Economy in post war Britain Flashcards
What was the stop-go policy?
A way to control economic growth through controlling inflation rates.
- Interests would be raised when growth was too fast.
- This increased the cost of borrowing to reduce demand
When did Macmillan’s team of treasury ministers resign due to stop-go?
1957
What did the conservative government announce in 1961?
A pay pause in the public sector to curb excessive pay demands.
When did Britain go through an economic boom?
1951-64.
How did the economy grow?
US marshall plan which was overseas investment to rebuild europe.
What was Butskellism?
Combo of Chancellor R.A Butler and Gaitskell.
What was the aims of Butskellism?
- Maintain full employment.
- Maintain economic growth.
- Develop welfare state.
- Continue defence commitments and develop nuclear weapons.
What was Harold Macmillan’s famous speech 1957?
'’Never had it so good.’’
What evidence disproves Macmillan’s idea of ‘‘Never had it so good’?
- Consumer spending was mainly on credit.
- While unemployment was low it was on the rise.
What were the problems with the British economy?
- Britain imported more than it exported (increased BoP)
- By 1961, the deficit was £95 mil.
- Difficult to commit to different promises made such as the welfare state and development of nuclear weapons.
- Growing inflation as workers demanded pay rises.
- Britain’s debt had grew by £260 mil in 7 years.
What was the British economy like in 1964?
- Unemployment rose to 800,000 by 1963.
- Chancellor Maudling introduced a free spending budget to try to reduce unemployment.
- This reduce interest rates and cut taxes, and employment fell by 300,000 in 1964.
Who was PM during this period?
Harold Macmillan.
