Britains Economy After WW2

Question 1

Austerity after WW2

Answer 1

• Austerity meant a continuation of rationing, private spending and other wartime measures.
• Working class people were hit the hardest. Trade Unions were outraged at pay freezes.

Question 2

Loans / Debt after WW2

Answer 2

• 1945: Britain had gathered £4 billion worth of debt to the USA, with an additional loan of £2.2 billion in 1945, it would cost Britain £70 million a day just to finance the debt.
• Deficit of £700million which grew to £800million by the 1960s.

Question 3

The Manufacturing Industry

Answer 3

• Government had little money to investment in new manufacturing industries because of nationalisation / commitment to full employment.
• This allowed new economies like Germany and Japan to grow and dominate manufacturing. Britain would go on to rely on imports, not lead the way in exports.

Question 4

Stop-Go Economics

Answer 4

• Macmillan Government relaxed controls on credit and spending to encourage economic growth…but it ended up based on debt.
• The government would “pump the breaks” on this when inflation was getting too high and companies were being charged more to import.
• The long-term consequence was stagflation. High inflation and low productivity in the economy.

Question 5

Economic “shocks”

Answer 5

1973 Oil Crisis. After oil prices rose by 70% in 1973 there was a dramatic surge in inflation, with the inflation rate over 20%.

Question 6

Education

Answer 6

In the post-war period, there was a growth in university education, and secondary education became more comprehensive.
More opportunity in traditionally white-collar jobs

Question 7

Immigration

Answer 7

UK growth was so rapid, the economy experienced labour shortages. This led to the mass immigration of the 1950s and 60s to help deal with the labour market shortages. This helped increase the working population and increase real GDP. GDP per capita rose at a slower pace than actual real GDP.

Question 8

Unrest in the Trade Unions

Answer 8

NICKY (An incomes commission formed by the government in the 1950s) aimed to work with Trade Unions to control wage demands. Unions would not cooperate.
TUs became more beligerent in demands.Rejected In Place of Strife. “The Winter of Discontent” followed cuts that needed to be made in 1976 because of the IMF loan.