National Government; Economic and Political Extremism

The National Government was blamed for depth of the Depression, the appeasement of Hitler, the failure of overcoming social divisions and mass unemployment
Shift in Industry - Effects of the Depression largely relied on what how rich you were where you lived and whether you had a job or not
1. Those who worked in older staples industries were hit the worst Factories closed and hald the population was out of work for years
2. Where industries were expanding there was new opportunities for entertainment and leisure, new consumer goods and new suburban houses
3. For these reasons Britain appeared to be completely different Nations as the divide was largely noticable
Issues - Depression - mass unemployment Political Extremism caused a serious danger Rise of Aggressive dictators like Hitler, Franco and Mussolini
National Policies
1. Financial Policy
  1. Success/Failure
    1. Gold Standard - Britain had to abandon the Gold Standard September '31 which was not a bad thing
      1. The value of the pound fell which made British exports cheaper and more competitive However other countries also left the Gold Standard so success was limited.
      2. Britain sold more exports to it's empire within the 'sterling area' which only partly made up for the demand from America and Germany
      3. The Bank of England was able to reduce its interest rates which made it easier for industries to borrow money to invest on modern machinery as well as making it easier for consumers to borrow money on mortgages
    2. Wage cuts of public employees as well as unemployment benefits helped maintain international confidence and stopped the banking crisis
    3. However, it lower total demand for goods and service in the depth of World Depression Unemployment rose '32-33 Cuts didnt save the Gold Standard
    4. Housing Boom 2 million houses built in 30's which created more jobs and also made more of a demand for furniture and fittings - However many were for middle-classes
  2. Balance Budget and limit government spending
  3. 10% unemployment benefit cuts and introduced 'means test'
  4. Cuts in wages of public employees
  5. keep pound stable by intervening in currency markets
  6. lower interest rates to 2% in '32
2. Trade Policies
  1. 'sterling area' members use the pound rather than gold to settle their trading accounts
  2. passed Import Duties Act '32, imposed tariffs to protect British industry and agriculture with exemptions for empire countries
  3. Agreed a form of imperial tariff system at the Ottawa Conference in '32 - Commonwealth countries help in Canda, agreed trade relations in the Depression.
  4. Made trade treaties with various countries, allowing a quota for their imports into Britain in return for a similar quota for British Exports
3. Industrial Policies
  1. Success/Failure
    1. Special Areas Act - only £2m aid and only very most depressed areas - Despite high unemployment many old staples industries did not qualify - Prefered the unemployed to move rather than building up industries around them - Public worker schemes were on a much smaller scale than America and Germany
    2. Closing down uncompetitive shipyard mills and mines meant those left standing attracted new investment - However new machinery meant a lot less people were employed, in Jarrow 70% were unemployed
  2. Special Areas Act '34 - Provide government aid to most depressed areas
  3. Cotton Industry Act '36 closing down all non-profitable mills to reduce surplus capacity in industry
  4. British Shipping Act '35 provide loans for shipping companies scrap older ship to build new ones
  5. North Atlantic Shipping Act '34 loans to help restart the building of the Queen Mary
  6. Marketing boards for milk, bacon and potatoes providing guaranteed prices for farmers, Subsidies for live stock farmers and sugar beet growers
Economic Recovery
1. Growth of Consumption - The Depression lowered prices so those who had a job found that their wages stretched further
  1. Home Market
    1. New Industries - such as motor vehicles, chemicals and civil aviation grew Output of motorcars doubled between '29-39 Even staples industries recovered Coal production '38 was at 227 tonnes almost the same as back in '28
    2. New Jobs - encouraged growth of jobs in service such as transport and retail. Mass entertainment was also another growing sector of employment
      Annotations:
      - Motor industry employed 400,000 workers by '39
    3. Rising consumer demand led to an expansion in the Home Market. This stopped the Depression from getting worse and helped it recover
    4. Electrical demand doubled in 30's Radios and motor cars grew '38 9 million wireless sets in private homes and 2 million private cars on the road
2. Real Wages - the term for measuring income by what it will buy, taking prices into account
  1. Rise in real wages helped raised demand at home and partly offset the fall in demand abroad. Also trend such as smaller family size meant that those in work had more to spend.
3. Methods of production - such as assembly lines and the use of electrical power enabled many goods to be sold more cheaply.
4. Rearmament - Stimulated both old staples such as shipbuilding and new industries such as aircraft Many unemployed in Jarrow found work '38-39
Political Extremism
1. Communist Party of Great Britain - Support grew in the 30's After communist regime was estbalished in Russia '17, it appeared they were building what British sympathisers called 'a new civilisation' - equality was promoted
  1. Conservative Views
    1. Fear of Communism was often exaggerated to weaken the support of the Labour Party Zinoviev Letter and allegations of Communist influence over General Strike During the 30's Communists did play key role in many strikes and many Trade Union leaders were members or sympathisers
  2. Organisations
    1. National Unemployed Workers' Movement 50,000 members - hunger marches and mass demonstrations which sometimes lead to violent outbreaks
    2. Newspaper the Daily Worker had 80,000 circulation a day Left Book Club had 50,000 memebers
  3. Universities
    1. some headway in universities however student usually lost interest once they had established their careers.
    2. Apostles; network of spies, who had been passing secrets to the USSR during the war and early cold war years.
  4. Overall Effect - Although it obviously had some influence it never really posed a serious threat Peaked 18,000 members Opposition within Trade Unions was limited by moderates such as Ernst Bevin. Labour Party refused to work with CPGB as they wanted to gain support back by diverting from political extremism
    1. Secret Service kept a close eye on it's leaders, sympathisers and activists Police were not discouraged from cracking down hard on communist led or inspired demonstrations.
  5. Faced with mass unemployment the break up of the Labour Party and creation of the British Facist Party membership of CPGB rose Particularly so in late-30's with the outbreak of the Spanish civil war
2. British Union of Fascists
  1. Support - Much of its support lay around London , Liverpool, Manchester and Leeds.
  2. Oswald Mosley - Powerful speaker His book was said to be 'intellectually superior to the writings of Hitler and Mussolini' Wrote 3 books, many articles and many speaches but there were few other talented people in the party.
    1. Collapse of Labour Party Failure of National Government Appealed to anti-semitism two-edged sword...for every supporter Mosley gained at least one potential supporter was turned off
    2. Some were won over by the argument over tariff to protect the declining textile industry Some Labours Thoe who wanted better relations with Hitler to prevent war
  3. Overall Effect
    1. No serious effect Credible political figure of the 30's Had the National Govrnment broken up in 33 or 34 like the Labour had ithen Mosley may of had his chance
    2. 50,000 members, enough to make an impact but far from mass movement, declined to 5,000 '35
      1. No MPs nor even local councilors
    3. Violence of London's Olympia Hall '34 lost support of Lord Rothermore Declined by becoming associated with Nazi regime and Hitler
3. Limiting Political Extremism
  1. Policies
    1. Incitement to Disaffection Act used to prosecute communists
    2. Public Order Act '36 - forbade wearing of political uniforms and gave police greater power
    3. Banned political meetings and demonstrations (no Nuremburg Rallies in Britain)
  2. Moderation - Labour Party refused to support Communism. Moderates from Trade Unions such as Ernst Bevin held other extremists back
  3. Communist Realisation
    1. By the late 30's it had become a realisation to some members the brutality of Communism in USSR Also turned away from Communist Russia when Stalin made the Nazi-Soviet Pact with Hitler
    2. Mussolini's invasion of Abyssinia turned people away from Fascist Italy. Germany's violence became well known too, Kristallnacht and aggrssiv e foreign policy.
  4. Economic Recovery
    1. Reduction in unemployment by '37 lead to decline in support Midlands and South East had new industries
4. Overall
  1. Communists never had an outstanding leader Mosley was impatient, a poor administrator and made political mistakes
  2. BUF associated with thuggery Continued strength of Britain's political institutions especially parliament and Monarchy

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