An empire of influence

As the economic crisis unleashed by the Korean War and the strain of rearmament began to intensify, a new government came to power in London. It was headed by the indomitable Churchill, now seeking to crown his career by a summit conference with Stalin to end the Cold War – a plan regarded coldly in Washington and by his own Foreign Office. The Conservative party had won the election under a populist banner – ‘Set the people free!’ – that decried the bureaucratic austerity of the Labour regime. Rationing was indeed abandoned in 1954, and Labour's late nationalisation of the steel industry reversed. But there was no major departure from the domestic priorities of the previous government. Full employment remained at the centre of economic policy. The welfare state, its social corollary, was politically sacrosanct: indeed, one of its main Conservative architects, R. A. Butler, was Chancellor of the Exchequer from 1951 to 1955. The tax system was left much as it was.1 No great ideological shift separated the two phases of British post-war politics between 1945 and 1963, even if over particular issues (like the Suez crisis or entry into the Common Market) there was sometimes a wide gap between the two major parties.

In their approach to the management of British world power and what remained of Britain's world-system, Churchill and his colleagues displayed what might be called a limited pragmatism. The senior ministers – Churchill himself, Anthony Eden (the new Foreign Secretary), Lord Salisbury, Lord Swinton (who became Secretary of State for Commonwealth Relations in 1952), Oliver Lyttelton (Colonial Secretary) – had direct experience of the crushing burden of war on British prestige and resources. They knew at first hand how the astonishing scale of American wealth had tipped the balance of power in Anglo-American relations. Lyttelton had been Minister of Production in the second half of the war; as Minister of Civil Aviation, Swinton had struggled to defend Britain's imperial air routes against American demands for the ‘open skies’. Coming to power amid the third great crisis of the British economy in six years of peace, they had good reason to think that Britain's commitments must be brought more into balance with its available strength. They were also bombarded with their officials’ advice: a litany of warnings about the ever-growing constraints of economic weakness, ‘Asiatic’ nationalism, and the demands of Cold War. Churchill himself played an ambivalent role. His impulsiveness and unpredictability alternately enraged and intimidated his cabinet colleagues and drove Eden, his ‘crown prince’, to ineffectual despair. ‘The fact is’, said Lord Salisbury, ‘the PM is much tougher than Anthony.’2 Churchill's instincts were to conserve British energy (by ending the Cold War) but also maintain British imperial claims by outright force if need be (his view about Egypt). The question of when he would go (or die) hung over his government like a fog. His extraordinary position and the intrigues of the Churchillian ‘court’ made the task of decision in any area that attracted his interest one of exceptional difficulty.

It would be a mistake to suppose that Churchill's ‘die hardism’ frustrated every new policy, and wrong to assume that Churchillian reaction was the primary obstacle to more radical thinking about Britain's place in the world. His colleagues believed that better management was the key to reducing the strain on a hard-pressed economy. They did not draw too dramatic a conclusion from the crisis conditions in which they had come into office. They still thought in terms of a British world-system, necessarily modified in methods and scope, but still recognisably global in reach. Behind this ‘conservative’ outlook lay three connected assumptions. First, in common with most ‘informed’ opinion across the whole Western world, they still drew a distinction between the political capacities of whites and non-whites. The independence of India, Burma and Ceylon (Sri Lanka), the resurgence of China under Kuomintang and then Communist rule, and the popular appeal of Arab nationalist movements wrung a grudging acceptance that ‘Asiatic nationalism’ was a force to be reckoned with. They accepted that confrontation with it was counter-productive and futile. But they were instinctively sceptical about how far such nationalism (or its communist variant) could build a modern nation-state. They thought that the challenge facing Asia's nationalist leaders was how to shrug off obsolete anti-colonial attitudes and acknowledge their dependence upon Western know-how and cash as the means to transform their backward economies. The danger they feared was that by bad luck or bad judgment the West might alienate the new Asian states, delay their transition to ‘moderation’ and ‘realism’, or even drive them like China into the communist bloc. British imperial power, on this view of the world, still had a large role to play in the transformation of Asia – in the Middle East and Southeast Asia especially. In Africa, where nationalism lagged far behind Asia in its mobilising potential, that role seemed likely to loom a lot larger. Here, the nationalist leaders (or so it was hoped) could be kept at a safe distance from the virus of Marxism, and coached in the arts of modern state management before being allowed to drive on their own. In its African version, the empire of influence would last a lot longer and compromise a lot less.

Their second assumption also seemed to be vindicated by the course of events since the end of the war. It was that the world would remain divided between great rival blocs and between international groupings that were actually empires or closely resembled them. Survival outside them would be short-lived and risky. The successor-states of empire in the Middle East and Asia would be targets of subversion, and would be forced to choose between rival great power protectors sooner or later. It was in this context that British leaders found Indian criticism of their colonial policies particularly irritating, although it seemed to be driven in part by New Delhi's special concern for the rights of Indian communities in African and other colonial territories.3 Nehru's public support for the Mau Mau rebellion in Kenya brought a strong private protest. It was only gradually that the defects of this geopolitical outlook began to be seen. In 1955, at the Bandung ‘Asian-African’ conference (to which colonial leaders were invited), Nehru and Sukarno, the Indonesian prime minister, urged ‘non-alignment’ for Afro-Asian states, rejecting association with either the West or the Soviet bloc, and calling for the swift end of colonial rule.4 By the mid-1950s, the United Nations was becoming the forum where post-colonial states could make common cause, and mount a propaganda offensive against the remaining colonial powers. This trend was dramatically strengthened by the Suez crisis in 1956 after which Britain became for many ex-colonial states ‘Public Enemy Number One’.5

Their third assumption was also subject to rapid erosion as the decade proceeded. But, in 1951–2, it was still possible for senior ministers to take satisfaction in the moral reputation of British colonial rule and of British foreign policy generally. This strengthened their resistance to calls for a more rapid contraction of Britain's imperial role and deepened their confidence that ex-colonial states would want a special relationship with their former imperial master. Indeed, Britain's adherence to a broadly liberal ideology, newly infused with post-war social democracy, seemed likely to make it a more ‘attractive’ great power in certain respects than the United States, the seat of red-blooded capitalism and race segregation. British policy-makers liked to contrast their tactful handling of the new Asian states (especially India) with what they saw as Washington's ham-handed treatment of post-colonial sensitivities. Where hubris led, nemesis followed.

There was, even so, a considerable sense of urgency in the crisis conditions of 1951. There was little disagreement in principle that Britain must cut its overseas costs, and find a new equilibrium in those countries and regions where its power and influence had come under challenge. Economic and technological change had transformed the conditions in which British world power had been made. ‘I believe’, the new Colonial Secretary told his Cabinet colleagues on his return from Malaya,

that the ever-improving communications of our century – Singapore will soon be less than twenty-four hours by Comet from London – the rapidity with which news and propaganda can now be spread, and above all the increasing education and literacy of all people make it impossible to hold any other policy than the creation of new Dominions, self-governing but part of the Commonwealth owing allegiance to the Crown…Fifty million islanders shorn of so much of their economic power can no longer by themselves expect to hold dominion over palm and pine on the nineteenth century model of power and paternalism which made us the greatest nation in the world. We may regain our pinnacle of fame and power by the pursuit of this new policy.6

In much the same spirit, he pressed ahead with the rapid development of self-government in the Gold Coast (modern Ghana) under way since 1948, and persuaded the Cabinet in February 1952 that Nkrumah, the ‘leader of government business’ in its legislative assembly, should be allowed the title of ‘prime minister’.7 To his ministerial colleagues, Lyttelton sometimes struck a pose of reluctant consent to the force majeure of events. But, in both the Gold Coast and Nigeria, he endorsed expectations of a steady advance to independence. ‘It has been the expressed intention of successive…governments’, he declared in September 1953,

to help the Colonies to attain self-government within the Commonwealth. The timing and method of attaining this objective must vary from one territory to another; but the Gold Coast, with no racial problem, considerable natural wealth and a popular African Government…is offering …enough evidence of ability to manage its own affairs to deprive [us] of any justification for refusing this request.8

What mattered was to devise a political system robust enough to survive the strains of independence and to manoeuvre the local politicians into accepting it. This approach was even more obvious in the case of Nigeria where the 1951 constitution, designed to promote the gradual emergence of a unified state out of the political fragments of the inter-war regime of indirect rule, broke down almost immediately. There was no question of falling back on coercion. Here, too, Lyttelton licensed a major concession. The three regional governments – North, East and West – were to get self-government by 1956, with the implicit suggestion that independence for a federal Nigeria would follow soon after.9 The main concern in British policy was to prevent the Muslim North, where popular nationalism was far less in evidence than it was in the South, from going its own way. As in the Gold Coast (and in Malaya), Lyttelton's aim was the creation of ‘new Dominions’, independent and sovereign, but bound in reality to follow the lead of the ‘Mother-Country’.

Of course, there were plenty of colonies where promoting self-government raised many more difficulties. In East Africa, British policy-makers were attracted to the idea of federating Kenya, Tanganyika (a United Nations trust territory) and Uganda, partly because they thought that a federation would hasten economic development, partly because they hoped it would diffuse settler anxieties in Kenya (where settler opinion was vocal and organised) and Tanganyika. They certainly expected that political progress in East Africa would be much more leisurely than it was in the West African colonies, and the outbreak of Kenya's Mau Mau rebellion in 1952 seemed to confirm this. Yet, even in Kenya, which, said its governor, ‘is and will remain an exceptionally explosive country’,10 Lyttelton supported the move towards greater local self-rule and the sharing of power between settlers and Asians, to be extended in time to Africans as well. It was the only way, the governor argued, to break down the ‘opposition mentality’ from which the whites seemed to suffer and make government work better. In the British Caribbean, London had long favoured federation as the only practicable framework through which a group of small and impoverished territories could achieve greater self-rule and increased prosperity. In the early 1950s, it was anxious to ‘manage’ the constitutional progress of the larger islands like Jamaica, Trinidad and Barbados in ways that would not foreclose the larger objective of a West Indies Federation – a difficult and ultimately futile endeavour. In Malaya, where the worst of the communist insurrection was over by 1953, British policy was similarly dominated by two interlocking objectives. In Malaya itself, they were eager to encourage the formation of multiracial parties and break down the communal antagonism of Malays and Chinese. The promise of staged self-government was the carrot they offered. But they were also determined that Malaya should be part of a larger federal dominion embracing Singapore and the Borneo territories (Sarawak and British North Borneo), as a durable vehicle for British influence and interests in the post-colonial era.11

The larger issue was how that influence could be maintained in ex-colonial territories. Lyttelton had talked of retaining their allegiance to the Crown. The notion that Commonwealth membership would act as the key source of solidarity between Britain and the post-colonial states had already been aired during the Labour government. But, after 1951, it assumed much greater importance as the prospect of self-government in West Africa, the Caribbean and Southeast Asia loomed larger. In the Churchill government there was more than a little unease about the effects of ‘admitting’ new African and Asian members into what was still mainly a white dominions’ club, in which India, Pakistan and Ceylon still formed a minority. Lord Swinton especially worried that the intimacy between Britain and the ‘old dominions’, already under pressure from the new Asian members, would fray to breaking point once the Commonwealth became an association mainly composed of Afro-Asian ex-colonies.12 Yet it was really on the support of the ‘old’ members that Britain would have to rely in the event (still not improbable) of a third world war. One solution proposed was to create two grades of members: in effect an ‘old’ and a ‘new’ Commonwealth. The arguments rattled through Whitehall in 1953 and 1954. The clinching objection was that a two-tier Commonwealth would fail to achieve the primary purpose of the whole Commonwealth system. It would anger and alienate the ex-colonial territories where pro-British feeling was weakest, and where the prestige of ‘full’ Commonwealth membership was the most promising way of maintaining the British connection. To this, Swinton bowed.13 In reality, of course, a pragmatic distinction was made between those Commonwealth countries with whom Britain worked closely in defence and intelligence, and those outside the magic circle of old friends. Meanwhile, the Commonwealth idea became more and more central to British hopes of upholding their status as the third world power, comparable to – if certainly weaker than – the two superpowers, but clearly different in stature from any other great power. ‘Were the United Kingdom to stand by herself’, remarked a departmental memorandum in June 1956, ‘her importance would still be great, but immensely less than it is while she remains the centre of the Commonwealth’.14 Britain's ‘authority and influence will continue, in an increasing degree as its rivals grow in strength and power, to derive from its headship of, or association with, the world-wide group of States that compose the Commonwealth’.15

It could be objected, of course, that this was so much pie in the sky if Britain itself were to be drastically weakened by economic exhaustion or geopolitical crisis, or if the pace of change in the colonial world got out of control. Churchill's obsession with promoting a summit conference with Stalin and (after his death in 1953) his successors worried his colleagues, unnerved the Foreign Office and annoyed the Americans.16 It was rooted in Churchill's belief that his personal influence could achieve the breakthrough to a real European peace and end the Cold War. But it also reflected his deep sense of foreboding at the effects on Britain and British world power of a prolonged ‘armed peace’. As much as, if not more than, his Cabinet colleagues, Churchill was conscious of the limits of Britain's material strength and the vital importance of economic recovery, on which the huge burden of defence spending (around 8 per cent of GDP in 1952) hung like an albatross. Continued Cold War would drive Britain deeper into dependence on America. Even more worrying was the risk that the American will to confront communist power would set off a crisis that could not be stopped. There could be no illusion that either British world power, or even Britain itself, could survive a third world war in the twentieth century.

In fact, the failure of summitry did not prevent an easing of the tensions that had made Attlee's rearmament programme seem so urgent in 1951. Meanwhile, British leaders drew comfort from the powerful advantages that Britain's geopolitical position still seemed to confer. Despite a niggling sense of American rivalry, they enjoyed Washington's general backing for their Middle East policies, and their effort to keep Britain's regional primacy there. American antipathy to European colonialism had already been modified by the fear that the over-hasty demolition of European rule would open the door not to West-leaning nationalism but an East-leaning Marxism. The growing intensity of Cold War competition by 1950 and ever heavier emphasis on the supply of strategic materials strengthened the case for keeping key colonial producers under politically reliable management. The Belgian Congo supplied more than 50 per cent of the ‘free world's’ uranium (all of it destined for the United States) and 75 per cent of its cobalt. Even Fortune magazine, mouthpiece of American big business, choked back its dislike of the Belgian cartels that controlled the Congo's economy in light of these facts.17 Even the French, on whose colonial methods Franklin D. Roosevelt had once lavished his vitriol, enjoyed the support and extensive largesse of the American government in their Vietnamese war. There was good reason to think that Britain's contribution to global ‘containment’ would earn Washington's goodwill for as long as the Soviet threat lasted.

Thus London could hope for far greater leverage in Washington than any other Western country. It could also exploit its special position in Europe. This was not just a matter of being (for the moment) economically stronger than other European countries. It derived in great part from the deep rift of mistrust between France and West Germany, and French opposition to the rearming of Germany or the German admission to NATO. So long as this rift lasted, France was bound to look to Britain as its most reliable ally: after all, the Germans might be bribed into pro-Soviet neutrality; and American willingness to pay the full price of keeping France free could never be more than a matter of faith. But British self-interest bound them to France against both the Soviet threat and the danger of German aggrandisement. It was the British undertaking (in the Paris agreement of 1954) to keep 50,000 men in West Germany (the ‘British Army of the Rhine’) that cleared the logjam and won French agreement to recruiting a West German army, the vital reinforcement of NATO that Washington wanted. The British were the key (or so it appeared) to the internal solidarity of the West European members of NATO. Their blessing was needed (or so it appeared) for any West European project. Their cooperation was vital if the United States was to manage its cumbrous European commitments alongside its burdens in Northeast and Southeast Asia and in Latin America.

Finally, the British could take some satisfaction, in the early 1950s at least, from the fact that their colonial empire was still little exposed to direct assault from outside. Hong Kong was perhaps the greatest exception. Elsewhere, for the most part, it was the risk of internal subversion that threatened colonial authority and the efforts to orchestrate colonial politics. Nor had their colonial power yet become the embarrassing archaism that it later appeared. The British could point to the French, the Portuguese and the Belgians as practitioners of colonialisms far less liberal than their own, and far less likely to lead to the self-governing nation-states, the ideal form of polity enshrined in the Charter of the United Nations. Much effort was expended in the reinvention of empire as the preparatory school for colonial adulthood, finally recognised with the key to the door – sovereign membership of the (British) Commonwealth.

These aims and plans belonged to the world of ‘high’ policy-making: they drew on the products of a Realpolitik calculus. But how far were they ‘viable’ in terms of public opinion? In Britain itself, the rough rule of thumb for working politicians remained much as it had been for decades. British opinion was largely indifferent to the detail of what happened in ‘remote corners’ of the Empire. But it could be quickly aroused by reports of the murder or mistreatment of other (white) Britons, and expected the smack of firm government to be felt by the miscreants. On the other hand, intervention that went wrong or produced heavy casualties for little return, would damage a government's prestige, perhaps very badly. It might be better in those cases to stage a rapid retreat from an untenable salient (like Palestine or Abadan) and hope that this would be seen as cool-headed restraint. As an index of attitudes the British newspaper market offered a very approximate guide. Of the daily papers, those leaning to the Right (Daily Express, Daily Mail, Daily Sketch and Daily Telegraph) had a circulation (in 1956) of approximately 8.2 million; those to the Left (Daily Mirror, Daily Herald and News Chronicle) approximately 7.2 million.18 Although it could not be assumed that this reflected the relative strength of opinion for or against the defence of empire, these figures gave some indication of the fine line to be trodden if it was to enjoy general backing at home. The more serious danger was that public opinion in general would become disillusioned by the cost (in lives and money) of fighting colonial insurrections; that the burden of world power on the domestic standard of living would grow unacceptably heavy; or that some shocking abuse of colonial rule would give the critics of empire (usually a vociferous but minority group19) a chance to derail official policy and encourage its local opponents – those politicians who were labelled ‘extremists’ by the colonial authorities. In general, however, a revolt by public opinion seemed unlikely, and the counter-insurgencies in Malaya, Kenya and (after 1954) Cyprus were successfully portrayed as a fight against communism, terrorism and barbarism.

British opinion was important, but so was opinion elsewhere in what was still meant to be Britain's sphere of influence. In Australia, the sense of being a ‘British’ country was still very strong. Intense rivalry in cricket, periodic bursts of resentment over trading arrangements, irritation at London's indifference to Australia's regional defence and the knowledge that Australia now depended more upon American power for its national security had not erased the close identification with Britain's fate and fortunes.20Britain's survival as a major world power and the centre of a global trading system still seemed emphatically in Australia's interests. To most Australians, the stability of their own society and its cultural cohesion still seemed to derive mainly from its British origins and continuing ‘British’ character. As a small community of European stock on the maritime margins of Asia, the cultural lifeline to Britain had always been important. The independence of India, Pakistan, Sri Lanka, Burma and Indonesia, and the political change impending elsewhere in Southeast Asia may have deepened the feeling of antipodean isolation, and increased the urgency of keeping the British connection. One measure of this continuing bond was the pattern of migration. Increasing Australia's British-born population was government policy, and (white) British immigrants (a large proportion of them ‘assisted immigrants’) made up half the intake of newcomers until the 1960s.21 There was also a migration in the other direction as Australians came to Britain in substantial numbers to pursue education and seek career opportunities. The public stance of the Menzies government (Menzies was prime minister from 1949 to 1966) of loyalty to Britain and devotion to the Crown (the Queen's visit to Australia in 1954 – the year after her coronation – was received with great popular enthusiasm) thus largely reflected Australian feeling – and the expectation that the British should continue to behave like an imperial people.

Not surprisingly, perhaps, these attitudes were echoed with still greater vehemence across the Tasman Sea in New Zealand. There, the cool calculation of an expert committee at the end of the war that immigration from Britain was unnecessary22 was overturned by ‘the clamour of public opinion’.23 The sense of dependence on the British market for New Zealand's foodstuffs and wool was almost overwhelming. Under the National party government of Sidney Holland, New Zealand's place in a Britain-centred world was announced unequivocally. ‘Where Britain goes, we go’, declared Holland's press statement after the Commonwealth Finance Ministers Conference in early 1952. ‘If Britain sinks, we are sunk…but neither of us will sink’, he added – perhaps a little hastily.24Like the Australians, New Zealanders expected the British to behave imperially, especially when it came to safeguarding the Suez route to the South Pacific. On the future of the Suez Canal, the New Zealand press was even more unbending than the Conservative diehards in Britain.25 At the height of the Suez crisis in November 1956, Holland asked himself: ‘Do we want to be in a position where Britain will say, or even think, we sought their help and it was not forthcoming…?’.26 His answer was no. Of course, there was scope for friction and disagreement, not least over the role of British-owned shipping companies in New Zealand's trade.27 But, in the Cold War climate, there were few parts of the ‘British world’ where London could hope for a more sympathetic hearing than in 1950s New Zealand.

In the other ‘old dominions’, public attitudes were less crystalline. Canada ‘is no longer a British dominion trying to act like a nation’, said Fortune magazine approvingly in August 1952.28 Its population had risen by 20 per cent since 1940, its national product by 90 per cent while its foreign trade had tripled. The presumption remained deeply rooted that what made Canada Canada was its British inheritance, in institutions particularly. Canada also continued to be a major destination for migrants from Britain. But, in communications, business and cultural life, the dominant influences now came up from the south. After the Second World War, Canada was integrated much more fully into a ‘continental’ economy. A huge tide of investment poured in from the United States to develop Canada's natural resources: a huge stream of raw or semi-processed materials, especially minerals and wood-pulp, poured back in return. Canada's ‘“triangular trade” seems nearly done for’, crowed Fortune: now Canada had to pay for its American imports by exporting not to Europe (as before the war) but to the United States. Defending Canada against the effects of American mass culture came to seem urgent enough to prompt a ‘Royal Commission on Arts, Letters and Sciences in Canada’ – a revealing designation. Perhaps the need to define a distinctively Canadian culture signalled the increasingly rapid decline of older British connections in the media, publishing and higher education. Canadian troops formed part of the ‘Commonwealth’ division that fought in Korea and Canadian ministers took a prominent part in Commonwealth meetings. But Canadian opinion had far less reason than Australian or New Zealand to interest itself in Britain's imperial problems in the Middle East or elsewhere, and was far less likely (as events were to prove) to give public support where that risked disagreement with the United States.29

South Africa was a paradox. After 1948, Afrikaner nationalism had strengthened its grip on the country. While the shift to republican status that had been a public goal of the National party for thirty years was quietly deferred, the right of ‘coloureds’ (i.e. persons of mixed race) to vote – a right confined to Cape Province and a relic of its ‘colonial’ parliamentary system – was swept away amidst a fierce constitutional crisis. As the elements of what became the apartheid policy (residential segregation, urban removals, formalised racial status, stricter labour controls, and prohibitions on political and social mixing) were gradually enforced, the volume of public disapproval from interested parties in Britain became far louder than before 1939. In their relations with London, however, the governments of Malan and Strijdom showed caution and pragmatism. The long-standing demand for the transfer of the ‘High Commission Territories’, Basutoland (now Lesotho), Bechuanaland (Botswana) and Swaziland, to South African control was kept in low key. In 1955, the Simonstown agreement ended British control over the naval base near Cape Town, but placed the South African navy under the overall command of the Royal Navy in wartime.30 Meanwhile, British investment in South African mining and industrial companies continued to grow rapidly. Among the South African ‘English’, still around 40 per cent of whites, attachment to Britain remained strong, reinforced by disdain for Afrikaans (a ‘kitchen’ language) and for most Afrikaners, stereotyped as the dim ‘Van der Merwe’ (a common Afrikaner surname) from the platteland or backblocks. By the mid-1950s, however, ‘English’ feeling was being cooled by resentment at the chorus of criticism from Britain aimed at apartheid and by the growing suspicion that British colonial policy elsewhere in Africa posed a threat to white supremacy.

Elsewhere in their ‘system’, the British could draw comfort from what still seemed the malleability of colonial opinion in their Asian and African empire. Even in Kenya, where they faced the Mau Mau uprising and resorted to drastic measures to ‘rehabilitate’ those suspected of Mau Mau sympathies, they could rely on a much larger group of anti-Mau Mau ‘loyalists’.31 In Northern Rhodesia (now Zambia) and Nyasaland (now Malawi), they dismissed African opposition to the making of a white-ruled federation as a temporary ebullition fomented by ‘extremists’ and insisted that it would die away once federation's material benefits were seen.32 Nor by the mid-1950s had London given up hope of Anglo-Indian friendship as Eden's diplomacy at the 1954 Geneva conference revealed. Once the policy of colonial self-government was fully established, or so it was thought, much of the friction in Anglo-Indian relations would be soothed away. The one region of British influence where the prospects seemed gloomier (although not so gloomy as they later appeared) was the Middle East.

This formed the context in which British governments tried to set their course through the 1950s. They were eager for detente to ease the strain on their overloaded economy. They were also determined to uphold if they could their regional pre-eminence among the Western European powers and check any change there that threatened their interests. They expected to enjoy a privileged status as Washington's closest and most valuable ally in the evolving Cold War. They attached huge priority to rebuilding the strength of the sterling economy and restoring as much as they could of Britain's old commercial role in the world. They were anxious to retain Britain's Middle East imperium as much for the leverage it conferred geopolitically as for the access it promised to oil – rapidly replacing coal as the source of industrial energy. And they were keen to reinforce Britain's close relations with the ‘old’ dominions – especially Australia and New Zealand – and, where they could, to build new ones. We can trace the faint outlines (however opaque) of a grand design. Britain would remain at the centre of an empire of both influence and identity, the head of a civic association (the Commonwealth) and a ‘British world’ held together in part by ethnic and cultural ties. But, as British leaders half-acknowledged, and as their advisers insisted, the fate of this ‘project’ depended almost entirely on forces that lay beyond Britain's control. As the 1950s unfolded, these were to turn London's uphill struggle into a headlong descent.

The sterling economy

Any hope of restoring Britain's pre-war position as the centre of an independent world-system was bound to turn on its economic performance. This was not just a question of achieving a surplus on the balance of payments, and competing successfully in overseas markets, nor of attaining a steady improvement in the standard of living, depressed by the austerity of wartime and post-war conditions. Regaining the economic independence, commercial influence and relative wealth that Britain had enjoyed in 1938, let alone in 1913, was a much more demanding task. It required Britain to be free from external obligations and debts and the distorting effect these might have on its domestic economy. It meant reviving the capacity to be the prime source of overseas borrowing for established clients among the developing countries (like Australia and South Africa) as well as some new ones. It implied the steady (re-)acquisition of those overseas assets that had contributed so much to past British wealth and security. It needed Britain to serve as an expanding market for overseas produce, both for domestic consumption and for re-export to other ‘end-users’ – its old entrepot function. For this to work smoothly, it was vital to have a freely convertible currency that could be traded easily and which potential customers would be willing to hold. It also followed that Britain would have to supply in return a large portion of the manufactures wanted by its non-industrial partners if their commercial relations were not to become too unbalanced. And, of course, the efficient working of this commercial system would depend (as it had in the past) upon a vast network of services: shipping, insurance, banking and merchanting. Largely managed from London, these had been one of the most profitable elements of the pre-war ‘commercial empire’.

It was a daunting list. But British leaders in the 1950s were determined to restore Britain as an economic great power, and to use its economic strength to preserve a wide sphere of influence and a world-power status. They were acutely conscious of the enormous scale of the American economy, which produced almost two-thirds of the world's manufactured goods in the late 1940s. They expected the Soviet Union to become in time an advanced industrial power within its closed trading bloc. They were aware of how quickly Germany was emerging from the economic abyss of the end of the war to compete with Britain in industrial exports. They hoped nevertheless to exploit Britain's assets and its economic inheritance to construct a modified form of commercial empire to underpin the domestic economy and meet the overseas costs of a world-power role. It was a goal they pursued with gradually waning confidence until its futility overwhelmed them after 1960.

The economic crisis of 1951–2 could be blamed in part on the huge rearmament programme on which the Attlee government had embarked. It was eased quite quickly by imposing strict controls on imported dollar goods, and by restraining domestic demand through higher interest rates. But it was a painful reminder that, after six years of recovery, the British economy was still very vulnerable to sudden fluctuations in overseas trade. The reserve of dollars and gold to meet any emergency was still desperately slim. Despite the huge effort to raise British merchandise exports well above their pre-war level, building a margin of safety in the balance of payments proved very hard. A key reason for this was the drastic reduction in overseas income and the corresponding huge rise in foreign obligations since 1939. In 1913, Britain's net overseas assets (at £4 billion) had been nearly twice as large as its GDP.33 In the depressed 1930s, they had fallen just below the figure for GDP. But, in 1951, after wartime disinvestment and large-scale borrowing from other sterling area countries (incurring the so-called ‘sterling balances’), net overseas assets were actually negative: −0.05 per cent of GDP. In constant (1938) prices, they had declined from £7.3 billion in 1913, to £4.1 billion in 1937 to −£0.3 billion in 1951. Income from abroad as a proportion of national production was one-sixth of what it had been in 1913. The huge foreign earnings that had helped keep Britain solvent and fund ever more foreign investment had largely vanished. So had the means to restore the huge foreign portfolio sold off or mortgaged after 1940. In 1913, overseas assets accounted for over one-third of all British assets: in 1973, despite a wave of post-war investment, they stood at only 3 per cent.34

But the picture was not an entirely bleak one. The British may have lagged far behind the United States in industrial production but they remained at the centre of a far-flung system of trade. In the early 1950s, about half the world's trade was still transacted in sterling. Britain imported more foodstuffs and raw cotton than the United States. The Americans had built up their overseas assets to around $17 billion by 1950 – perhaps a total no larger than Britain had held before 1939.35 But nearly 70 per cent was concentrated in Canada and Latin America and both regulation and practice made lending difficult to many of those countries that had traditionally looked to London. The Soviet Union was not a foreign investor and showed (at first) little sign of offering economic aid to countries in the British ‘sphere’. The British hoped to restore the City's role as the banker and financier of the developing countries. They expected to profit from the surging demand for raw materials that had loomed so large in the post-war recovery. With much of the world's high-value minerals in their colonial empire or in ‘sterling’ countries, and with other raw materials like cocoa and tin under their economic control, they looked well placed to profit from the general expansion of trade. With a large part of the world's deep-sea shipping still British-owned, they could expect to earn a handsome dividend from supplying the services that kept commerce moving, just as they had before 1914. British merchant enterprise was still very active across much of the Afro-Asian world. Nor was it solely a matter of exploiting colonial windfalls or long-practised trades. Britain also seemed in the van of the new science-based economy. It had large investments in oil, the fuel of the future. Its large aerospace industry – partly the product of war – had built the world's first jet airliner (the ill-fated Comet) to transform long-distance air travel. The post-war commitment to building nuclear weapons promised economic advantages. With the opening of Calder Hall in 1956, the British pioneered the generation of electricity using nuclear power, an achievement revealed to an awed New Zealand prime minister.36 And, right through the decade, the British spent heavily on research and development (both civil and military), more heavily than any other Western country except the United States.37

We shall see later on that few of these ‘assets’ yielded more than a modest return in the quest for economic revival. The immediate task, which commanded a wide consensus in both Whitehall and the City, was to maintain and enhance the strength of the pound, and restore its position as a ‘top currency’: that is, a ‘top favourite for international monetary transactions, most often and most widely used for a great variety of monetary purposes…the choice of the world market’.38 The strong pound would enable Britain to profit from the growth of world trade. It would attract the deposits of other currencies to London, swelling the funds at the City's disposal. It would boost the appeal of the commercial services that London could offer, since overseas confidence in insurance and other financial arrangements was bound to be greater if sterling's value was impregnable. It would help to stabilise the domestic economy and reduce the threat of inflation which had briefly reached 9 per cent in 1951–2. A strong pound was the key to a strong British economy. The weak post-war pound had to put on weight and gain muscles. The question that tormented bankers, officials and their ministerial masters through the 1950s was how to achieve this goal.

What was generally agreed was that the sterling area was the essential platform for sterling's revival as a top currency. Under its rules, the member countries held their dollar earnings in a common pool managed in London, pegged their currencies on sterling, and imposed strict control over their dollar purchases and the exchange of sterling into other currencies. The incentive for Britain's sterling partners to observe these rules sprang from their fear that the shortage of dollars worldwide (a result of the huge demand for American goods and the difficulty of selling into the American market) meant that the freedom to exchange sterling at will would result in a crash of its value (as in the near-disaster of 1947). If that were to happen, their claims on London (the sterling balances) would be worthless, and the economic dislocation in Britain would wipe out their most important market. For the British, the sterling area's existence offered a guarantee that the sums Britain owed to the other sterling countries (mainly debts arising from the war) could be paid off at an affordable rate and without jeopardising sterling's value against the dollar. It averted the risk that a country holding large sums in sterling might suddenly sell them for dollars and wreck the British balance of payments. It also allowed a gradual resumption of British overseas lending but without the danger of that foreign investment being exchanged into dollars. It propped up the system of trading preferences (‘Commonwealth preference’ also extended to Canada) to which British industry was still deeply attached. More than 50 per cent of British exports were being sent to ‘British countries’ throughout most of the 1950s.39 As late as 1958, the sterling area's merits were still being trumpeted in the most influential quarters. It was well designed for its members’ interests and also for world trade, declared Sir Oliver Franks, a former ambassador in Washington and chairman of Lloyds Bank. Member countries had no need to worry about bilateral balances, and using the pound kept down the demand for gold – any shortage of which would restrain world trade. The sterling area also allowed Britain to earn gold (by its trade with South Africa), and encouraged the City to use its financial machinery to help expand British exports.40 It was not a system to be abandoned lightly.

But it was also acknowledged in the Bank of England, by Treasury officials and even by ministers, that preserving the sterling area as a closed currency zone was not a long-term solution to the problem of sterling. Sooner or later, the ‘one world’ economy envisaged in the Bretton Woods agreements at the close of the war would have to come into force. The alternative was return to the protectionist blocs of the inter-war years with all the consequences that might follow from that. Open disavowal of the Bretton Woods system would be hugely controversial. It might easily lead to an open breach with the United States, and perhaps the break-up of the Western Alliance. Washington had been patient with London's delays, but on the understanding that it intended to honour the promise of a convertible pound as soon as it could. There were other reasons as well. It was widely agreed that, before very long (the timescale was unclear), the dollar famine would end (as more countries recovered and were able to earn dollars). The case for restrictions would be harder to make. The sterling area countries were already eager to borrow American dollars for development purposes but were unlikely to entice the American investor if his dividend was paid in inconvertible pounds. Their interest lay in a looser system. And the British themselves knew perfectly well that, so long as the pound was ‘soft’ and the dollar was ‘hard’, they would lose the race to restore sterling's old status and win back for the City its central place in international trade. It was too much to hope for the long-lost pre-eminence of 1913. But, in the 1930s, as the head of the sterling bloc and with a convertible pound, Britain had been the world's largest trading economy.

The terms and timing of ‘convertibility’ became the central issue in economic policy. Within the Bank of England and the Treasury, there were those who were eager to get it done quickly, arguing that sterling's prospects would not improve with delay. The sterling crisis that broke over their heads at the end of 1951 pushed them into a radical plan. Under the acronym ‘ROBOT’, it proposed to make sterling convertible subject to two drastic conditions. First, it would be necessary to persuade those countries with large sterling balances that the bulk of them should be frozen, leaving only the amounts they needed for normal trading purposes. This was the quid pro quo for the end of exchange control. Secondly (and much more controversially), the plan proposed that sterling should ‘float’ (just as it had in the 1930s). The reason for this was that defending a fixed rate (sterling had been fixed at $2.80 to £1 in 1949) might quickly consume much of Britain's reserve of dollars and gold (just as it had in 1947) and wreck the experiment almost before it had started. Allowing sterling to find its own level in the period of sharp adjustment that would follow free exchange would also reduce the risk of British exports becoming uncompetitive with the end of import controls and dollar restriction in sterling area markets.41 With the support of the Bank of England and his own expert advisers, the Chancellor of the Exchequer, R. A. Butler, presented ROBOT to his colleagues as the best solution to the financial crisis that the new Churchill government had inherited. The sequel was instructive.

For all its heavyweight backing, ROBOT soon attracted fierce opposition, not least from Lord Cherwell, Churchill's scientific adviser, known colloquially as the ‘Prime Minister's Adder’. Cherwell was scornful of the flimsy statistical basis on which ROBOT was built, and argued persuasively that the pressure on sterling could be relieved by the use of much less drastic measures. It was, he said, ‘a reckless leap in the dark involving appalling political and economic risks at home and abroad’.42 The objection to ROBOT was not just that Butler's medicine was unnecessarily strong. Four arguments sank it. First, although there had been ambiguous signals from across the Atlantic, floating the pound would breach the first commandment of the Bretton Woods doctrine. It was hard to believe that the American response would not be severe. Secondly, it was far from certain that all the other countries in the sterling area would adopt a floating exchange rate. Far from forming a bloc of like-minded states, the sterling countries might break up in anger and acrimony. Thirdly, floating the pound might lead to the break-up of the European Payments Union (a currency pool along sterling area lines) if the pound was devalued against some European currencies. At a time when London was also trying to promote defence cooperation among the Western European states, and soothing French fears of future German aggrandisement, such a large spanner in the European works was unwelcome at best. The Foreign Office and Foreign Secretary were among ROBOT's fiercest critics.43 Finally, since it was hard to predict how far sterling's value would fall under the ROBOT regime, it was hard to deny that, at least in the short run, the domestic effects might be very unsettling: rapid inflation if imports cost more; severe unemployment if other countries retaliated against a devaluing pound.

ROBOT was opposed by those who thought Britain's position too fragile to survive the shock treatment it promised and by those (like Cherwell) who argued that sticking to ‘the long steady task of building up our reserves’ was the best recipe for success. That it would be a long haul seemed amply confirmed in the next few years. In 1955, after two better years, inflationary pressure in the British economy and a sharp negative movement in the balance of payments led to credit restrictions to dampen home demand and strengthen sterling abroad. The following year was the year of Suez. The British invasion of Egypt triggered a flight from the pound; the cost of supporting its value from a fast dwindling reserve of dollars and gold was the critical factor in forcing the British withdrawal. In 1957, inflation in Britain and the devaluation of the French franc reopened doubts over whether sterling could hold its fixed dollar value. It took a fierce contraction of credit (the Bank rate rose to 7 per cent, its highest level since 1921) and an American loan to beat off the threat. It seems somewhat surprising after this ragged performance that the Macmillan government quietly made sterling convertible over the Christmas break in 1958. It was certainly true that the balance of trade had improved and inflation was down. But it was also true that its hand was being forced. Strict exchange control had already collapsed: it was the buying and selling of sterling in the market of currencies that now determined its value. Secondly, France had pre-empted the British in making the franc convertible (while devaluing again). At the moment when London was straining to persuade the new European Economic Community to include Britain in a ‘free trade agreement’, the pound had to look the franc demi-fort in the eye. But had the reserves that were needed to defend sterling's value been salted away? The Treasury's target for a payments surplus had still not been reached. Instead, reliance was now placed on being able to borrow from the International Monetary Fund if the going got hard.44 Convertibility, remarked The Economist in a phrase that ought to have struck a ministerial chill, was an ‘act of bravery’.45

British leaders knew of course that convertibility was not enough. To be an economic great power required a central position in the flows of world trade, and reasonable access to some of the world's richest markets. Before 1914, over one-third of British trade had been with Europe, and nearly one-quarter with the countries that became the European Economic Community (the ‘EEC Six’) in 1958. In the inter-war years, the share of British exports sent to the future ‘EEC Six’ fell to under 15%. After the Second World War, it fell even further, to less than 10% in 1948.46 But, by the 1950s, these were the countries that were growing most rapidly. More generally, it was industrial countries that made the best markets. Here, too, Britain lagged behind its main competitors. Its principal rivals increased the share of their exports to other industrial countries from 58% in 1950–2 to 61% in 1957–9. The British share rose from 39% to 45%.47 To keep up the momentum that had doubled British exports from their pre-war levels required a major effort in Europe.

For this reason alone, London kept a wary eye on the progress of European schemes for economic and political unity that were gathering pace in the early 1950s. Its negative attitude towards the plans that emerged for an Economic Community from the Messina Conference in 1955 has been much derided in hindsight. In fact, the British regarded the idea of forming an inner group (with discriminatory tariffs) within the larger collectivity of Western European states with considerable hostility. They thought it would damage the prospects for freer trade in general and for British trade in particular. They wanted it to fail, and thought that it would.48 They saw no point in lending it any support. But this was far from an attitude of indifference or hostility towards closer cooperation with Europe, although there were plenty of those in the Conservative party who took a ‘blue water’ view of continental commitments. Instead, in the late summer of 1956, the Cabinet agreed on a plan that was intended deliberately to seize control of the movement towards a European customs union and drive it in the direction that British policy favoured. This was ‘Plan G’, which proposed to sink the EEC project within a larger ‘Free Trade Area’ within which there would be free trade in manufactured goods but no common agricultural policy. The obvious merit from a British point of view was that this would allow continued preferential arrangements both for British farmers (heavily protected since the Second World War) and for Commonwealth producers. It would give Britain the benefits of a large open European market with few of the drawbacks of being tied to an economic bloc.

The plan was put to the Cabinet by Harold Macmillan, then Chancellor of the Exchequer, as a series of rhetorical questions, designed to flush out its fiercest opponents. ‘Is this a good plan for the British economy?’, asked the Chancellor,

Will it bring us strength in the long run…? Can the British economy survive alone, insulated and protected from European competition? Will it be able to maintain its exports to Europe…? Equally important, can it maintain its exports to other countries against the competition of European countries, either individually, as now, or in a unified Europe largely under German domination? Can we enter into a new structure and at the same time maintain the advantages of the Commonwealth, our preferences and all the rest? Can we retain them even if we keep out?49

Nor, of course, were the issues at stake of solely economic concern. Were the aims of Plan G ‘politically sound’? ‘Can we retain the leadership of the Commonwealth world

and at the same time seize the leadership of Europe? Would it help us to create a new period of British strength and power, or should we be foolishly throwing away what we have? Would it bring us promise for the future, or is it an abdication and betrayal of our past?50

Macmillan also spelled out the risk of division within the Conservative party, the threat posed by free trade to maintaining full employment and the need to reassure both Commonwealth countries and the United States. But there was no doubt that he wanted his colleagues’ approval for a plan which among other things, was intended to make London the centre for Europe's foreign investment. ‘The economic unification of much of Western Europe’, declared Peter Thorneycroft, President of the Board of Trade, ‘would create a new source of investment capital for overseas development which might be expected to flow out to Commonwealth countries through London under our management’.51 In the discussion that followed, there were predictable fears that the main Commonwealth countries would turn away from Britain towards the United States and ‘the status of Britain as a world power depends on her position as head of the Commonwealth’.52 But Macmillan insisted that, without a new basis for the British economy, it could not provide the market that the Commonwealth needed, nor secure the future of sterling. When Eden summed up, his view was decisive. There was little hope, he said, of an economic policy based on the Commonwealth: even Australia and New Zealand seemed to be turning towards the United States. The Asian Commonwealth could not be relied on. ‘Unless we were capable, acting alone, of meeting formidable European competition in oversea markets, there seemed no alternative but to base our policy on the proposed plan for closer association with Europe’.53 After further consultations, and some positive signals from the United States, Europe, the Commonwealth and domestic opinion, the decision was made in early November to press ahead and negotiate.

But, as it turned out, the British had badly mistaken the strength of their hand. They had coolly assumed that, if they took a firm line on the exclusion of foodstuffs from the free trade arrangements, they would get their way: ‘We should expect this condition to be ultimately accepted’, said Macmillan and Thorneycroft.54 They also assumed that, once they had given a lead, the idea of a free trade area would trump the plan for an economic community drawn up by the Six. One key to their thinking was the belief that France shared Britain's fear of a ‘German-dominated’ Europe, to which Macmillan had referred, but felt it even more deeply. French paranoia would give the British the lever they needed to switch the points towards the free trade line, or derail the train. All this proved wrong. The European Six signed the Treaty of Rome in March 1957. When the British began to negotiate in October that year, they met a stubborn refusal on the foodstuffs question. And, far from France proving the weak link in the EEC chain, the reverse was the case. In June 1958, General De Gaulle returned to power, first as prime minister in the dying Fourth Republic, then as president in the Fifth. It was De Gaulle who firmly put an end to the free trade area diplomacy. It was an unmistakable omen. All the British could hope (with some justification from history) was that his tenure would be short and his retirement long.

It was a major defeat. London tried to make the best of things. The British had already committed themselves (at the Montreal Commonwealth Economic Conference) to stand by the system of Commonwealth preference and to make up the shortfall of private investment in their colonial and ex-colonial territories through government aid and loans.55 All this was intended to hold the Commonwealth together as a system of trade and influence and provide reassurance of British aims and intentions. But it was starkly clear as the decade came to an end that what mattered most was the export competitiveness of the British economy. The 1959 Radcliffe Report on the British monetary system gave a ringing endorsement of ‘the general harmony of interest between the United Kingdom economy and that of the rest of the sterling area’,56 and insisted that it was in Britain's interest to invest more and more in the economic development of the Commonwealth countries.57 But it also warned that sterling's role as a reserve currency had been displaced by the dollar, and that the UK's reserves still formed only a fraction of sterling's liabilities. The only solution, as Cherwell had argued some seven years earlier, was to press on in the hope that export growth would build up the margin of safety to protect the domestic economy, make sterling secure and fund the export of capital to non-industrial countries.

But, on this battlefront, there were very mixed signals. The British economy had not performed badly. It had paid for a notable increase in living standards at home – the ‘affluence’ for which the Conservative government was keen to take credit. But it had not performed well enough to allow Britain to become (or remain) an economic great power. There were several reasons for this. It may have been partly the fault of an old or obsolete infrastructure whose renewal was too costly under post-war conditions. This was the burden of being an ‘old’ industrial power. A more immediate difficulty was the need to transform an industrial structure largely adapted to the highly diversified markets in non-industrial countries that had been Britain's main customers since the inter-war years and before. The move towards a production system based on higher volume and standardisation was technically difficult and very disruptive in labour relations.58 As a result, the great shift from textiles to engineering as Britain's industrial staple was made too slowly.59 Thirdly, British leaders shrank from the challenge to domestic opinion. In theory at least, they might have hoped to improve Britain's export performance and suppressed the inflationary trend that helped make sterling so fragile by enforcing a ‘flexible’ market in labour. An attack on restrictive practices, and the willingness to risk a short-term rise in unemployment, might have forced down real wages and secured productivity gains. Politically, there was no question of this. Full employment was part of the post-war compact: it was widely assumed that electoral suicide would follow its breach. Thus the sterling economy followed a zigzag path dictated by the aspiration to great-power status, the fear of abandoning its traditional base in the ‘Commonwealth world’, and mortal terror of an electorate enraged by an attack on job security and hard-won affluence. It would have needed an exceptionally benign outside world for this course to have brought British leaders the results that they craved.

Descent to Suez

As we saw in the last chapter, almost unobserved there had been a critical change in the position of Britain in Egypt. The means and the will to exert British military power directly in Cairo had quietly collapsed in January 1952. The political crowbar in the Residency's possession since the era of Cromer could no longer be used. Yet, in London, the value of Egypt and the Canal Zone base had never seemed higher. Reaching an agreement over the use of the base and for Egypt's cooperation in Middle East defence was as urgent a priority for Churchill's government as it had been for Attlee's. But, by the time it was signed in October 1954, it was an open question whether the hard-won agreement had any value at all, except to avoid a hugely embarrassing ‘scuttle’. The arduous path to its making had signalled a shift in the balance of strength. The tragedy that followed sprang from a gross paradox. The importance that London attached to its regional primacy now had no counterpart in its regional power: the reverse was the case. The desperate remedy of Eden's Suez invasion was required to conceal this. The crushing failure that followed exposed its truth.

Why did London care so much about Egypt and the Canal Zone? Behind the logistical detail of stores and supply routes, the imaginary defence lines against a Soviet advance into the Middle East, and the plans to bomb Southern Russia in the event of world war, lay a (largely) unspoken assumption. Britain's ability to use the Canal Zone and its bases (as well as drawing more widely on Egyptian resources since the Zone was not self-sufficient) was its greatest surviving geostrategic asset outside the Home Islands. It served as the pivot from which British power could be projected north towards Russia, eastwards to the Gulf (and its oil), across the Indian Ocean to Australia and New Zealand, and south to East Africa. The Canal Zone depended upon Egyptian goodwill to function efficiently; but it was also the lever with which to extract cooperation from Cairo. Preserving Britain's claim to make use of the Zone was a standing affront to Egyptian nationalist feeling. But it was also the main guarantee that Egypt's leaders would take a ‘realistic’ view of their national interests and accept the reality of their ‘satellite’ status in the British world-system.

Egypt was important for itself. It was also the pre-eminent state of the Arab Middle East. It had the biggest population, the largest middle class and the oldest tradition of nationalist politics. Its writers, intellectuals and journalists exerted a pan-Arab influence. For most cultural purposes, Cairo was the capital of the Arab world. The Al-Azhar, half mosque, half university, was the great centre of Islamic learning. This gave Anglo-Egyptian relations a particular delicacy. A compliant, if not ‘loyal’, Egypt was the key component of Britain's Middle Eastern imperium as the regional power, regulating the relations of the Arab states with each other as well as with the outside world. An Egyptian ‘revolt’ against this ‘system’ would be a serious threat. As we have seen, under post-war conditions the Arab Middle East as a whole had become even more valuable from London's viewpoint than before 1939. This was partly a matter of strategic defence against Russia, partly a matter of oil. But, despite the prominence that both these assume in the archival record, the intensity with which British leaders regarded their Middle East interests, and the extent to which they became the index of Britain's world power status, hint at a larger assumption. It was sometimes expressed in terms of prestige, but its real meaning ran deeper.

Before 1939, it was a commonplace that the ultimate source of British power in the world, including its great-power status in Europe, was the Royal Navy. British sea-power had had to share global supremacy with that of America: but, in European waters and the Indian Ocean, it had remained pre-eminent in the inter-war years. Almost unheralded, the course and outcome of the Second World War struck the maritime sword from Britain's hand. Taken together, the growth of air warfare, the massive scale of Soviet land forces and the colossal expansion of the American navy removed any illusion that the strategic significance of Britain's sea-power was remotely comparable with what it had been just a decade before. We ‘cannot afford the American technique of building up large naval forces to support continental land battles’, remarked the Chiefs of Staff sorrowfully.60 The Middle East imperium silently filled the gap. Strategic command of the region gave Britain a critical role in the defence of Europe. It secured its primacy among the West European states and (perhaps more important) conferred an exceptional leverage in London's often tetchy relations with Washington. More than anything else, it lifted Britain out of the category of a merely European power. And, although London sought material help from the Americans, it insisted on Britain's claim to be the political guardian of the West's regional interests. In the plans drawn up in mid-1953, it was British, Arab and Commonwealth forces that were to defend the Middle East against a Soviet invasion.61 Among British leaders, no one was more sensitive than Anthony Eden to the grand geopolitics of Middle East power.

This was the setting in which the British tried to reopen the question of their right to use the Canal Zone bases after the expiry of the 1936 treaty due in 1956. Eden as Foreign Secretary was determined to do this, despite lurid warnings from Cairo where the British ambassador was convinced that Egypt was on the brink of chaos.62 Against Churchill's scepticism and the ambassador's proposal that, rather than seek an agreement, British policy should aim ‘to isolate Egypt as a potential enemy’,63 Eden insisted that the new set of ministers King Farouk had appointed (following the bloody riots in Cairo) offered the best chance for striking a bargain. Egypt, as part of a new ‘Middle East Command’, would take charge of the Canal Zone bases in peacetime. The British would keep on the spot only the minimum force needed to ‘help’ the Egyptians to maintain the bases. The alternative, Eden warned his Cabinet colleagues, was a long confrontation and the effective loss of the base. ‘I am convinced’, he told Churchill,

that we shall not reach an agreement unless we are willing to agree to the principle of evacuation. The net result of the last five months has been to bring Egypt to the verge of anarchy. The present Egyptian government is the best we can hope for. Its position is precarious and its continuance in power depends on its ability to clip the wings of the Wafd. To do this it needs some helpful move by us, and it needs it soon…The plain fact is that we are no longer in a position to impose our will on Egypt, regardless of the cost in men, money, and international goodwill both throughout the Middle East and in the rest of the world.64

But progress was meagre. There was little incentive for the Egyptian ministers to risk acceptance of Eden's terms, all too readily seen as a transparent device for keeping Britain's grip on the Zone and its military bases. Nor did they dare give up Egypt's claim to be sovereign in the Sudan, whose political future remained deeply uncertain. The Egyptian ambassador was convinced, reported a senior Foreign Office official,

that the only chance of our inducing the Egyptians either to accept our formula or to begin negotiations with us over the Sudan…lay in our being able to make them believe that the ultimate result of their refusal…would be the reoccupation of Cairo by British forces. This was the only thing they were really scared of.65

While the British brooded over this latest rebuff and pondered Egypt's place in their new global strategy, Cairo's politics lurched in an unexpected direction.66 In July 1952, a military coup pushed aside the old rivalry between the Court and the Wafd. The ‘Revolutionary Command Council’, led by Neguib and Nasser, became the real power. The Egyptian army, hitherto a quiescent if discontented force, now had to be squared.

By the end of the year, Eden was ready to try again. The same set of pressures was still pushing him forward. Without Egyptian goodwill, the Canal Zone was useless as a great military base. Indeed, without an agreement, it might become the scene of a guerrilla war. Its huge British garrison of 80,000 men was chiefly employed in defending itself: ‘It is their presence that creates the need for them to be there’, said a British official with mandarin irony.67 But simply handing it over would be a colossal defeat. It must be available in case of a war against Russia, said the military planners. Egypt had to promise its help if the Middle East were invaded. To let Cairo completely cut loose from its British connection would weaken Britain's allies in the other Arab states, and might provoke further demands for British withdrawal – including from the important air bases at Habbaniya and Shaiba in Iraq. It would signal a drastic decline in both the will and the means to enforce British interests. It would be bound to stir up fierce objection at home among those who disliked the ‘appeasement’ of nationalism or any retreat on the front line of empire – opinions well represented in the Conservative party. Eden's new formula was a cautious advance on the abortive proposal for a ‘Middle East Command’. Now, with American backing, the Egyptians were urged to join a new organisation for the region's defence, the ‘Middle East Defence Organisation’ or MEDO. Loosely modelled on NATO, MEDO would include both the Arab states and their Western ‘friends’, principally Britain and the United States. On joining this club, Egypt would be entrusted with the Canal Zone and its bases, to be run with some British help. This time the prospects for settlement seemed brighter. In February 1953, London and Cairo reached an agreement on the future of the Sudan, so often the stumbling block to their friendly relations. Like all previous regimes, Egypt's military leaders were determined to regain what they saw as its rightful authority in the vast country it had colonised in the previous century but then lost to the Mahdist revolt and the British reconquest. All shades of opinion resented what was seen as a British conspiracy to encourage Sudan's separation and patronise Sudanese nationalism. The British, for their part, had briefly considered giving up the Sudan as the price for a new treaty with Cairo in 1946, but then had drawn back.68 Neither Attlee nor Bevin had known the Sudan's peculiar history – unlike the veteran of Omdurman now at 10 Downing Street. The 1953 agreement was an interesting compromise. It promised Sudanese self-government by 1956, the same year that the Anglo-Egyptian treaty expired. The Sudanese people would choose through the ballot box whether they wished to become independent or seek a union with Egypt. For both the signatories it was a calculated risk. But Neguib (who had close ties with the Sudan) may have hoped that giving up Egypt's sovereignty claim would increase the backing for union in Sudanese politics against its Mahdist opponents and their nationalist rhetoric.69

But as the pessimists had predicted, the defence talks soon stalled. Neguib and his colleagues rejected an advance commitment to MEDO. Nasser knew about ‘Rodeo’, said an embassy official70 and was deeply suspicious of British intentions. The Revolutionary Command Council had one ambition – to get the British troops out and end any risk of British intervention in Cairo. The delicate balance of Egyptian politics, in which Revolutionary Command Council rule coexisted uneasily with the monarchy (only abolished in July 1953), the Wafd party and the Muslim Brotherhood, sharpened their fear of a British ‘coup’ on the one hand and popular outrage on the other. They dreaded being painted as pro-British puppets betraying the national cause. They were determined not to let any British military units, however disguised as ‘technicians’, remain in the Canal Zone. On the British side, when deadlock was reached in the middle of May, a new wave of violence was feared. ‘Serious trouble may now be imminent’, warned the Joint Intelligence Committee.71 Despite Churchill's reluctance to make any further concessions, a new round of talks was begun, with the outgoing British commander-in-chief in Egypt, General Sir Brian Robertson, negotiating soldier to soldier. With MEDO now dead (the final rejection came in July), disagreement was centred on how the base would be managed once the British withdrew, and how large a force of technicians would be required to maintain it. The discussions struggled on. In September, the Egyptians raised a further objection: the British technicians must be in civilian clothes. In London, the Cabinet decided first to break off, but then to press on. But, as the year came to an end, they had little to show. The Egyptians were willing to let the Canal base be used if an Arab state was attacked, but not Turkey or Iran, the Soviet Union's Middle East neighbours. They wanted a swift British withdrawal and a minimal presence of non-uniformed technicians. They would only consider a seven-year agreement.

The reaction in London was frustration and rage. From the Cairo embassy came a bitter reflection on the futility of continuing the search for agreement. Even if one were made, wrote Robin Hankey, then in charge at the embassy, it was highly doubtful that the Egyptians would honour it. ‘If after making the new defence agreement we are held in the same utter contempt as we seem to have been since the Sudan Agreement, no favourable outcome in the Canal Zone can conceivably be hoped for’.72 The agreement, anyway, was most unlikely to be renewed and ‘may well be turned into a farce before its expiry’. In Hankey's grim view, ‘the effect…on our position in the other Arab countries and on our whole position in the Mediterranean, in the Persian Gulf and in the Indian Ocean would be incalculable…it would far surpass the effect of Abadan or Palestine’.73Churchill's impatience now boiled over. He had carefully distanced himself from Eden's diplomacy and what he called ‘your treaty’. He was much more receptive than Eden had been to the flouts and jibes of the ‘Suez Group’, the forty-one Conservative MPs led by Charles Waterhouse and Julian Amery who opposed evacuation, and may even have hinted at his private approval. As the Queen's first minister, he did not wish to preside over the liquidation of the Suez Canal base, that great symbol of empire. Like Hankey, he feared that, once a withdrawal began, it would become a rout. Then ‘many in our own party will be able to say “I told you so”, and the others will mock’. Churchill's solution was to make a clean break but exact a revenge: to redeploy British troops to bases elsewhere in the region, but send reinforcements to Khartoum. Egypt would thus forfeit its Sudanese prize. Once this was done, ‘all the Conservative troubles here would be quenched…There is no alternative except a prolonged humiliating scuttle before all the world’.74

Eden rejected this view completely. To leave the Canal Zone without an agreement would be ‘less satisfactory from the point of view of our continuing authority in the Middle East’.75 This was his real concern. He had told Churchill earlier that a unilateral withdrawal posed considerable risks. ‘It could be very damaging to our whole reputation and position if it looked like running away…It could destroy all hope of maintaining our position in Iraq and the Persian Gulf.’76 Nor would it help matters to arouse the suspicions of Sudanese nationalists that London meant to renege on the promises made in the Sudan agreement. Like his officials in Cairo, Eden was inclined to lay much of the blame for Egyptian intransigence on American disloyalty and their tacit subversion of British prestige. ‘The American position over Egypt becomes increasingly unhelpful’, he minuted bitterly. ‘The Americans will have no friends left if they go on in this way.’77 What was becoming uncomfortably obvious was that without American backing there was little that could drive the Egyptians to sign. Lord Salisbury, Eden's stand-in during his long illness in 1953, had made the point bluntly. ‘If we reach an agreement with Egypt’, he told the Cabinet in July 1953, ‘it will…be essential that the Americans underwrite such an agreement if there is to be any prospect of the Egyptians keeping it.’78 Churchill now pressed Eisenhower to refuse the Egyptians economic aid until they agreed on a treaty, but the reply was guarded. How far, Eisenhower asked, was Britain willing to go to support American efforts to isolate ‘the bloody Chinese aggressor’ and oppose its admission into the United Nations?79 Had not the British been happy to trade with China? The implication was obvious. Perhaps it was this that occasioned Eden's anti-American outburst.

He had little choice, however, but to rehearse to his colleagues the urgency of reaching some kind of agreement: ‘If we do not succeed, we are in a bad position.’80 Failure would mean the more or less rapid erosion of Britain's Arab prestige. It would reduce Britain's claim on the support of Australia, New Zealand and South Africa. And, if the Suez base were simply abandoned, it would be almost impossible to persuade British opinion to accept other commitments in the Middle East. When the Chiefs of Staff weighed in with a warning that a withdrawal agreement was of the ‘utmost importance’, a subtle change could be seen coming over the British approach. However useful the Canal base might be in a general war (now thought less likely), it was more important to get out – to save money, men and morale. Indeed, in the spring and summer of 1954, geostrategic change suggested that the base was now of secondary value at best. Its exposure to air attack was greatly enhanced – or so it was argued – by the advent of the hydrogen bomb. Secondly, the strategic defence of the Middle East was conceived more and more in terms of the ‘Northern Tier’ states – Turkey, Iraq, Iran and Pakistan – backed up by the use of tactical nuclear weapons and local air bases: the drift of American thinking since mid-1953. What mattered most to the British was a dignified exit from the Canal Zone and (increasingly) reassurance that their use of the Canal would not be affected by a military withdrawal. When the Americans promised to delay any aid until Egypt signed up, and Nasser let it be known that an attack on Turkey would permit reactivation of the base, a light seemed to glint at the end of the tunnel. But clinching the deal seemed as elusive as ever. In Cairo, General Neguib was first removed as the leader of the Revolutionary Command Council and then restored. The transfer of power to civilian rule and a return to party politics were promised and rescinded within a matter of days.81 It was only during April that Nasser's authority seemed firmly established. The British still fretted over how to present the concessions they were now willing to make (the use of civilian labour to service the base) and how to ensure that, with no military presence, the Egyptians could be held to their promise to maintain the base and respect free transit through the Canal. Churchill and Eden now agreed (Eden with some show of reluctance) to seek more explicit American help. At the Washington conference in June (mainly taken up with discussion of Churchill's scheme for a summit conference with the Russians), Dulles and Eisenhower gave the vital assurance: Nasser would be told that all American aid would depend on his keeping the promises made in a treaty.82 The British agreed to give way on the uniforms question. Within three weeks, the ‘heads of agreement’ had been signed in Cairo. The British would pull out completely over the course of twenty months (by June 1956), leaving civilian contractors to look after the base. They could use the base to help defend either Turkey or an Arab state from attack. But the treaty would last (as Nasser insisted) not twenty years but seven.

It is an intriguing question as to what persuaded Churchill to give his reluctant assent to the retreat he disliked. In his public defence he stressed the impact of the new H-bomb as making the Canal base redundant. But, if that were the reason, as a Tory critic remarked later, why was so much of the treaty concerned with its future use?83 In the Cabinet discussion, there is more than a hint that the H-bomb was a rabbit pulled out of the hat: it gave Churchill the escape route that he (and the government) needed, dousing (for the moment) the smouldering backbench rebellion. Churchill may also have wanted to clear the decks for his real ambition – the summit with Stalin's successors. The more interesting question is what the agreement meant for Britain's Middle Eastern position – the main justification that Eden advanced. Leaving the base was meant to give Britain's regional imperium a new lease of life, not to signal a general retreat. It did not turn out like that.

In fact, the Canal base agreement embodied a transfer of power as important as any that was made in the retreat from empire after 1945, with the single exception of the withdrawal from India. This was veiled at the time from the makers of policy (although not from their critics). They averted their eyes from the three critical factors that governed the course and outcome of their diplomatic ordeal. The first was the change in the nature of Egyptian politics. Disillusioned with the Wafd and the king, the British were not unsympathetic to the military rulers who replaced them. Nasser, they thought, was a ‘realist’ and honest. The political turmoil of 1952–4 made it harder to see that the chaos and corruption of ‘liberal’ Egypt was making way for an authoritarian regime driven restlessly forward by populist nationalism and geopolitical ambition. The Canal base agreement was its ticket to power. The British liked to think that Nasser would be a new Ataturk, the Turkish strong man with whom they had come to amicable terms after 1922. Nasser, they thought, would follow the Ataturk model, and devote his political energy to internal reform. It was a drastic misjudgment. The second great shift may have been easier to see but harder to acknowledge. Again and again the men on the spot had complained that their efforts to make the Egyptians see reason had been frustrated by the nods and winks of the American ambassador, Jefferson Caffery. At a much higher level, the British were dimly aware that Washington was pursuing a different agenda, that they could not match its promise of aid, and that without American backing the treaty they sought would be hard to achieve and worse to enforce. The Canal base agreement was a silent reminder that British authority now needed the weight of American power, and was unlikely to flourish without its support. The third was the change from Egypt to Iraq as the strategic pivot of the British position. The growing importance of the ‘Northern Tier’ states (Turkey, Iraq, Iran and Pakistan) as the main barrier to a Soviet advance had helped to devalue the Canal base and ease the pangs of the British withdrawal. It made the British now eager to build up Iraq as the main Arab component of a new Middle Eastern alliance, and to attach as many Arab states as they could to what became known as the ‘Baghdad Pact’84 of which they themselves would also be members. This would be the new platform of their Middle Eastern position: an Arab ‘bloc’ of which the ‘Hashemite’ kingdoms of Iraq and Jordan and the Syrian Republic (domination of Syria was an old Hashemite aim) would be the core members. But, between the Hashemite kings and the Iraq ‘strong man’ Nuri as-Said on the one hand, and Nasser on the other, there was little love lost. Both claimed the leadership of the Arab world. Thus the curious sequel to the British agreement with Nasser was their strategic partnership with his bitterest enemies.

In earlier times the British might have laughed at Cairo's annoyance. But now they could not afford to do so. An intelligence briefing in late 1954 spelt out their dilemma. The political threat from the Soviet Union, declared the Joint Intelligence Committee, could be intensified at any time and no Arab state had the means to resist it any more than it could beat off a military assault. British help was needed, but ‘xenophobia is endemic in the Middle East as a whole’, while the end of the Raj ‘had undermined confidence’ that British power would be used to restrain or protect the Middle East countries’.85 Britain's position was not getting easier; it was now more precarious. But its stake in the region seemed greater than ever: the Western interest in excluding Soviet influence; the British need to be seen as the West's regional guardian; and Britain's share of the oil industry, much of it located in northern Iraq. In April 1955, Eden, now at last prime minister, committed Britain to the Baghdad Pact and to building a new Arab alliance. Nasser's riposte was not long in coming. By the following September he had arranged to buy arms from the Soviet bloc and break the embargo that the West had imposed. The Soviet entrée had begun in earnest. Nasser's prestige and Egypt's military power were now certain to grow. Nasser proclaimed himself champion of the pan-Arab cause and denounced Britain's friends as betrayers and toadies. The Baghdad Pact was a ‘relic of colonialism’. Whether Iraq, Britain's main Arab ally, and its tight oligarchic regime under Nuri as-Said, would survive the political storm seemed uncertain at best. ‘If we lose Egypt’, minuted the British official in charge of Middle East policy, ‘we shall lose the rest of the Arab World.’86 This was the setting in which the British began their ‘descent to Suez’.

The stages passed in rapid succession. By October, the British had begun to fret over their oil supplies if Soviet influence and Egyptian hostility continued to grow. ‘Our interests’, said Eden (in what proved to be a prophetic phrase),

were greater than those of the United States because of our dependence on Middle East oil, and our experience in the area was greater than theirs. We should not…allow ourselves to be restricted overmuch by reluctance to act without full American concurrence and support. We should frame our own policy in the light of our interests in the area.87

In December, Nasser, with Saudi support, raised an outcry in Jordan and blocked the kingdom's accession to the Baghdad Pact. The British were furious. In March 1956, while the British Foreign Secretary was actually visiting Cairo, the British commander of the Jordanian army, General John Glubb, was dismissed – a move widely (but wrongly) attributed to Nasser's machinations. In the same month, Plan Alpha, the Anglo-American effort to draw Nasser into peace negotiations with Israel and lance the boil of anti-Western feeling, broke down completely. Today, recorded Evelyn Shuckburgh, head of the Foreign Office's Middle East department on 8 March, ‘we and the Americans really gave up hope of Nasser and began to look round for means of destroying him’.88 For Eden, especially, the destruction of Nasser had become a priority. ‘It's either him or us, don't forget that’, he said.89 But, as the British pondered how to isolate Nasser, events in the region spun out of control. When the United States blocked the funds for the Aswan High Dam, Nasser's grand project, his response was even more daring than the Soviet arms deal. On 26 July, with all British troops safely out of the Canal Zone, he nationalised the Suez Canal Company, an Anglo-French enterprise with a substantial British government holding. It was an astonishing move. It seemed to prove beyond doubt that his ultimate aim was to drive Britain out of the Arab world bag and baggage.

It was now that the weaknesses of the British position, painfully exposed in the Canal Zone diplomacy, made themselves felt. The Cabinet agreed straightaway that Nasser should be made to back down, if need be by force and by Britain alone. But the coercion of Egypt was not going to be easy. It would mean a major invasion with repercussions elsewhere on British commitments. It might mean the occupation of Egypt until a compliant government was formed – if indeed one could be found. It would deeply embarrass Britain's closest Arab allies and vindicate Nasserite claims that they were colonialist toadies. Above all, perhaps, although there were signs that Nasser's removal would be welcomed in Washington, American backing for a British invasion was out of the question. Paratroop diplomacy, in Washington's view, would be a crime and a blunder, and wreck Western influence at a critical time. The British hoped for international action, but the legal case against Nasser was transparently weak (the Suez Canal Company was after all an Egyptian company). Once Dulles made clear that he did not favour action against Nasser to extract the Canal dues (reversing the effect of nationalisation), Eden's position was desperate. No British leader had been more deeply committed to upholding Britain's Middle Eastern imperium as an ‘empire by treaty’. Now that Nasser had revealed it as a house of cards, his authority as prime minister could hardly survive.

Although Eden could not or would not admit it, his position was so difficult as to be almost impossible. Awareness of his own part in handing back the Canal Zone, and thus freeing Nasser to act, may have made matters worse. How far he acknowledged that the scheme to invade Egypt in concert with France, drawn up and agreed on by the middle of August, was based on very fragile assumptions is unclear. But it may explain his reluctance to consult more widely among his colleagues and officials. Indeed, it seems clear that, insofar as they grasped his intentions, these aroused doubt and uncertainty. The Foreign Secretary (Selwyn Lloyd), the Minister of Defence (Walter Monckton), the Lord Privy Seal (R. A. Butler), the First Lord of the Admiralty (Lord Hailsham) and the Chief of Naval Staff (the redoubtable Lord Mountbatten) were all of this number. But neither doubts nor doubters had any effect.

Part of the reason was that few outside a very small circle knew enough of the detail of what Eden intended or had enough status to voice their dissent. To challenge Eden's authority in a period of crisis would have been exceptionally dangerous, especially for one of his Conservative colleagues. As Churchill's successor, Eden had stepped into his shoes as the great anti-appeaser, and champion of British world power. Moreover, a very strong group in the Cabinet endorsed his decision to erase Nasser's influence, and to do so by force. They could not have ignored the risks that this ran. But the real question they faced was what else could be done. Any compromise deal (of the kind Selwyn Lloyd hoped for) that left Nasser in power would not meet their purpose – to uphold what Eden called Britain's ‘Middle Eastern position’. They may have accepted, like Eden himself, that the jumble of treaties, alliances, protectorates, colonies, bases, gunboats and garrisons that made up this undeclared empire could not stand the challenge that Nasser's defiance would pose; and that without this undeclared empire Britain's world power could not survive long. For behind the dire warnings about the Canal and Nasser's hand on ‘our windpipe’, this was the real issue.

On one point at least, Eden knew he was vulnerable. He needed a pretext to launch an invasion or risk being denounced as an imperialist aggressor. This would have been deeply embarrassing both abroad and at home, where the cross-party support he had enjoyed at the outset could not have survived. To escape this dilemma he embarked on what came to be seen as the most reckless gamble of all. On 13 October, as the decision to launch the invasion grew nearer, he was urged by the French to make a secret arrangement with Israel, which was also eager to weaken Nasser, and willing to strike.

The sequel is infamous. On 22 October, the British and French (who had their own quarrel with Nasser) made their secret pact with Israel to occupy the Canal Zone in concert with an Israeli invasion of Sinai. The prize for all three was the elimination of Nasser. On 29 October, the Israeli attack began. On 1 November, when Nasser rejected their demand to stop fighting, the Anglo-French intervention began. Egyptian airfields were bombed, and on 5 November British and French troops landed in Egypt to seize the Canal. But, in a matter of days, intense pressure from Washington and the threat of sterling's collapse without dollar support forced first a ceasefire and then the withdrawal of the Anglo-French forces, to be replaced by a ‘peace-keeping’ contingent under United Nations authority. Eden's health now collapsed and so did his premiership. The confrontation with Nasser, on which he was set, consigned him to oblivion and raised Nasser to power as the pan-Arab hero.90 In less than two years, the Iraqi regime on which Eden's policy was centred had been destroyed in a coup. The British fell back on Southern Arabia and the Gulf. The British ‘moment’ in the Middle East, when they had been the authors and arbiters of its regional politics, was over.

‘Anthony, are you out of your mind?’ was how Eisenhower put it to Eden when he learnt of the British invasion. There was certainly much about Eden's conduct of policy that was reckless and irregular. He chose to ignore the widespread misgivings among both his military and his diplomatic advisers over the use of force against Nasser: whether it was justified legally and morally; whether it was practicable militarily; whether it could work politically to produce a replacement for Nasser; whether it would wreck Britain's standing in the Arab Middle East more surely than compromise, however unpalatable. Eden's secretive style, the exclusion of almost all of his expert advisers, his highly strung manner, the rough edge of his tongue, and his over-vehement language, unnerved many who saw him as to his balance and judgment. If it had been known more widely that he had concealed his intentions from Washington's eyes, let alone colluded with France in an Israeli invasion, opposition to his policy inside and outside the government would have been much greater. Eden was unlucky that his Suez expedition coincided with the popular uprising in Hungary. This raised the temperature of East–West relations and fuelled Washington's fury at the ill-timed embarrassment to Western diplomacy that Eden inflicted. But his misjudgment of Eisenhower was a catastrophic mistake, and so was the assumption – on Macmillan's advice soon retracted in panic – that sterling was strong enough to ride the political storm.

But should Eden's actions be seen as the great aberration in Britain's last phase of imperial power? Only if we subscribe to the historical myth of ‘managed decline’. In this fanciful tale, (most) British leaders responded pragmatically to the symptoms of weakness: pulling back here; devolving power there; carefully cutting their coat to the available cloth; steering their bark towards the safety of Europe. Eden stands out as the reactionary relic, impervious to reason. But the tortuous approach march to the crisis at Suez (and not just the crisis itself) gives little comfort to this sanctimonious legend. The assumption that Nasser could and should be removed extended far beyond Eden. Eden himself had been the apostle of pragmatism in the wearying struggle for an Anglo-Egyptian agreement. At the Geneva conference in 1954, his restraining influence on the United States, and his support for a compromise peace, played a key role in bringing the first Indochina war to an end. His metamorphosis into a war-mongering imperialist less than eighteen months later seems hard to explain. Invoking his health, or his need to appear ‘strong’ for party political reasons, may have some virtue but misses the main point. For Eden had always been clear that settling the Anglo-Egyptian dispute would mark a new phase in Britain's Middle Eastern diplomacy, but not a retreat. With the Canal base disposed of, and Egyptian resentment subsiding, the British would be in a far better position to ‘manage’ the region's affairs. He was acutely aware of how vital it was to make good Britain's claim to be the regional ‘guardian’. Without it, the influence he was able to wield (not least at Geneva) was bound to decline sharply, while American power would rise in proportion. He was convinced from the outset (so his actions suggest) that the British position, already under siege from American, Soviet and Arab nationalist pressure, could not survive Nasser's challenge, and certainly not once he took the Canal. Eden's tragedy was that most of the means to bring Nasser to heel had already dissolved – the hidden lesson of 1954. The informal ‘empire-by–treaty’ which he had hoped to construct was already dying or dead. It was the frantic effort to revive it that led to the desperate measures, and even more desperate failure, of October–November 1956.

No end of a lesson?

‘Let us admit it fairly as a business people should, We have had no end of a lesson: it will do us no end of good.’ This was Rudyard Kipling's harsh comment on the failings and blunders that the Boer War had exposed.91 Its key phrase was adopted by Anthony Nutting (Eden's junior minister at the Foreign Office, who had resigned in protest at his policy) as the title of his book published ten years after the crisis.92 For Kipling, the point of the lesson was to waken British opinion to its imperial duty. ‘We have had an Imperial lesson. It may make us an Empire yet.’ For the ‘Suez generation’, perhaps the lesson was different: bleaker for those who were still deeply attached to an imperial destiny; salutary for those who were anxious to escape from the futile pursuit of imperial power, and the deadweight of tradition it laid (so they thought) on British society.

Suez has been seen very widely as the real turning point in Britain's post-war attempt to remain a great power. The crushing humiliation of the premature ceasefire; the enforced withdrawal of British and French troops; the public excoriation at the United Nations; the open breach with the United States; and Eden's fall as prime minister (even if masked by ill-health): these were misfortunes that befell lesser powers, not one of the Big Three that had won the Second World War. Suez on this count appears as the end of illusion: a brutal exposure of geopolitical realities in a ‘superpower’ world. Suez marked the pricking of the Churchillian bubble: the belief that Britain could intervene decisively in world affairs, when and if it chose. Yet it is doubtful how far British leaders drew such an apocalyptic conclusion or abandoned their great power mentality. It has also been argued that Britain's defeat over Suez was the trigger for the rapid withdrawal from colonial responsibilities that set in after 1960. That too may be too simple a view. Official opinion had long since accepted that maintaining colonial rule against mass opposition, or the resistance of local political leaders, was counter-productive at best. Independence for Ghana, Malaya and Nigeria, and increasing self-government in most other colonies, were agreed as objectives well before Suez. The conversion of ‘empire’ into a self-governing ‘Commonwealth’ had been loudly proclaimed as the keystone of policy. And, although the disaster of Suez might have made British governments more nervous about the risks of military action, it did not deter them from keeping their existing commitments in Aden, South Arabia and the Persian Gulf as well as in Southeast Asia after 1960, although the military burden these imposed began to rise steeply. Nor did it discourage the confident view that British power was sufficient to delay self-rule in East Africa until ‘safe’ successor regimes had emerged on the scene.

It may be more plausible to see the domestic divisions over Suez as heralding a more sceptical view of the value of Empire to Britain. The prestige and appeal of ‘imperial attitudes’ had suffered severely: to mock or attack them had become somewhat safer. Suez in that sense might almost be thought of as the domestic equivalent to the loss of Singapore in 1942. After Singapore's fall, recalled the novelist J. G. Ballard, then a youthful internee in Shanghai, ‘Chinese shopkeepers, French dentists and Sikh school-bus drivers made disparaging remarks about British power’.93 After Suez, an alternative view of Britain's place in the world, no longer ‘great’, no longer imperial, could not be lightly dismissed. Indeed, some six months before the Suez invasion was launched, the BBC had screened a series of programmes titled ‘We the British: Are We in Decline?’, a question to which the first (on colonial wars) had replied with a disconcertingly definite yes.94 Yet it took considerably longer before it seemed wise to assume that the imperial idea (in however diluted a form) no longer commanded wide public loyalty.

From our vantage point some fifty years later, the ‘logic’ of Suez was to show how constrained British power had become. Eden had struggled to maintain at least the appearance of parity with the United States. Britain's Middle East role had been crucial to this. The defeat over Suez had a dual implication. It revealed the grim truth that to incur serious disapproval in Washington would place any British government in considerable danger, while the collapse of British influence in the Middle East region simultaneously shrivelled the leverage that London could exert on its superpower partner. Henceforth, Britain's place in great power diplomacy would depend even more on a rhetorical ‘leadership’, on a confident voice influencing global opinion, and on the reinvention of empire as a beneficent legacy, a school of stable democracy. It may have been this that made Harold Macmillan, an actor to his fingertips, a more attractive successor to Eden than his main Conservative rival, R. A. Butler. Only very gradually did British leaders begin to accept that the adventure of Suez had made them ‘Public Enemy Number One’ in the eyes of much of the world.95

Secondly, Suez revealed the continued fragility of the sterling economy. ‘Whatever longer term effects Suez may prove to have on the economy’, the Governor of the Bank of England told Harold Macmillan soon after, ‘it has certainly had the immediate effect of laying bare to the public eye, both at home and abroad, some of the weaknesses of which we have long been conscious.’96 It was a strident reminder that diplomatic isolation could disrupt economic and financial stability, and thus hopes of recovery. London had always depended on flows of ‘hot money’ – short-term deposits by overseas lenders, placed there for convenience or to exploit higher interest rates. They made London more ‘liquid’, and were a profitable adjunct to the City's other activities. Before 1914, fears of conflict or crisis would usually drive ‘hot money’ towards London, not away. By 1939, the strength of the dollar meant that New York was a haven, so the prospect of Britain's involvement in war drained money westwards. But the danger this posed was reduced by the scale of Britain's overseas assets and it took defeat in the European war of 1939–40 to make it acute. In 1956, however, no ‘cushion’ of assets was there to protect sterling from anxious or speculative selling – and the Chancellor of the Exchequer from his descent into panic. In fact, it seems likely that Macmillan exaggerated the loss of sterling reserves, through muddle or deliberately.97 But fear of falling short of the minimum floating balance for the sterling area was undoubtedly real.98 As long as sterling's fixed value was the centrepiece of their policy, British governments were desperately vulnerable to the threat of a ‘run’, whether imagined or real. Eden's successors knew how quickly sterling's weakness could disable a policy that offended the White House.

Thirdly, Suez exposed the divisions that would make themselves felt if London resorted to unilateral action internationally – the alliance with France cut little ice with the critics of Suez. It might have been true that Eden's opponents at home were more vocal than numerous, and that he enjoyed the support of a silent majority. The protracted delay before he took action may have amplified doubts and multiplied doubters. But the torrent of criticism showed that ‘liberal internationalism’ – faith in collective action and the ‘rule of law’ – enjoyed wide public support, not least among the elite. Ignoring its precepts risked the corrosion of a government's moral authority, and made it more vulnerable to external pressures. Division at home was mirrored in the Commonwealth. Among the Commonwealth countries, only Australia and New Zealand gave Eden full backing. The Liberal government in Canada, mindful of Washington's views, and traditionally mistrustful of Britain's Middle Eastern adventures, expressed deep reservations. Nehru's opposition was vehement.99 It could hardly be doubted that, if they wanted the Commonwealth to reflect British influence, British leaders would have to take care not to upset its new member states, henceforth mainly Asian and African. Old-fashioned imperialism (of the Suez variety) would be self-defeating at best.

Fourthly, Suez suggested the limits of British military power. In 1882, they had landed from the Canal, scattering the Egyptians at Tel el-Kebir before entering Cairo to install a puppet regime. In 1956, they occupied (most of) the Canal Zone alongside the French. But there would be no knock-out blow and no Egyptian collapse.100 The British faced a tougher regime, an urban environment and a hostile population. Nor could they count on their regional allies where the popular mood was one of Arab nationalist outrage: their bases in Libya (perfect for use against Egypt) could not be used.101 Their military action was then brusquely called off on Washington's orders. Suez seemed to show that the age of colonial ‘expeditions’ had passed. It was one thing to engage in counter-insurgency (as in Malaya, Kenya or Cyprus) or to defend a frontier against foreign incursions (as the British were to do in Kuwait, Borneo and Oman). But invading a recalcitrant state to defend British interests was now beyond British strength. Of course, this was a symptom not just of military weakness but of geopolitical change. 1956 marked a shift in superpower competition. The dual crisis set off by the Soviet invasion of Hungary and the Anglo-French intervention in Egypt signalled a new phase of Cold War. It confirmed the effective partition of Europe between two grand ‘protectors’. But it was also the moment at which Soviet–American rivalry began to extend much more widely in the ex- (or nearly ex-) colonial world. The British had their part in this new global struggle, but they had to observe the new rules of the game. It was more important than ever to show that the West was the nationalists’ friend. Independent Afro-Asia must not turn to the East. Colonialism's aim should be to wind itself up, as a finishing school for Afro-Asia's new nation-states. The other ground-rule was just as important. Deploying British troops against mass political movements had always been risky, and was rarely favoured in London. By the late 1950s, to be trapped in a struggle against any popular movement with no end in sight and no local allies seemed the worst possible option. We will see in the next chapter how London reacted to the threat of this happening.

It might be deduced from these objective conditions that a British world-system could survive in some form, at least for a while. But it could have no real independence while the Cold War persisted (as Churchill had seen) and could face no serious opposition. Its internal solidarity (as a grouping of Commonwealth countries) was bound to be fragile. The burden on Britain, economic and military, was bound to be large. Yet British leaders, however shrewd and pragmatic, saw little choice but to press on. Why they did so, and what happened, is the theme of what follows.

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