ABSTRACT
War tested Britain’s ability to mobilise its economic resources for a long, draining and expensive national effort. The Emergency Powers (Defence) Act of August 1939 was the first in a series of measures which enabled the government to intervene in the economy on an unprecedented scale. As the war progressed an extensive network of economic controls was established, covering almost every aspect of supply, production and trade. The machinery of government was redesigned to administer these controls (Hancock and Gowing 1949; Chester 1951) and some fifty economists were recruited into Whitehall to act as advisers (Cairncross 1995:20). In the ‘phoney war’ there had been some reluctance to exploit these powers to the full: Chamberlain’s government was ideologically opposed to extensive state intervention in the economy; it feared that a rapid mobilisation of resources for war production would have damaging economic consequences, and mutual suspicion between government and trade unions meant that imaginative manpower policies were rejected as unlikely to work. Therefore, although there was some departure from pre-war orthodoxy before May 1940, the most significant developments in the mobilisation of the war economy came after Hitler’s attack on the west and the setting up of Churchill’s wartime coalition. This chapter will assess the main measures used to gear the economy for war, the performance of Britain’s wartime economic effort and the legacy of the conflict for the post-war economy.
