Government Service and the House of Lords

Hall's tenure as Director of the Economic Section of the Cabinet Office (1947-1953) and Chief Economic Adviser at the Treasury (1953-1961) has been dealt with in detail by Cairncross in his edited volumes of Hall's diaries (Cairncross 1989, 1991), Cairncross and Watts in their history of the Economic Section published in 1989, and Jones in his biography of Hall, An Economist Among Mandarins (1994), and thus will not be surveyed in detail here.

Hall took up the post as part-time Director of the Economic Section in June 1947, becoming full-time in September 1947. Meade had left the posi­tion in April of that year due to illness. At the Section, Hall worked with a number of people who were to go on to make their mark on economics. Among these were his Deputy Director, Marcus Fleming, Trevor Swan, Christopher Dow, George Shackle and Bryan Hopkin, among others. During the economic crisis in Britain and nationalisation of industries over the period July 1947-December 1948, as Meade and his staff had done previously, Hall and his staff produced discussion papers, including the “Balance of Payments Crisis”, “Import Replacement”, “Devaluation” “Fiscal Policy and Economic Planning”, “Interest Rate Policy” and “The Pricing Policy of Nationalised Industries” (see Treasury Papers). Indeed, as Chick commented (1997: 132):

Concerned to improve the influence of the Section, Hall sought to make its ideas more accessible to non-economists. Some simple improvements could be made, such as dissuading the Section from continuing to write “briefs that are too long”.. Hall sought to improve both the presentation of the Section's argu­ments and to reduce their perception as being a gathering of merely academic theorists. Emphasising “the points on which there is substantial agreement” rather than the irreconcilable differences, Hall also attempted to get the econo­mists and industrialists to meet one another.

Hall’s integration into his new position was enabled by the establishment of a good working relationship with Edwin (later Lord) Plowden, who headed the Central Economic Planning Staff from 1947 to 1953. As Jones put it (1994: 95), their ‘friendship and method of working closely...was of a kind that was extremely rare in Whitehall’. Also, according to Jones, as Plowden himself later recalled, their respective advice was given ‘in tandem’: Hall pro­viding the idea or analysis, and after discussion between them, it would be presented by Plowden to the Chancellor of the Exchequer or relevant Treasury committee for their consideration (ibid.).

Reflecting their close working relationship, Plowden and Hall made a joint contribution entitled “The Supremacy of Politics” (1968) to a symposium in 1968 initiated by the editors of The Political Quarterly on priorities in the allocation of national resources, focusing in particular on the determination of public expenditure. With the journal’s editors arguing for the need for a table of priorities and stressing ‘the limited role of rationality’, Plowden and Hall wrote:

Although the electorate cannot be expected to understand the technicalities of the management of the economy, it does take into account, in the consider­ations which lead to the outcome of elections, a view about how the national resources have been managed. But we think that many of the pleas for more research, a more technically trained higher Civil Service, and a reorganisation of the processes of government, are really pleas for a different political system which will hand over the management of public affairs to experts in particular skills or professions. In politics there is no market as there is in economic life, where values which are objectively commensurable are established (at any rate as a first and useful approximation) by the market process, or by calculations about what might be expected to happen if markets which took account of social val­ues could be made to operate.

Regarding Hall's influence on policy-making from the early 1950s onwards, the following may be said. Britain faced balance of payments and inflation problems during Hall's entire tenure at both the Economic Section and the Treasury. By 1952, the joint problems of sterling convertibility and the bal­ance of payments came to a head. A plan to combine the restoration of ster­ling convertibility and a flexible exchange rate—called ROBOT^[92]—was suggested and rejected because of its employment implications. Hall, for his part, opposed the plan as it included sterling convertibility. In 1957, Chancellor of the Exchequer, Harold Macmillan, reconsidered the idea of floating, in the hope that it could reduce exchange rate volatility. Hall sup­ported the float idea, but it was not implemented at the time, or in 1963, after Hall had left the Treasury, when Macmillan, who had become Prime Minister, again considered floating if the balance of payments situation necessitated it (see Jones 1994: 116-121).

Incomes policy was also considered in the early 1950s to counter inflation. Hall strongly advocated it as a tool for wage restraint and argued at the time that it was the only policy that could reconcile price stability and full employ­ment However, the policy was not utilised as the government did not want to antagonise the unions and bring about industrial strife (see Cairncross and Watts 1989: 337).

However, there is another side to the story of Hall’s tenure as head of the Economic Section. While the defeat of the Bank of England and the Treasury over the ROBOT plan for sterling convertibility in 1952 is usually attributed to Hall and Plowden, it was actually the Paymaster General, Lord Cherwell, who did most to block the plan in Cabinet and, while Cherwell consulted Hall, he relied mainly on his own economic adviser, Donald MacDougall. Moreover, Macmillan, both as Chancellor of the Exchequer and as Prime Minister, was in direct contact with Roy Harrod, who was his ex officio infor­mal adviser, something which upset Hall. In addition, in 1957, Thorneycroft consulted Lionel Robbins, leading Hall to seriously consider leaving public service (see Peden 2003: 119).

After his elevation to the House of Lords in 1969, Hall began a second career, first, as a crossbencher between 1970 and 1981 and then as economic spokesperson for the new Social Democratic Party (SDP) over the period 1981-1986. He was an active member of the Lords, giving speeches, engag­ing in debates, and serving on committees and chairing them. Over the period 1970-1981, he spoke on Britain and the EEC, sterling and the decision to float the pound (1972), and inflation, economic policy and OPEC I (1973).

As noted, from 1981 until 1986, Hall was SDP economic spokesperson in the Lords. In 1981, he spoke on social security and workforce expansion, and on the EEC's Common Agricultural Policy, following this in 1982 by speak­ing on the Lords Select Committee's Report on Unemployment, as well as on social security, economic and social policies in developing countries, housing policy, wage councils and the current account. Between 1983 and 1986, he offered his opinions on a host of subjects, including the world economy and currency stability, unemployment in the UK compared to the OECD, trade with Germany, employment policy and monetary policy (see ibid.: 179-180).

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