The More Significant Feature of Britain's Inter-War Economy
During the inter-war period Britain's economy was not performing well. As the First World War had cost Britain millions of pounds, not to mention millions of lives, the potential debt was crippling. Yet did this hinder Britain's economic growth so that it could not return to its pre-war level? You could argue that Britain's economy was. However, masked behind a series of setbacks outside the government's control, the statistics told a story of decline.
1918 saw the defeat of the Kaiser's Germany and the Austro-Hungarian Empire. However, it also saw Britain facing bills of millions of pounds. The reparations awarded to Britain payable by
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However it was unemployment mentioned previously that was the government's biggest worry. During the First World War Britain had had to sacrifice many of its key industries to focus on the war effort. Many of the suppliers either turned to competitor's brands or developed their own industries, so when the war had finished many of the industries - particularly the labour intensive industries in the north - found themselves with no buyers and had to lay off many workers just to balance their books. Most of these industries had the opportunity to modernise before the war, but decided not to as labour was cheaper than machines. Added to this the return to the Gold Standard (which raised the price of British exports), and in some areas as many as 70% of men were unemployed. In the winter of 1921-22 two million men were unemployed, and throughout the period there was never less than 10% of the working population (one million) unemployed. The mass unemployment meant that without jobs these men could not re-start the ailing economy, but instead ate away at the governments funds in the form of unemployment benefits. Many local businesses such as pubs or local shops were forced to close which gave the area a run down appearance which discouraged investment. This meant more jobs were laid off