Economic Effects of the War
- 745,000 Britons killed in war, Spanish Flu killed 150,000 more, 1.6 mil wounded and 3.5 mil recieving some form of war pension
- Many markets lost to the US
- Many debtors, particularly the newly Bolshevik Russia, failed to pay up, so the UK could not pay the US back
- Over-investment in iron and steel, shipbuilding, coal and textiles, all industries that weren't needed as much post-war
- Short term boom caused spiralling inflation-interest rates were then raised, causing a depression
- Dec. 1920, unemployment went from 300,000 to 700,000. Rose to 2 mil. by June 1921
- End of 1921-Chancellor called for cuts of £175 mil. out of £1,136 mil.. Departments could only agree on £75 mil.
- Committee headed by Eric Geddes ('Geddes Axe') set up to find the remaining £100 mil. but only managed £64 mil.
- 1922 budget saw a 12% per cent cut in gov't. spending. Cuts later became the norm of dealing with depression in the inter-war period
- Farmers were big victims of the cuts as it undrmined the 1920 Agriculture Act that guaranteed minimum prices, leading to massive subsidies as depression hit.
- Gov't. went back on its commitments and alienated 40-50 MPs of agricultural constituencies
- Ministry of Reconstruction in 1917-headed by Christoper Addison
- Developed plans for housing, extension of unemployment insurance and abolition of the poor law
- Appointed Minister of Health following the 1918 election
- His dismissal in 1921 signalled the end of reconstruction
- Reconstruction was…
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