Interwar unemployment and poverty in the United Kingdom
Unemployment was the dominant issue of British society during the interwar years.[1] Unemployment levels rarely dipped below 1,000,000 and reached a peak of more than 3,000,000 in 1933, a figure which represented more than 20% of the working population. The unemployment rate was even higher in areas including South Wales and Liverpool.[1] The Government extended unemployment insurance schemes in 1920 to alleviate the effects of unemployment.[2]
Causes
There were several reasons for the decline in industry after the First World War. The end of the war brought a boom. In the shipping industry, businesses expanded rapidly in order to take advantage of the increase in demand. However, the boom was short-lived and this rapid expansion caused a slump from oversupply.
Apart from the major pockets of unemployment, Britain was generally prosperous. Historian Piers Brendon writes:
- Historians, however, have long since revised this grim picture, presenting the devil's decade as the cradle of the affluent society. Prices fell sharply between the wars and average incomes rose by about a third. The term "property-owning democracy" was coined in the 1920s, and 3,000,000 houses were built during the 1930s. Land, labour and materials were cheap: a bungalow could be purchased for £225 and a semi for £450. The middle-class also bought Odeon cinemas in Austin Sevens (costing £135 by 1930) and smoked Craven A cigarettes, cork-tipped "to prevent sore throats". The depression spawned a consumer boom.[6]
Response
Lloyd George's coalition
As the Government had funded the Great War 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 Liberal-Conservative coalition lost power at the
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 committeess.
Labour Policy
Ramsay MacDonald's Government passed the Development (Loan Guarantees and Grants) Act 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 the Second World War.
Local government was reorganised so that local authorities provided school dinners and health services, means testing was introduced and the
Legislation
- Unemployment Insurance Act 1920
- Unemployment Insurance Act 1921
- Unemployment Insurance Act 1924
- Unemployment Insurance Act 1927
- Unemployment Insurance Act 1930
- Coal Mines Act 1930
- Import Duties Act 1932
- Unemployment Act 1934
- Special Areas Act 1934
- British Shipping (Assistance) Act 1935
- Cotton Industry (Reorgainsation) Act 1936
- Special Areas (Amendment) Act 1937
- Cotton Industry (Reorgainsation) Act 1939
Unrest
There were several examples of unrest during this period, most notably the
References
- ^ ISBN 978-1-86064-237-1.
- ^ "The Cabinet Papers | Alleviating inter-war unemployment". Nationalarchives.gov.uk. Retrieved 2012-10-06.
- ^ "The Cabinet Papers | Interwar period". Nationalarchives.gov.uk. Retrieved 2012-10-06.
- ^ "Introduction". Making the Modern World. 1938-12-12. Retrieved 2012-10-06.
- ^ Daniel K. Benjamin & Levis A. Kochin, "Searching for an Explanation for Unemployment in Interwar Britain", Journal of Political Economy 87 (1979), pp. 441-478.
- TheGuardian.com. Retrieved 12 November 2017.
- ^ a b "The Cabinet Papers | Lloyd George's coalition". Nationalarchives.gov.uk. Retrieved 2012-10-06.
Further reading
- Benjamin, Daniel K. & Levis A. Kochin, "Searching for an Explanation for Unemployment in Interwar Britain" Journal of Political Economy 87 (1979), pp. 441–478.
- Cole, Harold L., and Lee E. Ohanian. "The Great UK Depression: A puzzle and possible resolution." Review of Economic Dynamics 5.1 (2002): 19–44.
- Eichengreen, Barry J., and Timothy J. Hatton, eds. Interwar unemployment in international perspective (Springer, 2012).
- Eichengreen, Barry. "Unemployment in Interwar Britain." Institute for Research on Labor and Employment (1988). online
- Hatton, Timothy J. "Unemployment and the labour market, 1870-1939." in The Cambridge economic history of modern Britain: vol 2 1860-1939 (2004)
- Hatton, Timothy J., and Roy E. Bailey. "Unemployment incidence in interwar London." Economica 69.276 (2002): 631–654.
- McKibbin, Ross. Classes and Cultures: England 1918-1951 (2000) pp 111–26.
- Pugh, Martin. 'We Danced All Night': A Social History of Britain Between the Wars (2008) review by Piers Brendon in The Guardian 4 July 2008
- Srinivasan, Naveen, and Pratik Mitra. "Interwar Unemployment in the UK and the US: Old and New Evidence." South Asian Journal of Macroeconomics and Public Finance 5.1 (2016): 96–112. online