FREE Chapter from Homes For For Heroes

Economic Crisis 

1922–1930

Once British industry had resolved the initial problems of supply and had returned to peacetime production it was met with a boom in demand. There was an assumption amongst many that the country would shortly return to its traditional position of industrial supremacy. 

However, many factors had now changed and the signs were there long before the war. Competing nations had more modern and efficient production techniques and were quick to seize opportunities in both traditional heavy and the new light industries.

During the war Britain’s existing customers had sourced their supplies from elsewhere as production was switched to the war effort, and when the conflict ended many of them did not return. By 1920 demand began to drop especially in textiles, iron, steel, coal and shipbuilding. Economic growth stagnated and by 1921 there was deflation. As a result unemployment rose sharply to over 10% and remained fairly high through the rest of the decade. At the same time income tax had risen by over 30% since 1919. This was particularly cruel on many of the returning soldiers who were promised a ‘Land Fit for Heroes’ only to find themselves still stuck in poor housing and now without a job.

In the aftermath of the war there was little assistance beyond basic financial aid for those who had suffered as a result of the conflict or for the families of men who did not return. Even those who were fit and well often found themselves struggling with life in the slums, the effects of the flu epidemic and by the early 1920s, rising unemployment.

Looking to the private sector

In January 1921 the newspaper proprietor Lord Rothermere launched the Anti-Waste League, a political party which publicly campaigned against what they saw as inappropriate levels of government spending at a time of economic strife.

They particularly focused upon the high levels of income tax and the huge expenditure bill on the social housing scheme. As pressure grew, Lloyd George appointed Eric Geddes in August 1921 as chairman of a committee to see where cuts could be made. The report of the Committee on National Expenditure was published in the following year and the housing budget was severely cut back by what became known as the ‘Geddes Axe’.

The schemes planned under the Addison Act were slowly wound up. In October 1922 Lloyd George was ousted as Prime Minister and in the subsequent general election the Conservatives under Andrew Bonar Law won an overall majority, bringing an end to the wartime coalition government. The new government looked to the private sector to help reduce the housing shortage. Since 1915 rent restrictions had been in place which controlled the amount tenants could be charged, hence there had been little incentive for private builders to erect working class housing.

The removal of these restrictions would be a highly controversial move and instead the new Minister of Health, Neville Chamberlain, introduced the 1923 Housing Act in which subsidies were made available for the private sector to encourage them to tackle the problem.

It was envisaged that this would boost the supply such that within a couple of years rent restrictions could be lifted (they actually remained in place until 1933 and then in revised forms until the 1980s). There were subsidies available for continued local authority housing but they were much reduced and so councils were forced to cut back their planning ambitions and reduce the size of the houses built. In order to receive government funding, the maximum floor area of a two storey house was now 950 sq ft which had been a minimum size for many of the houses under the Addison Act. From now on the private sector would become more involved in providing housing for the working classes although not on the scale Chamberlain envisaged. Nor were the houses they built always to the same standard as those in the public sector as speculative builders would trim the dimensions and simplify the layout to reduce construction costs and maintain profits.

The Wheatley Housing Act 1924 

In May 1923 Prime Minister Bonar Law was diagnosed with cancer and immediately stepped down. His replacement as leader, Stanley Baldwin, sought a mandate for his position and went to the polls in December but his rash decision backfired and he lost the party’s majority.

In January the following year Labour under Ramsey MacDonald formed a new government. The new Minister of Health was John Wheatley and he immediately set about creating legislation to tackle the ongoing housing crisis. He sought a solution on a larger scale and longer term, looking not just at the financial support and cost of supplies but also improving training so that there would be a workforce able to step up the rate of construction.

The standard of the houses would maintain the quality set by the Addison Act but were of the reduced size established by Chamberlain, although Wheatley maintained that they would be ‘homes not hutches’. When the act was passed it put the emphasis back upon the public sector with subsidies in place to encourage local councils to build large scale working class estates again. The aim was to triple the rate of construction so that just under half a million houses would be built each year by the mid 1930s. 

Across the country existing projects received a boost and new ones were put in motion. The Conservative council in Liverpool had been at the forefront of municipal housing before the war and had built the most houses under the Addison Act.

Now, in the wake of the Wheatley Act they purchased over 600 acres on the edge of the city and began building the Norris Green Estate at such a rapid rate that it had a population of around 25,000 by 1930. 

In Wolverhampton the council began the construction of the Low Hill and Bushbury Estates with over 2,000 houses erected by 1927. Bristol’s authorities continued with their existing sites using the new legislation to construct just short of 10,000 homes by the mid 1930s. In London work on the huge Becontree Estate continued apace while other projects like the attractive Arts and Crafts inspired Dover House Estate in Putney were completed. 

London County Council and the local borough authorities however faced difficulties in housing families on the limited pockets of land available within the metropolis and so began to build blocks of flats as a solution. As the slums were cleared it was these brick-built five storey tenements which became a common sight around the capital.

The problems with the new estates 

Those homes fit for heroes which were erected in the 1920s may have been inspired by a need to reward returning soldiers and stave off the threat of revolution but it was quickly becoming apparent that only certain types of family were benefiting from them.

Despite the attempts to build houses more cheaply the low density planning, sturdy structures and spacious interiors made the completed homes relatively expensive to rent. In Leeds for instance, where there were still large swathes of compact back to backs which could be rented for as little as 5 shillings a week, the charge of over 15 shillings for an out of town council house was beyond many families. There were even big differences between the various council estates; in Poplar new houses could be rented for between 13 and 18 shillings a week while those built by the LCC out in the suburbs would cost another 5 shillings on top of that. 

The more compact houses built under the Wheatley Act were generally cheaper to rent than the earlier ones and those made from concrete or steel cheaper still. Despite this in most cases the new houses were only let to those who had a permanent skilled job, like teachers, shopkeepers, civil servants and transport workers.

Not only were these families most likely to pass the council’s stringent tests before a house would be allocated but they were the ones who could afford the higher rent. The country of birth of applicants could also influence the decision on who would be offered a new house or flat. In London the LCC gave preference to British families from 1923, while some borough councils even refused to offer ethnic minorities a new home altogether. 

Most families who moved out of cramped and unsanitary terraces into the new suburban cottages liked the space and features they found in their new homes. The bathrooms and flushing toilets which most houses had were especially appreciated. However there were problems. With their jobs back in the city centre many workers now had a long commute and had to find the money for trains or trams, adding more pressure to their weekly budget. 

The houses also came with strict rules on maintenance so took more time and money to heat, clean and keep the gardens trim. In the rush to build houses many of the planned facilities like shops, churches and community halls were not in place when families moved in. The local pub which had often been the centre of social life in the city was banned from many of these new suburban council estates. 

They also found that there was a less than warm welcome from some of the private housing nearby. In Downham, Kent a high wall topped with broken glass was built across the road linking the new council estate to Bromley to prevent its residents passing through the neighbouring private estate! Hence families could find their new homes lonely and often felt cut off from the tight knit community back in the slums where everything they needed was just around the corner. It was not unusual for some to pack up their belongings and move back to their old terraced homes which were significantly cheaper and where they would be surrounded by familiar faces. 

Despite the problems with the new estates and the state of the economy the rate of building new homes did increase. Under the Wheatley Act around half a million new homes were built and the concept and financial support of councilprovided housing became more embedded.

The Labour-led coalition only lasted until the end of 1924 but Chamberlain, who was restored to the position of Minister of Health in the new Conservative government, maintained the rate of progress. When Labour won the election in 1929 John Wheatley, having fallen out with the leadership over the General Strike three years earlier, was not offered a position and died the following year. He did not live to see the subsidies he introduced be abolished in 1933 as in the wake of a faltering economy and rising unemployment it was viewed as too expensive.

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