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placate labour and voters in 1937 by introducing a new tax, national
defence contribution (NDC), to be levied on any increase in pro¬ts.
However, NDC as originally proposed would have hit ¬rms that
were recovering after being severely affected by the depression, and
Chamberlain gave way to business protests and changed it to a straight

114
Peden, British Rearmament, pp. 169“71, 175.
115
DPR(DR)C minutes, 13 Jan. 1936 and DPR (DR) 8, memorandum by Weir, 27 Jan.
1936, CAB 16/123, TNA.
116
R. A. C. Parker, ˜British rearmament 1936“9: Treasury, trade unions and skilled
labour™, English Historical Review, 96 (1981), 306“43.
Retrenchment and rearmament 143

5 per cent tax on all pro¬ts.117 Robert Shay has described pro¬teering as
the ¬nal manifestation of the breakdown of co-operation between
government and industry.118 However, he overstates the problem.
The inter-service Contracts Co-ordinating Committee recommended a
maximum pro¬t of 15 per cent on capital employed in defence contracts,
and the aircraft industry™s average pro¬ts were 10 per cent in 1936 and 20
per cent in 1937. Under pressure of parliamentary criticism, the aircraft
industry agreed to forgo a third of their forecast pro¬ts for 1939, to bring
them down to 14 to 15 per cent. On the other hand, average pro¬ts on
War Of¬ce contracts in 1937 and again in 1943 were estimated at about
10 per cent on capital employed. The highest pro¬ts appear to have been
made on naval contracts: 27 per cent on cost between 1936 and 1939.
Insofar as increasing pro¬ts re¬‚ected increasing ef¬ciency “ and this
appears to have been the case at least in the aircraft industry “ the nation
bene¬ted from having increased production from scarce resources.119
Shay believes that the government should have taken powers to
oversee the management of industry to expedite the changeover of pro-
duction from older to newer armaments, and to introduce the most
productive organisational methods. He noted that Chamberlain was
reluctant to incur the opposition of the Federation of British Industries,
and preferred to ask for the resignation of ministers: Swinton from the
Air Ministry in May 1938 and Inskip in January 1939, when they became
convinced of the need for government controls.120 Shay appears to see
government as a potential deus ex machina for industrial problems, but
civil servants lacked the necessary skills to operate controls without the
wholehearted co-operation of businessmen. Departments like the Board
of Trade and the Ministry of Supply delegated many of their responsi-
bilities to business organisations both before and during the war.121
To argue thus is not to say that nothing could have been done. Clearly
there were ways in which government controls could have transferred
capital and labour to rearmament. For example, private funds could
have been released to purchase government bonds, and the shortage of
building labour could have been eased, if the government had taken
action to curb the speculative house-building boom of the 1930s. The
Ministry of Labour advised in the summer of 1936 that, as things stood,
117
Daunton, Just Taxes, pp. 172“3.
118
Robert P. Shay, British Rearmament in the Thirties: Politics and Pro¬ts (Princeton
University Press, 1977), p. 290.
119
G. C. Peden, ˜Arms, government and businessmen, 1935“1945™, in John Turner (ed.),
Businessmen and Politics: Studies of Business Activity in British Politics, 1900“1945
(London: Heinemann, 1984), pp. 130“45, at pp. 139“41.
120
Shay, British Rearmament, pp. 291“2.
121
Peden, ˜Arms, government and businessmen™.
144 Arms, economics and British strategy

the shortage of building labour could be expected to be serious for at
least eighteen months (an accurate forecast: the boom broke at the end
of 1937). Nevertheless, nothing was done, apart from administrative
action to curb local authority building. It seems that ministers did not
wish to offend middle-class voters. In July 1939, when war was still not
certain, but the scale of rearmament was rapidly mounting, the Treasury
recommended measures to control building society loans, bank advan-
ces, new issues on the stock exchange and company dividends, to ensure
that the government could continue to borrow without in¬‚ation. The
Treasury™s conversion to controls that would normally be anathema to it
re¬‚ected the extent to which it had lost control of the growth of defence
expenditure and was having to ¬nd new ways in which to preserve the
˜fourth arm™ of economic stability.122
By 1939 British armaments production matched that of Germany in
important respects. Monthly aircraft production overtook that of Ger-
many in September. More surprisingly, British monthly tank production
was higher than German tank production in August 1939.123 It is
tempting to argue that if British rearmament had begun earlier “ if
Chamberlain had agreed to borrowing for defence in 1934 instead of
1935 “ matters would have been very different in 1938 and 1939.
Historians are not alone in exercising hindsight. Bridges, who had been
the of¬cial in charge of the Treasury™s division supervising defence
expenditure before he succeeded Hankey as Cabinet Secretary in
August 1938, remarked in December 1938 that there was nothing much
wrong with the scale of Britain™s preparations, but ˜I wish we had started
rearming a year earlier™.124 Sir Roger Backhouse, newly appointed ¬rst
sea lord in November 1938, took the view that it had been a great
misfortune that rearmament had not started two years earlier; ˜even one
year would have made a great difference™.125 That was true of building
warships that were not limited by treaty, of reconstruction of capital
ships, and of stores, such as reserves of oil for the main ¬‚eet™s movement
to Singapore. However, as noted in previous sections, not all modern
armaments were available for production earlier than 1938“9, the most
important examples being monoplane ¬ghters and tanks larger than
light tanks. The question of what armaments were to be produced was
also determined in part by strategy, and it is to strategy, and its inter-
actions with economic considerations, that we now turn.

122
Peden, British Rearmament, pp. 83“4, 100“3.
123
Postan, British War Production, pp. 56, 107, 109“10, 471, 484.
124
Chief of Staff: The Diaries of Lieutenant-General Sir Henry Pownall, ed. Brian Bond,
2 vols. (London: Leo Cooper, 1972“74), vol. I: 1933“1940, p. 175.
125
Backhouse to Vice-Admiral G. H. D™O Lyon, 21 Nov. 1938, ADM 205/2, TNA.
Retrenchment and rearmament 145

Grand strategy
Victory in the First World War left Britain, for a time, without any
obvious enemy against whom to prepare. The Air Staff cultivated
politicians™ fears about air warfare, but until after Hitler came to power
the only air force within striking distance of Britain was the French
´
Armee de l™Air. In CID discussions on ˜the continental air menace™ in
1922 Lloyd George did mention the possibility that French air super-
iority might weaken British diplomacy, but France was unlikely to allow
relations with Britain to deteriorate to a point that would allow Germany
to denounce the Treaty of Versailles. The primary reason given for
creating what became known as the Home Defence Force in the United
Kingdom was to allow a strategic bombing force to be organised.126 A
force of ¬fty-two squadrons, including ¬ghters, reconnaissance and
army co-operation machines as well as bombers, was approved in 1923,
but once Anglo-French relations improved in 1925 there was no
urgency in completing it until it became known in 1934 that Germany
was secretly creating an air force. As for the British army, its plans were
laid on the basis of slow mobilisation to provide reinforcements for India
against the Soviet Union, until the DRC identi¬ed Germany as Britain™s
likely long-term enemy in 1934.
Naval strategy was based on protecting Britain™s world-wide interests.
The Admiralty™s aim in disarmament negotiations was to ensure that the
navy would have enough ships to protect British trade and the Empire™s
communications and territories, where these were exposed to seaborne
attack. Barnett and Paul Kennedy lament the loss of British naval
supremacy at Washington in 1921.127 However, the upper limits agreed
at Washington on total tonnage of capital ships and aircraft carriers, as
well as on the maximum size and armament of capital ships, aircraft
carriers and cruisers, enabled the Admiralty to achieve its aim at a cost
that Britain could afford. The Admiralty resisted American efforts to
extend the 5:5:3 ratio to cruisers, since it claimed that British cruiser
strength was determined by what was required to protect Britain™s
world-wide trade and communications. In 1921 the Admiralty said ¬fty
cruisers would be necessary; in 1927, at the Geneva conference, it
claimed seventy (contributing thereby to the failure of the conference);
in 1930, at the ¬rst London naval conference, it settled for ¬fty, on the
126
CID minutes, 5 July 1922, CAB 2/3; ˜Report of the Sub-Committee on Continental
Air Menace™, 26 Apr. 1922, CAB 3/3, TNA. See also John Ferris, ˜The theory of a
˜˜French air menace™™: Anglo-French relations and the British Home Defence Air
Force programmes of 1921“25™, Journal of Strategic Studies, 10 (1987), no. 1, 62“83.
127
Barnett, Collapse of British Power, pp. 270“2; Paul Kennedy, The Rise and Fall of British
Naval Mastery (London: Allen Lane, 1976), pp. 276“7.
146 Arms, economics and British strategy

grounds that it was unlikely to have more, given the large block of
cruisers built during the war that would be due to be scrapped in the
mid-1930s. The difference between the British and the Americans was
essentially technical: the British wanted adequate cruisers of 7,500 tons,
armed with 6-inch guns and costing £1,400,000, for trade protection
and enforcing blockade; the Americans, with less trade to protect but
with vast oceans to operate in, preferred 10,000-ton cruisers, with
8-inch guns and costing £2,200,000. The difference was resolved in
1930 by giving the British a higher tonnage, but fewer 10,000-ton
cruisers, than the Americans. A ratio of 10:10:7 was agreed for Britain,
the United States and Japan in cruisers and destroyers, provided the
Japanese, like the British, limited their number of larger cruisers. The
American navy was seen by the Admiralty as a yardstick, not as a
potential enemy.128
The Admiralty™s plans for a war with Japan evolved from 1919 to
1939 but all assumed that each navy would attempt to interrupt the
other country™s trade, and that Japan would be vulnerable to a distant
blockade, given her need to import food and raw materials, including
oil. A British ¬‚eet based at Singapore could defend British interests, and
Admiralty planners doubted whether the Japanese would risk their ¬‚eet
in what would be a long-range operation to attack the base there.
Indeed, until 1937 naval strategy aimed at using economic pressure or
operations against Japanese colonies to force the Japanese to accept
battle. Hong Kong was seen as a valuable forward base that should be
defended if possible, although not at the expense of the main base at
Singapore.129 The building of capital ships by Germany and Italy in the
late 1930s drastically changed the number of capital ships that could be
spared for the Far East. Down to 1939 it had been assumed that from
Britain™s ¬fteen capital ships a force could be sent to the Far East
roughly equal to Japan™s nine (ten once the Hiei, which had been
reduced after Washington to a training ship, had been reconverted to a
combat ship). In May 1939, however, Admiralty policy was altered to
sending only seven capital ships, and then only if Italy were neutral or
had been eliminated. Otherwise only four would go if the United States

128
O™Brien, British and American Naval Power, pp. 164“8, 173, 183, 193, 198, 210“13.
129
The key documents are the ˜Eastern war memorandum™ prepared by the Admiralty™s
Plans division in 1920 (ADM 116/3124) with subsequent revisions in 1923 (ADM
116/3124), 1924 (ADM 116/3125), 1931 (ADM 116/3118), 1933 (ADM 116/3475)
and 1937, with amendments to June 1939 (ADM 116/4393), TNA. For evolution of
Far Eastern strategy, see Christopher Bell, The Royal Navy, Seapower and Strategy
between the Wars (Basingstoke: Macmillan, 2000), pp. 49“98, and Andrew Field, Royal
Navy Strategy in the Far East 1919“1939: Planning for War against Japan (London:
Frank Cass, 2004).
Retrenchment and rearmament 147

were neutral, and only two if the United States were an ally.130 The
following month, Chat¬eld, now minister for co-ordination of defence,
challenged this policy, and a new assessment by the Chiefs of Staff
stated that seven capital ships could be sent to the Far East, once two
ships re¬tting in dock became available in August and September, if
the Mediterranean were to be abandoned. Allowing for the fact that
two other capital ships would still be re¬tting, only six would be
available in home waters against the Germans™ two battle-cruisers and
three pocket battleships.131 The dilemma with which strategists would
be presented in the Second World War had thus been set out
beforehand.
The army and air force were involved in planning for a Far Eastern
war only insofar as they were required to assist in the protection of the
Singapore naval base, especially while the main ¬‚eet was sailing from
European waters, a period assumed in 1921 to be 42 days. However,
in 1937 the period before relief was estimated to be 70 days, and in
July 1939 it was extended by the CID to 90 days. Moreover, whereas
the Air Staff had been keen between 1921 and 1934 to press the
merits of air power for the defence of Singapore, the air defence of the
United Kingdom took priority thereafter, and the number of RAF
aircraft stationed in Malaya was always smaller than the number that
could be carried aboard the Japanese navy™s aircraft carriers. The
nature of the problems of protecting Singapore was thus altering
dramatically in the 1930s owing to external factors. The same was true
of local factors. The seaward defences of Singapore depended upon
15-inch coastal guns, capable of sinking a capital ship, but the vul-
nerability of the landward approach changed over the inter-war period
owing to the development of the Malayan economy. In 1921“4 the
¬rst military studies of the possibility of Japanese troops landing in
Johore to attack Singapore from the landward side had suggested that
the combination of dense jungle and poor roads would make their
movements dif¬cult. However, the replacement of jungle by rubber
plantations, through which troops could move easily, had altered the
situation by the 1930s. Moreover, as a result of exercises in 1936“7, it
became apparent that the Japanese might land in the north of Malaya,
to establish air bases, before the main British ¬‚eet could arrive. The
scales of the army and air forces required to defend Malaya were thus

130
˜Naval policy in the event of Far Eastern war™, minute by Director of Plans, Captain
V. H. Danckwerts, 5 May 1939, enclosing revised memorandum, ADM 116/3863,
TNA.
131
˜The situation in the Far East™, COS 931, 24 June 1939, CAB 53/50, TNA.
148 Arms, economics and British strategy

increasing even as developments in Europe made adequate reinforce-
ment from Britain less likely.132
The most likely alternative sources of reinforcements for the Far East in
war-time were India and Australia. Down to the mid-1930s the Indian
army had been mainly concerned with internal security and with possible
Soviet threats to the North-West Frontier. However, from 1934 the War
Of¬ce and the Indian army began to think in terms of earmarking some
Indian units for service outside the sub-continent. The Indian army™s ˜Plan
M™ of 1935 envisaged sending one brigade to Singapore in sixteen to
eighteen days, provided the situation in India itself was favourable. In the
same year the crisis with Italy over its invasion of Abyssinia led to an Indian
brigade being earmarked for use in Egypt if necessary. By 1938 India had
accepted liabilities to provide a total of four infantry brigades and two
infantry battalions for emergencies in other parts of the Empire. Yet, as a
CID sub-committee reviewing Indian defence that year pointed out, the
British Government could have no certainty that India would be able to
ful¬l any of these commitments. India had achieved a degree of home rule
that enabled Indian politicians to oppose tax increases to pay for its armed
forces, and the modernisation of the Indian army that followed the CID
report and a further report by Chat¬eld in 1939 was made possible only by
British subsidies and a reorganisation of the Indian army that reduced its
size. India™s role as a source of reinforcement for both the Far East and the
Middle East was signalled by decisions in July 1939 to send one brigade
each to Singapore and Egypt prior to the outbreak of war.133
The independence of the dominions in regard to imperial defence had
been demonstrated in the Chanak crisis in 1922, when all except
New Zealand withheld unconditional support to Britain against Turkish
nationalist troops threatening British occupation forces at the Darda-
nelles. From that time the co-operation of the dominions could not be
taken for granted. As the Chiefs of Staff pointed out in 1930, the
dominions agreed that each part of the Empire was responsible for its
own local defence, but assumed that the United Kingdom would
shoulder most of the responsibility for defence of the Empire as a whole.
The Chiefs of Staff and the Treasury were at one in regarding as
absurd the need to make plans to send reinforcements from Britain to
Singapore, as these could be sent far more quickly from Australia.134 In

132
For the building of the Singapore naval base and for plans for its defence, see
Neidpath, Singapore Naval Base, esp. pp. 91“101, 125, 133, 153“62, 166“7.
133
John Rawson, ˜The role of India in Imperial defence beyond Indian frontiers and home
waters, 1919“39™, D. Phil. (Oxford, 1976), esp. pp. 199, 216, 250, 281, 316“17, 324“5, 352.
134
Chiefs of Staff to Prime Minister, 29 Oct. 1930 (copy in Chancellor of the Exchequer™s
Of¬ce), T 172/1700, TNA.
Retrenchment and rearmament 149
Table 3.7. Commonwealth navies in 1931 and 1939 (1931 ¬gures in brackets)

Capital ships Aircraft carriers Cruisers Destroyers

United Kingdom 15 (15) 7 (6) 56 (46) 174 (156)
Australia “ “ 6 (4) 5 (6)
New Zealand “ “ 2 (2) “
Canada “ “ “ 7 (4)

Sources: Jane™s Fighting Ships (1931 and 1939).

1934 Hankey undertook an Empire tour with a view to educating
dominion governments in the light of the DRC report, but found that
economic depression and tight budgets made it almost impossible for
them to ¬nd more money for defence.135 It was calculated that in 1937/
8 Britain spent ¬ve to six times as much per head of population on the
armed forces as the white populations of the dominions did. Even
Australia, the country most concerned with the Japanese danger, spent
only 1 per cent of its national income on defence in that year.136
Although the Empire depended upon seaborne communication the
dominions™ naval contributions were modest at best (table 3.7).
Between 1931 and 1939 the Australian navy took delivery of three
cruisers, transferring its sole, obsolescent, seaplane carrier to the Royal
Navy in part exchange, and the New Zealand navy replaced two old
cruisers with two new ones. The Canadian navy had no ships bigger
than destroyers. The largest ship in the South African navy was an
800-ton surveying vessel. At the Imperial Conference in 1937 the First
Lord of the Admiralty, Sir Samuel Hoare, recommended that the
dominions should consider carefully whether they were in a position to
build and maintain capital ships. The Admiralty calculated that, taking
maintenance into account, the overall cost of a capital ship only slightly
exceeded the cost of two large cruisers. However, although the
Dominions Secretary, Malcolm MacDonald, suggested in 1938 that
Australia might be asked to pay for a capital ship, in the same way as it
had done for the battle-cruiser HMS Australia before 1914, no
dominion did so.137 From an Australian or New Zealand point of view,
the question was: could the Royal Navy guarantee their coasts from
135
Roskill, Hankey, vol. III, pp. 121“40.
136
Peden, ˜Burden of imperial defence™, Historical Journal, 27 (1984), p. 416.
137
Extract from minutes of meeting of principal delegates at the Imperial Conference,
26 May 1937, reprinted in S. R. Ashton and S. E. Stockwell (eds.), British Documents
on the End of Empire: series A, vol. I: Imperial Policy and Colonial Practice, part 1:
Metropolitan Reorganisation, Defence and International Relations, Political Change and
Constitutional Reform (London: HMSO, 1996), pp. 116“19; Cabinet conclusions,
23 Feb. 1938, CAB 23/92, TNA.
150 Arms, economics and British strategy

attack? If not, these countries might do better to build up their ability to
meet such attacks with air and ground forces. In fact, persuaded by the
Admiralty, both Australia and New Zealand spent more on their navies
than on their armies and air forces.138
None of the dominion armies was trained or equipped to ¬ght the
troops of a ¬rst-class power at the outbreak of war. As late as April
1939 the incoming Labour government in Australia refused to imple-
ment its predecessor™s decision to create a small regular force of two
independent brigades, and in New Zealand the army estimates were
cut in 1937/8 to ¬nd room in the budget for more money for the navy
and air force. Australia could mobilise enough men from its militia for
two cavalry and four infantry divisions, three independent brigades and
two recently formed armoured car regiments, and New Zealand could
mobilise one division, but all of these units required further training
before they could be committed to a campaign. Canadian defence
policy gave ¬rst priority to the direct defence of Canada. Plans existed
for the mobilisation of two infantry divisions at the outbreak of war but
it was not until June 1940 that one of these was ready to be sent to
France. Prior to the war, South Africa™s small army was equipped
only for colonial warfare in Africa.139 British strategists, therefore, had
to regard dominion forces as potential extra assets which were not to
be taken into account in plans for what would happen at the outbreak
of war.
As table 3.8 shows, the pattern of defence expenditure down to 1935
re¬‚ected the predominance of the navy as the protector of British trade
and the Empire™s communications, with the army coming second as
the provider of imperial garrisons, and the air force a poor third. The
recommendations of the of¬cial Defence Requirements Sub-Committee
(DRC) on 28 February 1934, as drafted by Hankey, re¬‚ected and
reinforced this pattern. Although the report identi¬ed Germany as the
ultimate potential enemy, most of the de¬ciencies listed were in existing
programmes, and the most urgent recommendations were defensive
measures against Japan. As table 3.9 shows, the actual pattern of
expenditure from 1935 was quite different from that recommended by
the of¬cial DRC. The air force moved from having the smallest share of
expenditure to the largest share, overtaking the army in 1937/8 and the


138
John McCarthy, Australia and Imperial Defence 1918“39: A Study in Air and Sea Power
(St Lucia, Queensland: University of Queensland Press, 1976); W. David McIntyre,
New Zealand Prepares for War (University of Canterbury Press, 1988).
139
F. W. Perry, The Commonwealth Armies: Manpower and Organisation in the Two World
Wars (Manchester University Press, 1988), pp. 137“9, 160“4, 191“2.
Retrenchment and rearmament 151

Table 3.8. Expenditure by the defence departments, 1924/5“1939/40

(£™000)

Air Force Army Navy

1924/5 14,310 44,765 55,625
1925/6 15,470 44,250 59,657
1926/7 15,530 43,600 57,600
1927/8 15,150 44,150 58,140
1928/9 16,050 40,500 56,920
1929/30 16,750 40,500 55,750
1930/1 17,800 40,150 52,574
1931/2 17,700 38,520 51,060
1932/3 17,100 35,880 50,010
1933/4 16,780 37,592 53,500
1934/5 17,630 39,660 56,580
1935/6 27,496 44,647 64,806
1936/7 50,134 54,846 81,092
1937/8 82,290 77,877 101,950
1938/9 133,800 121,361 127,295
1939/40 294,834 242,438 181,771

Sources: Statistical Abstract for the United Kingdom for Each of the Fifteen Years
1924 to 1938 (Cmd 6232), PP 1939“40, x, 367; (for 1939/40 only) Shay, British
Rearmament, p. 297.


navy in 1938/9. These changes re¬‚ected a shift in priorities brought
about by fear of air attack, the theoretical danger mooted by Baldwin in
1932 having become a matter of urgency.
During the DRC™s discussions in January and February 1934, Fisher
and Vansittart had unsuccessfully urged the CAS, Ellington, to ask for
more than he did. The DRC report recommended ten additional
squadrons to complete the Home Defence scheme of ¬fty-two
squadrons of 1923; ten additional squadrons of aeroplanes and four of
¬‚ying boats for service in the Far East; and twenty additional squadrons
for the Fleet Air Arm (FAA). The report stated that a further twenty-¬ve
squadrons would be necessary to meet ˜all eventual requirements™, but it
did not consider these to be part of the ˜worst de¬ciencies™ to be
remedied by 1939, although they should be reconsidered if Germany
expanded her air force rapidly.140 When the report was considered by
ministers, Neville Chamberlain produced an alternative proposal for
thirty-eight additional squadrons instead of ten for the Home Defence

140
DRC minutes, 30 Jan., 16 Feb. and 26 Feb. 1934, and DRC report, paras. 28“9,
28 Feb. 1934, CAB 16/109, TNA.
152 Arms, economics and British strategy

Table 3.9. Distribution of expenditure by the defence services, 1933/4“1938/9

(per cent)

Financial year Air Force Army Navy

Defence Requirements Sub-committee Report, 1934
1934/5 14.9 37.7 47.5
1935/6 15.0 36.0 48.9
1936/7 15.8 35.1 49.1
1937/8 16.3 34.8 48.9
1938/9 16.1 34.6 49.3

Actual expenditure
1933/4 15.6 34.8 49.6
1934/5 15.5 34.9 49.7
1935/6 20.0 32.6 47.3
1936/7 26.9 29.5 43.6
1937/8 31.4 29.7 38.9
1938/9 35.0 31.7 33.3

Note: Because of rounding up or down, the ¬gures do not always sum to 100 per cent.
Sources: First DRC Report, 28 Feb. 1934, CAB 16/109, TNA; Statistical Abstract for the
United Kingdom (Cmd 6232), PP 1939“40, x, 367.


Force, but only three additional squadrons instead of ten for the Far East,
and with FAA requirements to be met by making Home and FAA
squadrons interchangeable. The source of these ideas was almost cer-
tainly Trenchard, who was advising the Permanent Secretary of the
Treasury, Fisher, at the time. A Cabinet sub-committee on the allocation
of air forces in July 1934 agreed with the Admiralty that FAA squadrons
had to be kept separate, but otherwise accepted Chamberlain™s view that
the RAF should be concentrated in the United Kingdom, recommending
thirty-three additional squadrons for the Home Defence Force, four for
the Far East, and four-and-a-half for the FAA.141
Chamberlain had intended to ¬nd the extra money for air force
expansion by cuts or delays in the army and navy programmes. In
particular, he thought that, while the naval base at Singapore must be
completed, it should be used for the time being only for submarines and
other light craft, and that plans for sending a ¬‚eet of capital ships there must
be postponed. Again he almost certainly got these ideas from Trenchard via
Fisher. As noted above, the Admiralty did not accept this reduction in
priority for the Far East until 1939. When the rearmament programme was

141
DCM (32) 120, 20 June 1934, CAB 27/511; CP 193 (34), 16 July 1934, CAB 27/514,
TNA. Andrew Boyle, Trenchard, Man of Vision (London: Collins, 1962), pp. 681“2.
Retrenchment and rearmament 153

drafted in the winter of 1935“6 the Admiralty recommended a two-power
standard, to match both Germany and Japan, without saying how many
capital ships this would require. In the event, although the two-power
standard was never formally sanctioned by the Cabinet, the Admiralty
proceeded to place orders for major warships as if it had. Industrial
capacity, not ¬nance, was the limiting factor.142
The War Of¬ce did not fare so well at Chamberlain™s hands in 1934.
The Chancellor secured a cut in the army™s DRC programme from
£40 million to £20 million, with the result that the army™s de¬ciencies
would take more than ¬ve years to repair.143 Again Trenchard™s in¬‚u-
ence can be seen in Treasury thinking. He advised Fisher that anti-
aircraft guns and searchlights south of the Wash and an expeditionary
force for securing continental air bases should rank alongside the Home
Defence air force and Singapore™s defences as ¬rst priorities among the
de¬ciencies to be made up. Chamberlain asked in a Cabinet committee
in May whether an expeditionary force could reach the Low Countries
in time to prevent them being overrun, and he seems to have been
impressed by the argument that possession of Belgian bases would place
the RAF as close to the Ruhr as German bombers would otherwise have
been to London. At any rate in June he said that, while priority should
be given to the RAF to deter Germany from going to war at all, the
United Kingdom could best be made secure by expanding the Home
Defence Force and anti-aircraft defences ¬rst, and then by equipping
the army to co-operate with allies in holding the Low Countries. He
justi¬ed the cut in the army™s DRC programme by saying that he did not
believe that Germany would be ready for war in 1939.144
When the army™s rearmament programme came to be considered by
ministers in January 1936, Weir advised that the army was the most
expensive way of helping allies. Professional soldiers cost more than
conscripts; the Territorial Army hardly existed, except on paper; the
Germans, starting from scratch, had got ahead on ¬eld artillery. The
army also took longer than the air force or navy to reach the scene of
action. Like Chamberlain, he wondered whether Germany could be
deterred by a powerful air force, in which case the army™s Field Force (as
the expeditionary force was then known) would not be needed.
Chamberlain noted that, of the three armed forces, the army would
make the largest demands on industry, and that an ˜offensive™, rather
than ˜defensive™, air force might be a more effective means of assisting

142
Peden, British Rearmament, pp. 114“16, 162“5.
143
Bond, British Military Policy, pp. 199“208.
144
Peden, British Rearmament, pp. 121“3.
154 Arms, economics and British strategy

the French if the Germans attempted to encircle their forti¬cations
in the ¬rst week of the war, before the Field Force could be dis-
embarked.145 Given what Weir had said about the impossibility of
carrying out the whole rearmament programme on time without semi-
war controls over industry, Chamberlain argued, some part of the
rearmament programme must be left out. He persuaded his Cabinet
colleagues that equipment for the Territorial Army™s twelve divisions
should be omitted, apart from what was required for training. Never-
theless, the Regular Army™s programme for equipment for four infantry
divisions, a mobile division and a tank brigade, with war reserves, was to
be completed, if possible, within ¬ve years.146
By October 1937 Chamberlain had read Liddell Hart™s Europe in Arms
and had recommended the book to Leslie Hore-Belisha, the secretary of
state for war, who was in any case in frequent communication with the
author. Liddell Hart™s thesis that British strategy in 1914“18 had been a
mistaken departure from a traditional British way of warfare based on
˜limited liability™ to European allies thus entered Whitehall at the highest
level.147 However, the Inskip review, which led to a change in the role of
the army in December 1937, was based on a report by the Chiefs of Staff
Sub-Committee on Planning for a War with Germany in February
1937. The report stated that economic pressure by naval blockade
would be a powerful, if slow, means of weakening Germany, and Inskip
drew the conclusion that she should be confronted with the risk of a long
war in which sea power would be decisive. Britain™s economic stability
would deter Germany, as would ability to repel an attempted knock-out
blow from the air.148 The key ¬gures who advised him when he
recommended that the Field Force should be prepared to meet the
military needs of the Empire, but not equipped on a scale necessary to
support allies in Europe, were Chat¬eld and Hankey. Chat¬eld was
chairman of the Chiefs of Staff Committee, as well as ¬rst sea lord, but
he did not operate through that committee when he advised Inskip on
this occasion. On 10 November Chat¬eld accepted the Treasury™s
argument that ever-growing defence programmes would lead to national

145
Memorandum by Lord Weir, 9 Jan. 1936, and DPR(DR)C minutes, 14 Jan. 1936,
CAB 16/123, TNA.
146
DPR(DR)C minutes, 13 Jan., 14 Jan., 16 Jan. and 27 Jan. 1936, CAB 16/123, TNA;
Chamberlain™s diary, NC 2/23A, 19 Jan. 1936, Birmingham University Library.
147
Basil Liddell Hart, Europe in Arms (London: Faber and Faber, 1937); Alex Danchev,
Alchemist of War: The Life of Basil Liddell Hart (London: Weidenfeld and Nicolson,
1998), pp. 187“94; Gat, History of Military Thought, pp. 725“7; R. J. Minney, The
Private Papers of Hore-Belisha (London: Collins, 1960), p. 54.
148
˜Planning for war with Germany™, DP (P) 2, 15 Feb. 1937, CAB 16/182, para. 115;
˜Defence expenditure in future years™, CP 316 (37), CAB 24/273, paras. 9“13, TNA.
Retrenchment and rearmament 155

bankruptcy, and he believed that Britain could not afford an army on the
scale that the War Of¬ce wanted as well as the navy and air force
essential for the security of the United Kingdom and the Empire. On 12
November a report by the Chiefs of Staff predicted that the German
army would be unlikely to be strong enough to attack the French and
Belgian frontier defences before 1939“40. Hankey, who did much of the
drafting of Inskip™s report, had always placed a high priority on the navy
and on imperial defence, and on 23 November he advised that the army
should no longer be prepared for service on the continent of Europe.
While the Treasury™s ˜fourth arm of defence™ argument led Inskip and
others to accept a need to impose ¬nancial limits on rearmament, the
consequent strategic priorities were determined outside the Treasury.149
Inskip™s interim report of 15 December 1937 stated that the corner-
stone of defence strategy must be the security of the United Kingdom,
where the Empire™s principal strengths in manpower and industrial
capacity lay. It was for this reason that he recommended that the ¬rst
and main effort should be directed to protection of the United Kingdom
against attack, and to preserving its trade routes. The defence of
Britain™s overseas territories and interests was less important than these
two objectives, since so long as the United Kingdom was secure ˜we may
hope in time to repair any losses or defeats suffered elsewhere™. Inskip
was unhappy about the recommendation that the objective of
co-operation in the defence of the territories of allies in war should be
provided for only after the ¬rst three had been met. His report noted
that, despite recent developments in air warfare and in mechanised
forces on land, there was no evidence that infantry would not be
required in a future war. He therefore warned his colleagues that they
should expect to be criticised if it proved later to be necessary to
improvise an army to assist France if she were in danger of being
overrun. Nevertheless, the Cabinet accepted his recommendation that
the War Of¬ce™s estimates should be prepared on the assumption that
the army™s primary roles were to be anti-aircraft defence of the United
Kingdom and imperial defence.150
Inskip™s second report of 8 February 1938, in ¬xing the defence
departments™ ¬nancial ˜rations™ for the next four years, mentioned that
the army was to be equipped for ˜an Eastern theatre™, claiming that this

149
˜Report by Chiefs of Staff Sub-Committee of the CID on comparison of the strength of
Great Britain with that of certain other nations as at January 1938™, Documents on
British Foreign Policy 1919“1939 (DBFP), 2nd series, vol. XIX (London: HMSO,
1982), p. 502; Peden, British Rearmament, pp. 137“8.
150
˜Defence expenditure in future years™, CP 316 (37), CAB 24/273, esp. paras. 41“4, 61,
72“5, 101, TNA.
156 Arms, economics and British strategy

role would make possible substantial reductions in the provision of tanks
and reserves of ammunition compared with what would be required for
European operations.151 The War Of¬ce took Egypt to be the most
probable eastern theatre. There had been a danger of war with Italy in
1935“6, and since the summer of 1937 the Chiefs of Staff had been
engaged in a major strategic appreciation on the Mediterranean and the
Middle East. The likelihood that control of the eastern Mediterranean
would be temporarily lost if Britain were engaged in war simultaneously
with Germany, Japan and Italy was accepted, but the Chiefs of Staff
agreed that the defence of Egypt was necessary both strategically, on
account of the Suez Canal, and to maintain Britain™s prestige in the
Middle East. It was envisaged that an armoured division and two
infantry divisions, with perhaps a third in reserve, would have to be sent
out from the United Kingdom within a month of the outbreak of hos-
tilities, and the Chiefs of Staff recommended that the garrison in Egypt
should be brought up to strength and should include a mobile force
capable of providing cover in the Western Desert until reinforcements
arrived.152 At the suggestion of the Chancellor of the Exchequer, now
Sir John Simon, the Cabinet decided that the Field Force should be
prepared ˜for general purposes™ rather than a particular campaign. This
decision enabled the Treasury to hold up War Of¬ce proposals that
would exceed what was required for a Field Force of one armoured
division and two infantry divisions, plus two infantry divisions to be
ready in forty days, plus a further two infantry divisions, which might be
Regular or Territorial, to be ready four months after the outbreak of
war. Further divisions, from the Territorial Army, would not be able to
take the ¬eld until after the eighth or tenth month of the war.153 In
March 1938 the army was able to put into the ¬eld only two infantry
divisions, both de¬cient in many kinds of equipment required for
modern warfare, including artillery.154 Inskip™s recommendation for the
army was ambitious in relation to what actually existed, and it allowed
for further re-equipment of the army with the available industrial
capacity. Apart from the new medium tank, which was only a paper
project in 1937, the development of the armoured vehicles designed for
European warfare was continued. Howard commented that Inskip had



151
˜Defence expenditure in future years: further report by the Minister for Co-ordination
of Defence™, CP 24 (38), 8 Feb. 1938, CAB 24/274, para. 15, TNA.
152
Steven Morewood, The British Defence of Egypt 1935“1940: Con¬‚ict and Crisis in the
Eastern Mediterranean (Abingdon, Oxon.: Frank Cass, 2005).
153
Peden, British Rearmament, pp. 143“4. 154 Ironside Diaries, pp. 53“4.
Retrenchment and rearmament 157

replaced a policy of limited liability in continental warfare with one of no
liability at all,155 but the new strategy was not irreversible.
The change in the European balance of power following the loss of the
Czech army of thirty-¬ve divisions after the Munich agreement made it
impossible to ignore French pressure for support on land in a future war.
The Chiefs of Staff recommended that the Field Force of four infantry
divisions, plus two armoured divisions each with six tank battalions
instead of the existing ˜mobile™ division of nine battalions, should be
equipped for a campaign on the European continent; that four Terri-
torial divisions should also be fully equipped so as to be ready to be sent
overseas as soon as their training was complete; and that a further eight
Territorial divisions should have enough equipment to enable them to
be trained for overseas service. When the role of the army was discussed
in Cabinet on 2 February 1939 Simon expressed his fear that the scale of
proposed increases from all three armed services would undermine
Britain™s ¬nancial strength, but the Foreign Secretary, Lord Halifax,
argued successfully that the present state of tension with Germany must
end soon in war or the destruction of the Nazi regime. When the War
Of¬ce™s proposals came before the Cabinet again on 22 February
Chamberlain said that he had come reluctantly to the conclusion that
there was no alternative to preparing the army for European operations.
The dates by which the ¬rst echelons, each of two infantry divisions, of
the Field Force were to be ready to embark were to be settled in staff
talks with the French, but the ¬rst of the two armoured divisions would
not be ready until mid-1940. Following the German occupation of the
rump of Czechoslovakia on 15 March 1939, volunteers ¬‚ocked to the
Territorial Army, and as an alternative to conscription its establishment
was doubled from thirteen to twenty-six divisions on 29 March. (Con-
scription followed anyway in April, partly to provide for permanent
manning of Britain™s anti-aircraft defences and partly to impress foreign
opinion.) The enlarged Territorial Army made it possible to promise
increased support for France and by mid-April the continental com-
mitment comprised four Regular infantry divisions to be despatched
within six weeks; the ¬rst ten Territorial divisions to be available in
the fourth, ¬fth and sixth months; and the last sixteen Territorial
divisions to be ready in the ninth to twelfth months.156 On the other
hand, the rapid increase in the number of divisions disrupted the
organisation of the Regular and Territorial armies only a few months

155
Howard, Continental Commitment, p. 117.
156
Cabinet conclusions, 2 Feb. and 22 Feb. 1939, CAB 23/97, TNA; Gibbs, Grand
Strategy, vol. I, pp. 503“18; Pownall Diaries, vol. I, pp. 196“7.
158 Arms, economics and British strategy

before the outbreak of war, and it was unlikely that the new Territorial
formations could be equipped and trained within twelve months.157
Howard argued that the defence of the Empire led to the dissipation
of British strength. However, Britain™s land and air forces round the
Empire tended to be the last to receive up-to-date equipment.158 It was
the defence of the United Kingdom that took up industrial capacity for
anti-aircraft guns and their reserves of ammunition “ capacity that might
otherwise have been used for the Field Force™s artillery. Likewise, Inskip
recommended that there should be expansion of the RAF in the United
Kingdom but he rejected proposed increases in overseas squadrons,
although he recognised that his recommendation meant permanent and
dangerous insecurity against Japan and Italy.159
Although Inskip was persuaded that the greatest danger to be faced was
an air attack on the United Kingdom that might in¬‚ict a knock-out blow at
the outset of a war, he did not give the RAF all that it wanted. He advised
that the Air Staff should no longer aim at having an air striking force equal
to the German air striking force. The Air Staff held that the deterrent effect
of an air force was greatly increased if the enemy knew that he would
sustain the same damage as he could in¬‚ict, but Inskip did not believe that
the government™s public commitment to air parity should lead it to try to
match the German air force as regards numbers or types. The full increase
asked for by the Air Staff for ¬ghter squadrons should, he thought, be
granted. However, according to the Air Ministry™s calculations, the aircraft
industry had not yet built up enough capacity for production in war-time
to replace the losses that the Air Staff estimated would be sustained by the
size of air force that the expansion scheme adopted in 1936 aimed to
create. The Air Staff had used these estimates to justify reserves of aircraft
equal to 225 per cent of ¬rst-line strength. Inskip argued that it would be
better to use some of the industrial resources that would have gone into
producing reserves of aircraft to expand the aircraft industry™s productive
capacity, including shadow factories. He also said that while there should
be ˜some increase™ in the present ¬rst-line bomber strength, ¬ghters must
have priority. Despite the priority he had allocated to defence of trade
routes, Inskip did not refer to the Air Staff™s proposal to provide only ¬fty-
six aircraft for trade defence, although that ¬gure was remarkably modest
in relation to the proposals for bombers (an increase from 1,022 to 1,442)
or the approved increase in ¬ghters (from 420 to 532).160 This lack of

157
David French, Raising Churchill™s Army: The British Army and the War against Germany
1919“1945 (Oxford University Press, 2000), p. 157.
158
Howard, Continental Commitment, p. 100; Peden, ˜Burden of imperial defence™.
159
˜Defence expenditure in future years™, CP 316 (37), CAB 24/273, paras. 98“9, TNA.
160
Ibid., paras. 80“99.
Retrenchment and rearmament 159

provision can be attributed to the Air Staff ™s priority for strategic bombing
and the Admiralty™s wish to avoid further con¬‚ict with the Air Ministry so
soon after recovering control of the FAA, but Inskip himself cannot escape
criticism.161
The Cabinet endorsed Inskip™s recommendations, but Sir John
Slessor, who was head of the Air Staff™s Plans Branch from 1937 to
1940, admitted in his memoirs that ¬ghters were not really given
priority by the Air Ministry until the autumn of 1938.162 Indeed, the
Secretary of State for Air, Swinton, told the Cabinet that, while it could
say whether an expansion scheme was affordable, it could not dictate to
the Air Staff what the character of the air force should be. Scheme L,
which the Cabinet approved on 27 April 1938, provided for 608
¬ghters, an increase of 76 on the proposed numbers in December
1937, and 1,352 bombers, a reduction of 90. Scheme M, which the Air
Ministry put forward after Munich, provided for 800 ¬ghters and 1,360
bombers, but 10 of the 50 ¬ghter squadrons were allocated to work
with the Field Force, and all of the bombers were to be heavy types,
whereas 600 of Scheme L™s bombers had been medium types. The
Treasury protested that Scheme M, if implemented in full, would make
such heavy demands on industry that it would ˜probably bring down
the general economy of this country™. Chamberlain, who in late 1938
was still in favour of maintaining the fourth arm of defence, and the
Secretary of State for Air, now Sir Kingsley Wood, accepted the
Treasury view that if Scheme M were revised to concentrate more on
¬ghters and go slowly on bombers, the strain on the economy would be
reduced. One heavy bomber cost the equivalent of four ¬ghters. On 7
November 1938 the Cabinet duly approved Scheme M™s proposals for
¬ghters, specifying maximum production possible before April 1940,
but directed that only suf¬cient orders for bombers were to be placed
to ensure that labour and plant were not unemployed. However,
Cabinet decisions do not necessarily determine what happens in the
execution of policy: technical dif¬culties in producing new ¬ghters and
the fact that much plant was already committed to producing bombers
meant that ¬ghter deliveries did not overtake those of bombers until
February 1940. Moreover, the Treasury could not prevent the Air
Ministry from creating the industrial capacity required to produce a
new generation of heavy bombers. In the event technical delays in

161
For the services™ attitudes, see John Buckley, ˜Contradictions in British defence policy
1937“1939: the RAF and the defence of trade™, Twentieth Century British History,
5 (1994), 100“13.
162
Slessor, Central Blue, pp. 166, 180.
160 Arms, economics and British strategy

bringing in new types into production, not the Treasury-inspired
Cabinet decision, were what held back the re-equipment of Bomber
Command.163
The RAF™s offensive strategy was confronted with other practical
dif¬culties in 1938 and 1939. Air Staff doctrine since Trenchard™s time
had held that an air force could act decisively to destroy the enemy™s
morale and means of production. However, the rapid expansion of
Bomber Command after 1936 had denied it the opportunity to train
aircrew adequately for the tasks they were expected to perform. Even in
favourable daylight conditions the average aircrew was unlikely to drop
bombs closer than 250 yards to its target, and experience of the Spanish
Civil War suggested that the 250- to 500-pound general purpose bombs
with which the RAF was equipped would do little damage to reinforced
concrete. Most of the aircraft available were too short-range to penetrate
deep into Germany, even from French bases, and had inadequate
defensive armament. The of¬cer in charge of Bomber Command, Air
Chief Marshal Sir Edgar Ludlow-Hewitt, warned the Air Council in
May 1939 that his force would not be ready for war ˜within any pre-
dictable period™.164 In the circumstances, the Air Staff™s offensive doc-
trine was hollow, and it was as well that Fighter Command had been
given suf¬cient priority to give the United Kingdom effective protection
against defeat by air attack.
The Air Staff™s strategic doctrine had led to a considerable mis-
allocation of resources in the production of bombers inadequate for
their purpose. Moreover, the Air Staff had aroused unnecessary fears
among ministers of a knock-out blow that the German air force was in
no position to deliver in September 1938 or even in the Second World
War. The Luftwaffe also experienced problems in carrying out rapid
expansion, and chose medium bombers in the 1930s instead of heavy
bombers, as they made fewer demands on scarce resources and had the
¬‚exibility to co-operate with the army as well as attack civil targets.
However, the choice also re¬‚ected the inadequacies of the four-engined
types available to the Germans at the time. The Luftwaffe believed in
strategic bombing, and had ordered the development of a new four-
engined type, the Heinkel He 177, which the German air ministry
expected to be in production in late 1940 or early 1941.165 Given that

163
Cabinet conclusions 6 Apr. and 27 Apr. 1938, CAB 23/93, and 7 Nov. 1938, CAB
23/96, TNA; Peden, British Rearmament, pp. 133“4, 158“60; Postan, British War
Production, p. 484; Smith, British Air Strategy, pp. 217“20, 264“6, 334“5.
164
Smith, British Air Strategy, pp. 241“3, 268“81.
165
Williamson Murray, The Change in the European Balance of Power: The Path to Ruin
(Princeton University Press, 1984), pp. 39“45, 250“2; R. J. Overy, ˜From ˜˜Uralbomber™™
Retrenchment and rearmament 161

Britain™s rearmament programme was designed to cover a period down
to April 1942, it was not unreasonable for Air Staff offensive and
defensive strategy to take account of the potential threat of German
heavy bombers.
What is perhaps most notable about British strategic foreign policy in
1939 is the con¬dence with which Chamberlain confronted Germany.
In the diplomatic sphere, he announced on 31 March that Britain would
support Poland in the event of an armed attack, and similar guarantees
to Romania, Greece and Turkey followed in April. However, he was
doubtful about the wisdom of an alliance with the Soviet Union. He
distrusted Stalin™s intentions, as did the Polish and Romanian govern-
ments. Moreover, British intelligence reports suggested that the Soviet
armed forces would not be able to provide much assistance.166 Nego-
tiations in Moscow failed to reach agreement on the crucial question of
whether the Red Army should have the right of passage over Polish ter-
ritory, and the Germans took the opportunity to sign a non-aggression
pact with the Soviet Union on 23 August, leaving Britain and France
isolated.167

Summary
By May 1939 the navy doubted its ability to ful¬l plans, dating from
1920, to send out a ¬‚eet to the Far East adequate to meet the Japanese
¬‚eet, and Bomber Command doubted its ability to carry out the stra-
tegic air offensive that Air Staff doctrine laid down for it. From February
1939 the army was being belatedly prepared for a continental com-
mitment that it had been told throughout the previous twelve months
not to prepare for. How had defence policy gone so far astray when
Britain had seemed to be so secure in the 1920s? One obvious reason
was the dif¬culty of adapting strategy to a changing international
situation. The DRC report of February 1934 was rapidly overtaken by
events: Germany rearmed at a pace that Britain found dif¬cult to match,
and Italy appeared as an additional potential enemy. The dominions
were not prepared to share Britain™s overall responsibility for the defence
of the Empire and Commonwealth, and political developments limited
India™s contribution. Chat¬eld and Hankey both put imperial defence

to ˜˜Amerikabomber™™: the Luftwaffe and strategic bombing™, Journal of Strategic Studies,
1 (1978), no. 2, 154“78.
166
See reports, dated 6 Mar. 1939, from Moscow Embassy in DBFP, 3rd series, vol. IV,
pp. 188“99.
167
The best account of these events is Donald Cameron Watt, How War Came: The
Immediate Origins of the Second World War, 1938“1939 (London: Heinemann, 1989).
162 Arms, economics and British strategy

before a continental commitment for the army, but Inskip, while allo-
cating a non-European role for the army, deliberately subordinated the
air requirements of imperial defence to the air defence of the United
Kingdom.
The Treasury exercised strong in¬‚uence as long as ministers were
more concerned with economic risks than military ones. The Treasury™s
doctrine of economic stability as a fourth arm of defence, which would
help to deter Germany and prepare for the long-war strategy being
planned by the Chiefs of Staff, re¬‚ected experience of the economic
effects of the First World War, just as the Chiefs™ strategy re¬‚ected the
perceived success of the blockade in weakening Germany by 1918. The
fact that Britain would be unable to borrow again from the United
States in the foreseeable future made it seem important that Britain
should be able to ¬nance purchases in America from her own resources.
The policy of non-interference with normal trade was designed to
protect export markets and therefore Britain™s ability to earn foreign
exchange. From March 1938 that policy was gradually abandoned and
rearmament accelerated, raising the question of whether an earlier effort
would not have greatly improved the position in which Britain found
itself in 1938 and 1939. However, while the British armaments indus-
tries were not backward by international standards in the early and mid
1930s, there was a danger in the case of the air force and army that an
earlier effort might have produced more obsolescent equipment,
exempli¬ed by the story of the Battle bomber or by the army™s problems
with tank designs, rather than war-winning weapons. This argument
does not apply to the navy, whose ships were less prone to obsolescence
than aircraft or tanks, but it was in the air and on land that Britain was
weakest.
Acceptance of the doctrine of the fourth arm of defence led the
Cabinet, on Inskip™s recommendation, to make a choice between having
an air force or an army ready for war with Germany in 1939. Fear of the
bomber, which the Air Staff had carefully cultivated since the 1920s,
pointed to a higher priority for the air force. The danger of the Luftwaffe
being able to deliver a knock-out blow by an attack on the United
Kingdom was much exaggerated in the 1930s. Far from being con-
servative, policymakers were too readily impressed by new weapons. On
the other hand, it could not have been known in advance that the
Germans would fail to develop strategic bombers, and Britain™s air
defences “ the most advanced in the world “ were by no means over-
insurance. It was realised that the United Kingdom would be more
exposed to air attack if the Low Countries were occupied by Germany,
Retrenchment and rearmament 163

but Inskip, in giving priority to air defence and to the defence of trade
routes, assumed that France was not in immediate danger of being
overrun. He recognised the possibility that the army would have to be
prepared to help France at a later date. The doctrine of the fourth arm of
defence was accepted in 1937“8 when the purpose of rearmament was
long-term deterrence rather than war. By February 1939 the situation
had changed and, in the last months of peace, military strategy was
determining economic policy rather than the other way round.
4 The Second World War




Introduction
The German invasion of Poland on 1 September 1939 led to British and
French declarations of war two days later, but Britain™s war aim was to
end the Nazi menace, not to preserve the status quo in Eastern Europe.
This aim endured through a succession of military disasters and the
extension of the war to the Mediterranean and the Far East through the
intervention of Italy on 10 June 1940 and of Japan on 7 December 1941.
From the French armistice with Germany on 22 June 1940 to Hitler™s
invasion of the Soviet Union exactly a year later the British Common-
wealth and Empire fought alone. Hopes of victory depended upon
supplies of food, raw materials and munitions from the United States,
and therefore on victory over the U-boats as well as on American aid
through the Lend-Lease Act of March 1941. Although the Japanese
attack on Pearl Harbor brought the United States fully into the war, it
was not until the American naval victory at Midway in June 1942 that
the Japanese were decisively checked. The summer of 1942 was the
nadir of British fortunes: Singapore had surrendered on 15 February;
India was threatened. The Commonwealth armies in North Africa were
heavily defeated by the Germans and Italians, and it seemed that Egypt
too might be lost. The tide turned in late 1942, with the battle of El
Alamein (23 October “ 5 November), the Anglo-American landings in
North Africa (8 November) and the Soviet relief of Stalingrad (19“25
November). Thereafter the Allies were on the offensive.
It is tempting for the economic historian to attribute the Allies™ victory
to their combined technological, industrial and manpower resources.
This position has been put forward most convincingly by Mark
Harrison, who has argued that, while purely military factors more than
offset the Allied economic advantage down to 1942, thereafter ˜eco-
nomics determined the outcome™ in a war of attrition.1 However, as
1
Mark Harrison (ed.), The Economics of World War II (Cambridge University Press,
1998), p. 2. Paul Kennedy takes a similar position: Rise and Fall, p. 458.

164
The Second World War 165

Richard Overy has argued, victory was not pre-ordained in 1942. The
Axis powers occupied most of continental Europe and much of the Far
East. Unity of purpose on the part of the Allies could not be assumed.
The Allies™ early defeats pointed to the need to improve the qualitative
performance of their armed forces as well as of their equipment.
Mobilisation of national economies depended upon a will to win on the
part of the people. Only after Germany had surrendered on 8 May 1945
did a decisive weapon appear in the shape of the atomic bomb.2
The scholarship embodied in the British of¬cial civil and military
histories of the Second World War has endured the test of time and the
opening of the archives. However, the division between civil and military
series makes it harder to see the war as a single process, especially
as weapons design and production, and blockade and economic warfare,
were covered in the civil series.3 This chapter discusses whether Britain
was able to produce weapons of the same standard as the Germans™;
whether her economic resources were fully utilised; and whether grand
strategy made the most of her advantages. For the purposes of analysis,
the war can be divided into three phases: ¬rst, the period of the Anglo-
French alliance, ending in June 1940; second, the period when Britain
and, from 1941, the Soviet Union and the United States were largely on
the defensive, down to the autumn of 1942; and third, the period
thereafter when the Allied powers were able to go over to the offensive.

Policymakers
Although Chamberlain had taken a leading part in shaping defence policy
since 1934, he was not cut out to be a war leader. Aged 70 in 1939, he
died of cancer in November 1940, six months after his resignation as
prime minister. He brought back Churchill into government as ¬rst lord
of the Admiralty at the outbreak of war, and gradually con¬dence and
goodwill developed between the two men. From 4 April 1940 Churchill
chaired meetings of the Military Co-ordination Committee when the
Prime Minister did not attend. The Military Co-ordination Committee
brought together the Chiefs of Staff and ministers, and its reports were
discussed by the Defence Committee of the War Cabinet, which met
almost daily, and conclusions or disagreements were referred to frequent
meetings of the War Cabinet. Churchill understandably felt that the
prolonged process of explanation and re-explanation was inappropriate

2
Richard Overy, Why the Allies Won (London: Jonathan Cape, 1995).
3
History of the Second World War, UK Civil Series, ed. W. K. Hancock and UK Military
Series, ed. J. R. M. Butler (London: HMSO, 1949“76).
166 Arms, economics and British strategy

when the pace of events increased after the invasion of Norway on 9
April, and was able to secure more authority for himself on 1 May even
before he became head of the coalition government nine days later.4
Churchill brought zeal and enthusiasm to the task of winning the war
and was undaunted in the face of defeat. He added the title of minister
of defence to that of prime minister, but there was no ministry of
defence. Instead interdepartmental sub-committees reported to the
Chiefs of Staff Committee and the Defence Committee of the War
Cabinet. He dealt directly with the Chiefs of Staff, summoning them to
conferences at all hours. He created the Defence Of¬ce under Major-
General Hastings Ismay, whom Chamberlain had placed in charge of
the central staff servicing the Chiefs of Staff Committee, and who acted
as Churchill™s personal representative on that committee.5 The Chiefs of
Staff might also be in attendance at the War Cabinet or its Defence
Committee, but meetings of the latter became rare as Churchill pre-
ferred staff conferences, where few or no other ministers were present.
The service ministers were left to run their departments while he and the
Chiefs of Staff ran the war. Churchill tended to think in terms of battles,
of which he had personal experience, rather than strategy, which
requires a steady, disciplined outlook on the overall situation. He fre-
quently badgered the Chiefs of Staff to produce plans for erratic stra-
tegies of his own devising and was reluctant to accept the limitations
imposed by what was logistically possible. His commitment to victory at
any cost assumed that the United States would pick up the bill and he
was reluctant to accept that Britain™s manpower could not sustain the
size of army and air force that he wished to create.6 His speeches
inspired the nation, but he could be deceived by his own rhetoric. No
one in authority but he referred to the Singapore naval base as a ˜for-
tress™, and he was surprised when it did not withstand a long siege. He
was constantly attracted to the potential of new weapons. He needed
strong men to stand up to him and fortunately the Chiefs of Staff
generally came into that category. Sir Alan Brooke (CIGS, 1941“6), Sir
Andrew Cunningham (¬rst sea lord, 1943“6) and Sir Charles Portal
(CAS, 1940“6) were not men who could be easily diverted from agreed

4
Winston S. Churchill, The Second World War, 6 vols. (London: Cassell, 1949“54), vol. I:
The Gathering Storm, pp. 406, 528“30, 576“8.
5
The Memoirs of General the Lord Ismay (London: Heinemann, 1960), ch. 6.
6
See War Diaries 1939“1945: Field Marshal Lord Alanbrooke, ed., Alex Danchev and
Daniel Todman (London: Weidenfeld and Nicolson, 2001), pp. 187, 189“91, 261, 263,
279, 321, 323“5, 410, 427“8, 430, 515, for Churchill™s obsession with invading Norway,
despite lack of air cover and shipping, his reluctance to reduce the size of the army, and
his opportunism as opposed to long-term strategy.
The Second World War 167

strategy by the ¬‚ow of minutes from the Prime Minister. On the other
hand, Sir John Dill, an able CIGS in 1940“1, found Churchill™s con-
frontational style almost unbearable. Sir Dudley Pound, the ¬rst sea lord
from 1939 to 1943, who also acted as chairman of the Chiefs of Staff
Committee, suffered from poor health and his colleagues thought that
he was too tolerant of Churchill™s interference in detail. His successor as
chairman, Brooke, admired Churchill™s achievements but felt in August
1944 that the Prime Minister, by then in his seventieth year, ought to
retire.7
The way in which the war economy was organised changed drama-
tically under Churchill. While Chamberlain was prime minister
the Treasury had been the central department of government. The
Chancellor of the Exchequer, Simon, chaired the War Cabinet™s
Ministerial Committee on Economic Policy, which co-ordinated the
work of a range of ministerial and of¬cial committees. Chamberlain
refused to appoint a minister for war economy, on the grounds that his
own authority and that of the Treasury would be undermined thereby.
He worked closely with the Permanent Secretary of the Treasury, Sir
Horace Wilson, who had been his con¬dential adviser since 1937 and
who was associated by many, including Churchill, with the policy of
appeasement. In contrast, Churchill™s War Cabinet did not include the
new Chancellor of the Exchequer, Sir Kingsley Wood, until 3 October
1940 and Wilson was banished permanently from 10 Downing Street.8
Churchill, like Lloyd George in the First World War, rejected ¬nancial
prudence. The allocation of physical resources, especially labour,
replaced ¬nancial budgeting as the means of allocating priorities. Co-
ordination of economic and social policy now became the responsibility
of the Lord President™s Committee, initially chaired by Chamberlain
but from 3 October 1940 by Sir John Anderson. Anderson was ideal
for the job, having a formidable intellect and vast experience as a
public servant in the Home Civil Service and in India. He was backed by
a staff of professional economists, the Central Economic Information
Service, which was divided into the Economic Section of the War
Cabinet Of¬ce and the Central Statistical Of¬ce in December 1940.
Economists had skills that enabled them to offer advice that was inde-
pendent of the Treasury and other Whitehall departments. Churchill™s



7
Michael Carver, ˜Churchill and the defence chiefs™, in Blake and Louis (eds.), Churchill ,
pp. 353“74; Alanbrooke, War Diaries 1939“1945, pp. 450“1, 580“1.
8
˜Economic co-ordination™, 7 Dec. 1939, T 175/117, TNA; Peden, Treasury and British
Public Policy, pp. 250, 301“2, 306“8.
168 Arms, economics and British strategy

Prime Minister™s Statistical Section, although chaired by a scientist,
Professor F. A. Lindemann, also included economists.9
The other major change in the War Cabinet on 3 October 1940 was
the inclusion of Ernest Bevin, a leading trade unionist, who had been
appointed minister for labour and national service on 13 May. Bevin
and Churchill had been on opposite sides during the General Strike of
1926, and workers accepted controls from Bevin that his Conservative
predecessor, Ernest Brown, had not dared to impose. Admittedly cir-
cumstances had altered: the danger of invasion in the summer and
autumn of 1940 made exceptional measures politically possible. How-
ever, a willingness to accept the transferability of labour between
industries and occupations was crucial to manpower planning long after
fear of the invasion had vanished.10
Churchill was alone among ministers in devising strategy, but the
War Cabinet included men of sound judgement who could criticise his
ideas. The Labour Party leader, Clement Attlee, was the most
important. He was, after all, Major Attlee, who had served at Gallipoli,
in Mesopotamia and on the Western Front, being twice wounded.
He was successively lord privy seal, dominions secretary and, from
September 1943, lord president of the council, in succession to
Anderson, who had become chancellor of the exchequer.11 Sir Stafford
Cripps, when lord privy seal in 1942, engaged in a critique of
Churchill™s highly personal direction of the war, before leaving the War
Cabinet to serve as an able minister of aircraft production. Policy-
making in war-time was much more of a team effort than Churchill™s
popular image, carefully cultivated in his memoirs, as the man who
won the war, would suggest.12 The nation needed an inspirational
leader and Whitehall badly needed prodding in 1940, but Churchill
needed antitheses to his theses to ensure that there would not be
another Gallipoli.



9
John Wheeler-Bennett, John Anderson, Viscount Waverley (London and New York:
Macmillan, 1962), pp. 258“71, 275, 315“16; Alec Cairncross and Nita Watts, The
Economic Section 1939“1961: A Study in Economic Advising (London: Routledge, 1989),
pp. 28“69; D. N. Chester, ˜The central machinery for economic policy™, in D. N.
Chester (ed.), Lessons of the British War Economy (Cambridge University Press, 1951),
pp. 5“33; Thomas Wilson, Churchill and the Prof (London: Cassell, 1995).
10
Alan Bullock, The Life and Times of Ernest Bevin, 2 vols. (London: Heinemann, 1960“
67), vol. II: Minister of Labour 1940“1945; W. K. Hancock and M. M. Gowing, British
War Economy (London: HMSO, 1949), pp. 148“50, 301“3, 452“5.
11
Kenneth Harris, Attlee (London: Weidenfeld and Nicolson, 1982).
12
David Reynolds, In Command of History: Churchill Fighting and Writing the Second World
War (London: Allen Lane, 2004).
The Second World War 169

Air weapons and tactics
Controversy over the strategic air offensive against Germany in the
Second World War shows no sign of abating. In particular, the
destruction of Dresden in February 1945 aroused condemnation that
has persisted for over half a century. Sir Arthur Harris, the air of¬cer
commanding-in-chief, Bomber Command, from February 1942 until
the end of the war, saw the main target of his force as the morale of the
enemy civil population, and in particular of the industrial workers. The
targeting of civilians through Bomber Command™s tactic of area bomb-
ing has since been criticised on tactical, strategic and moral grounds.13
The pros and cons of area bombing have to be considered in relation to
the technology available, as well as to the strategic alternatives.
As noted in the last chapter, Bomber Command had expanded so
rapidly that it was not ready for war in 1939, either in terms of having
enough trained crews or of having aircraft that could have made a reality
of its doctrine of strategic bombing. The larger bombers, the Hampden,
Wellington and Whitley, could reach any part of Germany except the
extreme east, but only the Hampden and the Wellington were designed
for day as well as night bombing, the slower Whitley being considered ¬t
only for night operations. The loss of twelve of twenty-two Wellingtons
to German ¬ghters during a reconnaissance of the Heligoland Bight in
December 1939 was an early warning that even the best-armed British
bomber was vulnerable by day. Accurate bombing by night was to prove
to be an elusive skill. The Butt Report of August 1941 used photo-
reconnaissance material to show that only one-third of aircraft reported
to have attacked their targets had been within ¬ve miles of them, many
of the bombs falling in open countryside. Clearly there was a great waste
of effort involved. A policy of widespread bombing of civilian areas was

13
Sir Charles Webster and Noble Frankland, The Strategic Air Offensive against Germany
1939“1945, 4 vols. (London: HMSO, 1961) was the most controversial of all the British
of¬cial histories of the Second World War. It drew upon the Report of the British
Bombing Survey, which was drafted by Solly Zuckerman and approved by the post-war
CAS, Sir Arthur Tedder, both of whom had pressed for bombing of transport systems
rather than area bombing during the war “ see Sebastian Cox™s introduction to the
published edition of the Report, The Strategic Air War Against Germany 1939“1945
(London: Frank Cass, 1998). Malcolm Smith, ˜The Allied air offensive™, in John Gooch
(ed.), Decisive Campaigns of the Second World War (London: Frank Cass, 1990), pp. 67“
83, is a useful short summary of the main issues from the point of view of the
implications of new technology. Denis Richards, The Hardest Victory: RAF Bomber
Command in the Second World War (London: Hodder and Stoughton, 1994), like
Webster and Frankland, challenged the effectiveness of area bombing, but denied that
the aim was to kill civilians. The debate on Dresden is placed in the context of Allied
bombing policy in Paul Addison and Jeremy Crang (eds.), Firestorm: The Bombing of
Dresden, 1945 (London: Pimlico, 2006).
170 Arms, economics and British strategy

adopted from the autumn of 1941, with a view to breaking German
morale. However, as better radar aids and bombsights became available,
and after a specialist Path¬nder Force was formed to guide the mass of
bombers, accuracy improved. By early 1944 area bombing was no
longer a technical necessity, and it had always been the Air Staff™s
intention to return to precision bombing of targets selected on strategic
grounds as soon as the tactical capabilities of the bomber force allowed.
Harris, however, preferred to continue with area bombing.14 The of¬cial
historians raised the question of why the CAS, Portal, did not impose
the Air Staff™s views or replace Harris, and concluded that Harris was
too popular with his command and with the Prime Minister for Portal to
do either.15
It was not until 1943 that Bomber Command had large numbers of
the kind of aircraft required for a strategic air offensive. The Mark V
Whitley, which had just entered production at the outbreak of war, had
a maximum bomb load of 8,000 pounds and was, by the standards of
the time, a true heavy bomber, but the maximum bomb loads of the
Hampden and the Wellington (4,500 pounds), and older Whitleys, were
much the same as the contemporary German medium bomber, the
Heinkel He 111. Moreover, only seventeen of Bomber Command™s
thirty-three operational squadrons in September 1939 had Whitleys,
Hampdens or Wellingtons. The rest had ˜medium™ bombers, Blenheims
or Battles, with maximum loads of 1,000 pounds, and the ten squadrons
equipped with Battles had to be based in France on account of their
short range. As a new generation of heavy bombers began to appear in
1940, the Battle and Blenheim were reclassi¬ed as light bombers. The
four-engined Stirling (maximum bomb load 14,000 pounds) and
Halifax (13,000 pounds), and the twin-engined Manchester (10,350
pounds) represented a huge technological advance, but development of
these aircraft and their introduction into service, took longer than
expected. The ¬rst sorties by the new bombers did not take place until
February 1941, and both the Stirling and the Manchester were plagued
with technical problems. The Lancaster, a four-engined version of the
Manchester, on the other hand, proved to be a great success from its
entry into service in the spring of 1942. With a maximum bomb load of
14,000 pounds, the Lancaster formed the backbone of Bomber Com-
mand from 1943. By February 1943 Bomber Command had grown

14
Sir Arthur Harris, Despatch on War Operations 23rd February, 1942, to 8th May, 1945, 18
Dec. 1945, with Air Staff memorandum on the despatch, March 1948, ed. Sebastian
Cox (London: Frank Cass, 1995), esp. pp. 30, 205; Webster and Frankland, Strategic
Air Offensive, vol. I, pp. 178“83, 323; vol. III, p. 124; vol. IV, pp. 3“17, 37“8.
15
Webster and Frankland, Strategic Air Offensive, vol. III, pp. 77“80.
The Second World War 171

from the thirty-three squadrons of September 1939 to sixty-two squa-
drons and in 1944 and 1945 there was a daily average of over 1,000
bombers available.16
Before the war the Air Staff had tended to rate the effectiveness of
bombers in terms of the size of their bomb loads. However, in 1938 the
de Havilland Company began designing a revolutionary high-speed
bomber, built of wood to economise on strategic metals and to facilitate
manufacture by sub-contractors. Air Ministry interest was aroused only
after the outbreak of war, but the resulting aircraft, the Mosquito, had
an outstanding performance, being able to evade German ¬ghters by
day yet able to carry a 2,000-pound bomb load (5,000 pounds in later
versions). From 1942 it carried out frequent nuisance raids on Berlin
and from 1943 played an important role in the Oboe system for guiding
heavy bombers to their targets. It was a versatile aircraft, with photo-
reconnaissance, night-¬ghter and long-range ¬ghter variants. In its
bomber version it had the best performance of any British aircraft in
terms of weight of bombs dropped per man-hour employed in its con-
struction, and was to that extent a better investment than any of the
heavy bombers.17
Was there an alternative to the night-bombing tactics employed by
Bomber Command? The United States Army Air Force (USAAF) was
likewise a believer in the strategic air offensive but preferred to attempt
precision bombing by day.18 American heavy bombers carried heavier
defensive guns than their British counterparts (0.5-inch calibre com-
pared with 0.303-inch) but encountered heavy losses when they oper-
ated beyond the range of ¬ghter escorts. Until the summer of 1943
American ¬ghters could not operate much beyond the French coast but
the introduction of disposable (drop) fuel tanks allowed them to escort
bombers across Germany. At ¬rst, the supply of drop tanks was limited
but by the beginning of 1944 the Americans were able to take the
offensive against German ¬ghters. It could be argued that the British
should have followed the American example. However, to be as well
able to defend themselves as the Americans, British bombers would
have had to be re-equipped with 0.5-inch guns. Harris ordered such
guns but they were delivered only in limited quantities towards the end

16
Ibid., vol. III, p. 124n; vol. IV, pp. 400“2, 407, 450“1.
17
Postan, Hay and Scott, Design and Development, pp. 84“6, 131“2; Webster and
Frankland, Strategic Air Offensive, vol. II, pp. 111“12, 199“201; vol. IV, pp. 7“8.
18
For a comparison of the development of doctrine on bombing in Britain and the United
States, see Tami Davis Biddle, ˜British and American approaches to strategic bombing:
their origins and implementation in the World War II combined bomber offensive™,
Journal of Strategic Studies, 18 (1995), no. 1, 91“144.
172 Arms, economics and British strategy

of the war. Moreover, a change of tactics would have required retraining
of aircrew. Bomber Command had evolved as a night bombing force
and its continued resort to area bombing was an example of path
dependency.19 In any case, as W. Hays Park has pointed out, Bomber
Command attacks, when directed at a speci¬c target, were often more
accurate than those carried out by day, but in cloudy conditions, by the
USAAF. Much depended upon the level of enemy opposition, and the
difference in bombing accuracy between the two air forces was not as
great as is often believed.20
In contrast to the long-drawn out problems in making strategic
bombing effective, the RAF had a model air defence system in place by
the outbreak of war, with a comprehensive radar early warning system,
underground operations rooms to direct ¬ghters, and high-speed
monoplanes, as well as the older technology of anti-aircraft guns,
searchlights and, as part of London™s defences, a balloon barrage. Well-
directed ¬ghter interceptions of German bombers were decisive in pre-
venting the Germans achieving air superiority. It was fortunate that radar
was so new in 1940 that no one had yet worked out how to jam it or how
to evade detection by low-level ¬‚ight. The Germans were also pioneers of
radar, but their efforts to guide bombers to targets by radio beams were
quickly frustrated by British signals and scienti¬c intelligence.21
The Spit¬re was the only operational aircraft in the world that was the
equal of the German Messerschmitt Bf 109 in 1939“40, but British
¬ghter development was not without its problems. Britain was the only
country to design ¬ghters with a powered turret that allowed four
machine guns to be brought to bear in a broadside, but the experiment
was not a success. The performance of these single-engined aircraft, the
De¬ant for the RAF and the Roc for the FAA, suffered from the weight
and drag of the turret, and the Roc was withdrawn from service shortly
after being issued in small numbers to squadrons. German ¬ghters
quickly discovered how to evade the De¬ant™s guns, which could only ¬re
to the rear or side, and it was withdrawn from daylight operations in the
summer of 1940, even though Fighter Command was then desperately
short of aircraft. However, the De¬ant found its niche as a night-¬ghter.
Most night-¬ghters pressed into service in the winter of 1940“1 were
19
A familiar concept to economic historians: for example, the standard gauge for railways
adopted in the nineteenth century and still used in Britain today was originally that
adopted for horse-drawn wagons. Once a particular course of action has been taken the
costs of changing it may exceed the short-term (although not necessarily the long-term)
bene¬ts.
20
W. Hays Park, ˜˜˜Precision™™ and ˜˜area™™ bombing: who did which, and when™, Journal of
Strategic Studies, 18 (1995), no. 1, 145“74.
21
R. V. Jones, Most Secret War (London: Hamish Hamilton, 1978), esp. pp. 135“80.
The Second World War 173

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