British aviation: Government versus industry after WWI

Posted by Matthew Powell on 27 January 2020

Debate:  The Economics of the Second World War: Seventy-Five Years On

In the run up to WWII, the Air Ministry looked to expand the capacity of the aircraft industry in Britain through the building of shadow factories. This scheme saw the government build empty factories and invite engineering and car manufacturers to utilise them to build airframes and aero-engines under the supervision of traditional aircraft firms such as Fairey, Short Brothers and Westland. The shadow factory programme was a key to the rapid increase of aircraft production when war broke out.

Historians have described the efforts of government and the aircraft firms to expand the industry in the 1930s (Hayward 1989, Edgerton 2005, 2006, 2013, Fearon 1979, Hyde 1976). Less is known about the efforts of the 1920s, which failed for a variety of reasons, including strict limits on defence procurement and a general war weariness. These failed efforts, which I describe in Powell (2018), helped to guide rearmament when it began in earnest in 1936.

The British aircraft industry ended WWI in a healthy position. The supply of aircraft to the Western Front had been profitable. The industry had encountered significant limits on supplies of skilled labour and raw materials. Because the market remained relatively small, the industry was still organised on cottage lines, with skilled artisans assembling airframes and engines one at a time by hand in small workshops.

The relationship between the newly created Air Ministry, formed alongside the Royal Air Force on 1 April 1918, and the aircraft firms was one of mutual dependence. While the dependence was mutual, the firms had the upper hand: aircraft had become a strategic necessity for the defence of the UK, and the state feared losing its only domestic suppliers. The Air Ministry could not afford to withhold production contracts from firms that might go bankrupt, causing the collapse of the aircraft industry and leaving Britain vulnerable militarily and politically.

However, the Air Ministry’s means were limited. Throughout the 1920s, expenditure on military equipment was severely restricted under the Ten-Year Rule. This planning rule, repealed only in 1932, stated that Britain would not engage in a major conflict for the next ten years. Despite this restriction, the Air Ministry looked to develop a strategic reserve of unused capacity within the aircraft industry that could be brought into operation in the event of unpleasant surprises. 

The Air Ministry’s interest in procurement was piqued by the downturn in relations between London and Paris because of the 1923 Ruhr Crisis, when the German government refused to pay the reparations expected under the Treaty of Versailles. While war remained unlikely, the crisis demonstrated France’s air superiority. The French air force numbered approximately 500 aircraft (Alexander and Philpott 2002) compared with 120-150 aircraft available to the British. 

Reviewing the situation in 1923, the Air Ministry saw an industry unready for up-to-date, mass-produced airframes and aero-engines. Mass production of aircraft, still in its infancy, would have given a significant advantage to Britain. But the small existing market gave no incentive for British aircraft firms to move to mass production techniques  

Its proposals now brought the Air Ministry into direct confrontation with the private firms. Under the proposed scheme, aircraft constructors would be required to create extra capacity that would only be utilised in an international emergency. However, the Air Ministry made it clear to both the firms and their trade body, the Society of British Aircraft Constructors (SBAC), that whilst the government was the primary customer for most firms, it could not fund the reserve capacity. The evidence suggests that the Air Ministry hoped to appeal to the industry’s patriotic motivations. 

In resisting these appeals, the aircraft firms faced two issues. They did not wish to invest their own money in new floor space, tools, jigs and labour, knowing that they would be unable to utilise these resources while aircraft orders remained the same. Another issue was the rapid pace of technological development. As the requirements for aircraft construction changed from wood, string and canvas bi-planes to all-metal monoplanes, any investment in established technologies that produced obsolescent aircraft would be wasted (Ritchie 1997). 

The Air Ministry were unable to increase their orders for aircraft as their budget was restricted due to the political and strategic outlook (French 1990). Defence funding remained unpopular with the British public. Despite these problems, the Air Ministry still conducted investigations into what the aircraft industry would require in case of a diplomatic emergency or surprise declaration of war. Air Commodore L.E.O. Charlton was appointed to conduct the investigations, working closely with individual manufacturers and the SBAC. 

Charlton found himself at the sharp end of the industry’s attempts to shape the relationship with the Air Ministry. The industry put up a united front against the Air Ministry’s attempts to build capacity. 

By exploiting the Air Ministry’s fear of losing the industry altogether, the aircraft firms succeeded in block the plan for a strategic capacity reserve. The differing perspectives of the Air Ministry and aircraft industry would eventually be reconciled only when the threat of total war focused the minds of both parties and forced them to collaborate in the national interest. 

Charlton’s investigations did reveal how and where firms might struggle when the industry went over to mass production and this knowledge was utilised under rearmament from the mid-1930s. Then the Royal Air Force expanded at such a rate that firms could not keep up with the required deliveries. The work done by Charlton in the 1920s helped the Air Ministry to manage these problems.


Alexander M S and W J Philpott (2002), “Introduction”, in M S Alexander and W J Philpott (eds), Anglo-French Defence Relations between the Wars, Palgrave Macmillan. 

Edgerton, D (2012), Britain’s War Machine: Weapons, Resources and Experts in the Second World War, Penguin.

Edgerton, D (2013), England and the Aeroplane: Militarism, Modernity and Machines, Penguin.

Edgerton, D (2006), Warfare State: Britain, 1920-1970, Cambridge University Press.

Fearon, P (1979), “Aircraft Manufacturing”, in N K Buxton and D H Aldcroft (eds), British Industry between the Wars: Instability and Industrial Development, 1919-1939, Scholar Press.

French, D (1990), The British Way in Warfare, 1688-2000, Routledge.

Hayward, K (1989), The British Aircraft Industry, Manchester University Press.

Hyde, H M (1976), British Air Policy between the Wars, 1918-1939, Heinemann.

Powell, M (2018), “Capacity for War: Preparing the British Aviation Industry in the 1920s”, Journal of the Royal United Services Institute 163(3): 28-34.

Ritchie, S (1997), Industry and Air Power: The Expansion of British Aircraft Production, 1935-1941, Routledge.