The Changing Economic Landscape 1945-79 Flashcards
What was the post war consensus?
• mixed economy - mixture of private and state owned businesses - bank of england, gas and electricity, coal, steel all nationalised
• full employment - Keynesian work schemes introduced to keep unemployment low and stimulate the economy
What was Butskellism?
• The almost identical policies of Labour and Conservative governments in order to implement the post war consensus
What was Keynesian economics?
• the government spending more stimulated the economy e.g the government created Keynesian work schemes to create jobs and money
What is monetarism?
the idea that by controlling government spending causes the economy to grow
What were the Conservative stop and go policies?
• stop - when government spending got to high, higher bank interest rates were implemented to save money and freeze wages in the public sector
• go - when demand for public spending decreased, bank interest rates decreased to let the economy grow
Why were Conservatives accused of only implementing go policies before an election?
• so that the economy would look successful, therefore making Conservatives look good and gain support from the electorate
What is stagflation?
• high unemployment
• high inflation
• slow economic growth
Why did stagflation become an issue in 1964 - 79?
• government had been spending too much, inflation inevitably rising
• stop - go policy worked in the short term, but made exports less competitive, led to issues with balance of payments
Explain the problem of stagflation 1964-79
• balance of payments crisis - more imports than exports
• 1963, unemployment high and rising, 878 000 - highest since the war where unemployment basically disappeared
• British economy growing slowly due to lack of investment in new industries - only 2.3% growth compared to 5.6% in Italy - European competitors doing better
Why did Harold Macmillan introduce NEDDY in 1962?
• minister, employers and unions met to plan the future of the economy
Why did Macmillan introduce NICKY in 1962?
set up to regulate wage increases
Why were NEDDY and NICKY ineffective?
it was voluntary, only provoking discussions and was hard to regulate.
Why did tensions increase between the trade unions and the government in the 60s and 70s?
•stagflation and industry negligence from the government led to unemployment and low wages
• government policies like NEDDY and NICKY were inaffective, therefore the trade unions didn’t trust the government to deliver change, led to more union militancy and strikes
• in 1964 3 million working days were lost
When did Wilson devalue the pound and why did he do this
• 1967
• to decrease the price of British goods abroad in order to increase British exports to deal with the balance of payments crisis
Why did Wilson devaluing the pound cause arguments in the Labour party?
• led to increased cost of living, negative impact on the working class
What was the oil crisis in 1973/74 and what did it result in?
• by 1974 oil prices had increased by 400%
• supply had been cut by 15% - disasterous as it was a main power supply, made even worse by industrial action with miners and electrical engineers
• 50 mph speed limit enforced, TV closed down at 10:30 each evening, panic buying of petrol - impacting quality of life
• therefore Heath (Conservative) voted out
How much was Britain loaned by the IMF and when and why did Wilson agree to this?
• £4 billion
• 1976
• The value of the pound had slumped as international banks lost trust in the British economy due to high inflation
What was the consequence of Britain receiving the IMF loan?
government had to agree to £3 b spending cuts to prove that it was capable of paying its debts- massive failure for Labour
What spending cuts did Heath impose and why? 1970-1974
• spending cuts of over £330 million in total in subsidies to council tax, charges raised on prescriptions, cuts to free school milk for children
• wanted to move back to free market - private businesses - wanted less state intervention
Why were Heath’s spending cuts not effective?
• 15% inflation in Britain aswell as mounting global inflation
• unemployment rose from 2% at the end of the 1950s to 6% in the early 1970s
What was inflation in 1975?
30%
Why did Britain renter the EEC in 1973 under Heath?
• it provided a vast ready made market and more competition, arguing that it would make Britain more competitive and therefore more productive - would help with the balance of payments crisis
Why were many on the left of Labour concerned about Britain joining the EEC?
• believed that the British government would lose its power and would be unable to plan its own economy
• Britain would become a part of a capitalist trading bloc - ideological differences
• Britain would contribute more and receive less than other members according to policies like the Common Agricultural Policy (CAP)
Why did the post war consensus start to break down?
• full employment wasn’t working - as the government spent more money, inflation increased
How did the percentage of 20-64 year olds working part time change between 1951 and 1981?
• 1951 - 12%
• 1981 - 42%
How did the percentage of married women in the workforce change between 1951 and 1981?
1951 - 26%
1981 - 62%
How did women’s pay change in 1968?
• Ford factory workers in Dagenham went on strike because they wanted to have equal pay to their male colleagues, only paid 87% of male wage
• then achieved 92% of male wage, catalyst for change
Why was the 1970 Equal Pay Act ineffective?
• voluntary for employers until 1975
• therefore employers claimed that men and women did not work the same jobs so the law didn’t apply
What did the 1975 Sex Discrimination Act do and why was it ineffective?
• Illegal to treat works of one gender less fairly than the other
• however was difficult to bring these claims to court, therefore cases of this unfair treatment could be ignored
What did the Unemployment Protection Act 1975 do?
•Illegal to sack women because they were pregnant. Gave women the right to maternity pay and to return to their jobs if they wanted.
• significant as women’s employment rights starting to have legal footing
Why did the role of women in the workplace begin to change?
•WW2 fuelled female desire to work
• Changes in education gave women more opportunities
•The number of ‘white collar’ jobs increased, which were deemed more suitable for women
•Some women became more assertive because of social changes
Why were unions so powerful in the period 1945-79?
•Closed shop: workers had to join a particular union which gave the unions more power to bargain with employers
• Strikes in nationalised industries could cause huge disruption and union bosses used this to their advantage
• In 1968 alone 4.7m days were lost to strike action
• A big factor was that consumerism affected ambitions of the workers – and the ambitions of workers far outstripped their earnings.
•Public sector wages could not keep up with the private sector
When was the Trade Disputes and Trade Union Act repealed and why?
•1946
• The act was Britain’s industries were becoming less competitive, the government were trying to reduce inflation
• however Labour cannot resist the demands of the unions, reliant on their funding and party membership
When was the National Seamen’s strike introduced and what did it do?
• 20,000 seafarers went on strike for a reduced working week, many were imprisoned, increased tensions
• wanted wage increase and working week reduced from 56 to 40
•disrupted shipping especially in London, Liverpool and Southampton
• Wilson’s government
When was Castle’s In Place of Strife proposed and why?
• 1969 (Wilson’s Government)
• meant to undermine union strength by letting the government enforce penalties on union disputes
• however wasn’t implemented as it was unpopular with unions and other members of the labour party
When was the Industrial Relations Act introduced and what did it do
• set up a National Industrial Relations Court, aiming to assess the legality of the registered unions strikes
• however unions weren’t forced to register, Heath failed to limit their power
• led to 140,000 workers protesting
When did the NUM demand a 43% pay increase and what did the government respond with
• 1971
• the government offered 8% to try and stick to inflation targets
• led to Miners Strike 1972
When was the Miner’s Strike and what happened?
• 1972
• 280,000 miners went on strike, reaching a climax at Satley Depot
•lead to a national emergency due to flying pickets - led to 3 day week, power and coal stations shut.
• Government offer 27% pay rise, strike ends
What did the 1972 Miner’s Strike lead to?
• In 1973 there were further strikes - hospital staff, teachers, garbage men, Ford car workers and gasmen were encouraged by miner’s success
What did the oil crisis lead to in 1973?
• NUM demand a 35% pay increase
Why was there a three day week introduced in 1974?
• 81% of miners vote to strike, production of power stops
Why did Heath lose the 1974 election?
• he tried to exert power over unions with manifesto ‘Who governs Britain’
• didn’t work, he was unpopular with unions and workers
• Callaghan then voted in
Why were there strikes in 1978?
• Callaghan says wages will only increase by 5%
Ford workers then went on strike in 1978, achieve 17%
• embarrassment for the government, cannot control the unions
What was the impact of the mass strikes in 1979?
• 1.5 million public sector workers went on strike
• impacted the public - lorry driver strikes led to panic buying of food as ports were blocked by flying pickets
What was the impact of industrial relations on the general election in 1979?
• public scared of the power of the trade unions and their impact on daily life
• Thatcher voted in, promises to control the unions
when was the marriage bar removed in the workplace
1946 - women then took on more part time work
When was the National Incomes Commission established and what did it do?
• 1962, a royal commission to provide impartial and authoritative advice based on incomes - boycotted by trade unions, refused to comply
How did trade unions refuse to cooperate with the Industrial Relations Act 1971?
• TUC threaten to suspend any union cooperating with the government over this act, confrontational nature
Political impact of the Winter of Discontent
• government had to call a vote of no confidence, Callaghan lost by one vote, leading to the general election of 1979 (Thatcher wins)
