The growth of manufacturing protection in 1920s Britain
| DOI | http://doi.org/10.1111/sjpe.12223 |
| Date | 01 November 2019 |
| Published date | 01 November 2019 |
| Author | Brian D. Varian |
THE GROWTH OF MANUFACTURING
PROTECTION IN 1920S BRITAIN
Brian D. Varian*
ABSTRACT
Prior to the Import Duties Act of 1932, an assortment of legislation expanded
the scope of manufacturing protection in Britain. This article assesses the magni-
tude of manufacturing protection before the Import Duties Act and finds that, in
1930, 9% of net manufacturing output occurred in a protected industry. In the
late 1920s, protected industries exhibited above-average growth in labour pro-
ductivity. However, protection was disproportionately extended to newer manu-
facturing industries, which presented greater potential for productivity growth.
This article concludes that protection did not enhance productivity growth in Bri-
tain’s manufacturing industries in the late 1920s.
II
NTRODUCTION
The Import Duties Act of 1932 imposed a tariff of at least 10% on almost all
manufactured imports (Sebag-Montefiore, 1943, pp. 22–6).
1
Quite appropri-
ately, economic historians have regarded the Import Duties Act as a water-
shed in Britain’s trade policy, with Capie (1978, p. 399) going so far as to
claim that the Act ‘ended almost eighty years of more or less complete free
trade’. Yet, it should be recognized that the Act was preceded by a variety of
legislation that incrementally extended tariff protection to several of Britain’s
manufacturing industries, beginning during the First World War and continu-
ing through the 1920s. In a recent article, de Bromhead et al. (2019, p. 331)
acknowledged the protective legislation of the 1920s, but asserted that
‘Notwithstanding these departures from nineteenth century practice, British
trade policy remained predominantly liberal until 1930’. Is it possible that eco-
nomic historians have advanced a narrative too dismissive of the protection
that came before the Import Duties Act?
The actual magnitude of protection in 1920s Britain has been obscured by
the piecemeal manner in which the legislation was enacted (and re-enacted, in
*Swansea University
1
The Import Duties Act, which became effective in March 1932, imposed a general tariff
of 10%. The Act also created the Import Duties Advisory Committee which was authorized
to recommend that the Treasury order additional import duties on certain commodities. The
first and most substantial Treasury Order for additional duties was issued in April 1932.
Scottish Journal of Political Economy, DOI: 10.1111/sjpe.12223, Vol. 66, No. 5, November 2019
©2019 Scottish Economic Society.
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