The Slump

Britain in the Great Depression

John Stevenson, Chris Cook

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781317862154
• Edition: 3
• Topic: History
• Subtopic: World History
• Index: History

'One of the most relentlessly brilliant studies of twentieth-century Britain... these young historians have found a marvellous theme and stuck to it. Theirs is the glory!' Professor Arthur Marwick, History

The 1930s - remembered as the decade of dole queues and hunger marches, mass unemployment, the means test, and the rise of fascism - also saw the development of new industries, the growth of comfortable suburbia, and rising standards of living for many. In Britain in the Depression, the authors look behind the legends for an objective - and timely - reassessment, as Britain again struggles with the economic and spiritual ills of recession and unemployment.

CHAPTER 1

Myth and reality: Britain in the 1930s

Of all periods in recent British history, the thirties have had the worst press. Although the decade can now only be remembered by the elderly, it retains the all-pervasive image of the ‘wasted years’ and the ‘low dishonest decade’. Even for those who did not live through them, the 1930s are haunted by the spectres of mass unemployment, hunger marches, appeasement, and the rise of fascism at home and abroad.

Mass unemployment, more than anything else, gave the interwar period its image of the ‘long weekend’. For almost twenty years there were never fewer than a million people out of work in Great Britain, representing a tenth of the insured working population. But the level and intensity of the depression varied during these years. In the 1920s, heavy unemployment reflected the special problems of the ‘ailing giants’, the staple export industries of coalmining, textiles, iron and steel, and shipbuilding, which had been the basis of the country’s prosperity in the years before the First World War. Their dislocation as a result of foreign competition and the contraction of world trade led to depression and unemployment in the old industrial areas. By 1929, the depression was a major political issue. The General Election of that year was fought primarily on domestic policy and resulted in a Labour Government under Ramsay MacDonald, pledged to conquer unemployment and restore the nation’s prosperity.

It was not to be. Almost as soon as it came into office in June 1929, the new government began to be affected by the international crisis which has been called the ‘Great Slump’. The promise of recovery in the depressed industries, and of a reduction of unemployment, was swept aside by the consequences of the Wall Street crash of October 1929. The speculative boom in American stocks and shares collapsed with disastrous effects upon confidence and world trade. Business activity declined in the European economies which had been sustained by American loans and credits; primary products fell in price and reduced their producers’ ability to buy manufactured goods from the industrial nations. Investment and trade declined. The reviving economies of Europe and the booming American markets were plunged into a deep and generalised depression. The immediate consequence was a rise of world-wide unemployment. By the middle of 1930 there were estimated to be over 11 million unemployed in 33 countries, double the figure before the onset of the slump. Britain was no exception. The country’s exports were almost halved in value between 1929 and 1931. The industries which had been depressed in the 1920s now had to face an economic blizzard of unprecedented severity, but the slump also affected almost every branch of business activity. Instead of falling, the unemployment figures continued to rise; by July 1930 there were over 2 million people out of work.

In May 1931, the failure of the Vienna Bank, the Credit Anstalt, sparked off a crisis of confidence in Germany and a run on the Reichsbank. When the ripples of the European banking crisis spread to Britain, the Labour Government was already in dire straits. The need to restore financial confidence had forced it to consider economy measures which were bound to create conflict within the Cabinet. The publication of the May Report on National Expenditure in August 1931, revealing a large deficit and recommending major economies and new taxes, precipitated a financial crisis and a run on the reserves. Unable to agree upon a programme of economy measures, the Labour Government resigned. Ramsay MacDonald and a small group of Labour M.P.s joined the Conservatives to form a ‘National’ Government on 24 August.

The new government’s tenure was confirmed two months later in a General Election which gave it a crushing majority of 497 seats and reduced the Labour Party to 52 seats in the House of Commons. It did not, however, end the economic crisis. Within a month of its formation the National Government was forced to abandon the Gold Standard. But the worst effects of the international slump were still to be felt. Unemployment continued to rise through the winter of 1931–2, reaching a peak in the third quarter of 1932 when there were almost 3 million people out of work in Great Britain. The government’s response was to implement economy measures, including cuts in unemployment benefit and the introduction of the means test. Financial orthodoxy and economic conservatism became the dominant features of its strategy to cope with the slump. For the next nine years, National and Conservative Governments presided over the consequences of the Great Crash. Although a measure of economic recovery began to be felt as early as 1933, when unemployment began to fall, there were still over 2 million people out of work in 1935. It was not until the first year of the Second World War that unemployment fell below a million.

Thus from 1929 until the outbreak of war, successive governments struggled to deal with the impact of world-wide depression. These years, the years of the slump, have been harshly judged. A.J.P. Taylor has written:

The nineteen-thirties have been called the black years, the devil’s decade. Its popular image can be expressed in two phrases: mass unemployment and ‘appeasement’. No set of political leaders have been judged so contemptuously since the days of Lord North.

But Taylor continues:

Yet, at the same time, most English people were enjoying a richer life than any previously known in the history of the world: longer holidays, shorter hours, higher real wages. They had motor cars, cinemas, radio sets, electrical appliances. The two sides of life did not join up.¹

However accurate this view, it has had little influence upon the popular mythology of the 1930s. By the outbreak of the Second World War, the decade had already been condemned by self-confessed critics as a period of missed opportunities and wasted time; a judgement which the disasters of the early years of the war seemed only to vindicate. In a sense the intervention of the Second World War served to perpetuate the more depressing image of the thirties, partly at least because the politics of the immediate post-war era were fought on the record of the pre-war years. As late as 1951 the Labour Party campaigned with the election slogan of ‘Ask your Dad!’ an illustration of the way in which the emotive image of the ‘hungry thirties’ had become part of the repertoire of political cliché. The popular view of the 1930s as a period of unrelieved failure was undoubtedly hardened and reinforced in the years after the war; a view which became sharpened against the background of full employment and affluence in the 1950s and 1960s. Again in the 1990s the ghost of the thirties stalked political platforms and the media as a symbol of economic disaster, social deprivation and political discontent.

But the very pervasiveness of the image of the ‘hungry thirties’ has done much to distort our view of the period and its more constructive and substantial achievements. A concentration upon unemployment and social distress does not represent a complete portrayal of the decade. Even during the 1930s social investigators, such as Seebohm Rowntree, and organisations, such as the Pilgrim Trust, sought to obtain a balanced account of social conditions. So too did writers such as George Orwell and J.B. Priestley, to name but two. Moreover, historians of the period were soon to revise the popular mythology. C.L. Mowat gave a measured judgement on the National Government when he wrote:

Its responses were not bold. It retreated before aggression; it rearmed but at first too slowly. In fact it was not unsuccessful in its economic policies but fatally narrow in its political conduct. Failure in the latter sphere darkened its reputation in the former; in retrospect it has been blamed for all the misfortunes of the time, partly because its opponents rose to power by reiterating their version of its history and its period.²

More recently, other writers have examined the responses of the second Labour Government to the slump. Robert Skidelsky has shown the attitudes which shaped its inability to provide a solution to mass unemployment. In addition, more attention has focused upon the advances made in the economic and social sphere. A.J.P. Taylor put the point in a nutshell when he asked of the decade, ‘which was more significant for the future – over a million unemployed or over a million private cars?’³

It would, of course, be fatuous to suggest that the 1930s were not for many thousands of people a time of great hardship and personal suffering. But beside the picture of the unemployed must be put the other side of the case. There were never less than three-quarters of the population in work during the 1930s and for most of the period considerably more. Alongside the pictures of the dole queues and hunger marches must also be placed those of another Britain, of new industries, prosperous suburbs and a rising standard of living. Any attempt to do justice to the condition of Britain in the thirties must give full weight to what J.B. Priestley described in 1934 as the England of

arterial and by-pass roads, filling stations and factories that look like exhibition buildings, of giant cinemas and dance-halls and cafés, bungalows with tiny garages, cocktail bars, Woolworths, motor coaches, wireless, hiking, factory girls looking like actresses, greyhound racing and dirt tracks, swimming pools, and everything given away for cigarette coupons.⁴

For those in work, the 1930s were a period of rising living standards and new levels of consumption, upon which a considerable degree of industrial growth was based. This was the paradox which lay at the heart of Britain in the thirties, where new levels of prosperity contrasted with the intractable problems of mass unemployment and the depressed areas. Mowat claimed that it was the depressed areas which ‘tarnished the picture of recovery and were the basis for the myth of the “hungry thirties”’.⁵ The concentration of Britain’s staple industries created conditions in which whole areas were in industrial decay as a result of the depression in world trade. But the problem of the unemployed and the distressed areas was only a part of the total picture of Britain in the thirties. Economic historians have long recognised that as well as being a period of prolonged depression in the old staple industries, these years can also be seen as the time when a new industrial structure was being established which provided the real basis for the export boom and the rising prosperity of the second half of the twentieth century.⁶ The picture of depression was not evenly spread, but was concentrated in the old industrial areas. Unemployment rates in 1932 varied for the different regions of the country between 36 per cent in Wales and only 13 per cent in London and the south-east. By the mid-1930s the disparity was even more striking, with unemployment rates in some towns in the depressed areas revealing tragic stories of the decay and impoverishment of whole communities; places such as Brynmawr, Dowlais, Jarrow, Gateshead, Greenock and Motherwell had almost three-quarters of the insured population out of work in 1934, while other parts of the country were experiencing almost boom conditions.

With a majority of the population in work, even in the worst years of the depression, most people in Britain were better off by 1939 than they had been ten years earlier. This was less because of substantial improvements in wages, though there were some, than because of the fall in the cost of living by almost a third during the inter-war period; a fall which the 1930s experienced as much as the 1920s and which especially affected the price of food and manufactured goods. The result was a quite perceptible improvement in the standard of comfort witnessed by many people, especially the middle classes. Though people in government service saw their wages cut in the trough of the depression from 1931 to 1934, they also benefited from the fall in prices and a greater disposable income because of smaller families. For many salaried people affluence began not in the 1950s but in the thirties, when it became possible for an average salaried person to buy his own house, usually on a mortgage, run a car, and begin to afford a range of consumer durables and household goods hitherto considered quite out of reach.

Some of the older myths on the economy and the standard of living had their parallel in the political arena. MacDonald’s decision to form a National Government and his ‘betrayal’ of the Labour Party have both heavily coloured existing interpretations of the politics of the thirties. Thus we tend to see the 1931 election disaster for Labour as a consequence of MacDonald’s betrayal. Yet the electoral unpopularity of the second Labour Government was clearly in evidence in the by-elections of 1929 to 1931. Labour would undoubtedly have lost any General Election in the early 1930s whether or not MacDonald had deserted the party.

Nor was 1931 the total electoral disaster for Labour that some historians have suggested. Labour secured more votes in 1931 than in any previous election except 1929. Labour even secured in 1931 a higher percentage share of votes cast than in December 1923 – the election which first brought Labour to power. The difference in 1931 was that Labour’s opponents were united, not that Labour had lost its basic core of working-class support. The events of 1931 did not break the Labour Party. Its recovery after 1931, in local elections and by-elections, was rapid and impressive, but not as great as is sometimes argued. There still exists a myth concerning the Labour Party that, if a General Election had been held in 1939 or 1940, somehow Attlee would have led Labour to an electoral victory. There is simply no evidence to support this view. Certainly it cannot be interpreted from by-elections or municipal elections. The mood of public opinion only changed during the course of the war.

Indeed, there is a curious paradox in British politics. For just as Hitler aided Britain’s economic recovery (by spurring rearmament) so Hitler’s wars paved the road to Labour’s 1945 election victory. The Jarrow marchers may have shocked the conscience of the nation, but it was the events of Dunkirk and after that turned the tide of public opinion to Labour.

This book has attempted not merely to question the social and political myths of the ‘devil’s decade’ but to pose other questions. How prosperous was the England of the new industries? How depressed were the depressed areas? What, if anything, did the hunger marches achieve? Why were both the communists and fascists confined to the sidelines of British politics? Why did the electors vote as they did? Why was there no revolution in Britain? And what has been the real legacy of the slump?

Not everyone will accept the answers to these questions given in this book. History is a controversial subject. And recent history is more controversial than most. The passions of the thirties are still very much alive even though over seventy years have gone by since the Jarrow marchers began their long trek to London. The slump has left an indelible mark on British history. It is now time to begin to assess its real significance.

Notes

1   A.J.P. Taylor, English History, 1914–1945 (Oxford, 1965), p. 317.

2   C.L. Mowat, Britain Between the Wars 1918–1940 (2nd edn, 1968) p. 413.

3   R. Skidelsky, Politicians and the Slump (1967). For Taylor’s comment see his review in Observer, 21 March, 1971.

4   J.B. Priestley, English Journey (1934), p. 401.

5   C.L. Mowat, op. cit., p. 463.

6   See especially S. Pollard, The Development of the British Economy, 1914–1950 (1962), chs iv and v; H.W. Richardson, Economic Recovery in Britain, 1932–9 (1967); D.H. Aldcroft, The Inter-War Economy: Britain, 1919–1939 (1970).

CHAPTER 2

The dawn of affluence

The popular image of the 1930s is that of the decade blighted by economic depression – the years of mass unemployment, dole queues, the means test and the hunger marches. Indeed, this is an image securely based upon reality for th...