Between the Wars
After four years of hardship during the First World War, the British people were promised
‘a land fit for heroes’ by Lloyd George who was Prime Minister.
In 1920 National Insurance for unemployment was extended to most workers earning less
than £5 a week (except farm labourers, domestic servants and civil servants). Men would
receive 15 shillings (75p) per week and women 12 shillings (60p). This was added to in
1921 so a married man also received 5 shillings for his wife and 1 shilling for each child.
The government had worked out they could afford to pay this as long as unemployment
did not rise above 4%.
By 1921, however, British trade was entering a decline and unemployment started to rise,
with 2 million men out of work by the summer, although the numbers did fall a bit, they
stayed above 1 million, 10% of the workforce, until 1940.
Unfortunately, the government did not realise the decline of Britain’s old industries was
going to be a long term problem and they kept expecting things to improve. These
included introducing ‘extended benefit’ or the ‘dole’ to keep people going when their
unemployment insurance ran out after fifteen weeks. Poor Law unions were allowed to
borrow money from the Ministry of Health if the ratepayers in their area could not pay to
support the unemployed.
By 1928 the unemployment fund was £25 million in debt. The Poor Law could not cope
with the numbers of unemployed, particularly in areas like Wales, the Midlands of
England and Scotland where the old coal, iron and steel and ship building industries were
suffering badly.
In 1929 the American Stock Exchange - Wall Street - crashed, bringing a world wide trade
depression in the 1930s. In 1930, unemployment rose to 1.9 million, reaching its highest
point of 2.8 million in 1932.
The Local Government Act of 1929 did away with the poor law and workhouses. The local
councils took over the task of looking after the poor. The national government gave them a
block grant to pay for social welfare, roads, slum clearance etc.
By 1931 the insurance fund was in debt to over £100 million and the national government
(containing all parties) had to take extreme measures, including cutting unemployment
benefit by 10%.
With so many unemployed the government needed to cut cost and introduced the means
test. Before the ‘dole’ was given officials came round to investigate families and
everyone’s wages were included in working out whether the dole was needed. A grown up
son, living at home, would have his wages counted, so reducing his father’s dole money.
People could be forced to sell household items like pianos and they would not receive dole
money until the money from the sale was used up. From 1934 the Unemployment
Assistance Boards (UAB) supervised the means test and payment of the dole.
Long term unemployment had a terrible effect on families.Source S is part of evidence
into unemployment by the Pilgrim Trust, Men Without Work (1938).
A young married woman in Blackburn said ‘these last few years since I’ve been
out of the mills, I don’t seem able to take trouble, somehow; I’ve got no spirit for
anything.’ One of us who saw her had little doubt ‘how it was’. The woman
looked thin and ill, and it was clear that what food there was was going to the
children.
Source T shows one of many marches of unemployed workers who wanted a job or decent
unemployment benefits
It was not until the threat of war in 1938 that the unemployment figures started to drop as
most people realised that the existing schemes of dealing with mass unemployment were
neither fair nor effective.
Questions:
1. In what ways was unemployment insurance improved in 1920-21?
2. Why did the government have to do away with the old poor law in 1929?
3. What was the means test?
4. Imagine you are one of the miners in Source T.
Using your knowledge of poverty and evidence from Source S, write a letter to
a newspaper explaining your views on unemployment, the dole and the means
test.
5. Did Low, the cartoonist in Source U, approve of the way Britain was re-arming
in1938? Give reasons for your answer.