Economic Policy

Question 1

Why did the government nationalise?

Answer 1

‘Common ownership of the means of production’ - Labs constitution

Hoped to ensure full employment

Unions hoped workers would come to
Control nationalised industries / have protected rights

Question 2

The Dollar crisis

Answer 2

Truman ends economic aid

Negotiated Anglo-American Loan:
$6000 million
In return demands to make sterling fully convertible to dollars by mid 1947

Gov buys sterling £645 million 1947-9

1949 devalues pound

18th September -
$1 : £4.08
To
$1 : £2.80

Question 3

When was the pound devalued?

Answer 3

September 1949

Question 4

Nationalisation

Answer 4

1946 - Coal
1946 - Bank of England
1947 - Transport (rail, road haulage, bus)
1947 - Electricity  
1948 - Gas 
1949 - Iron and steel 

Payed £1000 million for rail network ( example of how much it cost )

Question 5

Austerity

Answer 5

Large balance of payments deficit
Stafford Cripps:
Post war rationing more severe than wartime
1946 bread rationed for first time

Wage freeze 1948

Question 6

How successful?

Answer 6

✔️ 1945-51 industrial production up 33%

✔️ 1958-50 economy up 4% a year

✔️ labour productivity all time high 1950

✔️ 1945-50 exports up 77%

✔️ 1948 no balance of payments deficit

✔️ Britain’s share of world trade up 17.5% in 1939 to 20.7% 1950

✔️ full employment, between 1947-51 unemployment never above 300,000

✖️ nationalisation opportunities missed
Inefficiencies continued
After spending so much to nationalise them gov less money to invest in industrial modernisation