To what extent were Labour and Conservative government policies successful in tackling the economic problems facing Britain, 1951 – 1979?

Question 1

P1
P2
P3

Answer 1

P1: Macmillan failed to promote economic growth and menaingfully manage Inflation- FAIL-
P2: Wilson failure to modernise economy or improve balance of paymetn deficit - FAIL
P3: Success- 1979 IMF loan

Question 2

P1-

Answer 2

Macmillans government oversaw a period of growing affluence in which he claimed to the british public “never had it so good”

• HOWEVER
• Failed to promote consistent econmic growth
• FAILED TO MEANINGFULLY MANAGE INFLATION

Question 3

P1 evidences

Answer 3

E1: Encourage economic growth + consumer spending

• Relaxed laws on comsumer credit and borrowing
  -Cut intrest rates
  = ‘Cheap money
• “Give away budget - Heathcote Amory- 1959

A: Although consumer boom
- Howver inflation and influx of imports= balance of payment problem = Increased concumer spending increased demand for foreign goods = threat to value of the pound
+
Not able to keep up with competitors e.g.Japan and Germany recovered from war - their econmomies dramatically grown
JAPAN- 12% in 1960
BRITAIN- 2.3%

= REVEAL EXTENT OF MACMILLANS FAILIURE

E2: AIM= counter high levels of inflation and balance of payment problem
SLOW DOWN ECONOMY
-Raising taxed and interest rates= led to exports becoming less competitive + harder to borrow money for investment

A: Unsuccessful led to

• slow down spending
• resentment from taxpayers
• prevented economic growth- unemployment rose from 383,000 in 1957 to 878,000 (highest level since end of war) by 64- could not control inflation and unemployment together
• STOP GO= failure to ensure economic growth

E: Determined to not devalue the £ to ensure industry made a profit
= AUGUST 1961 -borrow $714 million from International Monetary Fund (lend money to countries in trouble)

A: Added to Britains mounting debt and did nothing to make British goods more attractive abroad = Macmillan unsuccessful in combating Britains economic woes

OA: failed to develop consistent policy for tackling inflation or promote lasting economic growth + unemployment rose to highest level since war = industry declined

Question 4

P2-

Answer 4

Wilsons government attempted to solve the similar economic issues faced by previous governments such as e.g recurring balance of payment and inflation. He aimed to modernize the economy by technological advancements and the introduction of wage freezes

Question 5

P2 evidences

Answer 5

E1: 1963- Britain= sick man of Europe + failed to match economic growth rates of most western Europe
-AIM- Transform economy by investing in tech to modernize industry- the creation of Ministry of technology 1964 (Led by Tony Benn 1966) + improve efficiency
-Therefore IRC(Industrial reorganization corporation) and promoter mergers= greater economic efficiency by combining businesses= FAILURE
= Leyland Motors + British motor corporation
£25 million loans offered to fund the cost of the merger
-Unable to compete with European and Japanese exports
-company operated at a loss needing subsidies

A: Failed to promote efficiency and modernisation of businesses
Merger failed- added to debt + company operated at a loss needing subsidies

E2:
E:In a last attempt to make British good more attractive abroad + bring down the balance of payment deficit
-Devalued pound from £2.80 to £2.40= reduced strength of pound by 14%
- claimed that “pound in your pocket “ would be unaffected

A: UNpopular- Callaghan resigns in protest
-Devaluation of pound unable to overcome Britain’s industrial decline as a result of industrial unrest and lack of modernization = British good remained unattractive

=Wislons failure to tackle the economic plight

Question 6

P3 evidence

Answer 6

Healy- Labour party

E1: 1976-Britain was forced to take out a £4billion loan from the IMF to cope with the economic crisis
-value of pound had decreased by almost 20% from £2 to £1.63
-money came with conditions= Britain had to prove capable to repay debt +
£3 billion spending cuts

A: - economy improved

• interest rates were soon cut +the pound appreciated (went up in value).
• economy could be stabilised whilst drastic budget cuts were implemented

= not complete failure