In February 1932 Britain imposed a General Tariff of 10 per cent ad valorem on imports from foreign countries. This represented a qualitative policy shift that affected most British industries which had been exposed to severe international competition in a world economy that was increasingly protectionist since the late 1870s. This book analyses the effects of this policy change both at the macroeconomic level and at the level of the industrial structure.

Britain's economic situation after the First World War

The performance of the British economy in the 1920s was unspectacular when compared to the achievements of the world economy. Although aggregate growth indicators show an improved performance between the cycle peak to peak years 1924–9, relative to the period 1899–1924, such measures are highly deceptive when reported in isolation. In chapter 1 we argue that such growth measures need to be placed in a long-term historical perspective. Such longer-run comparisons do not show the 1920s to be a period of rapid economic growth. Moreover, the economy was burdened with high unemployment throughout 1921–9, while many other industrial countries were able to grow more rapidly at higher levels of capacity utilisation; the manufacturing sector's performance, both in terms of output and productivity growth, was significantly lower than the 1930s; exports were below the level of 1913 even at the peak of 1929, while imports were rising as a percentage of GDP and domestic absorption.