatives returned to power in October 1951 they were
warned by the Treasury that the country faced a balance-of-payments
crisis brought about by rearmament and by rising prices of raw mate-
rials, the latter being in response to increased defence expenditure and
strategic stockpiling in the world as a whole, especially the United
States. The Permanent Secretary, Sir Edward Bridges, warned the new
Chancellor, R. A. Butler, that the position was worse than in 1949, the
year of devaluation, in that on current trends the gold and dollar
reserves were likely to fall below the minimum of £500 million required
for the operation of the sterling area by the end of June 1952. This date
was subsequently advanced to the end of April when it was discovered in
February that economic and defence aid from the United States would
be $225 (£80.4) million lower than expected. To ease the pressure on
the pound Butler raised Bank rate and used controls inherited from
Labour to cut imports from outside the sterling area. The Cabinet
agreed on 30 October 1951 that all government departments, including
the defence departments, must reduce their expenditure.60
A review of the rearmament programme was begun in December,
with an emphasis on reducing demand on the metal-using industries in

˜Progress of rearmament programme: meetings between the Minister of Defence and
service ministers™, DEFE 7/669, passim; ˜Programme report for 1952: note by Air
Ministry™, PDP/P (53) 3, 7 Feb. 1953, DEFE 7/670, TNA.
Sir Roy Fedden, Britain™s Air Survival: An Appraisement and Strategy for Success
(London: Cassell, 1957).
Edgerton, England and the Aeroplane, p. 89.
˜Machine tools for £4,700 million defence programme™, memorandum by the Minister
of Supply, CPC (51) 3, 5 Feb. 1951, CAB 134/115, TNA.
Peden, Treasury and British Public Policy, p. 458.
254 Arms, economics and British strategy

order to increase exports. It became clear that there was no prospect of
the programme being completed by the end of March 1954, and that
defence expenditure would continue to rise until 1955/6. The defence
budget for 1952/3 was based on the hypothesis that the rearmament
period would have to be extended by one year. The Treasury tried to
secure an agreement with the Minister of Defence, Earl Alexander, that
expenditure in 1953/4 would not exceed £1,600 million, but, with a
system of annual budgeting, there was no means of ensuring that the
three service departments™ expenditure could be kept in check in future
years.61 In May 1952 the Treasury produced a Cabinet paper pointing
out that Britain was spending a higher proportion of national output on
defence than in the late 1930s, and could not continue to rely on
American aid. The paper pointed out the extent to which Britain™s
external ¬nancial position had deteriorated since before the war, and
drew attention to preliminary studies that showed that defence was
placing too great a burden on the metal-using industries. Butler was
supported by Cherwell, who said that he agreed with almost everything
in the Treasury™s paper. The Board of Trade reported that overstraining
the engineering industry was leading to increased prices and longer
delivery dates at a time when competitiveness on international markets
was paramount.62 On 29 May the Cabinet asked the Minister of
Defence to examine the programme, in consultation with the Chancellor
of the Exchequer, and in the light of the new strategic appreciation being
prepared for him by the Chiefs of Staff, and to report on how economies
could be secured and the pressure on the balance of payments eased.63
This was the context for the Chiefs of Staff™s Global Strategy paper in
June 1952, the strategic aspects of which are dealt with in the next
section of this chapter. Costing of the Global Strategy paper indicated
that total expenditure for 1951/2 to 1953/4 would be £4,353 million,
compared with Labour™s £4,700 million programme for these three
¬nancial years, but another £3,724 million would be required over the
two years 1954/5 to 1955/6.64 Cherwell advised Churchill that the
Chiefs™ proposals were ˜quite beyond the bounds of practical politics™, in
that the rise in the annual cost of defence would be the equivalent of 2s

G. R. M. Hartcup, ˜History of the defence budget, 1946“71™, Treasury Historical
Memorandum (1971), pp. 4“5, T 267/23, TNA.
˜Economic policy™, memorandum by the Chancellor of the Exchequer, C (52) 166, 15
May, minute by the Paymaster General to the Prime Minister, C (52) 171, 23 May, and
˜The export problem™, memorandum by the President of the Board of Trade, C (52)
175, 26 May 1952, CAB 129/52, TNA.
Cabinet conclusions, 29 May 1952, CAB 128/25, TNA.
˜The defence programme™, memorandum by the Minister of Defence, C (52) 253, 22
July 1952, CAB 129/54, TNA.
The impacts of the atomic bomb and the Cold War 255

(10p) on the income tax, at a time when the standard rate was 9s 6d
(47.5p), barely below its wartime level of 10s (50p). Moreover, the
services™ proposed programmes for the products of the metal-using
industries would increase from £500 million in 1953 to £570 million in
1954, making it harder to correct the adverse balance of payments on
current account by increasing exports.65
The Treasury™s target for the load on the metal-using industries was
£450 million, and a committee was set up in the Ministry of Defence
under Sir Richard Powell, the deputy secretary, to ¬nd out what could
be done if the Global Strategy ¬gures were reduced by 8 per cent and by
10 per cent respectively. The Powell Report showed that the Chiefs of
Staff™s strategic aims were incompatible with Britain™s economic posi-
tion, and that commitments would have to be reduced. The Chancellor
was advised by his of¬cials to keep defence expenditure in 1953/4 below
£1,550 million. By deferring ¬ghter, naval and vehicle programmes, the
Minister of Defence was able to offer a ˜compromise™ plan, the cost of
which would be £1,645 million in 1953/4 and £1,698 million in 1955/6.
In November 1952 the Cabinet agreed that the defence budget for
1953/4 should be £1,610 million at current prices, but that this ¬gure
would have to be increased to take account of an expected wage increase
in the engineering industry and the additional expense of maintaining
troops in Germany, now that the Germans were no longer required to
pay for occupation costs. The load of defence orders on the metal-using
industries was not to exceed £480 million in any one year, 18 per cent
less than what would be required for the Chiefs of Staff™s global strategy.
Finally, the Cabinet instructed a committee chaired by Sir Norman
Brook, the Cabinet secretary, to conduct a radical review of the defence
effort after 1953 and to report on ways in which the defence budget
could be cut further.66 Inevitably, as the next section of this chapter will
show, the Radical Review provoked inter-service competition for funds
and made consensus on strategy dif¬cult.
Given the overloading of industry, there was a need to establish
priorities in the existing rearmament programme to speed up deliveries

Cherwell to Prime Minister, 18 July 1952, PREM 11/49, TNA. Figures for the burden
on the metal-using industries varied. The defence departments claimed that orders were
never ful¬lled on time, and used the ¬gures in the text, which were 15 per cent below
the total of orders that would be placed. Cherwell, on the other hand, argued that
orders would tie up capacity even if industry failed to ful¬l them, and used higher
Cabinet conclusions, 23 July 1952 and 7 Nov. 1952, both CAB 128/25; ˜The defence
programme™, report by Chiefs of Staff, 29 Sep. 1952, with ˜Report of the Committee on
the Defence Programme™ (Powell Report), 24 Sep. as annex, D (52) 41, CAB 131/12,
256 Arms, economics and British strategy

of the most urgent items. Consequently, a ˜super-priority™ scheme was
set up. Churchill stated in December 1951 that overriding priority, even
over exports, should be given to production of the latest types of aircraft,
ammunition for them, and the new radar chain, with its control and
reporting system, for the air defence of the United Kingdom. In January
1952 he speci¬ed Canberra and Valiant bombers, and Hunter, Swift
and Javelin ¬ghters, as the aircraft to be given priority, although of these
types only the Canberra was in production. He also speci¬ed 20-mm
ammunition, apparently in error, as the new ¬ghters would use 30-mm
ammunition. He then added Centurion tanks to the list.67 The Treasury
was suspicious of the effects of the super-priority scheme on exports “
with some reason as the Ministry of Supply, which was responsible for
operating it, sent out a standard letter to trade associations and main
contractors in March 1952, asking them to give identi¬ed contracts
priority ˜over all other work of any kind whatsoever™, including exports if
necessary.68 Duncan Sandys, the minister of supply, believed that the
acceleration of selected items was his principal task.69
In practice, the possibly bene¬cial effects of the scheme were diluted
by a tendency on the part of the services and others to add items to the
list. Nor was the list con¬ned to defence equipment. Civil airliners “ the
Bristol Britannia, the de Havilland Comet and the Vickers Viscount “ were
also given super-priority in December 1952. The Society of British Air-
craft Contractors and the Ministry of Supply hoped to break the American
monopoly in world markets by delivering as many of these jet or turbo-jet
aircraft as possible to foreign airlines before American jet airliners
appeared later in the decade.70 The Cabinet also agreed in December
1952 to add the Vulcan and Victor medium bombers, which were still at
an early stage of development. Then in March 1953 the Minister of
Defence wrote to Churchill suggesting that a new naval ¬ghter, the N.113,
should be given super-priority to de¬‚ect criticism of naval aviation,
although the prototype was not due to ¬‚y until January 1954 and
production was not expected until 1956/7. The head of the Treasury™s
division dealing with defence expenditure, G. P. Humphreys-Davies,

E. A. Shillito (Treasury), ˜Overriding priority for air programme™, 20 Dec. 1951; Prime
Minister to Minister of Supply, Minister of Labour and Chancellor of the Duchy of
Lancaster, 20 Jan. 1952, T 225/511, TNA.
Letter to trade association, 26 Mar. 1952, Ministry of Supply records, series 49, ¬le 189
(AVIA 49/189), TNA.
˜Notes of a meeting to discuss super priority for certain defence contracts™, 1 Apr. 1952,
AVIA 49/190, TNA.
Additional notes for ˜Super-priority for civil aircraft™, memorandum by the Minister of
Supply, C (52) 331, 15 Dec. 1952, AVIA 49/190; Cabinet conclusions, 16 Dec. 1952,
CAB 128/25, TNA.
The impacts of the atomic bomb and the Cold War 257

observed that there was no evidence that super-priority was involving
any extra cost to the Exchequer in the ¬eld of aircraft production (as
distinct from research and development) or doing any real harm to
exports; the addition of the N.113 to the list would strengthen the case
for cutting out other items and seemed ˜unlikely in itself to do any real
harm (or any real good)™.71
As regards the production of Centurion tanks, the Ministry of Defence
had made out a case at the end of 1950 for two new factories to meet War
Of¬ce requirements. Although the factories would make heavy demands
on building labour and on machine tools, and would require two to three
years to be brought into full production, the Treasury agreed to the
proposal, being persuaded that there was no other way to supply the
British and Commonwealth armies. The United States had no medium
tank ready for production when the Korean War broke out and could
offer only light tanks, in which the British army was not interested, until
American production of new medium tanks had met their own and
French requirements over the next three to four years; and no production
on the European continent was in sight.72 In extending super-priority to
Centurion tanks Churchill had in mind more than British requirements.
He was advised by Sandys in January 1952 that, if tanks were given
overriding priority, 800 Centurions could be produced in 1952/3, of
which 200 could be sold to the American or other buyers. Sandys had
misunderstood the position; the Ministry of Defence thought it most
unlikely that more than 600 Centurions could be produced in 1952/3, of
which 110 were for a Canadian order. One thousand Centurions could be
produced in 1953/4, if given suf¬cient priority, and the Chancellor of the
Exchequer, Butler, urged that as many as could be spared should be sold
to the Americans. Churchill, however, was not prepared to deny even
second-line Territorial formations Centurions in order to release more
than 500 tanks for the Americans. In the event this ¬gure broadly met the
American requirement for 135 in 1952, and 200 in each of the following
two years. Even with export orders, placed or in prospect, from Com-
monwealth countries and Sweden and Switzerland, Sandys agreed with
the Chancellor that only 650 tanks should be produced in each of the
years 1953/4 and 1954/5.73
Alexander to Prime Minister, 11 Mar., and G. P. Humphreys-Davies, ˜Super priority
for the N.113™, 12 Mar. 1953, T 225/511, TNA.
˜Increase of capacity for production of tanks™, DO (50) 106, 28 Dec. 1950, G. P.
Humphreys-Davies to E. G. Compton, 13 Jan., and Compton to William Armstrong,
18 Jan., 1951, T 229/850, TNA.
E. A. Shillito, ˜Tanks™, 30 Jan.; Butler to Prime Minister, 15 Feb. (draft dated 14 Feb.);
Churchill to Chancellor, Secretary of State for War and Minister of Supply, 16 Feb.;
Shillito, ˜Centurion tanks™, 18 Feb.; anon., ˜Tank production™, n.d. but July; F.F.
258 Arms, economics and British strategy

Table 5.5. UK share of export of manufactures from eleven
industrial countries, 1937, 1948, 1950“8a

1937 21.3
1948 29.3
1950 25.4
1951 21.9
1952 21.5
1953 20.9
1954 20.5
1955 19.8
1956 19.2
1957 17.9
1958 18.2

Note: a USA, Canada, UK, West Germany, France, Italy,
Belgium, Netherlands, Sweden, Switzerland and Japan.
Source: London and Cambridge Economic Service, The
British Economy: Key Statistics 1900“1970 (1971), p. 17.

The overall effect of rearmament on exports is dif¬cult to disentangle
from other factors. Britain™s share of exports of manufactures was
already declining in 1950, as it was well above the pre-war level and was
bound to fall as the German and Japanese economies recovered from
war-time disruption (see table 5.5). The fall of 3.5 percentage points in a
single year between 1950 and 1951 was not far short of the 3.9 per-
centage points in the two preceding years, 1948“50, suggesting that
rearmament did make a difference, but from 1951 to 1953 change was
gradual, suggesting that Treasury and Board of Trade attempts to
prevent defence crowding out exports had some success. Exports of
engineering products actually increased by 4 per cent between 1950 and
1951, but this was less than the 16 per cent increase between 1949 and
1950. Exports of the metal-using industries as a whole fell only slightly
as a proportion of total exports between 1950 and 1951, from 49.4 to
46.6 per cent.74 Nevertheless, rearmament did check the expansion of
exports required for a sound balance of payments on current account,
and by slowing delivery dates may have made British goods more
uncompetitive than they might otherwise have been.

Turnbull, ˜Tank production™, 8 Aug., and Duncan Sandys to Alexander, 17 Nov. (all
1952), T 229/850, TNA.
Economic Survey for 1952 (Cmd 8509), PP 1951“52. xxv. 203“49, paras. 28, 30, and
table 6.
The impacts of the atomic bomb and the Cold War 259
Table 5.6. Defence expenditure of leading NATO countries as a percentage of GNP at factor cost,

Calendar year

1949 1950 1951 1952 1953 1954 1955

Canada 2.4 2.9 6.2 8.5 8.5 7.7 7.2
France 6.2 6.3 8.2 10.0 10.6 8.5 7.4
Germany (West) n/a n/a n/a n/a 4.9 4.7 4.8
Italy 3.9 4.2 4.7 5.0 4.2 4.5 4.1
UK 7.0 7.3 8.9 11.2 11.2 9.9 9.2
USA 5.1 5.5 10.8 14.9 14.7 12.7 11.0
Total, Europe 5.6 5.8 7.1 8.6 8.0 7.1 6.5
Total, NATO 5.1 5.4 9.7 13.0 12.4 10.7 9.4

Source: NATO Information Service, NATO Facts and Figures (Brussels, 1976), p. 294.

Till Geiger has noted that increased demand for machine tools for
defence contractors disrupted investment in civil industry, but con-
cluded that there was no conclusive proof that higher investment would
have led to higher economic growth.75 However, high defence expen-
diture did contribute to excess demand in the economy and to balance-
of-payments problems. Both the Labour and Conservative governments
tried to avoid an in¬‚ationary wage“price spiral by persuading the Trades
Union Congress to encourage wage restraint, and to reduce pressure on
sterling by curbing imports. Stephen Broadberry and Nicholas Crafts
have argued that such policies, while effective at a macroeconomic level,
created a non-competitive environment in which restrictive practices on
the shop ¬‚oor, and price ¬xing by business, ¬‚ourished, to the detriment
of productivity growth.76 Lower defence expenditure would also have
allowed some tax relief at a time when businessmen and the Labour
government™s economic advisers were critical of the effects of direct
taxation on incentives to work harder or to take risks in new enterprises.77
Britain devoted a higher proportion of her GNP to defence than her
NATO allies in Europe (see table 5.6). The total NATO average was
heavily weighted by the United States™ contribution, and all countries
except the United States were below the total NATO average after 1951.
The United States, being then largely independent of foreign sources of

Geiger, Britain and the Economic Problem of the Cold War, pp. 226“36, 292, 324.
S. N. Broadberry and N. F. R. Crafts, ˜British economic policy and industrial
performance in the early postwar period™, Business History, 38 (1996), no. 4, pp. 65“91.
Daunton, Just Taxes, pp. 222“8.
260 Arms, economics and British strategy

food and raw materials, and possessing the bulk of the world™s reserves of
monetary gold, as well as the currency that other countries were anxious
to obtain for their monetary reserves, could afford to run a balance-of-
payments de¬cit on a scale that would have been inconceivable for
Britain. Britain could not have devoted as high a proportion of her GNP
to defence as the United States did from 1951 without bringing about a
sterling crisis. Table 5.6 also shows that, despite her post-war economic
problems, and despite reductions in the defence budget after 1947,
Britain had been spending more on defence relatively than even the
United States on the eve of rearmament in 1949 and 1950.78

Global strategy
Given that British defence expenditure was pressing against the limits of
what was economically possible, reliance upon a nuclear deterrent might
seem to be a logical way of achieving security at affordable cost. How-
ever, the road to the 1952 Global Strategy paper was by no means
straightforward, nor was it clear even then what the implications of the
atomic bomb for defence policy would be. Planners servicing the Chiefs
of Staff Committee had been formulating long-term strategy since
before the end of the war, identifying threats, the nature of a future war,
and what measures should be taken. Since it was assumed that war with
the United States was unthinkable, and that Germany and Japan would
be held down effectively, the only conceivable enemy was the Soviet
Union. The planners assumed that premeditated war by the Soviet
Union was unlikely before 1956, given the time required for economic
reconstruction and for manufacturing an adequate stock of atomic
bombs.79 The precise timing of when even the Americans would have
produced enough atomic bombs for an effective deterrent was uncer-
tain. The Soviet commander, Marshal Zhukov, said in 1955 that the
United States had had only ¬ve or six atomic bombs in the immediate
post-war period, and these had not had decisive signi¬cance.80 The
scienti¬c advice given to the Deputy Chiefs of Staff™s Atomic Weapons
Sub-Committee in January 1946 was that for a long time the number of



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