Affluent Society - Economy

Question 1

How did Attlee help rebuild post-war Britain?

Answer 1

Post-War Consensus + Welfare State

Question 2

Post-War Boom

Answer 2

Food rationing ended in 1954
Increased affluence + growth in consumerism
1955 estimated full employment had been reached (only 200,000 unemployed)
Increased birth rate (baby boom) –> 1961= 2 million more people than in 1951
Increased wages due to low unemployment
1 in 5 of population in service industries

DID NOT MEAN EXCEEDED GROWTH RATES ELSEWHERE

Question 3

How did Butler boost Conservative election prospects 1955?

Answer 3

“give away” budget which provided middle class w/ £134 million in tax cuts

Question 4

How did the Conservative government curb excessive inflation?

Answer 4

‘stop-go’ economics + taxation remained high

trying to maintain growth and employment at same time as keeping prices steady
difficult to pursuade trade unions that workers such not have wage increases (bigger increase in wages than production led to inflation)

Question 5

Main causes of financial crisis 1957-58

Answer 5

Bigger increase in wages than production –> inflation
Increased consumer demand (high wages) but manufacturers not increasing export trade = led to trade deficit
CAUSED a run on the pound

Issues exposed by US with Suez Crisis

Question 6

Why were there divisions in the cabinet over the run on the pound?

Answer 6

Peter Thorneycroft wanted to intoduce monetarism (restraint on gov. spending + limit on wage increase)
Opposition (McLeod) argued that this would lead to unemployment + housing cutbacks
Macmillan sided w/ McLeod and didnt allow drastic spending cuts –> post-war consensus remained in place

Question 7

Run on the pound

Answer 7

rapid fall in value of pound

Question 8

Effect of the financial crisis

Answer 8

No lasting harm to Conservative party as sterling regained its value against the dollar
Economy expanded + tax cuts of £370 million
Allowed Macmillan’s comfortable re-election in 1959

Question 9

What did the government introduce due to concerns about the economy overheating?

Answer 9

“pay pause”
Asked for a loan from IMF
set up NEDC (National Economic Development Council)

Question 10

Why did Britain make an application to join the EEC in 1961?

Answer 10

Europe’s economic growth better than Britain’s

Question 11

The Beeching Report 1963

Answer 11

Review into cutting public expenditure
Closure of 30% rail network (e.g. Otley) –> led to outrage

Question 12

Economy by end of Conservative rule (1963-64)

Answer 12

Small improvements:
lowering bank rate = encouraged consumer spending
growth rate increase 4% to 6%