The response to economic challenges 1951-79

Question 1

Post-war boom

Answer 1

Period of Conservative government 1951-64 - economic growth.
‘Stop Go’ - Macmillan’s Treasury ministers resigned in 1957.
Wanted to reduce government spending e.g. on welfare.

Question 2

Economic growth

Answer 2

1961 Conservative government set up two organisations.
NEDDY - representatives of employers, unions.
NICKY - regulate wage demands.

Question 3

The sterling

Answer 3

Valued too highly - November 1967 devalued by 14%.

Question 4

1973 Oil Crisis

Answer 4

War broke out in the Middle East - suppliers here reduced supply and raised prices, $2 to $35 per barrel.

Question 5

Effects of the crisis

Answer 5

Severe shortages of fuel for industry and petrol for transport.
Imports became more expensive - huge budget deficits.
Inflation grew again - 16% by 1974.

Question 6

The International Monetary Fund

Answer 6

1976 deficit continued - exchange rate collapsed.
In November the government had to apply to the IMF for a loan of £3billion.
Condition was deflationary measures - reductions in government spending, 7% in 1978.