1. General information for the period
Historian Arthur Marwick sees a radical transformation of British society resulting from the Great War, a deluge that swept away many old attitudes and brought in a more equalitarian society. He sees the famous literary pessimism of the 1920s as misplaced, arguing there were major positive long-term consequences of the war to British society. He points to an energized self-consciousness among workers that quickly built up the Labour Party, the coming of partial woman suffrage, and an acceleration of social reform and state control of the economy. He sees a decline of diference toward the aristocracy and established authority in general, and the weakening among youth of traditional restraints on individual moral behavior. The chaperone faded away; village druggists sold contraceptives. Marwick says that class distinctions softened, national cohesion increased, and British society became more equal.
World War 1 intensified Britain's old
economic difficulties as it created disruption on Britain's economy which was
highly dependant on oversea markets and heavy industry. With this, Britain
experienced recessional pressures, losing these main industries including the
textile and shipping industries to competition overseas. Post World War 1
Britain experienced an economic boom in the early 1920's, mainly attributed to
the expansion of the shipping industry due to the surge of demand for the
export of coal, steel and manufactured goods. This in turn increased the demand
for more ships. As a result this boom was short lived as industry began to
slump due to over supply as well as being faced with competition from other
nations.
Unemployment After 1919 - During the 1920's, Britain suffered
high unemployment after 1919 as the economy failed to expand in post war
markets. This was caused by Britain losing their markets to the increase in
tariff barriers, other economically industrial nations, and development of
competition to the textile industry and replacement of coal. By 1921 unemployed
receiving benefit payments reached over 2 million. Economic stress relieved
through programs including unemployment insurance, old age pensions, and
subsidizing housing. Before the Labour Party came to power in 1924 and in 1929,
Britain had adopted a welfare state to ensure there was no decline in the
standard of living for British Workers.
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| Unemployed people in front of a workhouse in London, 1930 |
Shifts In Government - Responses to the social welfare of the
state came from the labour unions who struggled to maintain the wage gains
received in wartime. Strikes from British unions broke out over welfare policies
and government had to implement military personnel to maintain the production
of industry. The Labour Party rose as the second of the two great parties of
Britain displacing the Liberal Party after the election of 1922 and opposed the
conservatives as official opposition. It soon rose in popularity as it was able
to consistently and actively deal with labour legislation and take bolder
measure to deal with the troubled economic state of Britain. Led by Prime
Minister Ramsay MacDonald the labour party decreased Government aid and
moderated unemployment relief and inaugurated housing and public works
projects. The Labour Party came to power again in 1929 as their representation
in the parliament doubled. In the same year the great depression hit and wall street
crashed, unemployment tripled, and deficit started to mount up. In response
MacDonald formed a all-party coalition known as the National Government.
The Great Depression - The Wall Street Crash in 1929 pushed
Britain into economic depression as the demand for British products collapsed.
Stagnation occurred in the shipping industry and in turn affected industries
dependant on British Exports. As British Shipping was devastated, the
industries relying on shipping including steel, coal, ship building and other
heavy industries all experienced difficulties. To counter act this loss, The
British Shipping Assistance Act was implemented to help shipping lines recover
by scraping old vessels and building new ships through Government subsidies.
This plan was ineffective because ships brought from overseas would be scraped
and rebuilt while the British merchant fleet remained untouched.
The Introduction of the Gold Standard - During the Great War, most countries
converted their currency to a floating exchange rate. In Britain, bank notes
were banned from conversion into gold. Thus, their value was variable, and on
par with the economic demands of the war. After the war, Britain amassed huge
amounts of debt, and saw themselves in an economic recession. In 1926, Winston
Churchill, in order to stimulate the economy, returned England to a monetary
Gold Standard. However, instead of valuing the pound at current economic
levels, Churchill valued it at pre-war parity. Unfortunately, the pound was
worth much more during the War than it was after. Because of the return to the
Gold Standard, in 1926 the pound was valued 10% higher than it was worth
internationally. In order to be competitive in foreign markets, British
exporters had to accept a price cut of 10% on all goods. Goods that were sold
on par with the pound in relation to the Gold Standard were 10% more expensive
than those of foreign competitors, and British exports became the more
expensive option. In the late 1920's, profit from domestic products decreased
substantially and export levels fell.
The British Coal Industry - During the Great War, domestic coal
usage rose in Britain in order to sustain the British war effort. Thus,
international exports of coal decreased during the 1910's. In 1925, American
economist Dawes introduced the Dawes plan, which allowed Germany to pay a
portion of its war reparations to France in coal, rather than money. Due to the
presence of "free coal" in the world market, both the demand for, and
price of coal fell. Due to these factors, coupled with the return to the Gold
Standard in 1926, profits from coal exports plummeted.
1926 General Strike and Red Friday - As coal exports fell, mine owners
attempted to normalize profits by implementing wage reductions on their
employees. Due to the already weakened economy, outcry from the miners
abounded. In what became known as Red Friday, the government promised to
subsidize any wage reductions that emerged. (This day was called Red Friday due
to its socialist nature, and was seen as a victory for the working class.)
However, due to economic and political pressures, these subsidies were soon
revoked. Because of this, the miners began to strike, in what became known as
the General Strike of 1926. During the first week of the General Strike, over
1.5 million men refused to work. The TUC union attempted to negotiate, however,
13 days later, the TUC called off the strike. Although without union support,
the miners continued to strike until November 1926, when financial pressures
forced them back to work for longer hours and less pay.
The National Government - Due to the return to the Gold Standard
and problems with domestic industry, Britain felt recessionary pressures in
both the 1920's and 1930's. The Labour Party, led by Prime Minister Macdonald,
was unable to balance the budget accordingly. In a government commission
entitled the May Report, the Labour Party was urged to cut public spending. The
Conservative opposition also pressured the government to reduce public works.
However, many Labour Party ministers threatened to resign if such cuts were
brought to life. Thus, due to conflicting national and party interests, King
George V asked MacDonald's government to reign. In 1931, they did so, and the
National Government was formed. The National Government was a coalition party
consisting of the Labour Party, the Conservatives and the Liberals. It was
hoped that the National government could balance the budget and bring about
economic stability. In order to increase profits, the National Government
introduced the General Tariff of 1932, which put a tax of 10% on all imports.
As well, in 1931 the National Government abandoned the Gold Standard, devaluing
the pound and helping Britain move towards economic recovery.
Unemployment Reforms of the 1930's - Due to the ideological shift in
Britain during the Interwar Years, the government of the 1930's went about
reforming unemployment benefits, in order to reach a greater number of British
citizens. Previously, citizens had to pay into Unemployment Insurance, and
could only draw funds from insurance relative to the amount they had
contributed. If a citizen could not afford to pay, they were forced to go to
traditional institutions (church, etc.) for financial aid, as per the New Poor
Law. The unemployment reforms of the 1930's allowed for all citizens,
regardless of contribution, to draw funds from unemployment insurance, and put
social welfare into the hands of the state. Additionally, the minimum age of a
claimant was lowered to 14. In Britain, unemployment reforms were a dramatic
shift to the left, and welfare capitalist ideals.
Emergence of John Maynard Keynes - Immediately following the Great War,
John Maynard Keynes produced the Economic Consequences of the Peace. In his
book, he predicted that high inflation rates and government price controls
would dampen production. In a short essay entitled The Economic Consequences of
Mr. Churchill, Keynes criticized the return to the Gold Standard, and predicted
that it would result in a European depression. Keynes proposed that the economy
be reinflated through public works. Due to his economic theories and
predictions during the Interwar Years, Keynes emerged as a leading economist
after the Second World War. During the Interwar Years, his theory of demand
side economics gained credibility and validity. The emergence of Keynes was a
key indication of Britain’s ideological shift towards leftist policies during
the Interwar Years.
Economic Recovery - Late into the 1930's Britain began to
see economic recovery and growth. The General Tariff of 1932 saw government
revenue increase, and the movement away from the Gold Standard allowed for
economic revitalization. New industries, such as chemicals and auto
manufacturing allowed for economic expansion, unlike the shipping and coal
industries of the earlier interwar years. As well, due to the rise of Nazi
Germany, British military spending began in 1937. This spending helped to
increase economic growth until Britain officially entered the war in 1939. From
1939 on, Britain had a wartime economy, and economic expansion continued to
increase.
Popular
culture - as a leisure, literacy, wealth,
ease of travel, and a broadened sense of community grew in Britain from the
late 19th century onward, there was more time and interest in leisure
activities of all sorts, on the part of all classes. The annual vacation became common. Tourists flocked to seaside
resorts; Blackpool hosted 7 million visitors a year in the 1930s. Organized leisure was primarily a male activity,
with middle-class women allowed in at the margins.
There were class differences with upper-class clubs, and working-class and middle-class pubs. Heavy drinking declined; there were more competitions that attractewd heavy betting. Participation in sports and all sorts of leisure activities increased for the average Englishman, and his interest in spectator sports increased dramatically.
By the 1920s the cinema and radio attracted all classes, ages and genders in very large numbers, with young women taking the lead. Working-class men wearing flat caps and munching fish and chips were boisterous football spectators. They sang along at the music hall, fancied their pigeons, gambled on horse racing, and took the family to Blackpool in summer. The cartoon realization of this life style Andy Capp began in 1957. Political activists complained that working-class leisure diverted men away from revolutionary agitation.
There were class differences with upper-class clubs, and working-class and middle-class pubs. Heavy drinking declined; there were more competitions that attractewd heavy betting. Participation in sports and all sorts of leisure activities increased for the average Englishman, and his interest in spectator sports increased dramatically.
By the 1920s the cinema and radio attracted all classes, ages and genders in very large numbers, with young women taking the lead. Working-class men wearing flat caps and munching fish and chips were boisterous football spectators. They sang along at the music hall, fancied their pigeons, gambled on horse racing, and took the family to Blackpool in summer. The cartoon realization of this life style Andy Capp began in 1957. Political activists complained that working-class leisure diverted men away from revolutionary agitation.
Cinema
and radio - the British
film industry emerged in 1890s, and built heavily on the strong reputation of
the London legitimate theater for actors, directors and producers. The
problem was that the American market was so much larger and richer. It bought
up the top talent, especially when Hollywood came to the fore in the 1920s and
produced over 80 percent of the total world output. Efforts to fight back were
futile—the government set a quota for British made films, but it failed.
Hollywood furthermore dominated the lucrative Canadian and Australian
markets. Bollywood (based in Bombay) dominated the huge Indian
market. The most
prominent directors remaining in London were Alexander Korda, an
expatriate Hungarian, and Alfred
Hitchcock. There was a revival of creativity in the 1933-45 era, especially with the
arrival of Jewish filmmakers and actors fleeing the Nazis. Meanwhile, giant palaces were built for the huge
audiences that wanted to see Hollywood films. In Liverpool 40 percent of the
population attended one of the 69 cinemas once a week; 25 percent went twice.
Traditionalists grumbled about the American cultural invasion, but the
permanent impact was minor.
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| flappers at the bar of Isa Lanchester's nightclub in London |
In radio,
British audiences had no choice apart from the upscale programming of the BBC,
a government agency which had a monopoly on broadcasting. John
Reith (1889 – 1971), an intensely moralistic engineer, was in full charge.
His goal was to broadcast, "All that is best in every department of human
knowledge, endeavor and achievement.... The preservation of a high moral tone
is obviously of paramount importance." Reith
succeeded in building a high wall against an American-style free-for-all in
radio in which the goal was to attract the largest audiences and thereby secure
the greatest advertising revenue. There was no paid advertising on the BBC; all
the revenue came from a tax on receiving sets. Highbrow audiences, however,
greatly enjoyed it. At a time when American, Australian and Canadian stations
were drawing huge audiences cheering for their local teams with the broadcast
of baseball, rugby and hockey, the BBC emphasized service for a national,
rather than a regional audience. Boat races were well covered along with tennis
and horse racing, but BBC was reluctant to spend its severely limited air time
on long football or cricket games, regardless of their popularity
2. Expanding the welfare state
Two major programs that permanently expanded the welfare state passed in 1919 and 1920 with surprisingly little debate, even as the Conservatives dominated parliament. The Housing and Town Planning Act of 1919 set up a system of government housing that followed the 1918 campaign promises of "homes fit for heroes." The Addison Act, named after the first Minister of Health Doctor Christopher Addison, required local authorities to survey their housing needs, and start building houses to replace slums. The treasury subsidized the low rents. In England and Wales, 214,000 houses were built, and the Ministry of Health became largely a ministry of housing.
The Unemployment
Insurance Act of 1920 passed at a time of very little unemployment. It
set up the dole system that provided 39 weeks of unemployment benefits to
practically the entire civilian working population except domestic service,
farm workers, and civil servants. Funded in part by weekly contributions from
both employers and employed, it provided weekly payments of 15s for unemployed
men and 12s for unemployed women. Historian Charles Mowat calls these two laws
"Socialism by the back door," and notes how surprised politicians
were when the costs to the Treasury soared during the high unemployment of
1921.
Taxes rose
sharply during the war and never returned to their old levels. A rich man paid
8% of his income in taxes before the war, and about a third afterwards. Much of
the money went for the dole, the weekly unemployment benefits. About 5% of the
national income every year was transferred from the rich to the poor. Taylor
argues most people "were enjoying a richer life than any previously known
in the history of the world: longer holidays, shorter hours, higher real
wages."
The British economy was lackluster in the 1920s, with sharp
declines and high unemployment in heavy industry and coal, especially in
Scotland and Wales. Exports of coal and steel fell in half by 1939 and the
business community was slow to adopt the new labour and management principles
coming from the US, such as Fordism, consumer
credit, eliminating surplus capacity, designing a more structured management,
and using greater economies of scale. For over a century the shipping
industry had dominated world trade, but it remained in the doldrums despite
various stimulus efforts by the government. With the very sharp decline in
world trade after 1929, its condition became critical.
Chancellor of
the Exchequer Winston Churchill put Britain
back on the gold standard in 1925, which many economists blame for the mediocre
performance of the economy. Others point to a variety of factors, including the
inflationary effects of the World War and supply-side shocks caused by reduced
working hours after the war.
By the late
1920s, economic performance had stabilised, but the overall situation was
disappointing, for Britain had fallen behind the United States as the leading
industrial power. There also remained a strong economic divide between the
north and south of England during this period, with the south of England and
the Midlands fairly prosperous by the Thirties, while parts of south Wales and
the industrial north of England became known as "distressed areas"
due to particularly high rates of unemployment and poverty. Despite this, the
standard of living continued to improve as local councils built new houses to let
to families rehoused from outdated slums, with up to date facilities including indoor toilets,
bathrooms and electric lighting now being included in the new properties. The
private sector enjoyed a housebuilding boom during the 1930s.
The Great
Depression originated in the United States in late 1929 and
quickly spread to the world. Britain had never experienced the boom that had
characterized the US, Germany, Canada and Australia in the 1920s, so its bust
appeared less severe. Britain's world trade fell in half (1929–33), the
output of heavy industry fell by a third, employment profits plunged in nearly
all sectors. At the depth in summer 1932, registered unemployed numbered 3.5 million,
and many more had only part-time employment. Experts tried to remain
optimistic. John
Maynard Keynes, who had not predicted the slump, said, "'There
will be no serious direct consequences in London. We find the look ahead
decidedly encouraging."
Doomsayers on
the left such as Sidney and Beatrice Webb, J.A. Hobson, and G.D.H. Cole
repeated the dire warnings they had been making for years about the imminent
death of capitalism, only now far more people paid attention. Starting in 1935 the Left Book Club provided a new warning every month, and built up
the credibility of Soviet-style socialism as an alternative.
Particularly
hardest hit by economic problems were the north of England, Scotland, Northern
Ireland and Wales; unemployment reached 70% in some areas at the start of the
1930s (with more than 3 million out of work nationally) and many families
depended entirely on payments from local government known as the dole.
In 1936, by
which time unemployment was lower, 200 unemployed men made a highly publicized
march from Jarrow to London in a bid to show the plight of the industrial poor.
Although much romanticized by the Left, the Jarrow Crusade marked a
deep split in the Labour Party and resulted in no government action. Unemployment remained high until the war absorbed all
the job seekers. George Orwell's book The
Road to Wigan Pier gives a bleak overview of the hardships of the
time.
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| Unemployed men on a hunger march pass through a British town, circa 1935 |
3. Interwar unemployment and poverty in the United Kingdom
It describes a period of poverty in the United Kingdom between the end of World War I in 1918 and the start of World War II in 1939. Unemployment was the dominant issue of British society during the interwar years Unemployment levels rarely dipped below 1 million and reached a peak of 3,000,000 in 1933, a figure which represented 22% of the working population. The Government deployed unemployment insurance schemes in 1920 to alleviate unemployment| Year | Total % | SE England % | NE England % | Ship- building % |
|---|---|---|---|---|
| 1923 | 11.7 | 9.2 | 12.2 | 43.6 |
| 1924 | 10.3 | 7.5 | 10.9 | 30.3 |
| 1925 | 11.3 | 5.9 | 15.0 | 33.5 |
| 1926 | 12.5 | 5.4 | 17.2 | 39.5 |
| 1927 | 9.7 | 5.0 | 13.7 | 29.7 |
| 1928 | 10.8 | 5.4 | 15.1 | 24.5 |
| 1929 | 10.4 | 5.6 | 13.7 | 25.3 |
| 1930 | 16.1 | 8.0 | 20.2 | 27.6 |
| 1931 | 21.3 | 12.0 | 27.4 | 51.9 |
| 1932 | 22.1 | 14.3 | 28.5 | 62.0 |
| 1933 | 19.9 | 11.5 | 26.0 | 61.7 |
| 1934 | 16.7 | 8.7 | 22.1 | 51.2 |
| 1935 | 15.5 | 8.1 | 20.7 | 44.4 |
| 1936 | 13.1 | 7.3 | 16.8 | 33.3 |
Causes - there were several reasons for the decline in industry
after the First World War. The end of World War I brought a postwar boom. In
the Shipping industry businesses expanded rapidly in order to take advantage in
the increase in business. However the boom was short lived and this rapid
expansion caused a slump from oversupply. Structural weaknesses in the British economy
meant a disproportionate number of jobs were in the traditional industries. A
lack of pre-war technological developments and post war competition damaged the
economy and the new industries which emerged employed fewer people. At the same
time Britain began to lose her overseas markets due to strong foreign competition. Some have argued than an overly generous
unemployment insurance system worsened the state of the economy. The Wall Street Crash in 1929 was responsible for a world wide downturn in trade and led to
the Great
Depression.
Response
Liberal
Party - as the Government had funded World
War I largely through borrowing, Britain had run up a large national debt. A
boom in the economy occurred in 1919 causing unemployment rates to decrease.
The boom stopped in 1920 when unemployment began to increase, by the time that
the Liberals lost power in 1922 the unemployment rate had reached 2.5 million.
A committee on unemployment was set up in 1920 and recommended public works
schemes to ease unemployment, this led to the establishment of the Unemployment
Grants Committee. As unemployment was not uniform across Britain it was decided
to concentrate schemes in areas of the country that were particularly affected
by the downturn. However the government wished,
also, to return to the gold standard, a move which would have required cuts in
public spending. The Unemployment
Insurance Act 1920 extended
unemployment benefits to cover all workers who earned less than £250. The
"Seeking Work Test" was introduced in 1921, it stated to receive full
unemployment benefit there had to be evidence the recipient was looking for
work.
Conservative
policy - the Unemployment
Insurance Act 1927 returned
to the principle that workers had to contribute to insurance schemes in order
to be a part of them. The workhouse system was abolished and replaced with a system
of Public
Assistance Committees.
Labour
Policy - Ramsay
Macdonald's Government passed the Development
(Loan Guarantees and Grants) Act of 1929.
National
Government - in 1931 a National Government formed
after Cabinet splits resulting from the financial crisis. National Governments
would stay in power from 1931-1940 until Winston Churchill became Prime
Minister of a Coalition Government during World War II. Local government was
reorganized so that local authorities provided school dinners and health
services, means testing was introduced and the Unemployment Assistance Board was set up in 1934. Economic measures included
the devaluation of the pound and taking Britain's currency off of the gold
standard, borrowing also increased. The Special
Areas Act of 1934 attempted to inject
finance into depressed areas and British industry was protected by
protectionist measures such as state subsidies and import quotas.The 1934
Unemployment Act Part I increased the numbers covered by unemployment insurance
and the Special
Areas Act 1934 increased
support for those areas of Britain which were considered to be worst hit by the
depression.
Prime ministers - all three of the major political parties held power
during this period. The first Labour Government came to power in 1924 and a
National Government was formed in 1931.
Unrest - there were
several examples of unrest during this period, most notably the General Strike of 1926
and the Jarrow March of
October 1936. There were also protests against the introduction of means
testing and hunger marches organized by the National
Unemployed Workers Movement.
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