Y, Nihil novum sub sole
que sera Geddes Axe, a ver, Axe, hacha, a quien le cortaron la cabeza, ah
Geddes Axe: a brief explanation
The cuts that an incoming Conservative government will need to make will be
the most severe since the 1920s, when the Geddes Axe was wielded. Harry
Wallop explains why this 1922 policy still casts such a long shadow over
politicians and economists.
After the First World War, Britain was gripped by enormous debts and a growing
sense of panic that the Government was hugely wasteful.
The national debt had risen dramatically from £677 million, about a quarter of
the GDP, in 1910. By 1920 it was £7.81 billion, larger even than the
country's GDP. A vast civil service, that had come together to administer
the war effort, was still operating at full capacity, while spending on
education had increased substantially. Many of the middle classes complained
how their tax bills had shot up.
The Government was under pressure to do something. The Times newspaper noted
in 1922: "There are signs of an astonished realisation of the alarming
bill for civil pensions that in a few years will be a millstone on the
taxpayer's neck."
The Anti-Waste League, formed by Lord Rothermere, had put up candidates and
won three by-elections during 1921.
Observemos el termino, Anti-Waste league
y que paso?
It highlighted waste in all areas of public spending, including details such
as there being a ratio of one cleaner for every vehicle in the Army.
Between 1921 and 1922 it recommended economies totalling £87 million, about 10
per cent of the country's entire GDP.
Though the cabinet only agreed to £52 million of cuts, these were enormous for
the time and in the end, total cuts were larger than either of these
figures. He was hailed a "superman" by one leading businessman,
but the axe hit some people very hard and led to a large reduction in social
benefits, particularly secondary education.
The biggest cuts were in the Army and Navy. The defence budget was cut by 42
per cent in the space of one year. But other workers were hit too.
Civil Service numbers were cut by 35 per cent - mostly female staff hired
during the war.
At the close of 1921, wage cuts averaging 8 shillings a week had been imposed
on 6 million workers. This equates to a £58 fall in today's money and led to
growing anger against the government.
Como siempre
The cuts were driven by a Treasury desperate to keep a control of its debts,
but they partly caused Britain's woes in the 1920s – a period of far greater
economic trouble for the country than it ever experienced during the 1930s.
The General Strike in 1926 can, in part, be explained by the mounting
resentment caused by the cuts, though some ecomonists argue it helped
Britain exit the vicious recession of 1919 to 1921 quicker than it might
otherwise have done.
The Geddes Act, introduced by one of the great Liberal administrations,
ironically gave impetus to burgeoning Labour Party. The number of seats it
held rose from 59 in 1918 to 142 in 1922, reflecting a new coalition across
class lines. It went on to form its first administration in 1924.
Original
http://www.telegraph.co.uk/news/election-2010/7640349/Geddes-Axe-a-brief-explanation.html