1b: Response to economic challenges, 1951-1979 Flashcards
Did Britain suffer the entire time?
No. There was an economic boom until the 1970s, due to a global boom, but Britain did experience a relative economic decline due to spending more than it earnt.
What were some of the key issues of this period?
Balance of Payments Problems.
Devaluation.
Union unrest and unemployment.
Inflation.
Tories and post-war economy, 1951-1964:
What were the Tories opposed to?
They were opposed to further nationalisation (but wouldn’t reverse the current legislation) and rationing, thus all rationing was over by 1954.
Tories and post-war economy, 1951-1964:
Did the Tories follow their own economic view?
Not really; they subscribed to an economic consensus that prioritised full employment and a mixed economy.
Tories and post-war economy, 1951-1964:
How was unemployment under the Tories?
It stayed between 300,000 and 500,000 - no return to 1930s levels.
They used Keynesian PWS when it began to increase.
What did Empire withdrawal and the Commonwealth mean?
Allowed the govt to conserve money and spend it elsewhere.
Mass migration mean more migrant workers - Indian/Pak population:
1949 = 64,000 vs 1959 = 462,000 ] result of the British Nationality Act, 1948.
Tories and post-war economy, 1951-1964:
What was stop-go economics?
An attempt at controlling inflation AND unemployment.
When the economy grew too quickly, taxes and interest rates were raised to prevent excessive borrowing and spending.
Tories and post-war economy, 1951-1964:
Why did the Tories have to implement stop-go?
They encouraged consumer spending (consumer credit laws relaxed in 1954) but they struggled to face the consequences of high imports and inflation - this led to increased balance of payments problems.
Tories and post-war economy, 1951-1964:
What was the impact of exports by stop go?
They became less competitive, so compounded the balance of payments issues further.
Tories and post-war economy, 1951-1964:
What were living standards like in 1957-1964?
Living standards were rising - “never had it so good.”
Tories and post-war economy, 1951-1964:
What was economic output like compared to rivals?
Poor.
Britain’s economic growth in 1960 was 4%; this was 12% in Japan.
Tories and post-war economy, 1951-1964:
What did MacMillan experiment with, and why?
Corporatism.
He was a one-nation conservative so tried to unite the country through getting cooperation labour, government and business managers.
Tories and post-war economy, 1951-1964:
How did Macmillan try to implement corporatism?
NICKY (National Incomes Commission).
NEDDY (National Development Council and Office).
Tories and post-war economy, 1951-1964:
What was NEDDY?
An institution that encouraged union and management co-operation and discussion of economic developments.
However, it had no legal control and was only suggestive - wrongly assumed that the goals of business and unions would be aligned.
Tories and post-war economy, 1951-1964:
What was NICKY?
Provided guidance over reasonable price increases - workers wanted higher wages to buy into materialism.
It was purely advisory so unions (shop stewards) ignored it.