How Successfully Did the National Government Deal with the Economic Problems of the 1930s

Topics: Great Depression, Unemployment, Labour Party Pages: 4 (1463 words) Published: April 24, 2012
How successfully did the National Government deal with the economic problems of the 1930s? In dealing with the economic depression of the 1930s, it is my opinion that the recovery of Britain was mainly due to the stages of rearmament in the run-up to the Second World War. This is not to say, however, that the National Government failed to combat the rises in unemployment, reaching a peak of three million, and the ruined staple industries, they implemented several policies to reboot the economy and lessen the impact on the people. The National Government were successful in some aspects of softening the blow in Britain. Faced with a steep decline in international trade the; partly due to America’s protectionist tariffs which set import prices of British goods so high that even were they to cost nothing, the price would still be far out of the competitive market, the government implemented an Imperial Tariff System which encouraged the public to buy only from countries within the empire and aid the situation of 1929 wherein the value of British exports was halved ands avoid external goods, thus keeping money in our own economy and not worsening the economic drought, the response tariffs this then caused further encouraged isolationism. In response to floundering businesses and lack of new companies the National Government lowered interest rates to 2% to boost the economy and encourage people to open new businesses using loans from banks which worked to ensure more spending in the aim of growth. This helped the middle class by helping them to help the economy but the effect that this would have on peoples savings was underestimated as suddenly their own money they kept in the banks during a depression at some risk to themselves is now doing less. The National Governments main means of recovery was a surprise to the Labour party, one minister quoting that “we didn’t know we could do that” referring to the decision by...
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