Economic policies of the National Government

Financial policy
1. aimed to balance the budget and limit government spending to match government income
2. Made a 10% cut in unemployment benefit and introduced a 'means test'
  1. Means test
    1. introduced in 1931
    2. the unemployed who had exhauseted their insurance benefits could apply for the dole
      1. the means test took into account the income of other family members
3. implemented cuts in wages of public employees
4. aimed to keep the values of the pound stable by intervening in currency markets
5. lowered interest rates to 2% in 1932
  1. made cheap money avaliable to borrowers
Trade policy
1. set up 'sterling area', using the pound instead of gold to settle trading accounts
2. import duties act 1932
  1. imposed tariffs to protect british industry and agriculture with exemptions for empire countries
3. agreed a form of imperial tariff system at Ottawa Conference 1932
4. made trade treaties with various countries, allowing a quota for their imports into britain for a similar quota for british exports
Industrial policy
1. Special Areas Act 1934
  1. provided government aid to the most depressed areas
2. Cotton Industry Act 1936
  1. closed down non-profitable mills
  2. reduce surplus capacity in the industry
3. British Shipping Act 1934
  1. provided loans to scrap older ships and build new ones
4. North Atlantic Shipping Act 1934
  1. provided loans to help build the atlantic liner 'Queen Mary'
5. set up marketing boards for milk, bacon and potatoes, providing guaranteed prices for farmers
6. provided government subsidies for livestock farmers and sugar beet growers

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Economic policies of the National Government

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