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8 December 2021

From the NS archive: The Christmas of unemployment

28 December 1918: There is every prospect that unemployment will rapidly increase in the next few weeks.

By New Statesman

This article from December 1918 explains that, in the immediate aftermath of the First World War, the British government had a number of problems to solve. Funding the war effort had left the government economically weak and so entailed a period of substantial borrowing, resulting in high inflation and a large increase to the national debt. The country was also in a bad shape physically with repairs necessary on “hundred millions or so of new work on the roads, railways and public buildings”. In addition to the economic damage caused by the war, there was the problem of reintroducing the mass numbers of discharged war-workers, some “eight or nine million men and women”, back into the workplace. While manufacturers and traders were eager to resume their business, the four years of a prolonged, brutal and expensive conflict had left industries uncertain “as to prices, transport, and markets”. The transition into peacetime was not only being fought with “appalling difficulty” but, pointedly, a “perturbing slowness”.


So disorganised is our news service, and so limited and preoccupied are our newspapers, that it is not generally realised that there are, this week, probably a larger number of persons without current wages in Great Britain than in any previous Christmas week in the history of the nation. For the moment, indeed, there is in these households a sudden penury and cruel uncertainty as to the future rather than actual distress. The savings to be drawn on are more substantial than at any previous time. The new Unemployment Benefit provided by the Exchequer from the 10th of December onward, for six months, with separate allowances for all the children – a momentous Precedent – is apparently being claimed (and after some delays) paid out, in sums ranging from twenty-five shillings up to more than three pounds per family, at that rate, it is rumoured, of something like a million pounds per week. The discharges are still going on, and the demobilisation of the Army has scarcely begun. Meanwhile, the absorption of the unemployed men and women is proceeding with perturbing slowness. Manufacturers and traders are eager to resume their civil business, but they can get neither materials nor machinery. Orders are delayed owing to the uncertainty as to prices, transport, and markets.

Even the indispensable means of communication are wanting. Telegrams to and from European countries, neutral or allied, still take days in transmission, owing, it is said, very largely to the lines being almost continuously occupied with Government messages. Belgium, for instance, is apparently almost as inaccessible as it was in the time of Julius Caesar – without railways, telegraphs, telephones or regular postal service – even swept bare of horses and wheeled vehicles, so that travellers officially authorised to leave Brussels for England have had to walk to the coast! The British export trade with the East is paralysed, not only by the lack of shipping, but also by the uncertainty as to future prices and the rates of exchange. Since the cessation of hostilities we have accomplished the General Election, but we have not, in six weeks, accomplished even a beginning of the 300,000 new cottages that the Government promised for the first twelve months; and not an order has seemingly yet been given for the hundred millions or so of new work on the roads, railways and public buildings that is imperatively required. The Government has, so far, totally failed to co-ordinate the discharges with the creation of new employment. The result is that already several hundred thousand men and women – the statistics are in the possession of the Ministry of Labour, but they have not been allowed to be published – are “out of work” this week. The Christmas of the Great Peace will be remembered for years as the Christmas of unemployment. There is every prospect that the unemployment will be rapidly increased in the next few weeks.

We imagine that as the coming of peace, sooner or later, was one of the things that could be foreseen with certainty, the Ministry of Reconstruction had ready in its pigeon-holes, on the 11th of November, a duly sanctioned plan for dealing with the sudden emergency, including the necessary enlargement of the scope of the Ministry of Labour; the due regulation of discharges by the Ministry of Munitions and other great spending departments and by their several contractors; the prompt fulfilment of the requirements of manufacturers and traders for restarting civil production; the preparations for instantly beginning the new cottages, the new schools, the delayed repairs, the refitting of the roads and railways, and the other public works that we know must be instantly undertaken; and with all this the systematic co-ordination, week by week, so far as aggregate numbers are concerned, of the taking on of workers in the new operations with the discharges from war work.

[From the NS archive: George Bernard Shaw and the New Statesman]

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If any such plan was got ready by the Ministry of Reconstruction it is only fair to Dr. Addison that it should be published. There is certainly no trace of its having been adopted by the War Cabinet, or of any official machinery having been devised for a duty of such vital importance to the community. Instead of which we had the Minister of Labour and his department suddenly, in effect, superseded by the appointment of Sir Stephenson Kent to be Controller-General of Demobilisation; without, apparently, his having anything to do with the co-ordination of the Government orders for new work, week by week, with the discharges. And now we have announced the astonishing transfer of Sir Eric Geddes from the duty of governing the Navy to that of generally supervising and controlling all the Ministers and Departments concerned with the whole operation. There is still, after more than six weeks, no news of the starting of the cottages, the road repairs, the schools of the Local Education Authorities, or the equipment of the railways. Hence the Treasury has to resign itself to shovelling out the Unemployment Benefit at the rate, we gather, of something like a million pounds per week: and to getting for the community in return for this not inconsiderable sum, in these hundreds of thousands of humble households, nothing but a somewhat demoralising idleness and a growing discontent.

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The problem of transferring eight or nine million men and women from the occupations incident on war to those of peace is doubtless one of appalling difficulty; but the failure of the Government to realise the magnitude of its own inevitable share in the task, and to make timely arrangements for fulfilling the duty which it cannot escape, is going to increase the difficulty. We cannot discover that any department whatever was charged with responsibility for seeing that the new employment which the National Government and the Local Authorities will have to offer was actually ready when the discharges began. Even now, after six weeks of discharges, there is no sign of any systematic collection of statistics, week by week, of the numbers to be turned off from war work and taken on for peace production, in public and private employment respectively; and equally little of any attempt to keep the two sets of figures at something like parity. Apparently both official tradition, and perhaps the inveterate repugnance of the Treasury, have so far prevented any action of this kind. The Treasury have now the pleasure of seeing the money go out in State Unemployment Benefit at a rate which gives the oldest heads of departments a shock. It is not generally realised that, under Mr. Lloyd George’s latest scale, the Government is, since the 10th of this month, paying many heads of families as much as three pounds a week each for being unemployed. This sum is drawn by the unskilled labourer who has a large family equally with the skilled artisan. The unemployed woman draws weekly what would amount in a year (if it were continued so long) to £65, which compares favourably with the pay of many a rural schoolmistress.

But we fear that even these facts still fail to convince some of our officials that it would have been cheaper, in the long run, to have put thought into such an organisation of the labour market as would have prevented unemployment on any large scale.

We do not know what may be the scope of the commission given to Sir Eric Geddes, but we assume that he is not taken from the Admiralty merely for the purpose of superseding Mr. G. H. Roberts as Minister of Labour. We hope that he is going to put himself at the head of a committee of the Ministers and Permanent Secretaries responsible for all the departments concerned, in order both to drive them to quicker and more drastic action and to compel them all to work to a common plan. The necessary statistics could presumably be got by the Ministry of Labour from all the public departments and the principal private employers. The Board of Trade, through the Railway Executive Committee, could be made to get on with the most urgent orders for railway reconstruction. The Board of Education has already passed the plans for hundreds of new schools, which the Local Education Authorities could be incited to get on with. The housing work, which is in the hands of the Local Government Board, is, notwithstanding innumerable reports of different kinds, proceeding with terrible slowness. The Scottish and Irish Departments have their own works to expedite. The Road Board has plans in hand for many millions of urgently required repairs and improvements of main roads, but find the greatest difficulty in getting the work actually begun. The new feature of the situation is that the unemployed have got to be found either work or wages.

The trouble is that each of these departments is at present going its own pace, in its own way, without being aware of what the other departments are doing; and, of course, without being in the least aware of the number of men and women whom other departments and their contractors are, week by week, having to discharge. Presently we shall have a swelling tide of discontent (because large as are the allowances they are not large enough for present prices), as the numbers of unemployed rise and as week after week passes without the Employment Exchanges being able to find them new situations. And all the time there is work of the most varied character urgently required by the nation, for which the different public authorities have only to give the orders, and by the aid of which the greater part at least of the involuntary unemployment could be prevented. Now that the financial responsibility for maintaining the unemployed has been directly assumed by the Government, we cannot believe that it will be possible for any administration to leave such things to blind chance. But unless Mr. Lloyd George seriously intends to leave the matter to blind chance, some machinery for the co-ordination of the discharges with the starting of new enterprises is urgently required.

Read more from the NS archive here, and sign up to the weekly “From the archive” newsletter here. A selection of pieces spanning the New Statesman’s history has recently been published as “Statesmanship” (Weidenfeld & Nicolson).