How well did Britains economy

1
Problems in staple industries, especially coal.
Poor industrial relations. Mines given back to
coal owners. Wages cut. Unemployment grew to 1
million after 1922. Miners strike in 1921. 1925
further problems over pay cuts led to General
Strike in 1926 after Samuel Report.
How well did Britains economy recover after
World War I?
Trades Disputes Act weakened unions at a time
when unemployment was increasing further after
1929.
2
By 1932 36.5 of the working population of Wales
was unemployed. In Dowlais 73.4 were out of work.
Was the Depression a watershed, a turning point?
Cheaper food, gas and electricity, cars more
houses, decreasing family size, cheap luxuries,
meant standards of living generally improved.
A survey of South Wales in the late 1930s
revealed that one third of single men and nearly
half of married men received more in unemployment
benefit than they had in their previous jobs.
Self help groups such as the Brynmawr Experiment
boots, furniture, public buildings were set
up.
Death rates in South Wales were higher than in
other parts of the country 13.4 per 1000,
compared to 9.3 for England and Wales as a whole.
3
Surveys conducted by Rowntree in 1935-6 in York,
and by Herbert Tout in Bristol in 1937. Both
found 18-19 lived in poverty, where they did not
have enough to survive illness, old age and
unemployment were the main causes of
poverty. However, the greatest cause of poverty
was childhood. Rowntree found half of the people
living in primary poverty were under fourteen.
Tout found that in a thriving city in the 1930s,
1 in 5 working class children came from homes
where incomes were below the poverty line nine
out of ten families with four or more children
lived in poverty. Old age pensions were not
enough and anyone over 65 with no resources would
probably need public assistance. Widows pensions
were not enough. The social enquires of the time
concluded that the Depression was not the main
cause of poverty. More significant were the
traditional causes, especially the poverty cycle
that trapped low earning families, who had little
chance of the education that take them out of it.
4
Children begin to earn
Children leave home
This is what Rowntree identified in 1901 and his
study of 1935-6 showed the same pattern.
Marriage.
Too old to work.
Primary Poverty Line
Such findings were confirmed in Bristol by Tout
in 1941, by Lewellyn Smith in London and by the
Pilgrim Trust. It is also recorded in the
observations of Priestley (English Journey and
Orwell 9The Road to Wigan Pier.)
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
5
So, how effectively did the inter-war governments
deal with the problems of poverty and welfare?

• Remember there were two problems for the
  government to deal with
• The government had to help the poor to survive
• The government had to provide alternative
  employment, regenerate industry.

To help to collect ideas, draw a timeline for
1919-1939. Record all government actions,
distinguishing between collectivist and
laissez-faire approaches.
1929
1919
6
Decide how far each of these measures would have
alleviated either of these problems.

• 1920, Lloyd-Georges government expanded the
  Unemployment Insurance Act.
• It now included most workers who earned less than
  250 pa, except for agricultural workers,
  domestic servants and the self employed another
  12 million workers were helped.
• It was still to be self financing, and
  contributions increased but so did benefits
  (from 7 to 15 shillings a week for up to 15 weeks
  a year). In 1921 extra allowances were introduced
  to cover the unemployed mans wife and family.
• However, after 1921 unemployment to over a
  million, so the self supporting principle had to
  be dropped.

7

• In 1921, Lloyd Georges government, still under
  the impression that unemployment would be short
  term, as it had been before WWI, but appreciating
  that people were still out of work after 15
  weeks, extended the period of benefits to 32
  weeks (2 x 16 with a gap in between). There had
  been the threat of riots in industrial areas when
  men had had to apply for poor relief after their
  benefits ran out. This put strain on the local
  authorities.
• So, by this act Lloyd George also recognised that
  the government had to contribute more. So, people
  were able to receive unemployment benefit for up
  to 32 weeks, even if their contribution did not
  cover this. The extra money was a gift or dole
  from the treasury.
• This extra money was means tested and the
  claimants had to prove that they were looking for
  work.
• However, this does signify that the government
  had now accepted the principle that the state was
  now responsible for maintenance of its unemployed
  this was no longer purely an insurance scheme.
• In 1924, the Labour government removed the gap
  between the 16 week periods.

8
Lloyd George , who had helped to introduce a
non-contributory pension for those over 70 in
1908, doubled the amount paid in 1919 (5 to 10
shillings). He was criticised by the Labour party
for not going further, but most people felt that
it would be too expensive to extend it to those
aged 60.

• In 1925 Neville Chamberlain (in Baldwins
  administration), introduced the
• Widows, Orphans and Old Age Contributory
  Pensions Fund.
• Contributions were compulsory, but it entitled
  contributors to
• A pension (10 shillings )from the age of 65,
  without a means test
• 10 shillings a week for widows
• Extra payments for children 5 shillings for the
  first and 3 shillings for the rest.
• This was extended to self employed workers in
  1927.

9
The fact that this still meant that the workers
were paying for their own benefits led to
criticism of Chamberlain One historian claimed
that Chamberlain had neither the resources nor
the imagination to practise generosity. Many
argued that if the Conservatives had not kept on
reducing income tax the whole scheme could have
been financed by the government.
10

• The Conservative Unemployment Insurance Act of
  1927, introduced by Baldwins government, removed
  the time limit and allowed the
  
  employed to claim for as long as they
  were unemployed, providing they were genuinely
  looking for work.
• So, the Conservatives too, had accepted the
  principle of state support.
• They went further in 1929 when Neville
  Chamberlain, in his Local Government Act
  abolished the Poor Law system, as collectivists
  had been urging for years.
• However, there were huge numbers who had been
  claiming support in this way, and these still had
  to be helped, so the local authorities were given
  grants to set up Public Assistance Committees.
• Unfortunately, in 1931 the employment situation
  got worse as the World Depression hit.
• By this time, there was a huge deficit between
  the amount of money the government was receiving
  in taxation, and the amount it was paying out in
  unemployment benefit.
• The government was in debt, and foreign banks
  would only renew loans if the government cut
  spending.

11
By this time, Ramsey MacDonald was PM at the head
of the second Labour government, a minority
government, that had actually polled less votes
than the Conservatives, though they had gained
more seats.
When MacDonald proposed a 10cut in benefits,
and reductions in public spending in 1931, he
split his cabinet. The cuts could only be
implemented when MacDonald formed the National
Government, a coalition of his supporters within
his party, Conservatives and Liberals.

• The 1934 Unemployment Insurance Act attempted to
  replace the Public Assistance Committees with
  Unemployment Assistance Boards. These UABs were
  to means test claimants, and the way in which
  benefits were paid by the Unemployment Assistance
  Boards actually meant that benefits were
  sometimes lower than they had been before 1934.
  There was the added humiliation of appearing
  before the UABs to plead your case.

12
There were so many protests against this the
Blaina Riots for example that the government
restored the 10 cuts of 1931 and allowed the
UABs to pay out whichever rate was highest. This
actually meant that in some areas, the unemployed
were actually receiving more than the
employed. There was wide debate in the country
about whether this. In comparison with the USA
and other western European countries, government
provision for the unemployed was unprecedented,
but many who actually received it were less
impressed hence the protests of the National
Unemployed Workers Unions, and the hunger marches
of the late 1930s.
13
But, equally there were protests from ratepayers
against what they considered as the extravagance
of the dole. There were letters to the Times
against relief scales and rules which have been
expanded and eased for the sake of the decent
unemployed, which have proved to be too easy
going and tempting for the venal minority.
14
How effectively did governments deal with other
welfare problems - old age health housing educati
on?
15

• In terms of health provisions..
• very little changed from 1911.
• A Ministry for Health was set up in 1919
• but
• The weekly payment was increased for 10 to 15
  shillings in 1919, but this was cut again in
  1926.
• Though a commission of 1926 recommended the
  scheme should include workers wives and
  children, this did not materialise.
• Suggestions were made that there should be a
  nation wide scheme to improve services, the big
  private companies, who ran the payments the
  Prudential, the Pearl, objected because they
  thought they would have to pay out more than the
  smaller companies.
• There was still not payment towards hospital
  treatment.
• There were still not enough hospitals the
  Ministry put no pressure on local authorities to
  build more.

16
In housing much was expected homes fit for
heroes at least 600,000 were needed.

• The Addison Housing Act provided government
  grants to local authorities to build more houses
  for working people. 21.3,000 new houses were
  built
• The Wheatley Housing Act of the 1924 Labour
  government provided government grants to build
  council houses, which could only be rented out.
  Over 500,000 houses were built and rented at
  pre-war prices. 700,00 council houses were built
  by 1939.
• The Greenwood Housing Act of 1930 (Labour)
  provided government grants to clear slums and
  build more houses.

• Addisons scheme was stopped because of the 1922
  slump.
• Wheatleys provisions were abandoned in 1933
  because of the slump, though it was brought back
  at the end of the 1930s.
• Greenwoods Act was suspended in 1931 because of
  the Depression, though many argued this would
  have provided many jobs.

17

• In terms of health provisions..
• very little changed from 1911.
• A Ministry for Health was set up in 1919
• but
• The weekly payment was increased for 10 to 15
  shillings in 1919, but this was cut again in
  1926.
• Though a commission of 1926 recommended the
  scheme should include workers wives and
  children, this did not materialise.
• Suggestions were made that there should be a
  nation wide scheme to improve services, the big
  private companies, who ran the payments the
  Prudential, the Pearl, objected because they
  thought they would have to pay out more than the
  smaller companies.
• There was still not payment towards hospital
  treatment.
• There were still not enough hospitals the
  Ministry put no pressure on local authorities to
  build more.

18
In Education

• The Fisher Education Act of 1918 stipulated that
• full time education should be compulsory up to
  the age of 14
• there should be more free places in secondary
  schools for bright children from poor backgrounds
  that there should be scholarships
• nursery schools should be provided for the under
  5s
• There should be continuation schools up to the
  age of 16
• Teachers salaries should be the same throughout
  the country.

• In fact, only the first part of this was ever
  enforced between the wars. There were few
  scholarships, nursery schools or continuation
  school. When unemployment expenditure rose,
  education was always the first budget to be cut.

19

• The Labour Government of 1924 was very concerned
  about the lack of education provision. They set
  up an enquiry into education under Sir Henry
  Hadow. The Hadow Report was a milestone in
  education because it laid the basis for the
  system that is still in place today
• that there should be a break between primary and
  secondary education at the age of 11.
• that children should be educated up to the age of
  15
• that there should be two types of secondary
  school dependent on the aptitude of the pupils.

• In fact, though the recommendations were widely
  accepted when the report appeared in 1926, they
  were never implemented, and education remained a
  low priority until 1945.

20
Was everyone happy with the policies of
successive governments between the wars? Were any
alternatives suggested?
Remember the economic circumstances of the period
from 1919-1939
1937-----1939 Things begin to improve in the
Midlands and the South-East where unemployment is
only 7 because of new industries, but with
unemployment sticking at 20 in Wales, the north,
Scotland and Northern Ireland.
1919--------------------1929 Staple industries
are hit by foreign competition and inefficiency -
structural problems, which require modernisation
of work and production practices.
1929----------------1937 World Depression and
slump in demand make matters worse.
Successive governments focused on dealing with
the effects of unemployment.
21
However, there were some politicians and
economists who wanted to tackle the causes of the
poverty and unemployment
Who were these people and what did they suggest?

• Within the Liberal Party
• In the 1920s the Liberals were trying to make a
  dramatic return to power.
• Lloyd George was the leader of the Liberals from
  1926, and he came out with new radical policies
  to deal with the structural problems of British
  industry.
• In 1925 he had published the Green Book, The
  Land and Nation where he suggested partial
  nationalisation of agricultural land.
• In 1926, his Yellow Book, Britains
  Industrial Future put forward his plans for the
  modernisation of British industry.
• In 1929 he produced his Orange Book,We Can
  Conquer Unemployment.

22
But, did they have any answers to the problems of
British industry?

• The Labour Party increasingly accepted Keynes
  ideas, though they also believed there should be
  an expansion in social services.
• In 1935, the more radical solution of
  nationalisation (taking into state control) of
  the main industries was put forward by John
  Strachey in a pamphlet The Theory and Practice
  of Socialism. He argued that boom,
  overproduction and slump were inevitable when
  there was no overall control of the economy, as
  in a capitalist system. He believed that if
  production was planned to coincide with need,
  then slumps and unemployment would be eliminated.

These ideas were considered too risky and
dangerous by most politicians some believed that
they were too close to Communism and too
expensive to implement.
23
But, did they have any answers to the problems of
British industry?

• The Labour Party increasingly accepted Keynes
  ideas, though they also believed there should be
  an expansion in social services.
• In 1935, the more radical solution of
  nationalisation (taking into state control) of
  the main industries was put forward by John
  Strachey in a pamphlet The Theory and Practice
  of Socialism. He argued that boom,
  overproduction and slump were inevitable when
  there was no overall control of the economy, as
  in a capitalist system. He believed that if
  production was planned to coincide with need,
  then slumps and unemployment would be eliminated.

These ideas were considered too risky and
dangerous by most politicians some believed that
they were too close to Communism and too
expensive to implement.
24

• In 1930 Oswald Mosley produced his Mosley
  Memorandum. He consulted Keynes and talked with
  leading figures in the Labour Party. He
  suggested
• Import restrictions to encourage British
  domestic industries
• Subsidies for farmers - to reduce dependence on
  food imports and increase farm revenues
• Government control of banks to ensure that
  British industry was given preferential treatment
  in terms of investment loans.
• Old age pensions at 60, which would create more
  job vacancies
• School up to the age of 15, which would also mean
  more jobs available.

25
The scheme was rejected as too expensive by the
Labour Chancellor one Cabinet member called the
plan grotesque and absurd. Apart from the
cost, there was also the problem of retaliation
by other countries to import restrictions and
Britain would have found it difficult to generate
recovery based purely on the domestic population.
Mosley went on to found the British Union of
Fascists, which added racism to its agenda.
26
The Conservatives, inpower 1922-1924, 1924-1929
and in the National Government
had similar ideas. Harold Macmillan produced a
document Peace and Reconstruction setting out
detailed public works schemes to be organised by
the Government and local authorities, using money
that would otherwise have gone on unemployment
benefits.
A cross-party group (Liberals and Conservatives)
called Political and Economic Planning (PEP),
made up of politicians, business people, bankers,
economists, architects and town planners also
advocated more forward planning for industry and
social services, including health and housing.
None of these ideas were adopted however, because
they were regarded as too expensive or too risky.
27
So, what did governments actually do?

• In 1932 free trade was abandoned, and a 10 duty
  was put on imports Mosley without the support
  measures, and what some Conservatives had been
  arguing for for some time.
• The Special Areas Act provided 2 million to help
  revive areas worst hit by unemployment
  Scotland, the North of England and Wales. Trading
  Estates, such as Treforest and Larkhall in
  Glasgow were set up, but these only provided a
  few jobs, and mostly for women. This initiative
  failed because businessmen wanted to produce
  consumer goods closer to the places they were
  most likely to be bought. Only later did the
  Government offer rates, rent and income tax
  reductions.
• The steel industry was revived by putting import
  duty on steel from abroad, and by setting up the
  British Iron and Steel Federation, so that
  employers could work together. New steel works
  were set up in Ebbw Vale and Corby though not
  Jarrow where unemployment was the highest in the
  country.

It was rearmament that really created the jobs
needed to reduce unemployment.