The year had started with a terrible winter that severely disrupted the nation’s productive capacity. Across the country villages and even towns were cut off by snow Even in Essex the drifts were 14ft deep. Many railway lines closed and, deprived of coal, so too did the power stations. Keeping warm was made illegal: factories closed and millions lost their jobs. Big Ben fell silent, its mechanism frozen solid.After the snow came the floods, and after these came the malign impact of American policies. With the economy almost on its knees it was so obvious that convertibility would lead to a devaluation that foreign central banks were already selling sterling even before the official date: an experience that Dalton likened to “watching a child bleed to death” After convertibility the sales accelerated.

On 20 August the Chancellor announced the suspension of convertibility. By then much of the American loan and much of the Official Reserves had been spent on defending sterling. The underlying crisis thus remained.On 12 November, Dalton presented a painfully deflationary Budget. This came as no surprise: everybody knew that the economic emergency demanded such an act, and indeed the April Budget and some small cuts in public spending had already anticipated the policy shift, though only in minor ways. It was, however, the November 1947 Budget that signified the Government’s acceptance of what everybody knew but that it had hitherto fudged: that war-time austerity had turned into post-war austerity, and that Labour really had no way out of the morass.For Dalton the November 1947 Budget was a great setback for another reason. Just before entering the chamber he carelessly leaked some Budget details to John Carvel, a journalist on the Star, a London evening paper. The Conservatives affected outrage, Dalton resigned and his place was taken by Stafford Cripps, whose asceticism ­ he horrified the diplomats at the British embassy in Washington by running naked around their garden at dawn ­ seemed to suit the new age.Cripps, however, turned out to be less austere in his policies than in his reputation, and his budgets were probably not as tough as they should have been.

A sickly man, he resigned in 1950 and left it to his successor, Hugh Gaitskell, to deliver in the April 1951 Budget the coda to Dalton’s November 1947 Budget, and indeed the coda to the whole of the Attlee administration.On the morning of 9 April 1951 Gaitskell presented to Cabinet the Budget that he intended to deliver the following day. It included the introduction of charges for National Health Service dentures and spectacles. The policy was symbolic (the revenue that he expected to raise was only small) but none the less important. The proposed Budget signalled an acceptance that Labour had been wrong to pledge that the welfare state would always be free at the point of delivery: instead, modest charges were essential to prevent demand for services from growing at an unrealistic rate.Gaitskell’s insistence on introducing a measure that many of his Cabinet colleagues disliked was also the Treasury’s first assertion of what we now accept, however reluctantly: that where spending as well as tax matters are concerned, the Chancellor gets the last word. The Budget also reflected the emergence of Gaitskell as a major political figure, one who was unsentimental about Labour’s heritage and uniquely willing to take on Labour’s keeper of the cloth-cap, the legendary Nye Bevan, architect of the NHS.