Great Britain 1900- 1950

Before WW1, Britain was a manufacturing workshop, and hub of international finance, confident in the economic doctrine of laissez faire (free from state intervention). However, between 1900 and 1950 Britain was weakened by two world wars, and beset by economic difficulties. The old staples of coal, steel, shipbuilding and textiles were declining, and the inter-war decades were overshadowed by mass unemployment; periods of poverty; dole queues, and derelict towns.

However, it was not all doom and gloom. Newer sectors were steadily growing. Moreover, these years witnessed major scientific advances, and substantial economic growth in the new industries. In 1913 Britain produced 34,000 motor vehicles; this figure had risen to 507,000 by 1937. There were breakthrough developments in plastics and artificial fibres contributing to the growth of the chemical industry. Giant combines were formed, such as ICI in 1926. The construction industry grew at almost double the rate of the economy, with over 4 million new homes built. And, by 1933 the national grid was almost complete giving Britain one of the most advanced systems of electricity supply in the world.

In 1914 Britain was a country where 4% of the population accounted for nearly 90% of the entire capital wealth, and where by contrast 30% of the population languished in abject poverty. There were serious tensions within society. Trade unions were demanding a redistribution of wealth. Ireland was demanding Home Rule; and Suffragettes were demanding justice. In the first six month of 1914 almost 5 million days were lost through strikes, and the prospect of civil-war in Ireland was only averted by the outbreak of WWI.

The war led to an unprecedented degree of government control, which until than had been remarkably unobtrusive. The Defence of the Realm Act equipped the government with unlimited powers. The government closed the Stock Exchange, controlled the means of production, imposed drinking hours, told the people what to think, and conscripted men into the army. With Lloyd George as prime minister the production of munitions became immense. On one day in September 1918 the British army fired off 943,000 shells.

The human cost is still difficult to comprehend; 30 % of all men aged 20 to 24 in 1914 were killed. 20% of the peerage who served was killed (a death toll greater than at any time since the Wars of the Roses). Ten years later 2.5 million men were receiving a disability pension (40% of those who served).

Initially the end of the war bought a speculative boom fuelled by a belief that the pre-war demands for British goods would return. The economic collapse began in 1920 with a contraction of the 'old staples' creating almost 2 million unemployed by June 1921. Millions of days were lost in strikes. To restore confidence Britain attempted to rejoin the Gold Standard which further eroded Britain's competiveness, and led to the General Strike of 1926.

The Conservative Prime Minister Stanley Baldwin, who dominated the interwar years, feared that Britain could be ripped apart by class conflict. Baldwin cultivated an image in complete contrast to the hard faced city slicker, and the bitter class warrior. His was the politics of anti-politics, the populism of the anti-populist. He strove to bring the Labour party into the political system. He insisted that he was a 'healer, and he sought to 'get at the soul of the working people'. Industrial relations improved, but hopes for a stronger revival were dashed by the Wall Street Crash of 1929 and the most profound depression that the industrial world had experienced for over a century. For many these were years of desperation, hopelessness, and long-term unemployment.

However, despite the bleak economic outlook, overall there was a steady rise in living standards for the majority of the population over the period. Those in work experiencing an average rise in real incomes of around one third. Women benefited to some extent from expanding opportunities, and greater freedom from social conventions, but many pioneers of women's liberation remained frustrated at the lack of equality of pay and status. New housing estates sprung-up in the suburbs. By 1939 about one-third of all people earning under £300 per year had running hot water, and two thirds of houses had electricity. However, house building lagged far behind demand. In 1935 it was estimated that 12% of the population still lived in damp, insanitary, overcrowded homes. In Shoreditch, for example, three or more families were living in small houses of four or five rooms.

General health standards were improving through better diet and living conditions. The average life expectancy increased by around 15 years, brought about by a reduction in the number of deaths through infectious diseases, such as tuberculosis, typhoid, and pneumonia. By 1937 free school milk was being provided to 3.2 million children. National Insurance provided free general practitioner and sickness benefit to around twenty million workers in 1937, but significantly their families were not included. Those not covered had to pay for a doctor or go the out-patients of a free hospital. It was not until the creation of the National Health Service, spearheaded by Anenurin Bevan in 1946, that everybody was entitled to treatment without payment at the time of use.

The growth of newspaper circulation, and radio broadcasting led to the development of a more homogenous society partaking of an increasingly common culture. Mains radios were in common use by the early 1930s with the BBC broadcasting both major sporting, and national events. Edward's VIII abdication message, and the Prime Minister's declaration of war spoken directly to the people in September 1939 remain etched the national folk memory. There was an increase in gambling with organised national football pools. Greyhound racing was massively popular, for example in 1931 there were 19 million greyhound attendances. This type of betting was small scale and affordable to the unemployed offering diversion and excitement, with the prospect of a small win.

There was a major shift of resources towards the provision of welfare benefits and social opportunities. Highly significant was the growth of government from 252,000 civil servants in 1914, to 575,000 in 1950, by which time a quarter of the working population were working in the public sector (although much of this was due to post war nationalisation). Asquith's Liberal Government of 1908 had introduced Old Age Pensions; and National Insurance for a limited number of workers, with widening scope throughout the period. The Poor Law was finally abolished in 1929 when it was absorbed by local authority means tested Public Assistance. However, it wasn't until Attlee's 1945 Labour government enacted the Beveridge Report that benefits became universal, as opposed to the ad hoc systems operating between the wars. The Butler Education Act 1944, provided free secondary education for all, with the preservation of grammar schools for the ablest children selected at 11 years. Most people who voted for Attlee were voting against the Tory record of unemployment and social insecurity, rather than for a new social order. The Labour Party's post war programme centred on providing full employment helped by extensive nationalisation of basic industries, and economic management. Attlee's post war censuses lasted until 1979.

The legacy of WW2 was near bankruptcy, and in 1945 Keynes was despatched to Washington to negotiate a loan of between $5 to 8 billion. Keynes was a sick man and described the long and arduous negotiations as 'hell'. . America, it turned out, was not inclined to spend dollars maintaining the British Empire, and a socialist economic agenda in Britain. Keynes had no follow-up plan, much against the advice of Treasury officials. In the end Britain had to settle for a $3.75 billion with onerous conditions, in particular America's insistence that the pound should be made convertible into dollars in 1947. War-time austerity continued as Britain's manufactures threw everything into exports. When the dreaded convertibility came to pass in 1947 there was a run on the pound which dangerously depleted Britain's reserves. There was respite, when in 1948 Britain received a tremendous economic boost of Marshall Aid. Yet, Britain's problems were not over, and in Sept 1949 the pound was devalued by a massive 30%, from $4 to $2.8 to the pound. Despite the loss of international prestige, Britain's trade balance moved strongly into surplus- at last!

Britain's alliance with a Superpower almost meant subordination. There were American airbases with nuclear weapons in Britain over which the British government had little effective control. Furthermore, the outbreak of the Korean War in 1950 meant Britain had to accept American pressure for an unrealistic rearmament programme, reducing exports, and necessitating cuts in the National Health Service. Anenurin Bevan resigned in a fit of anger. On occasion Britain did stand up to America and act independently, building its own atom bomb. Britain strove to define its roll in the post war world by creating a three pronged foreign policy; keeping strong links with the Commonwealth; playing its part in Europe; and maintaining the special war-time relationship with America.

Bibliography

Clark, Peter (1997) Hope and Glory; Britain 1900-1990. Penguin Books
Hennesy, Peter (1992) Never Again Britain 1945-1951. Jonathan Cope, London
Marquand, David (2008) Britain Since 1918. The Strange Case of British Democracy. Phenox
Morgan, Kenneth O (2001) The Oxford History of Britain. Oxford Press
Stevenson, John (1984) British Society 1914-45. Penguin

Bibliography