Chose to go with Snowden’s proposals which he suggested to the House of Commons 10th -11th of September. Meaning that the government’s aim was to make a balance budget by limiting government expenditure.
Range of economic policies addressing finical problems, trade and industry.
Some policies orthodox but mostly new.
Make a balanced budget Part of Snowden’s Plan.
-Tax rose to £51.5 million.
-Cut public service wage- Teachers pay cut 15%. Armed forces/Mp’s/judges pay reduced 10%. -Also cut unemployment benefit by 10% introducing a means test.
Maintained International Confidence in Banking and stopped banking crises. Opportunity to get extra dole because of the means testing. Bank of England gave loan of £80 million from New York and Paris
Lowered demand for goods and services. Unemployment rose 1932-3.
Keep Pound stable
-Intervene in currency markets. Lower interest rates to 2% 1932 making ‘cheap money’ for borrowers. -Loan from Bank of England of £80 million.
Value of the pound stayed the same. Housing Boom with 2 million houses made in 1930’s providing jobs and more need for furniture. Seemed to secure the gold standard as well.
Houses only targeted middle class who took advantage of cheap house prices and mortgages. Less council houses built- 700,000 built between 1931 and 1940.
-Set up sterling area were pound used not gold to settle trading accounts. -Made trade treaties with some countries (set quotas)
Made more exports, decreasing the amount of unemployment.
Exports created by the sterling area did not make up for the decline demand from America and Germany.
Help Industries get back on track
- Special areas act 1934 gave £2 million to ‘special areas’
-Cotton Industry Act 1936 shut down non-profitable mills.
-British Shipping Act 1935 provided loans to companies to build new ships in return to scrap old ones.
- North Atlantic Shipping act gave loans towards the building of Transatlantic Liner Queen Mary. -National Iron and Steel Federation 1932 helped demolish unprofitable places and build new ones.
New industrial equipment for coal mines but meant employed less people- Jarrow unemployment 70%. Created new jobs with the making the making of new ships/iron + steel factories.
Not all Industrial areas qualified for the £2 million. Preferred to aid new industries rather than old industries where there was high unemployment.
-Set marketing boards for milk, bacon and potatoes- set prices for farmers of 10 shillings per hundredweight.
Provided some security for agriculture farmers and protected them from foreign imports. Productivity rose 15%between 1931-1937
Less help for Arable Farmers
-Unemployment Act 1934 set up a board that standardised dole payments when the 26 weeks of unemployment benefit stopped.
Unpopular with the unemployed.
The Gold Standard was scrapped in September; even though was why the government was set up. This created a small but positive impact. The reason they had to scrap it was because of the Atlantic Fleet in Invergordon refused to go to sea as they had cuts of 10% and their admirals had cuts of only 7%. News…