It has been indicated thus far that the development of an active fiscal policy during the first post-war decade, in terms of a commitment to rising expenditure on works programmes for the sake of creating jobs, was extremely limited. Few of the public works undertaken were ever destined to achieve a substantial reduction in unemployment. They were developed in the early years of the post-war slump purely as emergency measures, necessary to allay social unrest and to ease the strain on both the Poor Law and the revamped unemployment insurance scheme. For the remainder of the decade, governments – whether Labour or Conservative – strove purposely to reduce their commitment to such activity to the shortest period compatible with efficiency and economy, preferring instead to await a substantial reduction in industrial costs and the revivial of normal trade.

Demands for increased public works expenditure violated the contemporary dictates of ‘sound finance’, themselves an embodiment of the Victorian principle that central government accounts should be balanced at the lowest possible level. Money, it was thought, was best left to ‘fructify in the pockets of the people’. It was generally believed that government should aim for a small Budget and for an ex post surplus sufficient to permit redemption of the national debt on a regular basis, whatever the state of the economy.