BRITAIN’S CENTURY OF BOOM AND BUST
Energy prices are rocketing. Other costs of living are soaring too. For the first time in decades, inflation is a pressing political issue. This has prompted suggestions that Britain is “going back to the 1970s”.
But is it? What does that dread phrase actually signify? To find out, we need to look further back, to trace the political impact of inflation – and the fear of inflation – since the advent of British mass democracy.
Just over 100 years ago, industrial workers came home from the First World War, expecting their sacrifices to be rewarded. For the first time, all working men now had the vote. The prime minister, David Lloyd George, maintained high taxes into peacetime, promising “homes fit for heroes”.
Meanwhile, as pent-up demand for long-unavailable goods was suddenly unleashed, the economy boomed. Prices in 1920 were up 250 per cent on those in 1913. Newly powerful trade unions led successful strikes to ensure workers’ pay was kept abreast with inflation. Even the Liverpool police went on strike – and Lloyd George intervened to secure their raise.
The thriller-writer E Phillips Oppenheim was aghast. In October 1919, he complained in the that “Labour today has only to open its mouth and it receives practically what it asks for.” Meanwhile, professionals such as himself, groaning under high taxes and rising prices, could
