economy 1939-1964 Flashcards
what was the state of the economy after WW2?
UK exports expensive so economy slumped
unemployment at 2 million
inflation at 50%
in debt to the US
war has distorted what the economy was doing pre war
what changes were made to the economy during WW2?
imported 1/2 of its food - labour could be directed elsewhere
defence was 12% of GDP in 1939
reliant on global trade
economic appeasement in Germany
risk of economy collapsing from quick rearmament
more specialised factories eg in Coventry and Chorley
what rule did the government adopt after the war to help rebuild the economy?
10 year rule
assuming there wouldn’t be a war for 10 years
what was the emergency powers act?
gave the government authority to bring into force regulations covering any aspect of life necessary to secure the defence of the realm
what was the impact of the emergency powers act?
ministries set up to co-ordinate all areas of economy
made conscription mandatory for all men aged 18-41 later 51
more centralised government
what the emergency powers act successful?
distorted economy and caused staple industries in relative decline
necessary and pragmatic
overall successful
what food and rationing measures were introduced?
run from 1940 by Lord Woolton
gained respect for effective management
introduced after U boats were attacked causing a reduction in food imports, clothing and fuel
introduced in 1940
rationing consumer goods continued until 1942
were the food and rationing measures successful?
some thought that it was demoralising
disappointment that it continued until 1954
nobody starved
shortage of fuel
black markets emerged
what organisation of labour measures were introduced?
Ministry of Labour led by Bevin
1 million unemployed which Bevin wanted to utilise
introduced conscription into industry
‘Bevin boys’ conscripted to work in coal mines
women encouraged to work in munitions, engineering and ship-building
demands of war production mopped up the unemployed
4.5 million entered armed forces
bevin used Essential Work Orders to force factories to improve conditions
wages raised
lunchtime entertainment introduced to improve morale
Bevin visited factories and gave speeches
was the organisation of labour successful?
people respected Bevin
total workforce rose by 2 million
what war production measures were introduced?
Bevin showed how a free society could mobilise its workforce for war
priority was given to essential raw materials
Royal Ordanance Factories employed 300,000
256 factories did work for Admiralty + Ministry of Aircraft Production
non-essential industries were run down so that labour could be diverted to war work
new production methods devised to raise output and save labour
government encouraged greater use of science and farmers to grow crops not meat
how successful were the changes in war production?
not as good as they’d hoped
coal industry output low due to no innovation
how was the impact of the blitz modified?
resourced mobilised
people used London Underground or Anderson shelters to protect themselves
children evacuated to countryside
Government made school meals available and cheap milk available for displaced children and vitamins for pregnant women
development of radar technology
how successful was the modification of the blitz?
secured a sense of national unity and collective resilience
why did Britain have a balance of payments problem at the end of the war?
didn’t have anymore invisible exports
no demand for exports in heavy industry
what did Britain have to do as a result of their debt?
decrease imports, increase exports
no consumer goods were made for British people
loan from USA
why did Britains invisible export trade decline?
fallen due to huge shipping losses and forced sale of overseas investments
interest on loans wasn’t coming back
what did the Labour government need to do in order to address Britain’s negative balance of payments and why was it so unpopular?
austerity
cut imports
was labours economic policy successful?
resources were diverted to exports to try to overcome the defecit
by 1947, exports had risen
exports double the 1938 figure by 1950
exports increased by 80% between 1946-1950
SUCCESSFUL - affluence by 1954
how did living standards rise in the post war boom?
consumer goods such as televisions, cars, clothes.. became more affordable
length of working week reduced
cheap mortgages available - more home ownership
what was the 1950s nicknamed and why?
Golden Age
change from austerity to affluence
how did wages and prices change from 1951-1953?
wages increased by 72%
prices rose by 45%
emergence of advertising industry
1955 ITV launched commercial broadcasting
what were stop-go policies?
government wanted to avoid extremes of inflation and deflation by adjusting to react.
they would raise inflation rates and import controls and increasing taxes to stop spending and demand to stop economy overheating
a fall in demand = introduction of a give away budget to encourage spending
1957 crisis
wages were running far ahead of productivity threatening a financial crisis
fear that the pound would be devalued against the dollar
Thorneycroft wanted monetarism - limiting wage increases
MacMillan overuled and adopted expansionist policy
how did Thorneycroft describe the stop go policies?
“bumbled from one disaster to another”
changes to nationalisation
Labour had nationalised alost 20% of enterprises
did bring improvements but was costly to the government as industries required subsidies
Conservatives reversed nationalisation of steel and road transport
abolition of the Retail Price Index
supermarkets could set their own prices, making it more competitive and allowing supermarket chains to grow
growth of transport industry
motorway construction began in 1958
by 1964 there were 300 miles of motorway
beeching axe
large amounts of trade diverted from trains to lorries
process accelerated by the denationalisation of road haulage - 24,000 lorries now privately owned
UK change in exports %
4.1 %
Japan change in exports %
15.4%
Council of Industrial Design
staged major exhibition of consumer goods
‘Britain Can Make it’
Victoria and Albert museum
how many people visited Britain Can Make it?
1.4 million
7000 trade buuyers
how many orders were there at the BCMI exhibition?
£25 million
what was Calder Hall?
first nuclear power plant providing commercial energy
UNEMPLOYMENT
successful
maintained full employment
1.6%
UNEMPLOYMENT
unsuccessful
drives up inflation more demand
WAGE LEVELS
successful
rose
stayed above prices
increased by 72%
WAGE LEVELS
unsuccessful
led to inflation demand for imports
when inflated workers wanted more wages causing strikes
STANDARD OF LIVING
successful
remained reasonable - welfare state
central heating
growth of consumer goods
Abolition of Retail Price Index
STANDARD OF LIVING
unsuccessful
still slums
striking
inequality
INFLATION
successful
generally kept down
INFLATION
unsuccessful
reactionary
not tackling fundamental problem
PRODUCTIVITY
successful
increased in mining industry with labour saving devices
chemical and aircraft increased
nuclear power
PRODUCTIVITY
unsuccessful
not as good as other countries
a lot of money spent on coal production
INTERNATIONAL POSITION
successful
growing
GDP rose by 2.7%
INTERNATIONAL POSITION
unsuccessful
Japan, Italy, France and West Germany doing better
COMPETITION
successful
denationalised road haulage
Abolition of Retail Price Index
new businesses and enterprises
COMPETITION
unsuccessful
new businessmen looked down upon by government
shipping not competitive - 14% of world total
India better at textiles
Japan better at technology
pros of stop-go policy
kept unemployment low
alright time for people at the time
standards of living ok
some luxuries
cons of stop-go policy
political influence
discourages investment
defecit £48 million more in 1964 than in 1951
reactionary
led to strikes
conservatives kept splitting - Macmillan and Thorneycroft
