“The changes in housing tenure during this period represent a major social revolution with long-term political and economic implications… By 1938, 35 per cent of homes were owner-occupied. The building societies had accumulated large funds during the war and enjoyed tax advantages. Whereas in 1910 they had advanced 9 million [pounds sterling] in mortgages, in 1936 they advanced 140 million [pounds sterling].” (Ormerod, 1998)
These measures on the real estate sector added more jobs to the ailing economy while also creating wealth.
Across the three National Governments, protectionism was promoted and interest rates were allowed to fall. But it did not have much beneficial effect on the unemployed. When in September 1931 the National Government abandoned the gold standard and undertook protectionist economic measures that lasted well into 1932. But protectionism, “although it did not necessarily impose the same deflationary pressures as were imposed to return to and operate the gold standard, brought little relief for the unemployed.” (Laybourn, 1990, p.23) In the same month the ‘Household Means Test’ was introduced on the ‘transitional payments’, which are remitted to applicants after six months of standard benefit had expired. Further, the government introduced measures to reduce unemployment during winter months (when it is seasonally high) and did nothing about the summer months. The three different National governments of the 1930s found competition among staple industries as problematic. They solved this problem by shutting down inefficient units or merging firms. The industries that witnessed a bulk of such restructuring are the mining, cotton and shipbuilding industries. As to the question of the effects of these measures on unemployment, the answer is in the negative. The industry restructuring process might have helped improve overall efficiency and productivity, but its effects on erstwhile industrial small towns was devastating. In towns such as Jarrow unemployment levels reached as much as 50% during the reign of National Governments. What financial assistance package the government was able to offer to the unemployed was generally inadequate. The worst hit regions in the UK were identified as the North East, West Cumberland, southern Scotland and South Wales. Special Commissioners were appointed to these regions “to spend £2 million a year to help local authorities carry out amenity schemes and to attract firms to their areas – although the figure was increased in 1936 and 1937 to allow the commissioners to spend £17 million in 1938.” (Laybourn, 1990, p.25)
It soon became evident that an unemployment problem that is 100 million pounds in magnitude cannot be alleviated by the limited funds entrusted to the commissioners. For example, in the North East region, of the 350,000 enrolled in the unemployed registry only 50,000 could be find suitable employment by 1935. A major factor in the National government’s failure to arrest unemployment was its misplaced adherence to economic orthodoxy. This meant they were more focussed on keeping expenditure low and by consequence keeping the budget balanced. Neville Chamberlain, the Chancellor of the Exchequer in Mac-Donald’s National government,