The Harrogate Programme of 1939
Thus as long as the final aim of the current programmes remained fixed at 12,000 aircraft by the spring of 1940, and the war potential at 2,000 aircraft per month, relatively little had to be added to the existing provisions. Before long, however, both the figure of 12,000 aircraft and that of the monthly output in war came to be reconsidered. In the months immediately preceding the outbreak of war the Air Ministry asked the Cabinet to authorise immediate ‘follow-on’ orders to the aircraft industry. Eventually the Ministry obtained the agreement of the Treasury to the raising of the total number of Aircraft on order from 12,000 to 17,500 on the understanding that the additional 5,500 were to be delivered after 1st April 1940. But this was obviously not enough. The Air Staff had been nursing plans for following up Scheme L with a further programme in order to keep pace with continued German expansion, and it was also necessary to maintain the operational quality of the Royal Air Force. A number of new aircraft, principally heavy bombers, had been under development since 1936, and a new programme to embody them was now thought both necessary and possible. The War Cabinet had also before it projects for an all-round increase of the Army to 55 divisions, and that alone would have necessitated additional aircraft for army cooperation.
On 9th September 1939 the Air Council decided that the objective of the RAF requirements should be increased from 2,000 to 3,000 new aircraft per month, based on an assumption that the war would last three years. The ambition reflected by these numbers was indeed very high, and even prompted a certain amount of criticism inside the Air Ministry. A smaller programme was therefore worked out for submission to the War Cabinet. On the assumption that 240 aircraft per month would be available from the Dominions, the target for the third year of the war – June 1942 – was set at 2,550 aircraft per month.
With this hopeful addendum the programme of 2,550 which came to be known as the Harrogate Programme formed the basis of wartime planning and was indeed to prove the most stable and most permanent of all the estimates of future output ever made in the Air Ministry or in the Ministry of Aircraft Production.
In view of the removal of budgetary constraints on rearmament, one financial factor still limiting its excess was the reserve of hard currencies. Concern about means of payment abroad and more especially about gold and dollars began to colour the financial policies of rearmament some time before war broke out. The effect of the dollar shortage on war supplies turned out to be even greater than the early estimates indicated. The theme became more pronounced as the implications of the American policy of ‘cash and carry’ became apparent. A rough statistical inquiry at the Bank of England and the Treasury showed that the realisable reserves of foreign exchange would not allow expenditure of gold, dollars, or other hard currencies to exceed £150 millions per year for three years. This set a limit on rearmament which was bound to slow down to a rate of progress which would spread the dwindling dollar reserves over a three-year war. It was not until February 1940 that the Allied Governments showed signs of accelerating their military purchases abroad beyond the pace dictated by dollar prudence, and agreed to spend their foreign exchange more quickly than the dollar rations would allow. The balance of payments policy was in fact only wholly abandoned when the Churchill Government took office.
Industry Under Government Control, 1939-1940
When in the autumn of 1937 the Cabinet considered further expansion of the Air Force which eventually led to the L programme, the Secretary of State for Air took the opportunity to point out how difficult it was to expand the production of aircraft while ‘business remained as usual’. He warned it that so long as the Government did not allow rearmament to interfere with the normal processes of industry the programme could not be completed by the end of 1939 but would require additional two years. In February 1938 the argument received forceful backing of the Chiefs of Staff, who argued that the policy of non-interference with normal trade would be a serious handicap when Britain was competing with Germany whose whole financial, social and industrial system had in fact been mobilised on a war footing for at least three years.
Consequently, when the Government finally decided to remove the financial limits and to order all that the industry could produce it was also bound to reconsider the entire system of industrial priorities. On the 22nd March 1938 the Cabinet decided that the entire industrial production must be governed at the nation-wide level. In word of the Prime Minister at the House of Commons, ‘men and material will be required, and rearmament work must have first priority in the nation’s effort. The full and rapid equipment of the nation for self-defence must be its primary aim‘. These decisions formed a basis for later creation of the Ministry of Aircraft Production in 1940, with which the Churchill Government de facto took control over industrial planning, distribution of resources, priorities and stockpiling.
In the period between Munich and June 1940 the problem with which governmental planners were mainly concerned was the supply of skilled workers. A lesson which emerged from the First World War was that the heavy demands on the munitions industries lead to haphazard recruiting of the more important skilled workers. The idea of a ‘central’ schedule of protected occupations had been evolved late in the 1914-18 war when the authorities had been called upon to extricate from the Services men essential to industry. One of the problems faced at the eve of the new war was eventual indiscriminate call-up of men to the armed forces. One of the results of economic depression at the beginning of 1930s was small intake of learners and apprentices, leading to increase the proportion of younger men in the skilled grades, which also were eligible for service in the armed forces. These had to be shielded from conscription to avoid endangering the labour supplies of war industry.
This and the simultaneous problems of distribution of skilled labour were well understood by the planners and became the subject of the Ministry of Labour’s planning starting with 1939. So far as there were still reserves of skilled labour in the country, either among the unemployed or in firm not engaged in war production, the remedy was to organise a wholesale transfer of labour. However, for various political and economical reasons the Ministry of Labour did not enforce transfers of labour until about mid-1940.