Tyldesley miners outside the Miners Hall during the 1926 General Strike

Interwar unemployment and poverty in the United Kingdom describes a period of poverty in

Interwar Britain In the United Kingdom, the interwar period (1918–1939) was a period of relative stability after the division of Ireland, though of economic stagnation. In politics, the Liberal Party collapsed and the Labour Party became the main challenger ...

between the end of the

First World War World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...

in 1918 and the start of the

Second World War World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...

in 1939. Unemployment was the dominant issue of British society during the interwar years. 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 South Wales ( cy, De Cymru) is a loosely defined region of Wales bordered by England to the east and mid Wales to the north. Generally considered to include the historic counties of Glamorgan and Monmouthshire, south Wales extends westwards ...

and

Liverpool Liverpool is a city and metropolitan borough in Merseyside, England. With a population of in 2019, it is the 10th largest English district by population and its metropolitan area is the fifth largest in the United Kingdom, with a popul ...

. The Government extended unemployment insurance schemes in 1920 to alleviate the effects of unemployment.

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. Structural weaknesses in the British economy meant a disproportionate number of jobs were in the traditional industries. A combination of a lack of pre-war technological development and post-war competition damaged the economy and the new industries which emerged employed fewer people. At the same time, Britain began to lose its overseas markets due to strong foreign competition. Some have argued that an overly generous unemployment insurance system worsened the state of the economy. The

Wall Street Crash The Wall Street Crash of 1929, also known as the Great Crash, was a major American stock market crash that occurred in the autumn of 1929. It started in September and ended late in October, when share prices on the New York Stock Exchange colla ...

in 1929 was responsible for a worldwide downturn in trade and led to the

Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...

. Apart from the major pockets of unemployment, Britain was generally prosperous. Historian

Piers Brendon Piers Brendon (born 21 December 1940) is a British historian and writer, known for historical and biographical works. He was educated at Shrewsbury School and Magdalene College, Cambridge, where he read history. He received a Ph.D. degree for h ...

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 radiograms, telephones,

three-piece suite A couch, also known as a sofa, settee, or chesterfield, is a cushioned item of furniture for seating multiple people (although it is not uncommon for a single person to use a couch alone). It is commonly found in the form of a bench with uph ...

s, electric cookers, vacuum cleaners and golf clubs. They ate

Kellogg's Corn Flakes Corn flakes, or cornflakes, are a breakfast cereal made from toasting flakes of corn (maize). The cereal, originally made with wheat, was created by Will Kellogg in 1894 for patients at the Battle Creek Sanitarium where he worked with his brothe ...

("never miss a day"), drove to

Odeon cinema Odeon, stylised as ODEON, is a cinema brand name operating in the United Kingdom, Ireland and Norway, which along with UCI Cinemas and Nordic Cinema Group is part of the Odeon Cinemas Group subsidiary of AMC Theatres. It uses the famous name of ...

s in Austin Sevens (costing £135 by 1930) and smoked

Craven A Craven A ''(stylized as'' Craven "A"'')'' is a British brand of cigarette, currently manufactured by British American Tobacco under some of its subsidiaries; it was originally created by the Carreras Tobacco Company in 1921 and made by them until ...

cigarettes, cork-tipped "to prevent sore throats". The depression spawned a consumer boom.

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 1922 general election, the unemployment rate had reached 2,500,000. A committee on unemployment was set up in 1920 and recommended public work schemes to ease unemployment, this led to the establishment of the

Unemployment Grants Committee Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the referenc ...

. As unemployment was not uniform across Britain, it was decided to concentrate schemes in areas of the country that were particularly affected by the economic downturn. However, the government wished, also, to return to the

gold standard A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from the la ...

, a move which would have required cuts in public spending. The

Unemployment Insurance Act 1920 The Unemployment Insurance Act 1920 was an Act of Parliament in the United Kingdom. It created the dole (weekly cash unemployment benefits) system of payments to unemployed workers. The Act passed at a time of very little unemployment, when the Con ...

extended unemployment benefits to cover all workers who earned less than £250. The "Seeking Work Test" was introduced in 1921, it stated to receive full unemployment benefit there had to be evidence the recipient was looking for work.

Conservative policy

The

Unemployment Insurance Act 1927 The Unemployment Insurance Act 1927 ('' 17 & 18 Geo. V'') was an Act of the Parliament of the United Kingdom passed by the Conservative Party The Conservative Party is a name used by many political parties around the world. These political partie ...

returned to the principle that workers had to contribute to insurance schemes in order to be a part of them. The

workhouse In Britain, a workhouse () was an institution where those unable to support themselves financially were offered accommodation and employment. (In Scotland, they were usually known as poorhouses.) The earliest known use of the term ''workhouse'' ...

system was abolished and replaced with a system of

Public Assistance Committees A Public Assistance Committee (PAC), in the UK, was a body locally created after the abolition of the boards of guardians in 1930 by the Local Government Act 1929, when their powers and responsibilities for poor relief were passed to county and c ...

Labour Policy

Ramsay MacDonald James Ramsay MacDonald (; 12 October 18669 November 1937) was a British politician who served as Prime Minister of the United Kingdom, the first who belonged to the Labour Party, leading minority Labour governments for nine months in 1924 ...

's Government passed the

Development (Loan Guarantees and Grants) Act 1929 Development or developing may refer to: Arts *Development hell, when a project is stuck in development *Filmmaking, development phase, including finance and budgeting *Development (music), the process thematic material is reshaped *Photographi ...

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

Unemployment Assistance Board The Unemployment Assistance Board was a body created in Britain by the Unemployment Act 1934 due to the high levels of inter-war poverty in Britain. The Board kept a system of means-tested benefit A means test is a determination of whether an in ...

was set up in 1934. Economic measures included the devaluation of the pound and taking Britain's currency off of the gold standard, borrowing also increased. The

Special Areas Act 1934 The Special Areas (Development and Improvement) Act was an Act of Parliament which gave aid to the areas of Britain which had the highest unemployment rates in the 1930s. Areas which benefited included South Wales, Tyneside, Cumberland and southern ...

attempted to inject finance into depressed areas and British industry was protected by protectionist measures such as state subsidies and import quotas. The

Unemployment Act 1934 The Unemployment Act 1934 was an Act of Parliament in the United Kingdom, reaching statute on 28 June 1934. It reduced the age at which a person entered the National Insurance scheme to 14 and made the claiming age 16 years. It also separated bene ...

increased the numbers covered by unemployment insurance.

Legislation

Unemployment Insurance Act 1921 The Unemployment Insurance Act 1921 was an Act of Parliament in the United Kingdom. The Act stated that under-18s were to receive less unemployment benefits Unemployment benefits, also called unemployment insurance, unemployment payment, unemp ...

Unemployment Insurance Act 1924 The Unemployment Insurance Act 1924 was passed when the British Labour Party was in power in 1924. The Act arose from a dispute over the means testing A means test is a determination of whether an individual or family is eligible for government ...

Unemployment Insurance Act 1930 The Unemployment Insurance Act 1930 was passed in the United Kingdom in response to the economic problems emerging due to the Wall Street Crash The Wall Street Crash of 1929, also known as the Great Crash, was a major American stock market c ...

Coal Mines Act 1930 The Coal Mines Act 1930 was an Act of Parliament which introduced a system of quotas in the coal mining industry of Great Britain. It was a major achievement of the Labour Party, which revoked the eight hour day that had been enacted in 1926, repl ...

Import Duties Act 1932 The Import Duties Act 1932 (22 & 23 Geo. V c. 8) was an Act of United Kingdom Parliament. The Act introduced a general tariff of 10% on most imports, though some foodstuffs, raw materials, and some imports from the British Empire were exempted. Sp ...

British Shipping (Assistance) Act 1935 The British Shipping (Assistance) Act 1935 was an Act of Parliament which subsidized the British shipping industry during the Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the ...

Cotton Industry (Reorgainsation) Act 1936 The Cotton Industry (Reorganisation) Act 1936 was an Act of Parliament in the United Kingdom which introduced a compulsory levy on cotton machinery. The proceeds from this levy were used to scrap surplus spindles.Modern Britain: An Economic and Soc ...

Special Areas (Amendment) Act 1937 The Special Areas (Amendment) Act of 1937 was an List of Acts of the Parliament of the United Kingdom, 1920–1939, Act of the Parliament of the United Kingdom which amended the Special Areas Act 1934. The new Act introduced concessions on taxes a ...

Cotton Industry (Reorgainsation) Act 1939 The Cotton Industry (Reorganisation) Act 1939 was an Act of Parliament in the United Kingdom. It established the Cotton Board and was responsible for streamlining the industry by closing "surplus" factories.Lawrence J. Butler , Industrialisation a ...

Unrest

There were several examples of unrest during this period, most notably the

General Strike A general strike refers to a strike action in which participants cease all economic activity, such as working, to strengthen the bargaining position of a trade union or achieve a common social or political goal. They are organised by large co ...

of 1926 and the

Jarrow March The Jarrow March of 5–31 October 1936, also known as the Jarrow Crusade, was an organised protest against the unemployment and poverty suffered in the English town of Jarrow, near Newcastle upon Tyne, during the 1930s. Around 200 men (or "Crus ...

of October 1936. There were also protests against the introduction of means testing and hunger marches organized by the

National Unemployed Workers Movement The National Unemployed Workers' Movement was a British organisation set up in 1921 by members of the Communist Party of Great Britain. It aimed to draw attention to the plight of unemployed workers during the post First World War slump, the 1926 ...

References

External links

Unemployment in interwar Britain
{{DEFAULTSORT:Interwar Unemployment And Poverty In The United Kingdom Poverty in the United Kingdom Poor Law in Britain and Ireland 20th century in the United Kingdom Unemployment in the United Kingdom Interwar Britain