Affluent Society 1951-64 ECONOMY Flashcards
When did rationing end?
1954
When was full employment reached?
1955
What was Butlers give away budget?
A reduction in tax of £135 million
Who was the only other country that had higher wages than Britain?
USA
What was the cause of inflation?
The growth in wages was faster than the increase in production so firms were increasing their prices
Why was the Conservative government struggling with how to deal with inflation?
They wanted to appeal to both industry and society but it was difficult to persuade trade unions that there shouldn’t be a wage increase
What were stop go policies?
The economy would overheat when it was doing well
Would prevent consumer spending by increasing tax and interest rates
Freeze wages which lowers imports and creates a balance of payment
Continuation of consumer demand fall and unemployment would cause economy to struggle
Would cut taxes and interest rates to boost economy again
End wage freeze to stimulate business again
OVERHEATS ECONOMY AGAIN🔄
What impact did Suez have on the economy?
Led to run on the pound
Why were the Conservatives divided over stop go? Who was the division between?
Thorneycroft wanted to end stop go through monetarism but one nation conservatives opposed due to unemployment risk and cuts in housing
Who resigned over the stop go policy issue?
Thorneycroft and 2 junior ministers- Macmillan overruled his spending cut proposal
How did Macmillan show life was better with the Conservatives?
Sterling regained its value against the dollar and he cut taxes by £370mil which was more than Butlers give away budget
What was the issue with how the Conservatives dealt with economic issues in this period?
They were trapped in a dependency of stop go policies
What did the worries of dependency on stop go policies lead to?
A pay pause in 1961 which led to them asking for a loan off the IMF
What was the Beeching Report 1963? What did it cause?
It cut over 30% of the rail network
Causes public outrage as it left rural areas more isolated
What did Macmillan set up for long term planning of the economy?
National Economic Development Council
