How far did the British government meet the economic challenges of the 1920s?

Learning objective – to be able to assess the economic policy of the British government during the 1920s. I can describe some of the key features of the British government’s economic policy of the 1920s. Grade D I can explain the impact of the British government’s economic policy of the 1920s. Grade B I can explain and assess the economic performance of the British government of the 1920s. Grade A

Starter – What can this source tell us about Britain’s economic performance in the interwar period?

What was the economic legacy of the First World War? Loss of trade – Britain’s merchant shipping was devoted to carrying essential supplies to Britain. The gap left by Britain in world trade was filled by the USA and Japan. Debt – the war cost Britain £3.25 billion with debts of £8 billion by 1920– mainly to US banks. Value of the pound fell when it removed itself from the Gold Standard. Inflation rose to 25% in 1918 which impacted upon prices. Technological development accelerated in the war – particularly in medicine and transport. Nearly 900,000 men were killed in the First World War – many who made up the British workforce.

What was the pattern of Britain’s economic story during the 1920s? 1919-20 saw a short post war boom fuelled by an increase demand for scarce goods caused by the First World War. 1920-21 saw a severe recession as unemployment rose to 12% of the working population. The heavy industries, particularly coaling mining, was hit the hardest as prices rose by 25% and wages had failed to keep up with these increases. The main causes of the recession were loss in trade, underinvestment in industry and declining industrial relations. Spending cuts helped to usher in a period of limited recession from 1922 although unemployment remained high averaging at 10%. The Great Depression from 1929 hit Britain hard as trade collapsed and unemployment soared.

Main task Tax, spending and balancing the budget. Cut out the statement cards from the worksheet. They all relate to one of the three main economic policy approaches of the government in the 1920s. Can you sort them out under the following headings – Tax, spending and balancing the budget. Interest rates the value of the pound. Protectionism. Extension task List the consequences of the British government’s economic policy in order of significance and explain your decision.

Home learning task Pair up with another member of the class. Here are two events that relate to the British economic policy of the 1920s. Between each pair, choose who is going to research which event. The Geddes Axe of 1922. The return to the Gold Standard in 1925. Your task is to produce a one page summary of the events using bullet points and divided by sub-headings. This is to be exchanged with your partner next lesson.