Cuts in thirties Britain

The setting is the UK in the 1930s. It was hoped that depression in basic exporting industries – and, thus, working class unrest – would soon disappear and output be even with production. In short, it was hoped the UK could be more like the US, where reduction in socially necessary labour time was matched with an abundance of goods to sell on the market and where consumers consumed en masse (Fordism, not Marxism).

Instead, unemployment in Britain reached 3 million – 23% of all insured workers – in 1933 while output was commensurate with the slow and erratic recovery. There were restrictions placed on production rather than a more desirable reduction of costs, tariffs and cartels for fear of over-production, and a country pulling its hair out.

An economy assisted by the state became very appealing to members of parliament on both sides of the house. Harold Macmillan – then a backbench Tory MP – remarked of the mood in the thirties: “the structure of capitalist society in its old form had broken down, not only in Britain but all over Europe and even in the US”.

No, he wasn’t advocating socialism, but he, like so many then, and so many today, did feel that in order for capitalism to remain, it must be helped out by a very visible hand. I’ll no doubt have my knuckles slapped for this, but Marx was right when he asserted capitalism would come to destroy itself; perhaps what he didn’t anticipate was that government would periodically come to its rescue.

The tendency of British investors to export capital into the colonies meant that many industrial plants in this country were left to dry; much the same argument can be said about manufacturing now as it could both in the seventies and the thirties – basic industries were not moving fast enough to maintain pace with the rest of the world. As such, manufacturing was left lacking while Japan, Germany and the US reaped all market rewards.

Even when production saw a recovery in 1934, unemployment remained relatively high to the extent that one in every eight people able to work could not.

This was a reality for the high skilled too, not to mention the so-called middle class. Noreen Branson and Margot Heinemann in their book Britain in the Nineteen Thirties point out the rise of the Middle Class in the mid-thirties was, strictly speaking, the increase of clerical, technical and administrative jobs, still affected by unemployment and of comparable wages to more traditional skilled labour.

Nobody can deny it is to the credit of trade unions at the time that real wages remained pretty steady after the crisis prior to the 1930s. Employers were simply unable to make wage cuts in line with the fall in prices – it would have been poison. Much like Britain of the seventies, the streets could be awash with concerned peoples at the drop of hat. On 21 September 1931, striking teachers caused the government to retreat on reducing wages in the public sector, and admit certain “classes of persons” were unfairly affected, while everybody was “in this together” to quote that familiar phrase.

Surprisingly for the government at the time, action had been taken by the Royal Navy after having their wages cut from 4s to 3s. Whitehall realised the error of their ways, backtracked, and further strike action called off on the promise no pay cut exceeded 10%, with no victimisation.

The latter promise was subsequently broken when 36 ringleaders were sacked and the Incitement to Dissatisfaction Act was later realised, with the aim of curbing subversive influences in the armed forces. In spite of this, however, the affair had a lasting effect on the working class movement who used it as proof of industrial action effectiveness.

The unfortunate grouping at the time were the unemployed. They were promised cut to benefit would not exceed 10%, though according to Branson and Heinemann it was more in the region of 20%. In June 1931 the Royal Commission advocated heavy reductions to benefit payments in their interim report (it was from this report too that a reduction in real wages was floated – in spite of unsettled opinion on it. The Macmillan report of July, which advocated this position on wages, even had as signatories Sir T. Allen of the cooperative movement and Ernest Bevin of the TGWU/TUC). It wasn’t until November 1933 that the Unemployment Bill, Part II restored the standard 10% cut in benefit.

Worse still, agricultural workers and domestic servants who lost their jobs were entirely excluded from benefit and would have to apply to the local Poor Law Authority – making times extremely tough had they no other means of securing money.

The cuts at the time were carried out so as to save the pound from collapsing, and as per usual everybody was in it together. Though, of course, some more than others. Strike action was the method of choice for keeping the government to check on the fairness of cuts, and indeed they were forced on some occasions to revise their sums and admit they had come down over-zealously on some over others.

It’s early days yet, but who can say what will happen in the future when people start to question the legitimacy and fairness of the cuts set by today’s coalition government.


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