Hugh Dalton

The Right Honourable The Lord Dalton PC
Dalton in 1940
Chancellor of the Duchy of Lancaster
In office 31 May 1948 – 28 February 1950
Prime Minister	Clement Attlee
Preceded by	The Lord Pakenham
Succeeded by	The Viscount Alexander of Hillsborough
Chancellor of the Exchequer
In office 27 July 1945 – 13 November 1947
Prime Minister	Clement Attlee
Preceded by	John Anderson
Succeeded by	Stafford Cripps
President of the Board of Trade
In office 22 February 1942 – 23 May 1945
Prime Minister	Winston Churchill
Preceded by	John Llewellin
Succeeded by	Oliver Lyttelton
Minister of Economic Warfare
In office 15 May 1940 – 22 February 1942
Prime Minister	Winston Churchill
Preceded by	Ronald Cross
Succeeded by	Roundell Palmer
Chairman of the Labour Party
In office 9 October 1936 – 8 October 1937
Leader	Clement Attlee
Preceded by	Jennie Adamson
Succeeded by	George Dallas
Parliamentary Under-Secretary of State for Foreign Affairs
In office 11 June 1929 – 3 September 1931
Prime Minister	Ramsay MacDonald
Preceded by	Anthony Eden
Succeeded by	James Stanhope
Member of the House of Lords Lord Temporal
In office 28 January 1960 – 13 February 1962 Life Peerage
Member of Parliament for Bishop Auckland
In office 14 November 1935 – 18 September 1959
Preceded by	Aaron Curry
Succeeded by	James Boyden
In office 30 May 1929 – 7 October 1931
Preceded by	Ruth Dalton
Succeeded by	Aaron Curry
Member of Parliament for Peckham
In office 29 October 1924 – 10 May 1929
Preceded by	Collingwood Hughes
Succeeded by	John Beckett
Personal details
Born	(1887-08-26)26 August 1887 Neath, Wales
Died	13 February 1962(1962-02-13) (aged 74)
Political party	Labour
Alma mater	King's College, Cambridge, London School of Economics

Edward Hugh John Neale Dalton, Baron Dalton, PC (16 August 1887 – 13 February 1962) was a British Labour Party economist and politician who served as Chancellor of the Exchequer from 1945 to 1947. He shaped Labour Party foreign policy in the 1930s, opposing pacifism; promoting rearmament against the German threat; and strongly opposed the appeasement policy of Prime Minister Neville Chamberlain in 1938. Dalton served in Winston Churchill's wartime coalition cabinet; after the Dunkirk evacuation he was Minister of Economic Warfare, and established Special Operations Executive. As Chancellor, he pushed his policy of cheap money too hard, and mishandled the sterling crisis of 1947. His political position was already in jeopardy in 1947 when he, seemingly inadvertently, revealed a sentence of the budget to a reporter minutes before delivering his budget speech. Prime Minister Clement Attlee accepted his resignation; Dalton later returned to the cabinet in relatively minor positions.

His biographer Ben Pimlott characterised Dalton as peevish, irascible, given to poor judgment and lacking administrative talent. Pimlott also recognised that Dalton was a genuine radical and an inspired politician; a man, to quote his old friend and critic John Freeman, "of feeling, humanity, and unshakeable loyalty to people which matched his talent."

Early life

Hugh Dalton was born in Neath in South Wales. His father, John Neale Dalton, was a Church of England clergyman who became chaplain to Queen Victoria, tutor to the princes George (later King George V) and Albert Victor, and a canon of Windsor.

Dalton was educated at Summer Fields School and then at Eton College. He then went to King's College, Cambridge, where he was active in student politics; his socialist views, then very rare amongst undergraduates, earned him the nickname "Comrade Hugh". Whilst at Cambridge he was President of the Cambridge University Fabian Society. He did not succeed in becoming President of the Cambridge Union Society, despite three attempts to be elected Secretary.

He went on to study at the London School of Economics (LSE) and the Middle Temple. During the First World War he was called up into the Army Service Corps, later transferring to the Royal Artillery. He served as a lieutenant on the French and Italian fronts, where he was awarded the Italian decoration, the Medaglia di Bronzo al Valor Militare, in recognition of his "contempt for danger" during the retreat from Caporetto; he later wrote a memoir of the war called With British Guns in Italy. Following demobilisation, he returned to the LSE and the University of London as a lecturer, where he was awarded a DSc for a thesis on the principles of public finance in 1920.

There have been suggestions that he was homosexual, but they are rejected by his major biographer Ben Pimlott, who states "no evidence exists that Dalton ever had a sexual relationship with another man, and his private life seems to have been one of blameless monogamy." However he does refer to Dalton having "homosexual tendencies", mentioned below.

Political career

Dalton (right), Minister of Economic Warfare, and Colin Gubbins, chief of the Special Operations Executive, talking to a Czech officer during a visit to Czech troops near Leamington Spa, Warwickshire

Dalton stood unsuccessfully for Parliament four times: at the 1922 Cambridge by-election, in Maidstone at the 1922 general election, in Cardiff East at the 1923 general election, and the 1924 Holland with Boston by-election, before entering Parliament for Peckham at the 1924 general election.

At the 1929 general election, he succeeded his wife Ruth Dalton, who retired, as Labour Member of Parliament (MP) for Bishop Auckland. Widely respected for his intellectual achievements in economics, he rose in the Labour Party's ranks, with election in 1925 to the shadow cabinet and, with strong union backing, to the Labour Party National Executive Committee (NEC). He gained ministerial and foreign policy experience as Under-Secretary at the Foreign Office in Ramsay MacDonald's second government, between 1929 and 1931. He lost this position when he, and most Labour leaders, rejected MacDonald's National Government. As with most other Labour MPs, he lost his seat in 1931; he was elected again in 1935.

Dalton published Practical Socialism for Britain, a bold and highly influential assessment of a future Labour government's policy options, in 1935. The book revived updated nuts-and-bolts Fabianism, which had been out of favour, and could be used to attack the more militant Left. His emphasis was on using the state as a national planning agency, an approach that appealed well beyond Labour.

Foreign policy

Turning his attention to the looming crisis in Europe, he became the Labour Party's spokesman on foreign policy in Parliament. Pacifism was a strong element in Labour Party, but the Spanish Civil War in 1936-1939 changed that, as the Left moved to support arms for the Republican ("Loyalist") cause. During his time in the shadow cabinet, Dalton was one of the leaders of the anti-fascist wing of the Labour Party who clashed with the anti-war wing of Labour. The Labour Party was divided between one faction that was opposed to all war on principle vs. another that was willing to support war against fascist aggression, and as one of the leaders of the latter faction, Dalton frequently fought against the pacifistic faction of Labour. However Dalton was not enthusiastic for the Labour party policy of wanting to intervene, later stating:

I was far from enthusiastic for the slogan "arms for Spain" if this meant, as some of my friends eagerly did, that we were to supply arms which otherwise we should keep for ourselves, for I was much more conscious than most of my friends of the terrible insufficiency of British armaments against the German danger.

His views were different from those of Attlee, later recalling that before the Second World War he believed:

as Germany and Italy were potential enemies of Britain and Franco was their ally, it was in Britain's interest that Franco should not win the Spanish Civil War. It was on this proposition rather than any extravagant eulogy of the Spanish Government that I based most of my public references to this most tragic struggle.

Yet Dalton admitted he was wrong in this assessment of British interests, stating that "When the Germans overran France in 1940 and reached the Pyrenees, Franco was neutral, and with remarkable skill maintained his neutrality until the end of the war. Hitler respected this and never forced his way through Spain to attack Gibraltar or crossed the Straits into Morocco." and "Hitler would not have respected the neutrality of a Spanish Republican Government. If Franco had lost the Civil War, Hitler would have occupied Spain."

Aided by union votes, Dalton moved the party from semi-pacifism to a policy of armed deterrence and rejection of appeasement. He was a bitter enemy of Prime Minister Neville Chamberlain. Dalton in his speeches to the House of Commons charged that the government during the Sudetenland crisis was deliberately trying to exclude the Soviet Union from any role in the crisis despite the fact that Soviet Union had alliances with both France and Czechoslovakia. In a speech to the House of Commons, he stated: "There are some in this country who apparently think it worthwhile and a good bargain to try to push the Soviet Union out of Europe". In a letter to Robert Vansittart, Dalton wrote: "It was amazing how some people, otherwise intelligent, had a fixture about Russia and seemed almost to prefer that this country should be defeated in war without Russian aid rather than win with it".

During the Sudetenland crisis, Dalton frequently defended the Soviet stance. Dalton was a strong supporter of the League of Nations and its principles of collective security, and believed that should be the basis of an Anglo-Soviet alliance. Dalton was attached to the principle of collective security rather than alliance with the Soviet Union per se, and stated if the Soviet Union should invade Germany, Britain should come to Germany's aid, and likewise favored coming to aid of the Soviet Union should Germany invade. Dalton stated that what he really wanted was "a system of mutual guarantee against aggression in Europe". As the Soviet Foreign Commissar Maxim Litvinov frequently praised the League of Nations and collective security in his speeches, it was under these grounds that Dalton advocated an Anglo-Soviet alliance rather in support of communism. Despite his public support for an Anglo-Soviet alliance, in private Dalton admitted that the Soviet Union was "an enigma". Joseph Stalin was a very remote, mysterious figure who rarely spoke in public or saw foreigners, making it extremely difficult to determine how much Litvinov was supported by Stalin. Dalton wrote in his diary: "This is the most difficult gap in one's knowledge to get filled in...what would they do? No one in this country seemed to know".

Under the terms of the 1935 Soviet-Czechoslovak alliance, the Soviet Union was only obligated to go to war if the 1924 Franco-Czechoslovak alliance were activated first in the event of aggression against Czechoslovakia. About the charge that the Soviets were acting in bad faith by only promising to go to war if France did so first, Dalton charged that Moscow was acting in accord with the text of the Soviet-Czechoslovak alliance. About the lack of a Soviet-Czechoslovak border, Dalton believe it was possible for Britain to pressure Poland and Romania into granting the Red Army transit rights to aid Czechoslovakia. At a meeting with Chamberlain on 17 September 1938, Dalton criticised the latter for accepting at face value the claims of the French foreign minister Georges Bonnet that the Soviet Union would do nothing if Germany invaded Czechoslovakia, and therefore it was foolish to trust the promises from the Soviet foreign commissar Maxim Litvinov who claimed otherwise. Bonnet had told Chamberlain that Litvinov had told Jean Payart, the French charge d'affairs in Moscow, that his government's talk of defending Czechoslovakia was empty buster. Dalton recalled: "The PM said that Bonnet, in consequence of this conversation, entertained grave doubts about whether the SU meant to do anything. At that point, I said 'I must say Mr. Prime Minister that I do not believe this story. It is quite contrary to what I have heard from more than one good source on which I place reliance...This conversation, moreover, is quite inconsistent, with the clear, repeated, and recent statements by the Soviet if France moved, she would move at once'". Dalton was well aware that the Yezhovschina had wrecked the Red Army at least for the moment, but still felt that the Soviet Union was the only power capable of engaging with the Germany in Eastern Europe, and was worth having as an ally against the Reich. In a speech in the House of Commons, Dalton asked Chamberlain "would it not be worth something to have the Red Army and Red Airforce on our side instead of being neutral? The Prime Minister claims for himself the title of a realist, but does not any realistic foreign policy in this country necessarily include an attempt to make sure that, if the worse should come, we should have that enormous potential on our side instead of being immobilised?...Is it not a clear calculation that if it can be shown in advance that there would be a combined force arrayed against an aggressor, which would include the Soviet Union, we should be more much likely to avoid war?"

On 15 March 1939, Germany occupied the Czech half of Czecho-Slovakia. Later that same day, Hitler during his visit to Prague proclaimed the Protectorate of Bohemia-Moravia. On 16 March 1939, Dalton played a leading role in the debates in the House of Commons about the end of Czechoslovak independence. Under the Munich Agreement, Britain had promised a "guarantee" of Czecho-Slovakia (as Czechoslovakia had been renamed in October 1938) against aggression in exchange for the Sudetenland being allowed to "go home to the Reich". Dalton in his speech to the House of Commons noted bitterly that Germany had just violated the Munich Agreement and that the British "guarantee" had proven worthless. Dalton stated that Chamberlain "should disappear from office", saying that the only decent thing left for him to do would be to resign immediately. Dalton called the newly declared state of Slovakia a sham as he stated the Slovak declaration of independence "had been paid for by German money...and organised by German agents".. Dalton called the Slovak declaration of independence "a convenient legal let-ago of the guarantee" as Chamberlain insisted that the "guarantee" was not longer valid as Czecho-Slovakia had ceased to exist on 14 March even before the Germans marched in on 15 March. In response to several Conservative MPs who called Czechoslovakia an "artificial" state created by the Treaty of Versailles, Dalton called Czechoslovakia "a once free and happy model democracy in Central Europe" and noted pointedly that he had actually visited Czechoslovakia a number of times, unlike his critics who had never been there. Dalton ended his speech by warning of "a rapidly increasing danger to Britain", supported the idea put forward by the former Foreign Secretary Anthony Eden for a bloc of states to resist further aggression and urged a barrier to further aggression under the slogan "thus far, but no further".

On the evening of 30 March 1939, Dalton along with Arthur Greenwood visited 10 Dowding Street where they were informed by Chamberlain that he planned to announce the British "guarantee" of Poland in a speech in the House of Commons the next day. Dalton expressed his approval of the "guarantee" of Poland, but told Chamberlain that he "would never get away with it...unless he brought in the Russians". During the Danzig crisis, Dalton supported Chamberlain's policy of creating a "peace front" to deter Germany from invading Poland, but was opposed to Chamberlain's policy of making Poland the eastern pivot of the proposed "peace front" rather than the Soviet Union. Dalton argued that Poland was too weak to play the role of the eastern pivot, and only the Soviet Union had the sufficient industrial and military capacity to engage in war with Germany. In particular, Dalton charged that Chamberlain was inept in offering the "guarantee" of Poland without any conditions as he noted that Britain had no leverage over the Polish foreign minister, Colonel Józef Beck, into granting transit rights to the Red Army in the event of a German invasion of Poland. The issue of transit rights became of a cardinal importance during the Danzig crisis as the Soviets refused to sign an alliance with Britain and France unless Poland gave transit rights first, which Colonel Beck was utterly opposed to granting.

Hugh Dalton was among the 2,300 names of prominent persons listed on the Nazis' Special Search List, of those who were to be arrested on the invasion of Great Britain and turned over to the Gestapo.

Second World War

When war came, Chamberlain's position became untenable after many Conservative MPs refused to support him in the Norway Debate in April 1940, and Dalton and other senior Labour leaders made clear they would join any coalition government except one headed by Chamberlain. After Chamberlain resigned early in May, and Lord Halifax had declined the position, Winston Churchill became prime minister. During Churchill's coalition government (1940–45) Dalton was Minister of Economic Warfare from 1940 to 1942. He established the Special Operations Executive, and was later a member of the executive committee of the Political Warfare Executive. He became President of the Board of Trade in 1942; the future Labour leader Hugh Gaitskell, drafted into the civil service during the war, was his Principal Private Secretary. In this position he tackled the price rings.

Chancellor of the Exchequer

Appointment

Main article: Post-war Britain (1945–1979)

After the unexpected Labour victory in the 1945 general election Dalton wished to become Foreign Secretary, but the job was instead given to Ernest Bevin. Dalton, with his skills in economics, became Chancellor of the Exchequer. Alongside Bevin, Clement Attlee, Herbert Morrison and Stafford Cripps, Dalton was one of the "Big Five" of the Labour government.

In his biography of Attlee and Churchill, Leo McKinstry wrote: "Attlee had initially decided that two of the other most vital jobs, the Treasury and the Foreign Office, should be filled by Bevin and Dalton respectively. But the King had baulked at the idea of Dalton as Foreign Secretary, seeing him as untrustworthy and partisan. Similarly, the Foreign Office exerted pressure against Dalton, the outgoing Foreign Secretary Anthony Eden declaring that ‘it should be Bevin’." In 1944, Dalton, a Zionist called for the establishment of a Jewish state in Palestine. He argued for population transfer, stating, "Let the Arabs be encouraged to move out, as the Jews move in." He went even further and discussed the possibility of "extending the present Palestinian boundaries, by agreement with Egypt, Syria, or Trans-Jordan." In private, Dalton often referred to people of color as "diseased nigger communities" or "wogs."

Economic policy

The Treasury faced urgent problems. Half of the wartime economy had been devoted to mobilizing soldiers, warplanes, bombs and munitions; an urgent transition to a peacetime budget was necessary, while minimizing inflation. Financial aid through Lend Lease from the United States was abruptly and unexpectedly terminated in September 1945, and new loans and cash grants from the United States and Canada were essential to keep living conditions tolerable. In the long run, Labour was committed to nationalization of industry and national planning of the economy, to more taxation of the rich and less of the poor, and to expanding the welfare state and creating free medical services for everyone.

Dalton in 1962

During the war, most overseas investments had been sold to fund the cost of its prosecution (the state thus losing the income from them), and Britain suffered severe balance of payments problems. The $3.75 billion 50-year American loan negotiated by John Maynard Keynes in 1946 (and the $1.25 billion loan from Canada) was soon exhausted. By 1947, rationing had to be tightened and the convertibility of the pound suspended. In the atmosphere of crisis, Morrison and Cripps intrigued to replace Attlee with Bevin as prime minister; Bevin refused to play along, and Attlee bought off Cripps by giving him Morrison's responsibilities for economic planning. Ironically, of the "Big Five" it was Dalton who ultimately fell victim to the events of that year.

Cheaper money—that is, low interest rates—was an important goal for Dalton during his Chancellorship. He wanted to avoid the high interest rates and unemployment experienced after the First World War, and to keep down the cost of nationalization. He gained support for this cheaper money policy from Keynes, as well as from officials of the Bank of England and the Treasury.

Budget

Budgetary policy under Dalton was strongly progressive, as characterised by policies such as increased food subsidies, heavily subsidised rents to council house tenants, the lifting of restrictions on housebuilding, the financing of national assistance and family allowances, and extensive assistance to rural communities and Development Areas. Dalton was also responsible for funding the introduction of Britain's universal family allowances scheme, doing so "with a song in my heart", as he later put it.

In one of his budgets, Dalton significantly increased spending on education (which included £4 million for the universities and the provision of free school milk), £38 million for the start (from August 1946) of family allowances, and an additional £10 million for Development Areas. In addition, the National Land Fund was established. Harold Macmillan, who inherited Dalton's housing responsibilities, later acknowledged his debt to Dalton's championing of New Towns, and was grateful for the legacy of Dalton's Town Development Bill, which encouraged urban overfill schemes and the movement of industry out of cities.

Food subsidies were maintained at high wartime levels in order to restrain living costs, while taxation structures were altered to benefit low-wage earners, with some 2.5 million workers taken out of the tax system altogether in Dalton's first two budgets. There were also increases in surtax and death duties, which were opposed by the Opposition. According to one historian, Dalton's policies as Chancellor reflected "an unprecedented emphasis by central government on the redistribution of income".

Budget-leaking and resignation

Walking into the House of Commons to give the autumn 1947 budget speech, Dalton made an off-the-cuff remark to a journalist, telling him of some of the tax changes in the budget. The news was printed in the early edition of the evening papers before he had completed his speech, and whilst the stock market was still open. This was a scandal, and led to his resignation for leaking a budget secret. He was succeeded by Stafford Cripps. Though initially implicated in the allegations that led to the Lynskey tribunal in 1948, he was ultimately exonerated officially, but his reputation suffered another blow.

Return to cabinet

The paved surface of the Pennine Way on Black Hill in the Peak District National Park

Dalton returned to the cabinet in 1948, as Chancellor of the Duchy of Lancaster, making him a minister without portfolio. He became Minister of Town and Country Planning in 1950, the position being renamed as Minister of Local Government and Planning the following year. An avid outdoorsman, he served a term as president of the Ramblers Association, which promoted walking tours. As Chancellor in 1946 he had started the National Land Fund to resource national parks, and in 1951 he approved the Pennine Way, which involved the creation of 70 additional miles of rights of way. He still had the ear of the Prime Minister, and enjoyed promoting the careers of candidates with potential, but was no longer a major political player as he had been until 1947. He left government after Labour lost the 1951 general election.

Personal life

In 1914 Dalton married Ruth with whom he had a daughter who died in infancy in the early 1920s.

Dalton's biographer, Ben Pimlott, suggests that Dalton had homosexual tendencies but concludes he never acted on them. Michael Bloch, on the other hand, thinks that Dalton's love for Rupert Brooke, whom he met at Cambridge University's Fabian Society, went beyond the platonic, citing bike rides in the countryside and sleeping naked under the stars.

In 1908, Dalton also made advances at James Strachey, "waving an immense steaming penis in his face and chuckling softly", as Brooke reported to James' brother Lytton. In later life, Dalton seems to have refrained from sexual relationships with men, though he kept a fatherly interest in the career of various young men (such as Hugh Gaitskell, Richard Crossman and Tony Crosland, who had been noted for their good looks and had had same-sex experiences at Oxford) and was rather touchy-feely with them.

In 1951, Dalton wrote to Crossman: "Thinking of Tony, with all his youth and beauty and gaiety and charm... I weep. I am more fond of that young man than I can put into words." According to Nicholas Davenport, Dalton's unrequited feelings for Crosland became an embarrassing joke within the Labour Party.

Dalton's papers, including his diaries, are held at the LSE Library. His diaries have been digitised and are available on LSE's Digital Library.

Awards

Dalton was president of the Ramblers' Association from 1948 to 1950, and Master of the Drapers' Company in 1958–59. He was created a life peer as Baron Dalton, of Forest and Frith in the County Palatine of Durham on 28 January 1960.

Contributions in economics

Dalton substantially expanded Max Otto Lorenz's work in the measurement of income inequality, offering both an expanded array of techniques but also a set of principles by which to comprehend shifts in an income distribution, thereby providing a more compelling theoretical basis for understanding relationships between incomes (1920).

Following a suggestion by Pigou (1912, p. 24), Dalton proposed the condition that a transfer of income from a richer to a poorer person, so long as that transfer does not reverse the ranking of the two, will result in greater equity (Dalton, p. 351). This principle has come to be known as the Pigou–Dalton principle (see, e.g., Amartya Sen, 1973).

Dalton offered a theoretical proposition of a positive functional relationship between income and economic welfare, stating that economic welfare increases at an exponentially decreasing rate with increased income, leading to the conclusion that maximum social welfare is achievable only when all incomes are equal.

Arms

Coat of arms of Hugh Dalton

Coronet Coronet of a baron Crest A Griffin or Demi-Dragon issuant Vert wings ouvert Escutcheon Azure semḗe of Cross Crosslets a Lion rampant guardant Or Motto Inter Cruces Triumphans In Cruce

Cited sources

• Pimlott, Ben (1985). Hugh Dalton. Macmillan. ISBN 9780333412510. online
• Shaw, Louise Grace (2013). The British Political Elite and the Soviet Union. London: Taylor & Francis. ISBN 9781135761271.
• Smetana, Vít (2008). In the Shadow of Munich British Policy Towards Czechslovakia from the Endorsement to the Renunciation of the Munich Agreement (1938-1942). Prague: Charles University Press. ISBN 9788024613734.

Further reading

• Brady, Robert A. (1950). Crisis in Britain: Plans and Achievements of the Labour Government. University of California Press. Detailed coverage of nationalisation, welfare state and planning
• Dell, Edmund. The Chancellors: A History of the Chancellors of the Exchequer, 1945–90 (HarperCollins, 1997) pp 15–93.

Primary sources

• Hugh Dalton, With British Guns in Italy (1919)
• Hugh Dalton, Call Back Yesterday: Memoirs – 1887–1931 (1953)
• Hugh Dalton, The Fateful Years: Memoirs – 1931–1945 (1957)
• Hugh Dalton, High Tide and After: Memoirs – 1945–1960 (1962)

References

• Craig, F. W. S. (1983) [1969]. British parliamentary election results 1918–1949 (3rd ed.). Chichester: Parliamentary Research Services. ISBN 0-900178-06-X.
• Dalton, H. The measurement of the inequality of incomes, Economic Journal, 30 (1920), pp. 348–461.

External links

Media related to Hugh Dalton at Wikimedia Commons

• Works by Hugh Dalton at Project Gutenberg
• Works by or about Hugh Dalton at the Internet Archive
• Hansard 1803–2005: contributions in Parliament by Hugh Dalton
• "Archival material relating to Hugh Dalton". UK National Archives.
• Hugh Dalton's papers at LSE Archives
• Newspaper clippings about Hugh Dalton in the 20th Century Press Archives of the ZBW
• Portraits of Hugh Dalton at the National Portrait Gallery, London