| By Finlo Rohrer BBC News Magazine |
Big cuts on the horizon, the media campaigning for an end to waste and those affected bitterly protesting. Sound familiar?
It might surprise a lot of people to think that 1921 and 2010 have a lot in common.
In 1921 public finances were looking shaky after years of rocketing expenditure during World War I and its aftermath.
The national debt had risen rapidly and many people - even outside the worlds of politics and business - weren't happy.
Agitation was led by Lord Rothermere, the Daily Mail owner, whose Anti-Waste League had started fighting by-elections on a manifesto of attacking excessive public spending.
At the same time cutting government spending was not a simple issue, with the Labour Party looking to use it rally people to its cause.
"The government of Lloyd George was being caught between Labour in the North and the Anti-Waste League in the south being led by the Daily Mail," says Martin Daunton, professor of economic history and author of Wealth and Welfare: An Economic and Social History of Britain, 1851-1951. " They were putting on candidates in this lower middle class attack on waste."
Shuffling responsibility
With this gathering storm in mind, at the start of August 1921 David Lloyd George announced the creation of an advisory committee of businessmen to advise him on departmental spending and the policy underlying that spending.
"Lloyd George, although a liberal, had a habit of calling on businessmen," says emeritus professor of history George Peden, author of The Treasury and British Public Policy, 1906-1959. "They had a reputation of being impartial, experts who knew how to get things done. It is politicians shuffling off the responsibility onto someone else."
The committee was led by businessman Sir Eric Geddes, who had joined the government in the war, before becoming minister of transport. He was not an uncontroversial choice, having presided over a ministry associated with lavish spending.
 Expenditure on WWI pushed the UK into debt |
But everybody knew which way the wind was blowing. The Times on 4 August 1921 had christened Geddes's new body the "Big Axe" committee, and coldly noted: "The Prime Minister has desired to set up the committee to take the sting out of the anti-waste agitation."
By 9 August, the Times was dubbing it the "Super-Axe" committee and asking questions about a body that seemed to bypass the chancellor, cabinet and even Parliament.
The need for action was clear to many. As Prof Daunton notes, the national debt had risen dramatically from a paltry £677.4m against a GDP of £2.233bn in 1910. By 1920 it was £7.809bn against a GDP of £6.23bn.
And the cost of servicing the debt was unpleasant with interest rates running at 5% in 1921, compared with 3% 10 years earlier.
"The Geddes committee was a piece of political rhetoric saying we are going to slash public expenditure," says Prof Daunton.
Defence cuts
"It was an incredibly tense period. The lower middle class really felt they had been hammered [through taxation]. There had been a big rise in trade union membership and militancy."
In February 1922 the recommendations of the first two-thirds of the report were made public, totalling £75m of annual cuts. The first part dealt with cuts in the armed forces, and the defenders of the Navy, for example, were quick to rail against some of the measures. The third part followed a short while later and covered another £15m in cuts.
 |  The next government is going to have many challenges, but tackling a public sector that has become obese and poor value for money is going to have to be a priority  The Times, 2010 |
"The bigger cuts were in defence. More controversial were the cuts in social services," says Prof Peden. "The then government under Lloyd George had promised a 'land fit for heroes' and then began to cut back on those promises."
Speaking in the Times after the release of the report, Sir Daniel Stevenson of Glasgow attacked the "cheeseparing" planned for the vital field of education.
But George Terrell, MP and president of the National Union of Manufacturers, probably gave some indication of the mood of business in response to the report.
He told the Times: "When the history of the war is written I am firmly convinced that Sir Eric Geddes will rank as a superman who not only performed great work in the war but who, by his Report, has indicated reforms which are necessary if we are to overcome the evils of unemployment and to recover financial stability."
| There are signs of an astonished realisation of the alarming bill for civil pensions that in a few years will be a millstone on the taxpayer's neck The Times, 1922 |
The overwhelming feeling was that something had been done and cuts were being made. "They were pretty severe at the time," says Prof Peden.
Apart from defence where there were widespread reductions, the blade of the Geddes Axe fell primarily on education and social housing.
Geddes scalpel
But the effect was not permanent. After cuts in the financial years between 1921-1924, expenditure again began to creep back up.
"After a couple of years the onward march of public expenditure resumed," says Prof Peden.
And for some, the Geddes Axe was not really that sharp at all.
 The report was well received by business but did draw protests |
"My argument is that it was not a Geddes Axe - it was a Geddes scalpel," says Prof Daunton. "It didn't slash expenditure as much as expected. It wasn't very rigorous. The level of government spending does not go down."
Instead, the real story is successive British governments quietly steering towards calmer fiscal waters.
"Compared with Germany and France, in Britain the government very carefully moves through this. It doesn't introduce a sales tax, it doesn't put up the income tax rate - but it does keep up the taxation on business.
"You gradually work your way out without cutting government expenditure."
It's certainly possible to find echoes of 2010 in 1921.
"The parallel you might make is the tremendous effort made by whoever's in power to win the confidence of the markets," says Prof Peden.
And the idea of taxpayers getting exercised over the national debt is also familiar. The idea of a taxpayers' revolt has certainly come up since.
"That's comparable to the feeling that brought Margaret Thatcher to power," says Prof Peden.
 Lord Rothermere's Anti-Waste League helped spur the cuts |
There are other echoes. The Times noted in 1922: "There are signs of an astonished realisation of the alarming bill for civil pensions that in a few years will be a millstone on the taxpayer's neck."
Perhaps the most extraordinary thing about the Geddes Axe was that it seemed to work as a political tool. The Anti-Waste League wound down. People were largely satisfied by the cuts, says Prof Daunton.
Lloyd George's political career was ended, but not by the issue of the national debt. The government continued to operate.
"Looking back the finances of the period look very sound and conventional compared with where they are now," says Prof Peden.
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