The Battle of Cable Street, 1936 Describe Britain's economic situation between 1929-1936

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Sheemul Ali – 11SJ Ms Tailor               History Coursework              Saturday 9th November 2002

The Battle of Cable Street, 1936

Q1. Describe Britain’s economic situation between 1929-1936                    (15)                          

Britain’s economic situation before 1929 had already slumped. After World War One, demand for goods ended, as when other countries weren’t able to buy goods from Britain, they started up their own factories. By 1921 unemployment had gone up from 2.6% in 1920 to 18%. British industry, mainly coal mining, shipbuilding and steel were in active decline and faced heavy competition from industrializing nations abroad. One of the reasons for this was the policy of free trade. This policy allowed foreign goods to enter Britain without any taxes or charges so foreign goods were cheaper to buy in Britain then actual British goods. Other countries such as the USA tried to prevent foreign competition by having the policy of protection, which allowed them to charge taxes on imported products making them more expensive. Britain’s share of all world trade dropped from 18% to 11% over this period.

   In October 24th 1929, Britain’s economy was hit by the Wall Street Crash, leading the world into an economic depression. Prices fell and therefore so did British exports forcing more British factories to close. There was a big balance of payments deficit. America stopped lending money to Britain after world war one and now wanted their money back, Unemployment grew rapidly and by 1932 almost 3 million people were out of work. The Wall Street Crash also affected other parts of Europe. The Depression hit the German economy really badly as 6 million people were left unemployed.  

   Also in 1929, the New Labour Government won the general election under Ramsey MacDonald. The biggest problem they faced was the economy. Increasing unemployment meant that the government had to pay more money in the unemployment benefits but they were also getting less money because only the people in employment paid tax. The Labour government had disagreements over the solving of this problem, and after the unsuccessful increase of the income tax, the Liberals and the Conservatives joined forces and formed the May Committee to look at the crisis. This Committee suggested a cut in wages for everyone employed by the government and also a 20% cutback in unemployment benefits. Ramsey MacDonald resigned from the Labour Party because he had to deal with a party who didn’t want to set up these measures. So in August 24th 1931, he created a coalition government with the conservatives and Liberals. This government was called the National Government.

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The National Government were opposed by the majority of the Labour government but were proved popular when they won 554 seats in the 1931 election with the anti-MacDonald Labour party winning only just 54. The National Government cut its spending and passed out the recommendations made by the May Committee – Government employees had their wages cut by 10% apart from teachers who had their wages cut by 15%. They also tried to deal with the overseas competition by raising import duties to protect British workers, however it forced it forced foreign industries to look for new countries to sell ...

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