Scotland – The Relatively Good Years – 1880 -1914
Between 1880 and 1914, Scotland’s relative position within the United Kingdom was improving. Before World War One, Scotland was, first of all, one of the high growth and high employment regions of the United Kingdom.
In 1913 Scotland’s unemployment rate was only 1.8% (of the insured, labour force) contrasted with 8.7% (in London). Coal output rose from 12.4% to 14.8%, Steel from 14.8% to 20.8% , and shipbuilding retained a third share of UK output.
Scotland’s more open economy – with indigenous control linked to a greater predominance of family firms, (as opposed to joint stock companies) offered limited opportunities for mergers, amalgamations and monopolies.
The Scottish business system still bore the signs of its origins in small family enterprises. Although the period from the 1890’s to the First World War involved numerous company amalgamations, the new combines differed only a little from their predecessors.
Amalgamations involved the fusion of independent family concerns into a holding structure in which there was little reorganisation at the technical or financial levels …Many dominant firms were either family firms, which had adopted the joint stock form concerns which had grown up on the basis of old family firms, or groups of family firms held together through a holding company. Only in the case of the railways and some newer firms in oil and electricity was the family principle not to be found. (Scott & Hughes: Anatomy of a Scottish Capital)
If wages did not match United Kingdom averages, they were rising faster than in the rest of Britain. And while Scotland’s social problems were immense (for example, one half of Scots lived in one or two roomed houses) there were signs of social improvement, such as in the fall in infant mortality rates between 1871 and 1911. The Scottish Infant Mortality rate was actually below that of England and Wales.
If there were symptoms of a deeper malaise affecting the industrial economy, as the severity of the 1906-1908 recession indicated, and if Scotland was both overdependent on a small group of stable industries and suffering because of a high level of capital exported abroad (in preference to reinvestment in the home economy), it was still possible for politicians to argue that Scotland’s economic difficulties were temporary and that the dominant trend was one of improvement. (The Search for Wealth and Stability, I Levitt), ( The Scottish Poor Law and Unemployment, T Snout).
These economic and social characteristics helped to determine political attitudes. Middle class support veered towards Conservatism after 1886 and working class voters became dependent on Liberalism, the Liberals were after all a party of all Scotland rural and industrial.
Their support owed little to their political organisation or the representativeness of their candidates (in 1910, of fifty-nine Liberal MP’s, twenty-five were lawyers, none were working men and many were Englishmen).
Rather the resilience of Liberalism owed more to the relevance of the Liberal philosophy, as demonstrated by the appeal of the social and economic views posted by Gladstone in his Midlothian speeches, as early as 1879. (The Scottish MP since 1910 : His background and performance, C Larner)
The Impact on Scottish Society of the First World War – The Development of the One World Economy and Associated Politics
By the late nineteen twenties, Scotland was a very different kind of economy and society. First, Scotland’s economic base was contracting. The striking feature of the inter-war years, in contrast with the late nineteenth century was the persistently wide margin of unemployed resources.
Scotland’s share of British output fell from 11.8% in 1907 to 10.5% in 1924 and only 8.8% in 1935 ), and with around 10% of the British labour force, Scotland had nearly 15% of British unemployment throughout the inter-war years, with an estimated three fifths of the workforce experiencing at least one period of unemployment during the 1920’s .
The most striking problems were in the staple industries – agriculture, mining, steel, engineering and textiles – which had formed the basis of Scotland’s industrial progress before 1914. While in 1907, they represented more than half (53%) of all output, by 1924 they accounted for only 48% and by 1935 only 39% of output (Depression and Recovery – British Economic Growth, 1919-1939, B Alford), (No Gods and Precious Few Heroes, C Harvie), (The Impact of Unemployment on the Development of Trade Unionism in Scotland, E Kebblewhite).
The Performance of Scotland’s Basic Industries, 1911-1929
M Tons Coal Iron Steel Shipbuilding
1911-13 22.7 1.32 1.3 676.0
1918-20 17.1 0.97 1.8 617.2
1927-29 16.8 0.61 1.3 544.3
The foregoing table illustrates the difficulties faced by coal, iron and steel and shipbuilding after the war. As early as 1921, officials in the Scottish Office realised that Scotland’s economic problems were permanent, rather than temporary. Diagnosing a picture of unrelieved blackness a confidential report remarked:
“The main belt of severe unemployment and accompanying distress runs through the mining, steel and shipbuilding areas of Fife, Edinburgh, Stirling, Linlithgow, Lanark, Dumbarton, Renfrew and Ayr … It is difficult to pick out any industrial occupation as being principally affected by unemployment, almost all are in bad condition.”
The report suggested that those engaged in export trade and the means of export were worse off than those engaged in home trade, while only certain luxury services were remarkably vigorous. It added that an estimated 25,000 miners were in excess of capacity of the mines for for years to come.
More than 400,000 Scots left the country during the nineteen twenties. It was a group that contained a disproportionate number of lower middle class and skilled manual workers. Throughout the period of the inter-war years unemployment was never less than 10%. And the numbers in metal industries and mining fell dramatically between the 1921 and 1931 censuses, by 23% and 18% respectively.
Shipbuilding, whose Clyde output had fallen-four fold between 1920 and 1923 employed 100,000 workers in 1920 but only 50,000 in 1925 and only 10,000 in 1932.
Scotland’s economy was becoming increasingly corporate in its organisation. Three trends stand out in the inter-war years, “economic concentration, anglicisation (Englishing) of control and the growth of government regulation”.
By 1923, mergers had brought three of Scotland’s seven banks into the hands of English banks. The vertical cartellisation of shipping, shipbuilding and steel production through company amalgamations resulted in Colville’s becoming a centre for steel, shipbuilding and shipping interests in the West of Scotland. This development was also closely associated with the rise of Lithgow in shipbuilding and together these firms became the pivot of Scottish heavy industry.
In whisky distillers, in brewing Scottish Brewers, and in textiles Jute industries, (with Coats and Linen Threads) became dominant, and the rail companies became part of London dominated cartels. Expansion of these companies tended to occur through the direct acquisition of other companies rather than through the older holder company form.
Monopolization in each of the major industrial sectors was producing the large corporations of the modern period.
Generally, the twenties saw little redistribution of income between rich and poor. What redistribution in wealth which did take place in the period was within the top fifth of the population and not from rich to poor. Scottish infant mortality was higher than in England and Wales. And it was outward mobility through emigration more so than upward mobility through education that did most to lessen the potential tensions in Scottish society.
The Labour Party and political change in Scotland 1918-1929 : the politics of five elections. Gordon Brown (https://www.era.lib.ed.ac.uk/handle/1842/7136 )