64-70 Economy

Question 1

Economic problems

Answer 1

-Britain was lagging behind other countries
-Post war boom hadn’t influenced productivity or growth
-economy trapped in stop go
-balance of payments crisis
-inherited a deficit of £800 million

Question 2

Solution of deflation

Answer 2

-support the pounds value and prevent inflation
-it continued the stop go approach
-would stop the party from meeting their manifesto, welfare and tech spending limited

Question 3

Solution of devaluation

Answer 3

-would make imports more expensive
-help exporters, make british goods cheaper abroad
-make britain look weak
-would mean britain must scale back activities worldwide
-would give labour devaluation reputation - attlee 1949

Question 4

Wilson’s solution

Answer 4

-careful management and planning
-DEA created led by george brown
-set up economic planning councils
-prevents inflation, wouldn’t end in stop go cycle

Question 5

DEAs failure

Answer 5

-didnt have united government support
-were in competition with callaghan
-wilson picked personalities, not most suitable

Question 6

What led to devaluation

Answer 6

-prices and incomes policy to reduce inflation
-sterling crisis 1966 caused by seamen strike
-wilson harsh on strikers
-harmed relationship with trade unions

Question 7

Decision to devalue

Answer 7

-sterling crisises 65 and 66
-middle eastern war and dock striker 67
-devaluation unavoidable
-pound dropped 14 percent to 2.40 dollars
-made defence cuts and hire purchase limits

Question 8

Consequences of devaluation

Answer 8

-damaged labours credibility
-rejected from EEC again
-callaghan replaced by jenkins
-jenkins used deflationary methods
-raised taxes, tightened government spending
-made gov unpopular but achieved balance of payments surplus by 1969