Chapter 22 Flashcards
Economic developments
How had the Conservatives inherited a fragile economic situation?
Balance of payments crisis and the Korean war pushing up military costs
How was the 1950s a time of continued economic improvement?
Food rationing came to an end in 1954, austerity was over, higher standards of living
What was the population size by 1961?
51 million
What was the impact of the booming global economy?
Sustained increase in overseas trade, high levels of earning from exports and investments, plentiful employment
How many people were estimated to be unemployed by 1955?
200,000
What industries were falling and what industries were experiencing an economic boost?
Agriculture, fishing, coal mining and shipbuilding fell but electrical and engineering work increased
How many more goods was Britain able to import by the late 1950s?
29% more
How much did the balance of payments crisis create a deficit of?
700 millionW
What did Butler recommend in his October 1951 memorandum?
Imposition of credit restrictions, reduction of imports, cutting food subsidies, reducing travel allowances, cutting ministers’ salaries, denationalisation of steel and iron
What was the overall trade balance from 1956-60?
+132
How was the government forced to deal with maintaining growth and employment?
Interest rates were increased to stop borrowing and import controls increased to limit purchases
How were the government expected to deal with a fall in demand for goods?
Taxes and interest rates might be lowered to stimulate spending
How did the government implement STOP-GO in 1951-52?
STOP: deflation was necessary, so bank rates were raised and credit restrictions imposed
How did the government implement STOP-GO in 1953-55?
GO: balance of payments was recovering so policy was focused on expansion and controls were removed
How did the government implement STOP-GO in 1955-59?
STOP: the economy was overheating so higher interest rates and spending cuts were required
