(1b) Economic challenges Flashcards
What was the economy like between 1918-1920?
Give an example
A lot of private capital that could not be spent during the war years flooded the market and there was a short-lived economic boom.
For example, the shipping industry was flooded with orders to replace the nearly 8 million tonnes of merchant stock that had been destroyed during the war.
What was the economy like between 1920-1921?
Give an example of what effected it during this time?
A serious recession gripped the country as Britain faltered in the transition between a wartime and peacetime economy.
The impact of the Spanish flu was felt as it reduced GDP by almost 3%. Britain’s old industries relied on a strong export market and this was hit by the fact that other countries were hit by a recession too.
What was the economy like between 1921-1929?
Give an example of what effected it during this time?
Problems with traditional industries built up as Britain lost out to new competitors. The issue of trying to make British products “attractive” to buy was compounded by the decision to return to the Gold Standard in 1924 which overvalued British sterling and diminished overseas trade even more.
What was the economy like between 1929-1939?
Give an example of what effected it during this time?
Britain, from 1931 under the leadership of a National Government, had to work to offset the worst effects of the Depression.
How did WW1 disrupt British markets?
During WW1, British ships were occupied as essential war supplies - with 20% being sunk in the process. Economic rivals ( US and Japan) filled the gap left by a decline in British exports, took over British markets.
How was trading with other countries effected by WW1?
Britain was also unable to trade with countries she was at war with - many of these countries became more self-sufficient, producing goods within the country that they had previously imported from Britain, and continued this practice one war had ended
What policy did the government put in place to protect industry?
What did they do this instead of?
Protectionism
Instead of finding ways to make Britain more dynamic in a global market that has changed and was expanding due to the rise of more nation-states,
What was the aim of protectionism?
to try to protect Britain’s own steel industry and other forms of traditional industry
What did protectionism lead to?
All this led to was other countries introducing their own higher taxes on what Britain needed to import, which further limited the role Britain could play in international trade. Ultimately, this slowed down the economy and meant job losses.
What was the biggest mismate in keeping Britain competitive?
What impact did this have?
§Chancellor Winston Churchill’s decision to return Britain to the Gold Standard in 1924.
Instead of restoring confidence in the value of the British pound, this overvalued it and made British exports even more expensive. In the context of a competitive global market, this was a disaster.
How much steal was Britain producing compared to Germany and the US in 1937?
By 1937, Britain was producing 83,000 tons of steel per year compared to 210,000 tons in the USA and 125,000 in Germany.
How much budget cuts were suggested in 1921?
What act made these cuts?
£87million of cuts were recommended, mostly from the military budget.
Geddes Axe
How much did Geddes Axe cut the health and housing budgets to?
What did this effect?
reduced from £205.8million in 1920-21 to £182.1 million in 1922-23.
This affected productivity, as it exacerbated poverty in a time when infectious diseases were still rampant in the country.
How did regional divides open up?
Due to new and old industries
The government sought to protect old industries, but there was no investment in keeping them dynamic.
New technologies and methods of production such as the assembly line were only adopted by newer industries and these were focussed in areas of the country such as the south-east and the midlands where the domestic market was situated.
What did new regional divides lead to?
Therefore, these areas experienced dynamic economic growth and recovery, whereas areas such as the north and south Wales fell into the pits of greater economic problems.
What was the 1932 imports duties act?
put a 10% tariff on most imports
What attempts were attempted to be made to deal with the economic shock of the depression
Attempts were also made in line with this to establish Imperial preference to encourage trading with other countries within the British Empire,
however it did not work as a coherent system of free trade as so many countries within the Empire depended on strong networks with other countries around the world outside of the Empire.
What was created from 1939 onwards to do with the economy?
How long did this last for?
planned economy was created in order to manage wartime production. The planned economy continued between 1945 and 1951 in order to set-up the recovery from World War Two.
When did rearmament begin?
Give examples of the amount of aircraft and tanks that were being produced?
Rearmament began at a pace in 1939;
Britain produced 15,000 aircraft in 1940, rising to 47,000 in 1944.
6,000-8,000 tanks were produced each year that World War Two was continuing.
How much of GDP was spent on the military in 1939 compared to 1945?
1939 = 15% 1945 = 51%
What became a huge feature of monetary policy?
Borrowing
How much debt and interest did Britain have after WW2?
What impact did this have?
Britain had accumulated over £4billion of debt with the USA with interest amounting to £70million every day.
This ended up putting permanent pressure on the value of the pound, leading to a devaluation in 1949.
What was the Essential Work Order in 1941?
This meant that people in essential fields of work (such as coal mining) were not allowed to leave their jobs for any purpose and also made it difficult for employers to dismiss them.
What was the 1939 Control of Employment Act?
Which allowed semi-skilled workers to take jobs in industries previously viewed as skilled, such as in some areas of shipbuilding.
What was the blue print for the NHS?
What did this serve give the govt the right to do?
The Emergency Medical Service provided the blueprint for the National Health Service established after the war. This service gave the government the right to direct voluntary and municipal hospitals across Britain.
What service was created during the war?
(blood)
What did this set?
The National Blood Transfusion service was also created. The purpose of this was get civilians to donate to help civilian and military casualties. It set the social precedent of one another taking an active role in the healthcare of others.
