A changing political and economic environment Flashcards

1
Q

How much debt was Britain in after WWI

A

£3.2 billion

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2
Q

What did the Labour party emerge from

A

The trade union congress

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3
Q

What did the liberal party believe in?

A

Free trade and a limited role for government.

They were a party of social reform.

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4
Q

What social reforms did the liberal party implement from 1906 onwards

A

-1906 free school meals
-1907 school medical inspections
-1908 Children’s charter
-1908 Introduced pensions
-1909 Labour exchanges set up
-1911 National Insurance Act is passed

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5
Q

Who became PM in 1908

A

Herbert Asquith

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6
Q

Why did the liberal party experience growing unrest pre war?

A

-The issue of Home Rule in Ireland
-The women’s suffrage movement
-An increasingly militant trade union movement

All three were paired with the outbreak of world war

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7
Q

Why did WWI divide the liberals

A

-Many opposed the growth in the power of the state, particularly with conscription

-Resulted in a coalition between conservatives and liberals 1915 onwards. Many believed Lloyd George had abandoned the principles of the party and become too conservative

-In the 1918 GE Lloyd George campaigned against liberal members who stood in independent opposition to him, splitting the party’s votes

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8
Q

Who became PM in 1916

A

David Lloyd George

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9
Q

Why did it become easier for working class politicians to be elected to parliament after 1911?

A

-Liberal government allowed for wages for Mps
-This meant that politics was no longer solely an activity for people who were already independently wealthy

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10
Q

What was the Representation of the People Act 1918

A

-Allowed British adult men over age 21 to vote

-Women over the age of 30 given the vote if they owned property or member of a local government register or their husband was

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11
Q

When was the Representation of the People Act introduced?

A

1918

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12
Q

Which parties formed a coalition 1915-1918

A

-Liberal and conservative

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13
Q

Where did a large portion of conservative votes come from after 1918

A

-Newly enfranchised, property owning women

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14
Q

Who won the 1918 post war general election

A

-David Lloyd George’s coalition

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15
Q

Why did the liberal party decline

A

-Scandals- DLG sold knighthoods, including to people with criminal record
-Rise of the labour party
-Appeal of the conservative party
-Split of the coalition parties

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16
Q

How many knighthoods did Lloyd George sell

A

1500

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17
Q

Which party won the 1924 General Election and who led it?

A

-Labour party (first labour gov)
-Ramsay MacDonald

(minority government)

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18
Q

What was the 1924 labour government committed to?

A

-Parliamentary democracy and went to great lengths to demonstrate how moderate it was

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19
Q

What was one of the main problems MacDonalds first Labour government faced

A

Strained relations with the National Executive Committee of the Labour Party

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20
Q

Why did MacDonalds first labour government face strained relations with the National Executive Committee of the Labour party

A

MacDonald was forced to make harsh economic choices that effected the poorest voters and had to manage the threat of industrial action.
As PM he had to compromise
However the party criticised him for not being more radical

He was dependent on liberal support so being more radical would have caused decline in votes

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21
Q

Housing Act 1924

A

Increased amount of money available to local authorities to build homes for low income workers

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22
Q

How long did MacDonald’s first Gov last

A

9months

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23
Q

Why did MacDonald’s first Gov collapse

A

-A motion of no confidence, which was brought about due to allegations of him having secret communist sympathies, which he narrowly won. This was coincided with his attempts to normalise relations with the Soviet Union
-A second motion was passed, calling for an enquiry into the withdrawal charges of a communist. He was then forced to resign

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24
Q

Which party won the October 1924 election and who led it

A

-The conservatives under Stanley Baldwin

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25
Q

How many seats did conservative gain compared to labour, October 1924 GE

A

-C= 412

-L=151

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26
Q

How did Stanley Baldwin’s 1924 conservative gov present itself

A

-An alternative to the labour government and the threat of socialism in Britain

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27
Q

How did Baldwin want to be seen and what did he discourage

A

-A moderate politician who could appeal to all social classes

-He discouraged the conservative party from attacking the labour party as secret agents of the USSR

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28
Q

Why did Baldwin oppose the Private Members Bill 1925?

A

-It prevented the Labour party from receiving a political levy (funding) from trade unions. Many conservative members believed they should weaken the labour party.
-He was more concerned with political stability than conflict between parties

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29
Q

Why did Baldwin’s concillatory approach to politics fail

A

-The General Strike caused him to yield to pressure from other members to introduce laws reducing labour’s funding from Unions

1927 Ammendment to the 1906 trade disputes Act

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30
Q

What was the 1927 Ammendment to the 1906 trade disputes Act

A

-The political levy on union members could no longer be automatically be deducted from their union membership and passed to the labour party.
Members had to agree to pay it.

-Over 1/3 chose to opt out causing labours finances to decrease by 35%

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31
Q

How long did Stanley Baldwins Conservative government last?

A

October 1924-29

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32
Q

What were the results of the 1929 General Election?

A

-Conservatives won the largest share of popular votes however it did not translate to an overall majority of seats
-MacDonald returned to power under the labour government

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33
Q

Housing Act 1930

A

-Cleared 3/4 of 1 million slum houses and replaced them with modern homes by 1939

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34
Q

The Coal Mines Act 1930

A

Attempted to ensure better pay for workers and more efficient pits but the weakness of the legislation ensured that mine owners could ignore it

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35
Q

Ammendment of the Unemployment Insurance Act (Under MacDonald)

A

-Gave the Government powers to create public works schemes to alleviate unemployment.
Was funded by £25 million of government money

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36
Q

Why was MacDonald’s government limited in the social reforms it could achieve (1929-31)

A

The economic crisis
(depression)

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37
Q

What measure did MacDonald’s government implement to help stabilise finances (1929-31) and what was its impact?

A

-Implemented 10% cut in unemployment assistance, which helped to stabilise the value of the pound

However caused hardship for Britain’s poorest and caused division within his cabinet as many disagreed with introducing it. Snowden and MacDonald were then expelled from the labour party

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38
Q

When did MacDonald’s second government resign

A

1931 August

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39
Q

What problems did Ramsay’s government face between 1929-31

A

-Rise of facism
-Strikes
-Wall Street Crash
-The Great Depression

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40
Q

What did Snowden and MacDonald form after being expelled from the labour party

A

-National Labour Committee

was designed to sponsor labour parliamentary candidates who supported the National government

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41
Q

Who won the October 1931 General election

A

-The National Government

Won by a huge majority

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42
Q

Who led the National Government between 1931-35

A

Ramsay MacDonald

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43
Q
A
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44
Q

Why did votes for the labour party slump at the October 1931 General election?

A

-Many voters believed the party was putting its own interests and those of the unions before the national interest.

They only got 46 seats

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45
Q

What problems did the National Government face between 1931-35

A

-Economic Crisis
-Attempts to rearm due to the rise of fascism in Europe
-Threat of fascism at home
-Implementing spending cuts

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46
Q

What was the National Governments economic policy implemented to deal with the economic crisis 1931-35

A

-Implemented spending cuts (caused previous govs downfall)

-Public sector pay cuts of 10% (so harsh it lead to a mutiny in the Royal Navy)

-Removed Gold standard and introduced tariffs to help boost the economy

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47
Q

What was the result of the National Governments economic policy

A

-Economy recovered from the economic crisis and the National Governments popularity increased, however MacDonald became increasingly isolated within the government

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48
Q

Who was the National Governments official opposition during the 1930s

A

The Labour Party

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49
Q

What did the Labour party focus on doing during the first half of the 1930s?

A

-Reorganising itself, leading it to become the National Governments official opposition

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50
Q

Who became leader of the labour party in 1935?

A

-Clement Atlee

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51
Q

How many seats did Labour gain at the 1935 General Election

A

154

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52
Q

Why did membership of communist and fascist parties increase in the 1930s

A

-More people became convinced that liberal democracy no longer had the answers to the economic crisis

-For example, Fabians like Sidney and Beatrice Webb visited the USSR, believing communism to be an economic success

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53
Q

How many members did the British Union of Fascists have by 1934

A

50,000

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54
Q

How many members did the Communist party of Great Britain have by 1934

A

9,000

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55
Q

What did the communist party of Great Britain organise in the 1930s

A

-The National Unemployed Workers Movement

Represented hundreds of thousands if unemployed men

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56
Q

What party was Oswald Mosley originally part of

A

Labour

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57
Q

What did Mosley set up after resigning from the labour party

A

Set up the New Party March 1931

In 1932 he then drew all British Fascist organisations together with the New Party to form The BUF

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58
Q

Who was Mosley inspired by when setting up the New Party

A

-The seemingly dynamic economic policies of Mussolini’s Italy

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59
Q

What was the Public Order Act and when was it passed

A

-1936
-Banned groups from wearing uniforms and they required permission for marches and demonstrations

The BUF never became a threat to the Government and began to decline after 1936

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60
Q

What were the reasons for rearmament in the 1930s

A

-Fear of fascism and the rise of Hitler
-The Peace Ballot 1934
-The failure of the World Disarmament conference when Germany withdrew 1933

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61
Q

Reasons for disarmament and peace during 1930s

A

-Many attracted to this after the traumatic experiences of WWI

-League of Nations offered peaceful solutions to world conflict

-By this time the Treaty of Versailles was overturned by Hitler and the idea that Germany was solely responsible for WWI was rejected

-The World Disarmament Conference 1932-1934

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62
Q

What was the World Peace Ballot 1934

A

-Organised by the League of Nations and asked opinions on war and security

-11million people agreed to the idea of collective security

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63
Q

When did Britain begin rearm

A

1934 onwards

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64
Q

How did Britain begin to rearm

A

-RAF was increased in size to 40 squadrons (Air power important for future conflict)
-The British Army was reorganised
-The Royal Navy was expanded
-The munitions industry was developed in partnership with private capital

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65
Q

When did Ramsay MacDonald resign and who replaced him (National gov)

A

-1935 due to ill health
-Stanley Baldwin

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66
Q

Who became PM in 1935

A

-Stanley Baldwin

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67
Q

Why did the Labour party remain divided on the question of peace and security during Baldwin and Chamberlain’s Leadership

A

-Left- Rearmament made war more likely not less

-Centre- Led by Atlee. Collective security would make war impossible so rearmament was unnecessary

-Right- Many had left and moved towards supporting other parties

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68
Q

World events that made collective security more difficult

A

-1935: Abyssinian Crisis
-!936: German reoccupation of the Rhineland
-1936: Outbreak of the Spanish Civil war
-1937: Manchurian Crisis
-1938: Sudetenland Crisis and annexation of Austria (anschluss)

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69
Q

How did Hitler fully overturn the Treaty of Versailles in 1936

A

-Germany re-occupied the Rhineland

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70
Q

How did the National Government react to Germany’s reoccupation of the Rhineland?

A

-Divided between taking action and backing down .
-Resulted in them not imposing economic sanctions but Baldwin continued to rearm

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71
Q

How long was Stanley Baldwin PM for

A

1935-37

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72
Q

Who became PM in 1937

A

Neville Chamberlain, former chancellor

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73
Q

How long was Chamberlain PM for

A

1937-40

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74
Q

What foreign policy did Neville Chamberlain follow particularly with Nazi Germany and why?

A

-Policy of appeasement

Wanted to prevent war by any means possible
France also followed this policy

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75
Q

What international problem was there between 1935-40

A

The breakdown of international order made war increasingly likely

The League of Nations failed to find peaceful resolution to conflict

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76
Q

What made rearmament more difficult in Britain

A

The anti war movement in Britain was growing in strength

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77
Q

When was it clear that Chamberlain’s policy of appeasement failed?

A

When Hitler broke the Munich agreement and invaded the rest of Czechoslovakia

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78
Q

When did Germany invade Poland

A

1st September 1939

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79
Q

When did France and Britain declare war on Germany

A

3rd September 1939

Lasted 7 months

80
Q

What happened in the Norway debate in Parliament 7th May 1940

A

-Chamberlain was criticised for ‘incompetently’ handling the war.
-He narrowly won a motion of no confidence but recognised it in real terms as a defeat

81
Q

What did Chamberlain do 9th May 1940

A

-Attempted to form a new coalition government but the labour party refused to serve under him, leaving either Lord Halifax or Winston Churchill to fill the position

82
Q

When did Churchill become PM

A

-10th May 1940

The day of Germany’s invasion of France

83
Q

What did Stanley Baldwin think about disarmament

A

-Argued not for disarmament but agreements limiting arms so that nations could have parity

84
Q

Why was politics described as ‘consensus’ between 1945-79

A

There was a broad agreement between both parties on the running of the economy and the development of the Welfare state

85
Q

What did the labour and conservative party both believe in during consensus politics 1945-79

A

-Attempting to achieve full employment (even though this might allow a degree of inflation)

-A mixed economy with heavy industry, railways and other parts of the national infrastructure in state ownership

-A welfare state and a NHS

-Co-operation between the government and the trade unions in managing wages and prices

86
Q

When did the labour party signal it’s intention to withdraw from the coalition?

A

May 1945, following WW2

87
Q

Which party won the July 1945 general election, how many seats?

A

-Labour Party

393 seats whereas conservatives got 210

88
Q

Why did conservative votes decline at the 1945 General election

A

-Churchill believed he would be rewarded by a grateful British public for his wartime service

-There were bitter memories of the conservative pre-war governments economic hardship (debts after war)

-Made crass claims that a post war labour government would rely on a ‘gestapo’ in order to police its planned social reforms

-Labour’s manifesto resulted in a landslide victory

89
Q

What was the labour party’s manifesto and what did it promise (post war)

A

‘Let us face the future’
Promised action on:

-Housing
-Jobs
-Social security
-The NHS

This resulted in a landslide victory

90
Q

What were the main social reforms passed by the labour government 1945-51

A

-Establishment of NHS 1948
-The National Insurance Act 1946
-The Housing Act 1949 ( extended local authorities ability to build housing)
-The Implementation of the Education Act 1944

91
Q

Who was PM 1945-51

A

Clement Atlee

92
Q

Which party won the 1950 General Election

A

-Labour
-Majority was slashed to just five seats, however still polled 1.5 million more votes than conservatives

93
Q

Reasons for labour’s decline in votes at the 1950 General election

A

-1949 House of Commons (Redistribution of seats) Act
-Decline of their popularity with the middle class voters
-The working class population was shrinking
-Rationing
-Austerity
-Taxation
-Conservatives offered to preserve the main features of the Welfare state

94
Q

What was the 1949 House of Commons Act?

A

(Redistribution of seats)

-Reduced the number of labour safe seats by redrawing constituency boundaries

95
Q

Why was the shrinking size of the working class a reason for decline in votes for the Labour party in 1950

A

-78% of British people identified themselves as working in 1931.
In 1951, this changed to 72%
-This meant more felt less inclined to vote for them or be part of a trade union

96
Q

Why was rationing why labour declined in votes in 1950

A

-Wartime food and fuel rationing continued after the war and some items during war that were not restricted like bread were now rationed

97
Q

Why was austerity why labour declined in votes in 1950

A

-The labour party seemed unable to revive Britain’s struggling economy in the immediate post war years

98
Q

Why was taxation why labour declined in votes in 1950

A

-The standard rate of taxation in 1949 was 9 shillings in every £1 (45 per cent)
-The top rate of Marginal tax for high earners was 90 per cent

99
Q

What war did Britain become involved in 1950

A

The Korean war

Joined to protect South Korea as part of the United Nations force

100
Q

What impact did Britain joining the Korean War in 1950 have on the economy

A

-Resulted in a huge increase in military spending and the new chancellor Hugh Gaitskell announced an ‘austerity budget’ in 1951

(included introduction of prescription charges for glasses and dentistry)

101
Q

How much debt did Britain accumulate from WW2

A

£21 Billion

102
Q

What party won the 1951 General Election and who led it?

A

-Conservatives under Winston Churchill

103
Q

How long was Churchill PM for during his second ministry?

A

1951-55

104
Q

Who replaced Churchill in 1955

A

Anthony Eden
-Was previously Churchill’s foreign minister

105
Q

When did India become independent

A

1947

106
Q

What was the Suez canal used for by Britain, Europe and America after 1947?

A

-To ship oil to Britain, Europe and America

107
Q

What was the 1956 Suez Crisis?

A

-President Nasser of Egypt stated the Suez Canal should be in Egyptian hands and that he would pay British shareholders a fair price. Nasser then occupied the Canal zone July 26 1956. His close relationship with the USSR convinced the British that it would soon be in Soviet hands.
-France and Israel invited Britain to take part in an invasion of the Suez Canal Zone. Eden agreed in secret and did not inform President Eisenhower. His standing in the party depended on presenting a strong image as an international statesman. The invasion took place 5th November 1956.

108
Q

How did President Eisenhower respond to Britain, France and Israel’s invasion of the Suez zone 1956

A

-Felt angry and deceived as he had not been informed of Britain’s intentions.
-He threatened to sell America’s reserves of British currency and collapse the value of the pound. Faced with a possible economic crisis, Britain withdrew and Eden resigned January 1957

109
Q

When did Anthony Eden resign

A

January 1957, following the withdrawal of Britain from the invasion of the Suez zone

110
Q

Who replaced Anthony Eden in 1957

A

-His chancellor of the exchequer, Harold MacMillan

111
Q

What made MacMillan’s government very popular between 1957-63

A

-A mixed economy, rising living standards, low unemployment, declining social inequality

(in 1957 British wages and living standards were at their most equal between the rich and poor)

112
Q

Which 3 members of MacMillan’s government resigned in 1959, why?

A

Chancellor Thorneycroft, Treasury Minister and the Financial Secretary to the Treasury all resigned

-They believed the government was spending too much and storing up economic problems for the future. They were convinced that inflation not unemployment , posed the biggest threat to the economy; they proposed spending cuts, tax rises, an end to subsidies to nationalised industries and other measures to take the excess money out of the economy that they claimed was the cause of inflation.

-These views were different to the ones of the other politicians at the time

113
Q

What was the Knight of the Long Knives 1962

A

-Many people began to believe the conservative party to be out of touch due to MacMillan’s privileged background and his cabinet was dominated by members of the upper class
-The labour party argued that privileged aristocratic conservatives who had risen due to their connections not ability were holding Britain back.

-To demonstrate he was under control of his government, he sacked 7 ministers of his cabinet and replaced them with younger men so they could be seen as young and meritocratic

114
Q

Why did the Knight of the Long Knives 1962 cause conservative decline

A

-Although it may have made him more popular to some, demonstrating he could take action and control, however, he sacked members who were popular to some of the middle class voters and so votes for conservatives decreased

115
Q

What scandals occurred 1951-63

A

-John Profumo: Secretary of State for War
Admitted to having an affair with a model, Christine Keeler, a model, despite having previously denied the affair to Macmillan who had believed him. However it later was revealed that she had a relationship with Russian attache, Yevgeny Ivanov. There was rumours that she was passing information to him.

-Harold ‘KIm’ Philby: Head of British Counter intelligence
January 1963, he defected to the USSR. He had been under suspicion for spying for them since the early 1950s, and as foreign secretary in 1955, Macmillan had announced that he had investigated him and exonerated him. When he defected to the USSR it was hugely embarrassing for him. However, due to the Official Secrets Act, it was not revealed until 1968 that he was important within the MI6

-John Vassal: Naval attache
Blackmailed between 1952-62 by the KGB. He passed on large quantities of top secret information on the Royal Navy. he was caught when Soviet spies defected to the West and gave MI6 Vassal’s name

-

116
Q

Why was the impact of the spy scandals that occured between 1951-63

A

-Happened during the height of the Cold-war so people were already weary
-Conservatives were mistrusted with national security
-Revealed the instability within the government an British intelligence as very high ranking people had betrayed Britain

117
Q

When did Macmillan resign and who replaced him?

A

Resigned October 1963, replaced by Sir Alec Douglas-Home

118
Q

Why did Sir Alec Douglas Home suffer from an image problem

A

-Although he was regarded by many to be a skilled administrator and astute politician, he suffered from an image problem that dampened the conservative party’s chances of winning the 1964 General Election
-He was a member of the House of Lords and had the title of Earl, which he renounced when becoming PM)
Satirists on television and in magazines like Private Eye, ridiculed him for his aristocratic manners

119
Q

What did the 1969 Representation of the People Act do

A

-Lowered the voting age to 18

120
Q

Who was leader of the labour party 1951-63

A

-Hugh Gaitskell

121
Q

Which party won the 1964 General Election and who led the new government

A

The labour party under Harold Wilson

122
Q

How many seats did labour get compared to the conservatives in 1964

A

L= 317
C=303

They won by a slender majority of 4 seats

123
Q

What methods did the labour party use to win the 1964 General Election

A

-Wilson presented the party as meritocratic and classless, comparing it to public perceptions of the conservatives

-Used new technology to spread propaganda, for example, he used the TV to present himself as the face of modern Britain

124
Q

What problems did Wilson face in his ministry

A

-The previous Chancellor exchequer, Maudling, had delivered generous tax cuts and spending promises in the conservatives last budget and left the country with an £800million budget deficit.

This was a problem as Wilson had promised to improve pensions and build half a million homes a year. He was also determined to improve Britain’s military presence overseas, which accounted for over 1/5 of all Britain’s spending in the 1960s

-His party also won with a slender majority meaning that if he wished to bring about major policy changes, a new election would have to be called

125
Q

How did Wilson attempt to solve the problem of the budget deficit

A

-Wilson did not want to abandon his commitments to either social reform or Britain’s prestige, the only other option to lessen the pressure on the economy was to devalue the pound, allowing the government to pay off debts more easily and aided exports but Wilson did not want to do this as he did not want the labour party to be seen as the party of devaluation

-However, 1967, he was forced to devalue the pound anyway, which caused embarrassment for the government and led to the resignation of Chancellor Callaghan

126
Q

When did Wilson hold a second general election and what was the outcome

A

-1966
He managed to get the majority that he needed to bring about major social policy reforms.

127
Q

What social and educational reforms did Harold Wilson introduce 1964-70

A

-A series of new universities and polytechnics were built
-The Open University was established
-The Laws on abortion and the death penalty were liberalised
(E.G 1967 Family Planning Act)

128
Q

Why did Harold Wilson’s government begin to decline in popularity

A

-Unemployment began to steadily grow
-The number of days lost to strikes increased
-Began to mistrust his ministers, who were popular in the party with trade unions, believing they may replace him
-His mistrust resulted in a decline in morale in Wilson’s cabinet:

In 1969 legislation to curb the numbers of unofficial strikes was proposed by one of his ministers. Wilson feared that Callaghan, a union loyalist, might use the confrontation that would ensue to replace him and so the legislation was never implemented and so Britain endured a decade of rising strikes and union unrest.

129
Q

Which party won the General election and who was now the PM 1970

A

Conservatives, under Edward Heath

130
Q

What did Edward Heath mean by a ‘Quiet revolution’

A

-Referred to the change in direction that he wanted the country to take. He wanted to remove the state from people’s lives so that they would become more enterprising

131
Q

When was the Barber Budget introduced and what did it feature

A

-1972, by Chancellor Barber
-Featured tax cuts and government spending cuts

132
Q

What steps did Heath and his government take in order to attempt a ‘quiet revolution’

A

-The Barber Budget
-Ended Wilson’s incomes policy, believing wages should be set by the market not the government

133
Q

Why was Heath forced to take a U-turn in policy and increase government intervention

A

-The Barber Budget ( Barber Boom) failed to cure Britain’s growing economic problems and it fuelled inflation and so within 18months was forced to increase government intervention in the economy

134
Q

What was Heath’s government’s biggest problem

A

-Relationship with trade unions

By 1974, Heath’s government had endured two miners strikes and he faced opposition from both the opposition and his own party.
Wilson had accused him of stripping away the rights of the Union

135
Q

How did the right of the conservative party criticise Heath

A

-They saw him as a traitor as he betrayed the promises he made in 1970 at the Selsdon Park meeting

136
Q

What did the second miners strike over the winter of 1973-74 result in

A

-Resulted in Heath declaring a stat of emergency and a 3 day week

137
Q

Why did Heath’s government decline

A

-Lack of confidence in his ability to manage the unions
-Inflation and economic decline
-Attempted to remove the state from people’s lives
-Miners strikes
-Strained relations with trade unions and ministers to the right of his party

138
Q

Which party came into power in 1974 and who led it

A

The Labour Party, under Harold Wilson again

Labour only won with a slender majority and so was a minority government dependent on liberal support

139
Q

How many seats did Labour gain compared to the conservatives in 1974

A

L= 301
C=297

140
Q

What was the first priority of Wilson’s third government and what did it focus on instead

A

-End union unrest by reappealing the Industrial Relations act

-Instead, it attempted to return the corporatism of the mid 1960s by developing a policy called the ‘social contract’

141
Q

What was the ‘social contract’

A
  • A policy introduced by Wilson’s government to return to the corporatism of the mid 1960. Wilson wanted to present his government to be concillatory towards to unions, unlike Heath

In return for the unions agreeing not to pursue excessive wage claims, the government would offer subsidies to the cost of living
However, it did nothing to deal with the underlying cause of the strikes; inflation

142
Q

Who replaced Wilson after his resignation in 1976

A

James Callaghan

143
Q

why did Callaghan begin to abandon key aspects of the post war economic consensus

A

He was a pragmatist and did not follow policies out of ideological reasons. This caused him to clash with Tony Benn at cabinet meetings as the party was divided

144
Q

What did tony Benn propose to Callaghan

A

-Leaving the EEC and believed Britain should effectively cut itself off from the global economy
-A ‘Siege Economy’ to protect state spending on welfare from the influence of international banks and currency traders

145
Q

Why did Tony Benn propose a siege economy

A

to protect state spending on welfare from the influence of international banks and currency traders

146
Q

Why did Callaghan believe Britain must ‘pay its way’ in the world

A

-No longer believed that the British government could continue to spend its way out of difficulties

-He thought that Britain had used borrowing to live beyond its means for decades, resulting in a loss of confidence in Britain and the pound on the international currency markets

147
Q

Why was Britain economically damaged after WWI

A

-America’s banks on Wall Street had loaned Britain large sums of money to enable it to continue the conflict

-The British Gov= didn’t expect it to last for so long or require as much money as it did

-Britain had been cut off from its most valuable export markets by German U-boats, which sank 40% British merchant shipping

-Britain’s industries had been forced to switch to war production instead of supplying export markets

-By 1918 the country had lost 750,000 men (essential for Britain’s economic output)

-The war costed £3.25Billion

148
Q

How much did Britain’s exports account for in 1914 and what did it decline to by 1918

A

1914: 1/3 of Britain’s total wealth

1918: 1/5 of Britain’s total wealth

149
Q

Why had individuals and buisnesses been able to accumulate considerable savings during the war

A

-Because wartime restrictions and rationing meant they had been unable to spend as much

150
Q

What did individuals and buisnesses begin to do with savings during 1919

A

-Spend their savings on luxury items that had been rationed during the war like coffee, soap, clothes and cigarettes

151
Q

Why was there a speculative boom

A

-Buisnesses issued new shares for traders, investors and other buisnesses to buy and more money poured into the London stock market than any other time in history

-Particular in areas such as cotton mills, ship yards and coal mines

152
Q

How much did the total amount of shares issued increase from 1918-20

A

1918: £65 million
1920: £384million

153
Q

Why did the Post war boom come to an end in 1920

A

-British industries, still in the process of returning to civillian usage, could not keep up with the demands and so goods were in short supply and became excessively expensive

154
Q

What did unemployment decrease to after ww1 during the recession

A

12%

155
Q

What did the cost of living increase to during the recession

A

25%

This meant that unions were more likely to strike

156
Q

What counties were particularly affected by the recession

A

-Wales and Tyneside:
Deeply depressed as the shipping and coal industries collapsed

157
Q

Why was there a post war recession

A

-Deflation
-Loss of Export Trade
-Underinvestment
-Industrial relations

158
Q

Why did deflation cause the post war recession

A

-The Government cut spending by 75% between 1918-20 and raised the interest rate to 7% to return the value of the pound to pre war levels. This meant it became expensive to borrow money.

159
Q

Why was loss of export trade a cause of the post war recession

A

-The global economy was no longer dominated by Britain, there was several new foreign manufacturing and financial competitors
-Countries like the USSR, America and China became the world leaders

160
Q

Why was underinvestment a cause of the post war recession

A

-The British industry suffered from long-term underinvestment by the 1920s and caused serious problems.

-The mining and steel industries were no longer invested in by the government as they were no longer needed

161
Q

why was industrial relations a cause for the post war recession

A

-1919 David Lloyd George had bought off British workers in the main industries with generous pay and working hours, in order to prevent a general strike.

-These workers were unwilling to lose these conditions when time became tough (many were ex soldiers).

-The creation of a 8 hour working day resulted in a 13% decrease in working hours, but no increase in productivity during the hours worked. Wage rates also stayed high, meaning products remained overpriced and uncompetitive

162
Q

What attempts were made under DLG’s coalition government to solve the post war economic problems

A

-Retrenchment:

-The Geddes Axe:

-Tariffs and free trade:
One of the most important questions of the interwar years was that of tariffs. For most of the previous century Britain had adopted free trade

163
Q

What was retrenchment

A

a policy of spending cuts.
Lloyd George believed that there was little choice but to wait until the crisis was over, however, was anxious to appease the middle class voters who were experiencing financial hardship and wanted to see tax cuts and less gov spending.

164
Q

What was the Geddes Axe

A

In 1921, DLG appointed Sir Eric Geddes to implement greater cuts in public expenditure.

-High taxes= blamed on high spending and DLG hoped tax cuts would stimulate the economy.

-Most of these came from the government military budget, but the health, housing and welfare budget was reduced from £205million in 1920 to £181million in 1922

165
Q

Advantages of free trade

A

Free trade means that domestic industries have to compete with foreign competitors

-No import taxes on foreign goods so British manufacturers have to make sure that their products are sold at the lowest possible prices in order to attract customers

-British buisnesses can trade in other countries without the threat of protectionist tariffs being imposed

166
Q

Disadvantages of free trade

A

-Free trade means that more competitive foreign buisnesses can out compete British ones and force them into bankruptcy. This can lead to unemployment and poverty, particularly in areas heavily dependent on one industry

167
Q

Advantages of tariffs/ protectionism

A

-It helps to protect domestic industries that are struggling from competition by making the goods more expensive. This protects the profits of domestic manufacturers

168
Q

Protectionism

A

Protectionism is the policy of adding tariffs to certain goods that are imported into a country.

169
Q

Disadvantages of tariffs/ protectionism

A

-The downside to protectionism is that it prevents consumers from having access to cheaper goods and it can result in other countries applying tariffs to British exports in retaliation

170
Q

Which industries were the most affected by the economic crisis

A

-Cotton
-Dock work
-Iron and steel
-Coal
-Ship building

Shops and markets, where the workers form these industries spent their wages were also heavily affected

171
Q

What was the difference in unemployment between 1929 and 1930

A

1929: 1million
1930: 2.5 million

172
Q

Ways the rise in unemployment put pressure on the labour government 1929-31

A

-Tax revenue declined
-The number of people applying for unemployment assistance rapidly increased

173
Q

How much did the British economy shrink by in 1931

A

5%

174
Q

What was the Labour government’s main priority during the economic crisis

A

-Keeping the pound in the Gold Standard system and supporting it’s value through spending cuts and high interest rates

175
Q

Why did providing for the unemployed become unsustainable 1929-31

A

-Chancellor Snowden believed that unemployment relief should come from taxing the wealthy and from corporate profits.
-However, as these profits slumped and wealthy individuals were becoming anxious to protect or conceal it, the cost of providing for the unemployed become unsustainable

176
Q

Who was John Maynard Keynes

A

A British Economist
Played an important role in the changing in the British public’s opinion of the Treaty of Versailles

177
Q

What did John Maynard Keynes suggest to help the economic crisis and what was Snowden’s response

A

-Suggested government spending on public works, such as new roads, to create jobs, but Snowden refused.
He knew that people had little patience for further spending .

178
Q

What was the only part of the economy that the labour government invested in during the economic crisis

A

-The defence industry
This did create some jobs

179
Q

What rumours spread during the summer of 1931

A

-Rumours that the forthcoming budget would be unbalanced ( the government would spend more than it could afford) leading to an increase in borrowing

180
Q

Why did the rumours spread about the labour government summer 1931 lead to the pound slumping in value

A

-The banks in America started to engage in panic selling of the pound, exchanging it for other currencies, causing the pound to slump in value.

This led to the gov implementing spending cuts including a 10% cut in unemployment assistance, causing division within the labour party and resulting in their resignation 24th August 1931

181
Q

What was the Special Areas Act and when was it introduced

A

-1934
-A measure that identified, Wales, Tyneside, South Wales, West Cumberland, and Scotland as regions in need of government assistance ( areas hit hardest by the Depression)

-However only a trickle of investment came to them. A new steel works in Ebbw Vale brought some jobs but it was too little to late

182
Q

On average between 1932-37, how did Britain’s economy recover

A

-Real incomes rose by 19%
-Industrial production rose by 46%
-GNP rose by 23%
-Exports increased by 28%
-Unemployment fell from 17% to 8.5%

183
Q

What did the decision to remove Britain from the Gold Standard enable?

A

Enabled the following economic measures:

-A cut in interest rates
-The government was able to allow for a degree of inflation
-The devaluation of the pound made British exports cheaper and more competitive
-Banks became more willing to spend again
-Economic growth was stimulated by restructuring British war debts

184
Q

How did Churchill’s national government create a
managed economy ( + impact of ww2)

A

-Economic Aid

-Military expenditure

-Post-war austerity

-The Marshall Aid

-Nationalisation

185
Q

Economic Aid (creating a managed economy)

A

-1938-41, USA had offered Britain a considerable amount of economic help.

-Churchill had arranged a Lend-Lease Agreement: this meant that the USA would supply Britain with what it needed but the debt would be resolved after WW2

186
Q

Military Expenditure (creating a managed economy)

A

-When Britain appeared to be losing the war in 1940, the growth of state intervention, resulted in a huge increase in war production and military expenditure.

-Britain produced 15,000 aircraft in 1940, 47,000 in 1944 and 6000-8000 tanks.

187
Q

Post war austerity (creating a managed economy)

A

-By the end of ww2, Britain had accumulated over £4 billion of debt with USA. Repaying this and the interest costed £70 million every day.
-Trade was also severely damaged

188
Q

The Marshall Aid (creating a managed economy)

A

-Britain = one of the biggest recipients of this aid, recieving £2.7 billion in loans. It was supposed to help with general infrastructure but by 1965, Britain’s investments only stood at 9%, whereas countries like Japan and Germany were closer to 20%. Britain had lagged behind

189
Q

Nationalisation (creating a managed economy)

A

-The labour government tried to nationalise everything in 1945

-The Coal Industry Act 1946
-The Bank OF England Act 1946
-The Transport Act 1947
-The Electricity Act 1947
-The Gas Act 1948
-The Iron and Steel Act 1949

-The total bill for nationalisation exceeded £2billion, leaving little money for modernisation needed and stored up economic problems for the future

190
Q

What economic problems were faced 1951-79

A

-Balance of payments problems
-Devaluation of the pound
-Inflation
-Union disputes
-Unemployment in the 1970s

191
Q

What was one of the main motivations for decolonisation

A

-The realisation that they cost more to govern than they were worth in trade, since foreign rivals now dominated trade to Britain’s colonies

192
Q

What was the NEDDY
(The National Development Council and Office)

A

-Set up in 1962.

-An institution where management and unions could discuss the development of the economy and co operate with one another.

-It was assumed that they would want to work together because both would benefit from long term economic growth. NEDDY was unable to enforce any legal control over either industry or unions, and the gov hoped that both sides would come to voluntary agreements with each other

193
Q

What was the NICKY
(The National Incomes Commission)

A

-An advisory council assembled from economists and industry experts
-They gave guidance to employers and unions on what the government considered ‘reasonable’ pay increases.
-It could not enforce any of its decisions.

-Unions mostly ignored NICKYS calls for wage restraint as they were mindful that their members wanted improved living standards and greater spending power.

194
Q

What was the Prices And Incomes Act 1966

A

-Forced a statutory wage freeze for 6 months to curb inflation

195
Q

What was the Prices And Incomes Act 1967

A

-Allowed wage increases in companies that could prove they were increasing productivity and output.

196
Q

What was the National Board of Prices and Incomes (NBPI)

A

-Created to regulate pay settlements.
It was accompanied by the Prices and Incomes Act of 1966 and 1967