The Affluent Society 1951-1964: Economic

Question 1

How was Britain’s attitude to the economy shaped by 1951?

Answer 1

1. The horror of the great depression with mass unemployment
2. The war where the coming together of a nation was unable to beat Nazism
3. The post war rebuilding of the nation with the creation of the NHS and the welfare state

Question 2

When did rationing end?

Answer 2

1954

Question 3

What was the population of Britain by 1961?

Answer 3

51 million- 2 million increase from 1951

Question 4

What were the main types of jobs people were now doing?

Answer 4

• Jobs relating to cars, steel manufacture and services ranging from financial to transport
• Decline in traditional occupations such as agriculture, fishing and coal mining
• By 1960, the service sector employed the same amount of people as heavy industry (5 million- 20%)

Question 5

What did Rab Butler give to the middle class?

Answer 5

£134 million in tax cuts

Question 6

How did the Conservative government try to battle with the desire to maintain growth and living standards but not to cause inflation?

Answer 6

1. Reducing wage increases (trade unions were unwilling to cooperate)
2. Through government intervention by using taxation and spending curbs to decrease the demand for goods and therefore reduce prices (stop-go economic policy)

Question 7

What event exposed Britain’s financial weakness?

Answer 7

The Suez Crisis

Question 8

What did the Conservative government do for the 1959 election?

Answer 8

Introduce a further round of £370 million in tax cuts

Question 9

What was published in 1963 and what did it do?

Answer 9

• The Beeching report
• Recommended massive cuts in Britain’s rail network, including the closure of more than 30% of the rail network
• Hundreds of branch lines and thousands of stations were axed
• Left many rural areas isolated and sparked public outrage

Question 10

What was estimated in 1955?

Answer 10

That full employment had been achieved, with only 200,000 left unemployed

Question 11

What did the improvement in world trade allow Britain to do in the later 1950’s?

Answer 11

Import about 29% more goods than it had in 1951 for the same number of exports

Question 12

What was the UK’s growth rate of industrial production in comparison to the USA and France in 1952 and 1959?

Answer 12

1952-
UK: 10 USA:111 France: 110

1959-
UK: 129 USA: 133 France: 170

Question 13

What happened in the late 1950’s?

Answer 13

• British people enjoyed more jobs, more money and better housing
• Adults suddenly found themselves with money to spend on cars, new appliances, luxuries, entertainment

Question 14

What led to a trade deficit?

Answer 14

• Despite higher salaries creating a large internal consumer demand, they didn’t encourage manufacturers to increase their export trade
• Caused problems with the balance of payments

Question 15

What did Thorneycroft believe in to help Britain after their financial weakness had been exposed by pressure from the US ever the Suez crisis?

Answer 15

• Believed in monetarism
• Wanted to limit wage increases and cut the money supply
• Many cabinet ministers opposed this idea because it would lead to increased unemployment and cutbacks in housing

Question 16

What did the budget of 1959 provide?

Answer 16

Tax cuts of £370 million- this was possible after the economy had expanded massively and the sterling regained its value against the dollar

Question 17

What was the government forced to do due to worries about the economy overheating and when was it?

Answer 17

• 1961
• Introduce a pay pause to hold down wage inflation
• Ask for a loan from the IMF

Question 18

What did Britain’s growth rate rise to in 1964?

Answer 18

6% (2% increase from 1963)

Question 19

How much did exports increase by between 1961 and 1964?

Answer 19

10%

Question 20

What did people claim that Macmillan did for 5 years?

Answer 20

Continue the apparent economic prosperity

Question 21

What was Britain’s trade balance between 1956 and 1960?

Answer 21

+£132 million

Question 22

What was Britain’s world trade share between 1959 and 1962?

Answer 22

17%

Question 23

What gained Britain a world status?

Answer 23

• The special relationship with the USA under Macmillan and the mutual defence agreement in 1958
• Allowed UK to look strong as they now possessed nuclear weapons

Question 24

How much did car ownership increase by between 1957 and 1959?

Answer 24

25%

Question 25

How much did TV ownership increase by between 1957 and 1959?

Answer 25

32%

Question 26

How did the economy lead to a rise in living standards?

Answer 26

The government built 300,000 houses per year and rented them at cheaper prices

Question 27

What did the government have to persuade trade unions about?

Answer 27

That their members shouldn’t have high wage increases, particularly in coal industries where miners felt they weren’t gaining as much as others

Question 28

How did go policies weaken the economy?

Answer 28

• Led to high inflation as they removed wage freezes
• Led to steep increases in demands and the balance of payments crisis as Britain was no longer exporting as much as they were importing

Question 29

How did stop policies weaken the economy?

Answer 29

• Made workers less productive, making Britain as a whole less productive and leading to less exports
• Due to high interest rates but low consumer confidence in businesses, investments into businesses decreased, stunting their growth (UK only saw a 2% growth in a year and fell behind their EU competitors)

Question 30

How did go policies strengthen the economy?

Answer 30

• Living standards didn’t fall
• Due to the fact that their was now an easier access to credit which made it easier to buy and own houses

Question 31

How did stop policies strengthen the economy?

Answer 31

• Wages always remained ahead of prices
• Wages stayed above inflation, impacting society positively
• Wages doubled from £8 million to £15 million between 1951 and 1964

Question 32

Who introduced stop go policies?

Answer 32

Macmillan

Question 33

Why was Britain’s economy weakened?

Answer 33

1. The government spent 10% of their GDP annually on military defence such as nuclear weapons and foreign bases instead of the public sector
2. The 1963 rejection from the EEC, as Britain had no close trading partners so couldn’t sell their exports
3. Reduction in the size of the empire meant that Britain no longer had countries to rely on to fuel their economy