Interwar Britain

Expanding the welfare state

Two major programs on unemployment and housing that permanently expanded the welfare state passed in 1919 and 1920 with surprisingly little debate, even as the Conservatives dominated parliament.

The Unemployment Insurance Act of 1920 expanded the provisions of the National Insurance Act 1911. 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. It passed at a time of very low unemployment. Historian Charles Mowat calls these 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.

Housing

The rapid expansion of housing was a major success story of the interwar years, standing in sharp contrast to the United States, where new housing construction practically collapsed after 1929. The total housing stock In England and Wales was 7.6 million in 1911; 8.0 million in 1921; 9.4 million in 1931; and 11.3 million in 1939.

The influential Tudor Walters Report of 1918 set the standards for council house design and location for the next 90 years.. It recommended housing in short terraces, spaced at 70 feet (21 m) at a density of 12 to the acre. With the Housing and Town Planning Act of 1919 Lloyd George set up a system of government housing that followed his 1918 campaign promises of "homes fit for heroes." Called the "Addison Act," it required local authorities to survey their housing needs, and start building houses to replace slums. The treasury subsidized the low rents. Older women could now vote. Local politicians consulted with them and in response put more emphasis on such amenities as communal laundromats, extra bedrooms, indoor lavatories, running hot water, separate parlours to demonstrate their respectability, and practical vegetable gardens rather than manicured yards. Progress was not automatic, as shown by the troubles of rural Norfolk. Many dreams were shattered as local authorities had to renege on promises they could not fulfill due to undue haste, impossible national deadlines, debilitating bureaucracy, lack of lumber, rising costs, and the non-affordability of rents by the rural poor.

In England and Wales, 214,000 multi-unit council buildings were built by 1939; the Ministry of Health became largely a ministry of housing. Council housing accounted for 10 percent of the housing stock in Britain by 1938, peaking at 32 percent in 1980, and dropping to 18 percent by 1996, where it held steady for the next two decades.

Increasing the British ideal was home ownership, even among the working class. Rates of home ownership rose steadily from 15 percent before 1914, to 32 percent by 1938, and 67 percent by 1996. Local building societies were primarily responsible. In the 1920s favourable tax policies encouraged substantial investment in the societies, creating huge reserves for lending. Beginning in 1927, the societies encouraged borrowing through gradual liberalization of mortgage terms.

Working class families proved eager to purchase their council homes when the Thatcher government offered a good financial bargain in the 1980s.

Conservative control

The Lloyd-George coalition fell apart in 1922. Stanley Baldwin, as leader of the Conservative Party (1923–37) and as Prime Minister (in 1923–24, 1924–29 and 1935–37), dominated British politics. His mixture of strong social reforms and steady government proved a powerful election combination, with the result that the Conservatives governed Britain either by themselves or as the leading component of the National Government. He was the last party leader to win over 50% of the vote (in the general election of 1931). Baldwin's political strategy was to polarize the electorate so that voters would choose between the Conservatives on the right and the Labour Party on the left, squeezing out the Liberals in the middle. The polarization did take place and while the Liberals remained active under Lloyd George, they won few seats and were a minor factor until they joined a coalition with the Conservatives in 2010. Baldwin's reputation soared in the 1920s and 1930s, but crashed after 1945 as he was blamed for the appeasement policies toward Germany, and as admirers of Churchill made him the Conservative icon. Since the 1970s Baldwin's reputation has recovered somewhat.

In May 1923 Prime Minister Bonar Law resigned from ill health and was replaced by Baldwin. Having won an election just the year before, Baldwin's Conservative party had a comfortable majority in the Commons and could have waited another four years, but the government was concerned. Baldwin felt the need to receive a new mandate from the people. Oxford historian (and Conservative MP) J.A.R. Marriott depicts the gloomy national mood:

The times were still out of joint. Mr. Baldwin had indeed succeeded in negotiating (January 1923) a settlement of the British debt to the United States, but on terms which involved an annual payment of £34 million, at the existing rate of exchange. The French remained in the Ruhr. Peace had not yet been made with Turkey; unemployment was a standing menace to national recovery; there was continued unrest among the wage-earners, and a significant strike among farm labourers in Norfolk. Confronted by these difficulties, convinced that economic conditions in England called for a drastic change in fiscal policy, and urged thereto by the Imperial Conference of 1928, Mr. Baldwin decided to ask the country for a mandate for Preference and Protection.

The result however backfired on Baldwin, who lost a host of seats to Labour and the Liberals. For the first time in history, Labour formed a government. However in 1924 Baldwin and the Conservatives returned with a large majority. McKibbin finds that the political culture of the interwar period was built around an anti-socialist middle class, supported by the Conservative leaders, especially Baldwin.

Economics

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.

Labour

During the war, trade unions were encouraged and their membership grew from 4.1 million in 1914 to 6.5 million in 1918. They peaked at 8.3 million in 1920 before relapsing to 5.4 million in 1923.

Coal was a sick industry; the best seams were being exhausted, raising the cost. Demand fell as oil began replacing coal for fuel. The 1926 general strike was a nine-day nationwide walkout of 1.3 million railwaymen, transport workers, printers, dockers, iron workers and steelworkers supporting the 1.2 million coal miners who had been locked out by the owners. The miners had rejected the owners' demands for longer hours and reduced pay in the face of falling prices. The Conservative government had provided a nine-month subsidy in 1925 but that was not enough to turn around a sick industry. To support the miners the Trades Union Congress (TUC), an umbrella organization of all trades unions, called out certain critical unions. The hope was the government would intervene to reorganize and rationalize the industry, and raise the subsidy. The Conservative government had stockpiled supplies and essential services continued with middle class volunteers. All three major parties opposed the strike. The Labour Party leaders did not approve and feared it would tar the party with the image of radicalism, for the Cominterm in Moscow had sent instructions for Communists to aggressively promote the strike. The general strike itself was largely non-violent, but the miners' lockout continued and there was violence in Scotland. It was the only general strike in British history, for TUC leaders such as Ernest Bevin considered it a mistake . Most historians treat it as a singular event with few long-term consequences, but Pugh says it accelerated the movement of working-class voters to the Labour Party, which led to future gains. The Trade Disputes and Trade Unions Act 1927 made general strikes illegal and ended the automatic payment of union dues to the Labour Party. That act was largely repealed in 1946. The coal industry, used up the more accessible coal as costs rose output fell from 267 million tons in 1924 to 183 million in 1945. The Labour government nationalised the mines in 1947.

Starting in 1909, Liberals, led especially by Lloyd George, promoted the idea of a minimum wage for farm workers. Resistance of landowners was strong, but success was achieved by 1924. According to Robin Gowers and Timothy J. Hatton, the impact In England and Wales was significant. They estimate that it raised wages for farm labourers by 15 per cent by 1929, and by more than 20 per cent in the 1930s. It reduced the employment of such labourers by 54,000 (6.5 per cent) in 1929 and 97,000 (13.3 per cent) in 1937. They argue, "The minimum wage lifted out of poverty many families of farm labourers who remained employed, but it significantly lowered the incomes of farmers, particularly during the 1930s."

Food

After the War, many new food products became available to the typical household, with branded foods advertised for their convenience. The shortage of servants was felt in the kitchen, but now instead of an experience cook spending hours on difficult custards and puddings the housewife could purchase instant foods in jars, or powders that could be quickly mixed. Breakfast porridge from branded, more finely milled, oats could now be cooked in two minutes, not 20. American-style dry cereals began to challenge the porridge and bacon and eggs of the middle classes, and the bread and margarine of the poor. Shops carried more bottled and canned goods and fresher meat, fish and vegetables. While wartime shipping shortages had sharply narrowed choices, the 1920s saw many new kinds of foods--especially fruits--imported from around the world, along with better quality, packaging, and hygiene. Middle classes households now had ice boxes or electric refrigerators, which made for better storage and the convenience of buying in larger quantities.

Numerous studies in the Depression years documented that the average consumer ate better than before. Seebohm Rowntree reported that the "standard to workers in 1936 was about 30 percent higher than it was in 1899." Food prices were low, but the advantage went overwhelmingly to the middle and upper classes, with the poorest third of the population suffering from sustained poor nutrition. Starvation was not a factor, but widespread hunger was. The dairy industry was producing too much, and profits were too low, so the government used the Milk Marketing Board to give cash subsidies to dairy farmers– a policy described by The Economist as the "economics of Bedlam." The deleterious effects on poor children were obvious to teachers. In 1934 the government began a program charging school children a halfpenny a day for a third of a pint of milk. This dramatically improved their nutrition, and the new demand kept up the wholesale price of milk paid to farmers. About half the nation's school children participated by 1936. In the Second World War milk was distributed free, and participation rose to 90 percent. Indeed, the rationing system of the wartime years sharply improved the nutrition of poorest third, together with their capacity for manual labour.

Great Depression

The Great Depression originated on Wall Street in the United States in late 1929 and quickly spread to the world. The main impact it written in 1931. However, Britain had never experienced the boom that had characterized the US, Germany, Canada and Australia in the 1920s, so its bust was much less severe and ended sooner.

By summer 1931 the world financial crisis began to overwhelm Britain; investors across the world started withdrawing their gold from London at the rate of £2½ millions a day. Credits of £25 millions each from the Bank of France and the Federal Reserve Bank of New York and an issue of £15 millions fiduciary note slowed, but did not reverse the British crisis. The financial crisis now caused a major political crisis in Britain in August 1931. With deficits mounting, the bankers demanded a balanced budget; the divided cabinet of Prime Minister Ramsay MacDonald's Labour government agreed; it proposed to raise taxes, cut spending and most controversially, to cut unemployment benefits 20%. The attack on welfare was totally unacceptable to the Labour movement. MacDonald wanted to resign, but King George V insisted he remain and form an all-party coalition "National government." The Conservative and Liberals parties signed on, along with a small cadre of Labour, but the vast majority of Labour leaders denounced MacDonald as a traitor for leading the new government. Britain went off the gold standard, and suffered relatively less than other major countries in the Grade Depression. In the 1931 British election the Labour Party was virtually destroyed, leaving MacDonald as Prime Minister for a largely Conservative coalition.

The flight of gold continued, however, and the Treasury finally was forced to abandon the gold standard in September 1931. Until now the government had religiously followed orthodox policies, which demanded balanced-budgets and the gold standard. Instead of the predicted disaster, cutting loose from gold proved a major advantage. Immediately the exchange rate of the pound fell by 25%, from $4.86 for one pound to $3.40. British exports were now much more competitive, which laid the ground for a gradual economic recovery. The worst was over.

Britain's world trade fell in half (1929–33), the output of heavy industry fell by a third. Employment and 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.

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.

Organized protests

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.

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.

Historiography

The economic crisis of the early 1930s, and the response of the Labour and National governments to the depression, have generated much historical controversy. Apart from the major pockets of long-term high 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 three million 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 radiograms, telephones, three-piece suites, electric cookers, vacuum cleaners and golf clubs. They ate Kellogg's Corn Flakes ("never miss a day"), drove to 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.

In the decades immediately following the Second World War, most historical opinion was critical of the governments of the period. Certain historians, such as Robert Skidelsky in his Politicians and the Slump, compared the orthodox policies of the Labour and National governments unfavourably with the more radical proto-Keynesian measures advocated by David Lloyd George and Oswald Mosley, and the more interventionist and Keynesian responses in other economies: Franklin Roosevelt's New Deal in the United States, the Labour government in New Zealand, and the Social Democratic government in Sweden. Since the 1970s opinion has become less uniformly hostile. In the preface to the 1994 edition, Skidelsky argues that recent experience of currency crises and capital flight make it hard to be so critical of the politicians who wanted to achieve stability by cutting labour costs and defending the value of the currency.

Foreign policy

Britain had suffered little physical devastation during the war but the cost in death and disability and money were very high. In the Khaki Election of 1918, coming days after the Allied victory over Germany, Lloyd George promised to impose a harsh treaty on Germany. At the Paris Peace Conference in early 1919, however, he took a much more moderate approach. France and Italy however demanded and achieved harsh terms, including German admission of guilt for starting the war (which humiliated Germany), and a demand that Germany pay the entire Allied cost of the war, including veterans' benefits and interest. Britain reluctantly supported the Treaty of Versailles, although many experts--most famously John Maynard Keynes-- thought it too harsh on Germany

Britain began to look on a restored Germany as an important trading partner and worried about the effect of reparations on the British economy. In the end the United States financed German debt payments to Britain, France and the other Allies through the Dawes Plan, and Britain used this income to repay the loans it borrowed from the U.S. during the war.

Vivid memories of the horrors and deaths of the World War made Britain and its leaders strongly inclined to pacifism in the interwar era.

1920s

Politically the coalition government of Prime Minister David Lloyd George depended primarily on Conservative Party support. He increasingly antagonized his supporters with foreign policy miscues. The Chanak Crisis of 1922 brought Britain to the brink of war with Turkey, but the Dominions were opposed and the British military was hesitant, so peace was preserved, but Lloyd George lost control of the coalition and was replaced as Prime Minister.

Britain maintained close relationships with France and the United States; however the U.S. refused to renegotiate its wartime loans. In the 1920s Britain rejected isolationism and sought world peace through naval arms limitation treaties, and peace with Germany through the Locarno treaties of 1925. A main goal was to restore Germany to a peaceful, prosperous state. The Dominions (Canada, Australia, South Africa and New Zealand) achieved virtual independence in foreign policy in 1931, though each depended heavily upon British naval protection. After 1931 trade policy favoured the Commonwealth with tariffs against the U.S. and others.

The success at Locarno in handling the German question impelled Foreign Secretary Austen Chamberlain, working with France and Italy, to find a master solution to the diplomatic problems of Eastern Europe and the Balkans. It proved impossible to overcome mutual antagonisms, because Chamberlain's program was flawed by his misperceptions and fallacious judgments.

1930s

The challenge came from dictators, first Benito Mussolini of Italy from 1923, then from 1933 Adolf Hitler of a much more powerful Nazi Germany. Britain and France led the policy of non-interference in the Spanish Civil War (1936–39). The League of Nations proved disappointing to its supporters; it was unable to resolve any of the threats posed by the dictators. British policy was to "appease" them in the hopes they would be satiated. League-authorized sanctions against Italy for its invasion of Ethiopia had support in Britain but proved a failure and were dropped in 1936.

Germany was the difficult case. By 1930 British leaders and intellectuals largely agreed that all major powers shared the blame for war in 1914, and not Germany alone as the Treaty of Versailles specified. Therefore, they believed the punitive harshness of the Treaty of Versailles was unwarranted, and this view, adopted by politicians and the public, was largely responsible for supporting appeasement policies down to 1938. That is, German rejections of treaty provisions seemed justified.

Coming of Second World War

By late 1938 it was clear that war was looming, and that Germany had the world's most powerful military. The British military leaders warned that Germany would win a war, and Britain needed another year or two to catch up in terms of aviation and air defense. The final act of appeasement came when Britain and France sacrificed Czechoslovakia to Hitler's demands at the Munich Agreement of 1938. Instead of satiation Hitler seized all of Czechoslovakia and menaced Poland.At last in 1939 Prime Minister Neville Chamberlain dropped appeasement and stood firm in promising to defend Poland. Hitler however cut a deal with Joseph Stalin to divide Eastern Europe; when Germany did invade Poland in September 1939, Britain and France declared war; the British Commonwealth followed London's lead.

Popular culture

As 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. Drinking was differentiated by class. with upper-class clubs, and working-class and middle-class pubs. However, drinking as a way of spending leisure time and spare cash declined during the Depression and pub attendance never returned to 1930 levels; it fell far below prewar levels. Taxes were raised on beer, and there were more alternatives now at hand, such as cigarettes (which attracted 8/10 men, and 4/10 women), the talkies, the dance halls, and Greyhound racing. Football pools offered the excitement of supporting the home team, and at a cost of 3s, maybe making some money. New estates with small, inexpensive houses offered gardening as an outdoor recreation. Church attendance decline to half the level of 1901.

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. 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.

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.

Sports

The British showed a more profound interest in sports, and in greater variety, that any rival. They gave pride of place to such moral issues as sportsmanship and fair play. Cricket became symbolic of the Imperial spirit throughout the Empire. Soccer proved highly attractive to the urban working classes, which introduced the rowdy spectator to the sports world. In some sports, there was significant controversy in the fight for amateur purity especially in rugby and rowing. New games became popular almost overnight, including golf, lawn tennis, cycling and hockey. Women were much more likely to enter these sports than the old established ones. The aristocracy and landed gentry, with their ironclad control over land rights, dominated hunting, shooting, fishing and horse racing.

Cricket had become well-established among the English upper class in the 18th century, And was a major factor in sports competition among the public schools. Army units around the Empire had time on their hands, and encouraged the locals to learn cricket so they could have some entertaining competition. Most of the Empire embraced cricket, with the exception of Canada. Cricket test matches (international) began by the 1870s; the most famous is that between Australia and Britain for "The Ashes."

For sports to become fully professionalized, coaching had to come first. It gradually professionalized in the Victorian era and the role was well established by 1914. In the First World War, military units sought out the coaches to supervise physical conditioning and develop morale-building teams.

Reading

As literacy and leisure time expanded after 1900, reading became a popular pastime. New additions to adult fiction doubled during the 1920s, reaching 2800 new books a year by 1935. Libraries tripled their stock, and saw heavy demand for new fiction. A dramatic innovation was the inexpensive paperback, pioneered by Allen Lane (1902–70) at Penguin Books in 1935. The first titles included novels by Ernest Hemingway and Agatha Christie. They were sold cheap (usually sixpence) in a wide variety of inexpensive stores such as Woolworth's. Penguin aimed at an educated middle class "middlebrow" audience. It avoided the downscale image of American paperbacks. The line signaled cultural self-improvement and political education. The more polemical Penguin Specials, typically with a leftist orientation for Labour readers, were widely distributed during World War II. However the war years caused a shortage of staff for publishers and book stores, and a severe shortage of rationed paper, worsened by the air raid on Paternoster Square in 1940 that burned 5 million books in warehouses.

Romantic fiction was especially popular, with Mills and Boon the leading publisher. Romantic encounters were embodied in a principle of sexual purity that demonstrated not only social conservatism, but also how heroines could control their personal autonomy. Adventure magazines became quite popular, especially those published by DC Thomson; the publisher sent observers around the country to talk to boys and learn what they wanted to read about. The story line in magazines and cinema that most appealed to boys was the glamorous heroism of British soldiers fighting wars that were exciting and just.