Chapter XLIII: If You Seek Peace, Prepare for War.
The first domestic challenge for Chamberlain's new government was the Budget, for our purposes we need only focus on the twin problems of defence spending and economic growth, save to mention that these were not the only areas occupying Chamberlain's mind, the Prime Minister was keen to re-assert his authority over domestic areas that had been neglected under Churchill's premiership.
The unexpectedness of war, combined with Britain's rapid success, had left defence spending in something of a mess; British industry was just getting into it's stride when the Italian's sued for peace, overnight making a great deal of the orders placed in anticipation of a long war unnecessary or at least less urgent. There was also the issue of the shadow factories, having rapidly been worked up to full production no-one was quite sure what they should produce or if they should even be kept open. This debate was further complicated by the calls from many to slow down or even halt re-armament, citing the rapid and comprehensive success as proof. With such calls not just from such predictable sources as Lord Halifax's peace faction and Neville Chamberlain's fiscal conservatives but also from those, such as Health Secretary Ernest Brown, who wished to increase their own department's budget.
Minister for Labour Oliver Stanley, one of the many new cabinet ministers not convinced of the need to up the pace of re-armament.
To deal with such views it was arranged for the service chiefs to present a short history of the war, to explain to those who had been outside the War Cabinet just how much of a close run thing it had been. The revelation of the paucity of Britain's home defences during the war; three newly raised divisions, no modern monoplane fighters and only a single carrier and four 'R' class battleships in the Home Fleet shocked many, as did the news of the ransacking of India's defences to bolster the Expeditionary Forces. For all that the necessity of re-armament was still in doubt until intervention from an unexpected sources; the Treasury special adviser John Maynard Keynes. Although brought into the cabinet for economic advice on funding and extending the 'Keynes programme' of investment and public works Keynes weighed into the debate arguing the moral, not economic, case for continuing with the orders. While the large industrial concerns would have undoubtedly survived the cancellation of the orders countless smaller firms would not, many of them had responded to urgent requests from the Service Ministries or the Ministry Defence Co-ordination and performed miracles in beating seemingly impossible deadlines, but at the cost of desperately over-stretching themselves financially. For Keynes the economic case to intervene, to prevent the immense damage such bankruptcies would cause, was secondary to the government's moral obligation to support those who had answered their countries call without regard for consequence. As there was little doubt the prompt delivery of supplies and new weapons had saved British lives, Keynes argued the very least the government could do was to ensure the firms who made that possible did not go bankrupt.
Whether it was that impassioned plea or the cold hard financial and military facts that convinced the cabinet depends very much on your view of the politicians involved, in public of course the argument was tailored to the audience. Regardless the move was generally popular in the country and helped the government meet it's manifesto commitments on re-armament, a not insignificant point at a time when manifesto commitments still meant something to both politicians and the voting public. That said it is worth noting that one of the last acts of the Lansdown led Labour opposition was to castigate the 'warmongering so-called national government' for 'bankrupting the country with unneeded aggressive rearmament' during the Opposition response to the budget, indicating the plan was not universally welcomed and highlighting the entrenched pacifism of much of Lansdown's shadow cabinet.
With the need to increase the budget agreed the first priority of the defence estimates was to 'top up' the defence budgets to cover those costs, such as the prioritised work on the Fairey Swordfish and the accelerated Hurricane development programme, that had not been covered by Treasury Reserve Funds. The 'top up' also covered the increases costs incurred by the expansion of the Regular Army, which had left the War Office without enough budget to actually pay all of its troops for the entire year. The budget for the next round of expansion, however, proved far more difficult to agree, not for a lack of spending plans from the Service Ministries, any General Staff worth it's salt always had expansion plans on hand, but because all such plans did not include the lessons of the Abyssinian War or the post-war strategic situation. While the service chiefs agreed with the wisdom of waiting to make more informed procurement decisions, they were also keen to strike while the iron was hot, bitter experience teaching them that defence projects delayed were often defence projects cancelled. As a compromise it was agreed to authorise the most urgently required and least likely to be altered items immediately, along with committing funds to a variety of research and development projects. The balance of the expenditure would be held back until the autumn when the 1937 Programme would be drawn up, based on the results of the various reviews and development projects.
Revised 1936 Defence Programme
Naval Estimate
Ark Royal class Aircraft Carriers
HMS
Ark Royal
HMS
Bulwark
Arethusa class Light Cruisers
HMS
Penelope
HMS
Aurora
'Post War Standard' Destroyers
Completion of existing nine 'H' Class vessels
Laying down of nine follow-up 'I' Class vessels
Funding for expedited revision of 'Ark Royal' class design to incorporate lessons learnt into existing hulls
Design study into updating 'King George V' class battleship design to remove treaty limitations.
Detailed design of 'Town' class cruisers and 'Tribal' class destroyers to be completed
Army Estimate
Establishment of permanent Expeditionary Force HQ and supporting units
Raising of six Infantry Division for assignment to Expeditionary Force
Formation of Experimental Mobile Division at Aldershot
Air Estimate
Volume production of Hawker Hurricane to replace existing front-line biplane fighters in RAF service.
Upgrading of Acoustic Location Mirror system to Watson-Watt pattern RADAR, the new stations to be part of the 'Dowding System' integrated aerial defence plan.
Urgent assessments and test flights of issued Air Ministry specifications with the aim of the complete removal of biplanes from RAF service
Starting with the easiest first, the Army's estimate was a simple reaction to the war and the acute shortage of available troops. That this was the case is unsurprising, for peace time Chancellors seeking to cut expenditure the military is always a tempting target and the reserve forces an almost irresistible one. Thus the fierce 'Geddes Axe' of the 1920s had hit the Territorial Army disproportionately hard, the 2nd Line units were disbanded on mass while the 1st Line and Yeomanry units were decimated, depriving the Regular Army of the ready pool of troops needed for rapid expansion. This deficiency was dramatically demonstrated at the start of the war, when the raiding of Territorial Army units produced barely enough men for three divisions, the 4th, 6th and 9th 'Highland'. Seizing on this the Imperial General Staff successfully lobbied for the recreation of a permanent Expeditionary Force, modelled upon the pre-Great War British Expeditionary Force setup under the Haldane Reforms. This would set the pattern for Army development over the following months and years, the emphasis being as much on the re-discovery and adaptation of old ideas as the development of brand new concepts. This was also the thinking behind the Experimental Mobile Division, a concerted attempt to re-create the Experimental Mechanised Force that had been scrapped on budgetary grounds in the late 1920s. The new division would not be a slavish copy however, but was an attempt to combine all the various work on mechanisation and motorisation into one project, using the latest technology and on a large scale. The Division would itself become a battleground between the various army factions, not only between modernisers and reactionaries but between those with different ideas about how to modernise.
In contrast to the Army's attempt to re-learn past lessons the Royal Air Force, with Churchill very much in the driving seat at the Air Ministry, was charging at break neck speed towards the future. The most pressing problem for the RAF was what to spend their new found wealth on, following the decision that keeping the 'Shadow Factories' open was good for the economy all the services were under pressure to utilise this capacity rather than have it stand idle or producing obsolete spares and supplies. This was a particular problem for the Air Staff as the Treasury had severely restricted the number of specifications they could issue in the early 1930s, the restriction only easing in late 1934. Given the typical lead time of peacetime aircraft development these specifications were only just beginning to progress to prototype stage, worse Churchill had cancelled a whole swathe of orders, the Gloster Gladiator and the army co-operation Hawker Hector being the most prominent, as he had determined the RAF would buy no more biplanes. Given the rapid rate of development he was probably correct to do so, the cancelled aircraft would never have seen front-line service except, perhaps, in the outer reaches of the Empire, certainly not against first rate opponents. The decision did however leave a gaping hole in the 'pipeline' of new developments, one that urgently needed filling to keep the factories busy. In the short term the go ahead for the Hawker Hurricane, combine with the existing Handley Page Hampden and Fleet Air Arm orders, would be just about enough leaving Britain's aircraft manufacturers working flat out over the summer to complete and test their prototypes in time for the autumn deadline.
The so called 'Reparations Fleet', the Italian cruisers surrendered by the Regia Marina into Royal Navy possession. Initially based in Alexandria the fleet would be transferred to Rosyth for in depth study and refitting to British standards.
The Royal Navy's Estimate appears relatively conservative at first glance, the Arethusa class was a proven design while the 'I' class destroyers were only a slightly evolution of the 'H's already on the slipway. The Estimate also pushed back most of the large scale decisions, the King George V class battleships and the new generation of light cruisers and destroyers would all be re-designed over the summer. The exceptions to this conservatism were the continuing of work on HMS
Ark Royal and the laying down of her sister ship HMS
Bulwark, both highly controversial moves when combined with the decision to re-design the basic design. That new aircraft carriers was needed was not in doubt, the decisive strike on Taranto harbour had proven to even the most sceptical that there was a role for aircraft carriers in the fleet beyond scouting while also exposing that the fleets' two oldest carriers, HMS
Argus and
Hermes were desperately in need of replacement. As with the other services the need to keep the shipyards open was a factor as was the fact that the Ark Royal design needed less work than the King George V, making it the least bad option. As with the other services the summer would not be for relaxation, especially for the Director of Naval Construction, Sir Stanley Goodall, and his staff.
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For the next update we descend into the fractious world of the Labour Party conference, thus I am obliged to issue the following warning: The next update will contain scenes of full frontal socialism and extreme social democrat action, viewers of a nervous disposition are advised to look away.
