Why was Britain's Heavy Industry in Decline by the 1920s?

Question 1

Long-Term Decline

Answer 1

War years were a period of growth- production expanded to meet demands
Masked underlying downwards trend, British industry weakened by foreign competition (USA + Germany) in 40 years pre-WW1
Industrial rate 2.3% per year- half USA growth
1910- British exports 10% of world trade, 20% Germany, 40% USA

Question 2

Impact of the First World War

Answer 2

Naval blockades + U-Boat campaigns disrupted trade in Europe + Asia
Trade partners developed own industries
Global economy no longer dominated by Britain- textiles, Japan supplied Asia + India

Question 2

Failure to Modernise + Lack of Investment (Modernise)

Answer 2

Overwhelming reliance on ‘heavy industry’, now antiquated- old machinery, methods of production + underinvestment
Failure to reinvest profits or modernise

Question 3

Failure to Modernise + Lack of Investment (Investment)

Answer 3

Britain ceased to be attractive investment opportunity, failed to attract capital needed for new machinery/development of modern techniques
New industries in Midlands + southeast received huge investment- new methods (assembly line) expanded rapidly
Cotton + mining lost 1/3 of workforce, electrical appliances increased by 100%, construction by 33%, service + leisure by 40%

Question 4

Foreign Competition

Answer 4

Dated industries didn’t remain competitive in global market- inefficient + expensive, high overheads so reluctant to drop prices- lack of competitiveness
Industry, such as steel, suffered from lack of investment
1920- importing American steel (cheap + high quality), so by 1937, Britain producing 83,000 tonnes, but America 210,000 tonnes (annualy)

Question 5

Analysis

Answer 5

First World War gave false sense of security
During war other countries established industries; Britain fell behind and lost export markets
British industry became outdated, investors not interested- so no money to modernise