Theme 1 b 3 - The response to economic challenges, 1951-79 Flashcards
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<p>The post war consensus can be characterised in the beliefs in what?</p>
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<ul> <li>Keynesian economics.</li> <li>A mixed economy.</li> <li>Nationalisation of major industries.</li> <li>The National Health Service.</li> <li>Commitment to full employment.</li> <li>A welfare state in Britain; social security and national insurance.</li> <li>Introduction of nuclear weapons.</li></ul>
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<p>Why did WW2 set the stage for consensus?</p>
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<p><strong>The National Government?</strong></p>
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<ul> <li>Proved <strong>ministers</strong> from rival parties could work together & that a broad agreement on key policies could be reached.</li></ul>
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<ul> <li><strong>Success of collectivisim</strong>- an approach where certain problems are tackled by taking away some rights for the common good.</li></ul>
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<p><strong>Why did WW2 set the stage for consensus</strong></p>
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<p>The war changed the role of the government- what was the state forced to do?</p>
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<p>Forced to take more control- <strong>Emergency Powers Act of 1940.</strong></p>
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<p><strong>Why did WW2 set the stage for consensus?</strong></p>
<p>There was a shift from a mainly free-market economy to.....</p>
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<p>A more <strong>mixed economy</strong>- where the government used <strong>rationing</strong>, the <strong>Essential Work Order</strong>,<strong>conscription</strong> and <strong>censorship </strong>all in a bid to engage Britain in a total war- by 1945, <strong>1/3 of citizens</strong> were taking in <strong>war-related work.</strong></p>
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<p>Why did WW2 set the stage for consensus</p>
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<p><strong>Beveridge Report- 1942?</strong></p>
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<ul> <li>Report- <strong>envisioned a welfare state</strong> that could care for a person throughout there entire life.</li> <li>Ideas- hugely popular- sold<strong> 635,000 copies.</strong></li> <li>Labours promise to fulifil report- was a huge contributing factor in them winning the election.</li> <li>Popularity created a <strong>"sea change"</strong> in British politics & rival parties to Labour Party couldn't ignore its popularity if they wanted to be the party of government.</li></ul>
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<p><strong>Why did Labour win by a landslide in the 1945 General Election?</strong></p>
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<p>Leadership</p>
<p>Campaigns</p>
<p>Policies</p>
<p>Public mood</p>
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<p>Why did Labour win by a landslide in the 1945 General Election?</p>
<p><strong>Leadership?</strong></p>
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<ul> <li><strong>Atlee</strong> portrayed himself as a<em><strong> 'man of the people'.</strong></em></li> <li>Churchill led the country through WW2- however people were unsure as to whether he was right leader for peacetime.</li> <li>During WW2- Atlee had managed the home front, showing that himself and the Labour party were capable leaders.</li></ul>
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<p>Why did Labour win by a landslide in the 1945 General Election?</p>
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<p>Campaigns?</p>
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<p>Labour broke offwartime coaltion after war to force an election, campaigned on the slogan <strong><em>'let us face the future' &</em></strong>campaign posters centred around the British people- with pictures of women & soldiers acompanied by the text <em>'Labour for him' </em>or <em>'Labour for her'.</em></p>
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<p><strong>Atlee</strong>- spent lots of time <strong>touring </strong>the country. Churchills campaign = lacklustre,was so confident in his victory after winning the war- Conservative slogan 'lets finish the job', Churchills spiteful 'Gestapo' speech- seen as distasteful & poorly judged.</p>
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<p>Why did Labour win by a landslide in the 1945 General Election?</p>
<p>Policies?</p>
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<ul> <li><strong>Labour </strong>promised to <strong>implement policies</strong> of the <strong>Beveridge Report</strong> (extremely popular).</li> <li>Churchill- rejected the report & did not have a clear strategy for post war recovery.</li> <li>Labour's manifesto seems more specific, ambitious, detailed and thought through.</li></ul>
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<p>Why did Labour win by a landslide in the 1945 General Election?</p>
<p>Public mood?</p>
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<ul> <li>Public- wanted a change after the harsh war years.</li></ul>
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<ul> <li>They associated the Tories with the high unemployment of the 20s & 30s and failed appeasement.</li></ul>
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<p><strong>Atlee Government 1945-51</strong></p>
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<p>What were some of the key achievements/ policies that show a development in welfare?</p>
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<ul> <li>The 1944 Education Act</li> <li>The 1945 Family Allowance Act</li> <li>The 1946 National Insurance Act</li> <li>The 1946 National Health Service Act</li> <li>The Industrial injuries Act</li> <li>Nationalised key industries</li> <li>More housing</li> <li>Means testing abolished.</li> <li>Improved education.</li></ul>
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<p>Atlee Government 1945-51</p>
<p><br></br>What did the 1944 Education Act do?</p>
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<ul> <li>Introduced universal secondary education split into three parts- Grammar, Modern and Technical schools.</li></ul>
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<ul> <li>It also created a Government Minister for education & raised the school leaving age to 16 by 1973.</li></ul>
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<p>Atlee Government 1945-51</p>
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<p>What did the 1945 Family Allowance Act do?</p>
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<p>Gave money to support those with children (child benefits).</p>
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<p>Atlee Government 1945-51</p>
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<p>What did the 1946 National Insurance Act do?</p>
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<ul> <li>Paid for through taxes.</li></ul>
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<ul> <li>Government provided support/ benefits in cases of sickness, unemployment, retirement, maternity, widows, guardians allowance for orphans and a grant for funeral expenses.</li></ul>
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<p>Atlee Government 1945-51</p>
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<p>The 1946 National Health Service Act?</p>
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<ul> <li>Major law- gave healthcare to all- paid for by taxes & free at the point of need.</li></ul>
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<ul> <li>Allowed for creation of NHS, 1948 (Nye Bevan was health minister in charge of the NHS.)</li></ul>
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<p>Atlee Government 1945-51</p>
<p><br></br>What did the Industrial Injuries Act do?</p>
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<p>Provided cover for accidents that happened at work.</p>
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<p>Atlee Government 1945-51</p>
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<p>What was nationalised?</p>
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<p>The coal, steel, iron and railway industries, which prevented their collapse.</p>
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<p>Atlee Government 1945-51</p>
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<p>What happened to housing?</p>
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<p>By <em><strong>1948</strong></em>, <strong>125,000 'prefab' homes</strong> had been built, and by <em><strong>1951</strong></em>, <strong>1 million</strong> good quality council homes were built, 4/5 homes built by the state.</p>
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<p>Atlee Government 1945-51</p>
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<p>What happened to education?</p>
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<p><strong>Improved education.</strong></p>
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<ul> <li>Built 900 primary schools (for baby boom).</li> <li>Built 250 secondary schools- schools leaving age raised to 15.</li></ul>
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<p>What were reasons as to why Labour lost the 1950 & 1951 election?</p>
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<ol> <li><strong>Rationing-</strong> dissatisfaction over wartime fuel & food continuing to be rationed.</li> <li><strong>Austerity-</strong> Labour Party- unable to revive Britain's struggling economy in immediate post-war years.</li> <li><strong>Taxation</strong>- Standard rate,<strong>1949</strong> was at <strong>45%</strong>= too high.</li> <li>Labour ministers beginning to divide & Labour became divided after <strong>Bevanite revolution</strong> in <strong>1951</strong> & over issue of nuclear weapons & the Korean war.</li> <li><strong>Conservatives</strong>- seen as <strong>united party</strong>- particularly over <strong>nationalisation of iron& steel</strong> - impressed electorate.</li> <li>Conservative <strong>1947 Industrial Charter</strong>- showed conservatives were willing to adapt & adopt consensus policies.</li> <li><strong>1950</strong>- saw influx of bright young conservative politicians.</li></ol>
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<p>Atlee Government 1945-51</p>
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<p>Reason for decline in Labours vote- what happened with the Korean war?</p>
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<ul> <li><strong>1950</strong>- Britain was involved in the <strong>Korean war</strong> to protect South Korea- as part of the new United Nations force.</li> <li>War- resulted in <strong>huge increase- military spending</strong> & new chancellor Hugh Gaitskell announced an <strong>'austerity budget'- 1951.</strong></li> <li>Involved the<strong> introduction of prescription charges</strong> for glasses & dentistry & resulted in resignation of Bevin- minister for Labour & pioneer of NHS.</li> <li>Atlee- previously skilled at defusing fueds within party but by 1951- he lacked authority.</li></ul>
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<p>Who won the October 1951 election?</p>
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<p>The conservatives!</p>
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<p>(Although Labour gained more votes- it won fewer seats due to the nature of the constituency structure in Britain and the first-past-the-post system.</p>
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<p>October 1951 election.</p>
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<p>Where did Labour voters tend to be concentrated?</p>
<p>What did Labour votes outnumber the conservatives by?</p>
<p>How many constituencies did the Conservatives win?</p>
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<ul> <li>Labour- in fewer, mainly <strong>urban constituencies.</strong></li> <li><strong>250,000.</strong></li> <li><strong>26 more</strong> constituencies- so formed the next government.</li></ul>
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<p>Churchill 1951-55</p>
<p><br></br>What was he like as a prime minister?</p>
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<ul> <li>Was 76 when returned to power- just as final wartime rations & restrictions came to end.</li></ul>
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<ul> <li>Many of his cabinet colleagues observedthe <strong>dynamism</strong>&drive exhibited duringwar years appeared to have gone.</li></ul>
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<ul> <li>Acted more as a 'caretaker' prime minister- while ministers in his government gradually came to prominence.</li></ul>
Eden 1955-57
How was he portrayed as a prime minister?
Relatively young & popular politician.
Had impressive wartime record as Churchill's foreign minister.
Eden government, 1955-57
In May 1955- he called for an election- why was this?
What did the election indicate?
By July 1955- what happened to unemployment figures?
- Ensure he had a strong mandate.
- Indicated- British public approved of Conservative Party's management of the economy.
- Lowest in its recent history, only 215,000 people out of work, accounting for just over 1% of the workforce.
Eden 1955-57
Suez Crisis
What had Britains relations been with Egypt before the Suez Crisis and before Nasser came into power?
- Britain- had maintained presence in Egypt since the 19th century to protect the Suez Canal (part owned by Britain & France) which was its route to India.
- After Indian Independence in 1947, the canal was used as a means of shipping oil to Britain, Europe and America.
Edens government, 1955-57
Suez Canal Crisis
What did Nasser want to do and what did he offer the British people?
How did Eden react/ what were his suspicions?
- Nationalist president- Egypt, Nasser stated canal should be in Egyptian hands & would be willing to pay British shareholders fair price for it.
- Eden reacted with suspicion & hostility & when Nasser occupied the Canal zone- 26th July 1956- his close relationship with USSR convinced the British that the canal would soon fall into Soviet hands.
Edens government, 1955-57
What happened in the Suez crisis?
- When France & Israel invited Britain to take part in an invasion of the Suez canal zone- Eden agreed in secret to participate.
- Was motivated by a desire not to be humiliated by Nasser & knew his standing in the Conservative party depended on presenting a strong image.
- When invasion began on 5 November 1956, US president Eisenhower (who had not been consulted in Britains intentions) reacted angrily & felt decieved.
- He threatened to sell America's reserves of British currency & collapse value of the pound.
- Faced with possibility of economic crisis- Britain = forced to withdraw & Eden resigned January 1957.
Edens government, 1955-57
What was the outcome of Suez Canal?
Significant reduction in British world power & recognition that it could no longer act independently without seeking US approval.
When was rationing ended?
1954
The political consensus between Labour and Conservative parties meant that the Conservatives wanted to prioritise what?
- A commitment to full employment- gov was quick to use Keynesian -style public works schemes when unemployment began to rise.
(Throughout the period, unemployment averaged at 500,000 with lows of 300,000 - was no return to the mass unemployment of 1930s.)
- A mixed economy. Conservatives had pledged not to increase the level of nationalisation, but they had no plans to reduce it either.
Stop-go economics
What was a key feature of 1954-64?
What did the government encourage & could they deal with this?
What did they put in place as a result?
- Growth of consumer affluence & ability of people in Britain to borrow and spend more on consumer goods than ever before!
- Encouraged this new spending- but struggled to deal with its consequences.
- Relaxed laws surrounding consumer credit & borrowing however had to employ a strategy that critics described as 'stop-go' economics.
'Stop- go' economics
- The conservatives allowed the consumer economy to grow, however what did excessive spending tend to result in?
In order to counter this what did Macmillan (serving as Edens chancellor) do & what did this do to exports?
- Growth in inflation!
- Result- increase in imports which led to balance of payments problems.
- Deliberately slowed down the economy by raising interest rates & taxes.
- Made exports less competitive & resentment from tax payers.
What did the 'stop go' policy refer to?
What did the government do in 'stop-go' economics?
- A failure of gov to develop consistent policies to ensure growth.
- Tend to increase taxes
- Raise interest rates- to make it difficult to borrow money for investment in order to slow things down when the economy grew too quickly.
- They would reduce them again in the slowdown to make money easier to borrow & facilitate an acceleration.
Key policies and achievements in the 13 Golden years
- Housing - Under Macmillan 1951-55?
- How many new houses did they want to build per year?
- How many were built in 1953 & 1954?
- What happened to housing subsidy in 1952?
- Mortgages?
- What percentage was house building by the state?
- Conservatives- made commitment to 300,000 new houses per year- which they achieved!
1953: 327,000
1954: 354,000
- Housing subsidy increased from 25 pounds- 35 pounds per home- supported by Butler.
- Mortgages- more readily available.
- 80% house building- state.
Key policies and achievements
What happened to iron and steel in 1953?
Largely denationalised!
Key policies and achievements
Health?
- 1959 Mental Health Act- Modernised treatment to be humane.
- 1962- Plans were unveiled for 90 new hospitals to be built within the next 10 years.
Key policies and achievements
Education 1957-64?
- Pledged that 6000 new schools would be built.
- 1963 Robbins Report suggested need for more universitys, so 7 new universities were established.
- Allowed local authorities to set up comprehensive schools if they so choose.
- 10 technical colleges (for further study) were set up.
Managing the economy 1957-64
Despite the rising living standards in Britain- why was the comparative difference between British economic performance and output of her competitors alarming for the government?
- West Germany and Japan had recovered from the devestation of war and their economies had dramatically grown.
- Japan experienced growth of 12% in 1960, whereas Britian managed just over 4% growth in the same year.
What are some examples of how the years were 'Golden' ?
- Housing- most remarkable achievement.
- Leading member of the UN & NATO by 1964.
- Britain- developing closer ties to the USA. Involved in the Test Ban Treaty Talks, 1963.
- 1950s- nearly 3% growth per annum.
- 1951-1964- Britains economy grew 40%.
- Consumer spending rose by 45%.
- NHS - its work was improved by the Mental Health Act of 1959.
- Families ate better & had more consumer luxary goods.
- Wages rose by 72%.
- Inflation- around 3/4% for most of the 13 years- unemployment below 2%.
What did wages rise by?
72%
What was inflation around for most of the 13 years and what was unemployment below?
Inflation - around 3/4%.
Unemployment- below 2%
What are some examples of how the '13 years' were not Golden?
- Britains economic rivals sent more young people to university.
- Failure to tackle inflation for fear of increasing unemployment. Inflation 3/4 %.
- Humiliation at Suez and the failure to find a place in the world.
- Economic growth was fairly low in Britain (2.4% compared with 5.6% in Italy and 5.1% in Germany.)
- Productivity was the lowest in Western Europe.
- Share of world exports in manufactured goods fell from 25.5% in 1951 to 13.9% by 1964.
Managing the economy, 1957-64
- What Conservatism did Macmillan believe in?
- What was this?
- What did he decided to experiment with and what did he believe would happen by doing this?
- 'one nation' Conservatism.
- Where a united Britain, irrespective of social class, could work together to solve common problems.
- Experiment with corporatism- to try to arrest the economic decline.
Managing the economy, 1957-64
- What do corporatists believe?
- In 1962, what two organisations were set up as a result of this?
- Believe that by uniting labour, management and government, economic goals could be planned and achieved.
- NEDDY (The National Development Council and Office)
- NICKY (the National Incomes Commission)
Managing the economy, 1957-64
What was NEDDY?
- Institution where management & unions could discuss the development of the economy & co-operate with one another.
- Assumed they would want to work together as they would both benefit from long term economic growth.
Managing the economy, 1957-64.
What was NEDDY unable to enforce?
Any legal control over either industry or unions, and the government hoped that both sides would come to voluntary agreements with each other.
Throughout the 1950s, what gradually increased and what was demanded by workers?
The number of working days lost to striking gradually increased.
The level of pay rises demanded by workers grew.
Managing the economy, 1957-64
What was NICKY?
What was its role?
- An advisory council assembled from economists and industry experts.
- Its role was to give guidance to employers and unions on what the government considered 'reasonable' pay increases.
Managing the economy, 1957-64
What could NICKY not do?
What did unions ignore?
What were union bosses mindful of?
- NICKY- could not enforce any of its decisions.
- Unions- ignored NICKY'S calls for wage restraint.
- Mindful that members wanted to improve living standards & greater spending power. The new consumerism of the 1960s was attractive to union members and they wanted to participate, so ignored appeals for wage restraint.
Economic problems by 1964
What was unemployment like in 1963?
It grew to its highest level (878,000) since the end of the war.
Economic problems by 1964
What did increased consumer spending result in?
Increased demand for foreign goods and Britain experienced a balance of payments problem, causing a threat to the value of the pound.
Economic problems by 1964
In August 1961, what did the government refuse to do to the pound?
What did they do instead?
- Refused to devalue the pound.
- Instead- borrowed 714 million from the IMF in order to support this.
By 1964, how many people owned and TV?
91% owned a TV.
By 1964, what happened to car ownership?
It had quadrupled to 8 million by 1964.
13 Golden Years - NOT Golden
in 1964, Labour inherited a balance of payments defecit of how much?
£750 million
13 Golden Years - NOT Golden
- What happened to the British apllication to join the EEC?
- What happened to investment?
- What debate was there over schooling and when did it become more problematic?
- It vetoed.
- Lack of investment in manufacturing- Germany & Japan did better in these years.
- Debate over grammar and comprehensive schools and the 11+. Not resolved & became more problematic after 1970.
End of conservative dominance
When had conservative popularity declined by?
People had become more opposed to what?
When was there failure to gain entry to the EEC?
What did the Night of the lond knives make Macmillan seem?
- Declined- 1962.
- Opposed to the 'establishment'
- Failure to gain entry- 1963.
- Seem ruthless!
What was the Profumo affair and how did it affect the Conservatives?
- Conservative secretary of state for war John Profumo discovered to have had affair with Christine Keller, who had also been sleeping with a soviet naval attache (and suspected spy).
- Profumo denied the affair in Parliament, and when the truth was exposed the Conservatives image was badly damaged and Macmillan's self-confidence was shattered.
