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 Post WW2 Britain & Europe - austerity, rationing & reconstruction

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Meles meles
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PostSubject: Post WW2 Britain & Europe - austerity, rationing & reconstruction   Tue 10 Oct 2017, 22:17

On the very day that Japan surrendered (15 Aug 1945) President Truman, in strict accordance with the original terms, ended the Lease-Lend agreement between the US and Britain. Since its inception in March 1941 Lease-Lend had channelled $30 billion worth of goods into Britain - and not just tanks, ships, aircraft, guns and ammunition. By 1945 Britain was getting 20% of its food and nearly all of its oil from America, but all this was abruptly stopped by the stroke of Truman’s pen. The effect on Attlee’s new Labour government, just eight weeks into its term, was instant. After six years of war Britain was bankrupt and without this American support there were simply not enough dollars or gold reserves left to feed the country. Nor was there any way to earn the money quickly. British industry was entirely directed towards war production and the shattered economy was only exporting one-fifth of what it had before the war, while at the same time non-military imports were five time higher than in 1938. Furthermore with the defeat of Germany, Britain, as an occupying power, was also responsible for feeding a large part of the German population. Accordingly in Britain strict rationing of food, sugar, soap and textiles, and restrictions on the use of fuel, remained in force ... and there were shortages of nearly everything everything else, from razor-blades, pencils and cigarettes to saucepans, bicycle tyres and light bulbs. Then in the severe winter of 1946/7 even bread was briefly rationed, which had never been necessary during the war. However in 1946 Britain had managed to secure a 50-year loan of $3.75 billion at 2% interest, and then in 1948 the US Marshall Plan came into force. But austerity remained and in Britain rationing only finally ended in June 1954.

France, like Britain, had introduced rationing in 1940 and this was continued under the Vichy government and Nazi occupation. Under occupation however the system had been deliberately operated at below subsistence level for the French population as a whole, with about 25% of all French agricultural produce being shipped out to help feed Germany. After liberation rationing was of necessity continued, but unlike in Britain where it was tolerated as giving "fair shares for all", in France I suspect it still had the stigma of being a punitive measure used by an occupying force to subdue the population. Furthermore, because of this severe rationing the black market and an unofficial barter economy had become well developed. France had a large agricultural economy and if left to its own devices could easily feed itself. Accordingly rationing in France formally ended in September 1949.

In 1945 Germany was devastated, with industry, communications and whole cities completely destroyed. The Nazi war-time plan had been to concentrate industrial production in Germany itself, while relying on the occupied countries of Europe to provide food and civilian commodities. Food rationing had been introduced in 1939 on the out-break of war but initially it was far from onerous and there were few shortages in Germany. As the war progressed rationing was extended to cover more and more commodities, and it started to become much more stringent after June 1941. Again of necessity food rationing was continued after 1945 in defeated Germany, but though severe shortages continued for some time (until the 1960s in East Germany) formal rationing was ended in July 1948 in all three western occupied zones.

1948 was also when the US Marshal Plan was introduced to help rebuild the war-torn countries of Europe. To maintain US influence on the continent from 1948 until 1951 funds were given to both allies and former enemies. Of the total $13 billion provided in Marshall Aid, Britain got the biggest share.

(Proportion of the total aid supplied in %):
UK                     26
France                18
West Germany     11
The Netherlands    9
Italy                    9
Belgium               6
Austria                 4

Ten years after the war the British economy had recovered and in 1959 Harold Macmillan could justifiably say that in Britain "most people have never had it so good". But the latter half of the 1950s were similarly boom times in France, Belgium, Germany, Italy, and indeed in most of western Europe. And despite these good times British industry was already starting to lag behind other countries. By the early 1970s Britain was economically "the sick man of Europe" … one reason why she belatedly joined the EEC in 1973.

So ...

Why did austerity and rationing continue so long in post-war Britain compared to in other countries?

Why, despite having emerged from the war with its industry still functioning (admittedly damaged but far from destroyed) did Britain lag industrially and economically behind other states whose industries had had to completely rebuild from scratch?

Given that Britain received the lion’s share of Marshall Aid but didn’t seem, even at the time, to have much to show for it, where did all the money go?

And what was the experience in other countries?


Last edited by Meles meles on Wed 11 Oct 2017, 13:30; edited 1 time in total
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PostSubject: Re: Post WW2 Britain & Europe - austerity, rationing & reconstruction   Wed 11 Oct 2017, 08:55

Not only did Britain persevere with rationing for a period of time over double that which the war itself had lasted, but between 1942 and 1954 it also imposed even more severe rationing of certain foodstuffs in its "dominion" states to force an artificial "surplus" which could be imported into Britain and keep even the meagre rations allowed to individuals available for purchase (New Zealand butter being a sore case in point and which led to several parliamentary debates regarding the nature of Britain's sovereignty itself over these countries and its power to deprive dominion citizens of essential foodstuffs to the benefit of "mainland" Britons). Real crisis management of the worst kind that seemed to stumble from blunder to ineptitude and back again repeatedly as a country's own government legislated against levels of raw material input sufficient to relaunch a swathe of vital industry in the name of an austerity that was increasingly self-imposed and simply evidence of successive governments' mismanagement as time went on, and for over a decade too!

Risking sovereignty for butter is the stuff that revolutions are made of in certain other countries where upper lips are more flexible and chins are not for "taking it on".

However in 1953 the government at least lifted sanctions on sugar availability to the confectionery industry, and on one glorious October day etched in the minds of those of a certain age at the time ...


Apparently on the day that sweets rationing ended it was toffee apples that proved by far the most popular item sold (lemon sherbert a distant second). Can these even be found anymore?
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PostSubject: Re: Post WW2 Britain & Europe - austerity, rationing & reconstruction   Wed 11 Oct 2017, 09:31

Nye Bevan:
"I stuffed their mouths with gold."
referring to consultants during the formation of the National Health Service.

I don't know how much it cost, but a chunk of the US money must have gone to setting up the NHS and other elements of the Welfare State.
Also there was the nationalisation of major industries and the New Towns Act of 1946 for  post war rehousing.

...........................................................................................................................

This is another point, for a sizeable part of the population of Britain, wartime rationing actually improved their diet;

wiki: (quoting Richard Titmuss)
"The families in that third of the population of Britain who, in 1938, were chronically undernourished, had their first adequate diet in 1940 and 1941 ... [after which] the incidence of deficiency diseases, and notably infant mortality, dropped dramatically."
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PostSubject: Re: Post WW2 Britain & Europe - austerity, rationing & reconstruction   Wed 11 Oct 2017, 10:06

Resurgance of German Economy:

Volkswagen Beetle

Mass production of civilian VW cars did not start until post-war occupation. The Volkswagen factory was handed over by the Americans to British control in 1945; it was to be dismantled and shipped to Britain.
Thankfully for Volkswagen, no British car manufacturer was interested in the factory; an official report included the phrases "the vehicle does not meet the fundamental technical requirement of a motor-car… it is quite unattractive to the average buyer… To build the car commercially would be a completely uneconomic enterprise."
The factory survived by producing cars for the British Army instead.
The re-opening of the factory is largely accredited to British Army officer Major Ivan Hirst. Hirst was ordered to take control of the heavily bombed factory, which the Americans had captured. His first task was to remove an unexploded bomb that had fallen through the roof and lodged itself between some pieces of irreplaceable production equipment; if the bomb had exploded, the Beetle's fate would have been sealed. Knowing Germany needed jobs and the British Army needed vehicles, Hirst persuaded the British military to order 20,000 cars, and by March 1946 the factory was producing 1,000 cars a month (in Army khaki, under the name Volkswagen Type 1), which Hirst said "was the limit set by the availability of materials".
........................................................................................................................................................................................

The Industrial Disarmament of Germany proposed by the Morgenthau Plan, was dropped ar US policy when it was realised that the German industrial economy was essential for the well being of Western Europe.

Reports such as this by former US President Herbert Hoover, dated March 1947, also argued for a change of policy, among other things through speaking frankly of the expected consequences.

wiki:( from report by former US President, Herbert Hoover )
There are several illusions in all this "war potential" attitude. There is the illusion that the New Germany left after the annexations can be reduced to a "pastoral state". It cannot be done unless we exterminate or move 25,000,000 people out of it. This would approximately reduce Germany to the density of the population of France.

West Berlin, 1948:

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PostSubject: Re: Post WW2 Britain & Europe - austerity, rationing & reconstruction   Wed 11 Oct 2017, 11:28

@nordmann wrote:
Not only did Britain persevere with rationing for a period of time over double that which the war itself had lasted, but between 1942 and 1954 it also imposed even more severe rationing of certain foodstuffs in its "dominion" states to force an artificial "surplus" which could be imported into Britain and keep even the meagre rations allowed to individuals available for purchase (New Zealand butter being a sore case in point and which led to several parliamentary debates regarding the nature of Britain's sovereignty itself over these countries and its power to deprive dominion citizens of essential foodstuffs to the benefit of "mainland" Britons).

I'm never quite sure about the true nature of Britain's relationship with her dominions during and after WW2 as there are as many elements of the "tail wagging the dog" as visa versa. On one hand, as you say, it seems the mother country was able to enforce its will to such an extent that housewives in Australia and New Zealand went without to the benefit of their counterparts in Britain (despite the pricipal need for rationing being the Atlantic U-boat blockade that was starving Britain - there were certainly few threats to food supplies in the Antipodes). On the other hand the dominions "freely" gave the UK extensive financial loans, for which they were energetic in getting prompt repayment, with interest, immediately after the war.

Post-war Britain certainly retained a degree of imperial delusion. Even while she was rapidly, perhaps too rapidly, divesting herself of India - as much because maintaining India was costing too much, than for satisfying local aspirations for independence - many British politicians, with the vocal support of the RN amongst others, were pushing for a new overseas empire in Africa, with grand plans for a new fleet of aircraft carriers, to be called HMS Kenya, HMS Uganda, HMS Rhodesia etc. Needless to say these grandiose plans all came to naught ... rather in the immediate post war years Britain flogged off her carriers to anyone that might buy them, and scrapped or moth-balled the majority of the rest of the fleet. (Russia was at the same time, 1945-1949, massively expanding its fleet).

Germany of course had no empire to worry about and any old imperial ideas were well and truely quashed post-war. But France retained the vestiges of her empire and was prepared to fight several wars to try and retain them, so it can't be all about spending Marshall Aid on trying to retain the trappings of empire.

Trike wrote:
don't know how much it cost, but a chunk of the US money must have gone to setting up the NHS and other elements of the Welfare State. Also there was the nationalisation of major industries and the New Towns Act of 1946 for  post war rehousing.

Yes, the 1945-1951 Labour government very much capitalised on the post-war optimism ("we've won the war, let's win the peace") of a population that had in wartime largely rallied round and worked for the common good. I do wonder whether the continuation of rationing was not so much through necessity (in short it wasn't really necessary) but as a form of social engineering. The Labour government were keen that prices should be maintained at a low level and that the wealthy should not be allowed to procure a larger share than the poor. Was rationing left to continue on this basis, ignoring the wider economic harm it was doing?

Also I suppose the almost complete destruction of German industry was an advantage as it had to be completely rebuilt from scratch. Certainly in the German steel industry I know that considerable resources were put into research and the development of new technologies. And with these advances came the need to change working methods and practices. By contrast in Britain, especially under the socialist policies of the Labour government, the unions regained their strength and tended to obstruct the introduction of newer technologies ... and they continued to do so under the following Conservative government, by which time German industry was already pulling ahead.
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PostSubject: Re: Post WW2 Britain & Europe - austerity, rationing & reconstruction   Wed 11 Oct 2017, 12:15

@Meles meles wrote:
The Labour government were keen that prices should be maintained at a low level and that the wealthy should not be allowed to procure a larger share than the poor. Was rationing left to continue on this basis, ignoring the wider economic harm it was doing?

A hypothesis I have read before - the little Marxist Party based in Exchequer Street in Dublin back in the 1970s (total membership probably about three sods) certainly seemed to think so according to their badly stenciled literature, as I recall.

I still reckon it was ineptitude more than anything else that dictated policy, engendered by the simple fact that there was no one authority within Britain which could, through unilateral executive directive, take the coordinated and drastic measures required to restore adequate supplies of even the most essential materials. A big part of that would have been a decision, taken much earlier and much more thoroughly than eventually occurred, to strip itself of its overseas colonies, the bulk of its armed forces, and go cap in hand to the Americans for a refill of the loan kitty which had been frittered away on much that simply accelerated industrial decline rather than helping it regain solvency. Instead it carried on, as you say, with a deluded sense of being still an empire, and an equally deluded notion that the nation's economy and infrastructure would somehow just "come right". Nationalisation and a concentration of investment in prestige industries, often scandalously wastefully, disguised the truth. Come the next great global economic squeeze, Britons learnt in the 1970s what others had already seen as evident in the 1950s regarding the country's industrial and economic prospects. They were bleak.

Exploiting unfair impositions on dominion citizens to keep the charade going at home was probably motivated by little else than a wish to get re-elected. Rationing was the number one issue for the vast majority of voters through four, if not five, general elections. And even in the aftermath of its official end in 1954, and in a country where there was nominal full employment, McMillan's famous exclamation was still met with hearty guffaws the length and breadth of the country.
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PostSubject: Re: Post WW2 Britain & Europe - austerity, rationing & reconstruction   Wed 11 Oct 2017, 12:54

Excerpt from The Strange Death of the British Motorcycle Industry;

Steve Koerner

note the phrase "segment retreat" to describe the demise.
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PostSubject: Re: Post WW2 Britain & Europe - austerity, rationing & reconstruction   Wed 11 Oct 2017, 13:05

Good article, Trike.

For another account of British industrial suicide read just about any history of the indigenous cheese industry between 1945 and the mid-1980s, what is now called "artisan" cheese and in full revival, but only after the tragedy's protagonist, the Milk Marketing Board, had effectively murdered it when it once had been the third highest grossing agrarian industry in the world at the outbreak of the war. It was only when the MMB itself was put out of its misery that the story eventually acquired the ending Aeschylus himself would have recommended (a glimmer of hope in the desolation caused by the hero's obtuseness).

It's a Greek tragedy, as anyone who remembers "government cheddar" in the late 1950s and early 1960s will surely testify.


Last edited by nordmann on Wed 11 Oct 2017, 13:54; edited 1 time in total (Reason for editing : Accidentally unsibilant Greek author)
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PostSubject: Re: Post WW2 Britain & Europe - austerity, rationing & reconstruction   Wed 11 Oct 2017, 13:23

From wiki (again), the after effects of the 1947 Winter:

Winter 1947 in the UK

The winter had a lasting effect on Britain's industry; by February 1947 it was already estimated that that year's industrial output would be down by 10 per cent. The effects of the March floods added a further £250–375 million (equivalent to £8.82–13.23 billion in 2015) in damage. Farming was particularly badly hit with cereal and potato harvests down 10 to 20 per cent on the previous two years. Sheep farmers lost one quarter of their flocks and it would be six years before sheep numbers recovered.

In Wales a disaster fund of £4,575,000 was partly allocated to assist farmers who lost about 4 million sheep.
The effects of the winter came at a time of heavy government spending with 15 per cent of the GDP being spent on the armed forces and large expenditure on the new National Health Service and post-war reconstruction. This made the currency less stable and, coupled with the emergence of the dollar as the currency of choice for foreign reserves, led the government to slash the Bretton Woods official exchange rate from $4.03 to $2.80. This was a major event in Britain's decline from superpower status. With the country struggling to feed its people at home and those it was responsible for in war-torn Europe, it also caused the US to take a greater interest in Europe and push through the Marshall Plan for assistance to Britain and the continent. In addition, the winter is cited as the reason for the emigration of thousands of British people, particularly to Australia. The winter as a whole was less cold than the winter of 1963 but more snow was recorded.
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PostSubject: Re: Post WW2 Britain & Europe - austerity, rationing & reconstruction   Wed 11 Oct 2017, 14:12

This link is to Amazon, with a "look inside" feature available:

Surrender: how British Industry gave up the ghost
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PostSubject: Re: Post WW2 Britain & Europe - austerity, rationing & reconstruction   Wed 11 Oct 2017, 20:06

Thanks for those links, Trike, about the decline of British industry.

But regarding the severe winter of 1946-47 .... those extreme conditions and the widespread flooding that eventually followed, also hit very hard, across the whole of northern Europe, causing power cuts, transport disruption, damage to infrastructure, food shortages and even outbreaks of civil unrest in the Netherlands and Germany. It wasn't just a British problem.
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PostSubject: Re: Post WW2 Britain & Europe - austerity, rationing & reconstruction   Thu 12 Oct 2017, 15:11

The Treaty (in French) signed by the Governments in exile of Belgium, the Netherlands and Luxemburg in London on the 5th September 1944, establishing the BENELUX customs union, later ratified post war;

Benelux
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PostSubject: Re: Post WW2 Britain & Europe - austerity, rationing & reconstruction   Thu 12 Oct 2017, 15:31

@Meles meles wrote:


But regarding the severe winter of 1946-47 .... those extreme conditions and the widespread flooding that eventually followed, also hit very hard, across the whole of northern Europe, causing power cuts, transport disruption, damage to infrastructure, food shortages and even outbreaks of civil unrest in the Netherlands and Germany. It wasn't just a British problem.

There's an article  here  about the situation in Germany over that winter.
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PostSubject: Re: Post WW2 Britain & Europe - austerity, rationing & reconstruction   Thu 12 Oct 2017, 20:38

@nordmann wrote:
Nationalisation and a concentration of investment in prestige industries, often scandalously wastefully, disguised the truth.

Aeronautical engineering being a case in point. Britain was way ahead of any other European country in this field at the time. When the Korean War broke out in 1950, the United Nations’ forces were shocked by the superb performance of the Soviet-built MiG-15 jet fighter. The engine of the MiG-15 was in fact an exact copy of a Rolls-Royce Nene engine which the Attlee government had bizarrely handed over to Stalin complete with blueprints in a seemingly one-way ‘trade’ deal only 4 years earlier. It was an example of the sort of ineptitude and profligacy which characterized the approach of so many of those charged with managing the British aviation industry during that era.

There were about 30 separate aircraft companies in the UK in what was then Britain’s largest manufacturing industry. Companies such as De Havilland, Gloster, Folland, Hunting, Avro, Handley Page, Supermarine, Bristol, Fairey, Vickers-Armstrongs, Blackburn, Hawker Siddeley, Auster, English Electric and Short Brothers employed (along with ancillary industries) around 1,000,000 people. These companies produced a dazzling array of cutting-edge military aircraft such as the Meteor, the Canberra, the Valiant, the Vulcan, the Vampire, the Venom, the Phantom, the Javelin, the Hunter, the Seahawk, the Seavixen, the Swift, the Scimitar and the Lightning. They also produced civilian airliners, often seminal jets and turbo-props such as the Comet, the Brabazon, the Viscount, the Britannia and the VC10.

The combined aeronautical industries of France, Italy and the Netherlands only amounted to a fraction of this, and although Germany undoubtedly had the expertise and the potential to rival Britain, defeat in the Second World War meant that their aeronautical sector was effectively dissolved. In Britain the brightest and best mechanical and electrical engineers were nearly all to be found in aviation. On the continent, however, and particularly in Germany these brains tended to go to other sectors and especially the automobile industry.
 
The initial design flaws of the Comet, the world’s first jet airliner which was unveiled in 1949, were infamously catastrophic. A seeming desperation to get the aircraft into service early (a desperation almost certainly driven by economic imperatives) had meant that the test-piloting of the Comet had not been as vigorous or as extensive as it might have been. Neither was the civilian aircraft industry helped by the state (long-haul) carrier BOAC which, despite having provided the specifications for aircraft such as the VC10, then chose to buy most of its aeroplanes from Boeing. None of these airliners (the Comet, the Brabazon, the Viscount, the Britannia or the VC10) was a genuine commercial success when compared to aircraft produced by the American companies Boeing and McDonnell Douglas.

When major RAF cutbacks began in the late 1950s and with civilian aircraft production not being able to fill the gap because of lack of orders, the British aeronautical industry soon became a shadow of its former self. It had been an excellent and indeed a fabulous asset (and still today in 2017 is the largest of its kind in Western Europe) but the story of its mismanagement during the ‘trente glorieuses’ is a sorry one indeed which was echoed in so many other sectors of the UK economy.
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