british economy 1945-79
- Created by: amisavage99
- Created on: 30-05-17 10:17
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- How far did British governments manage to resolve the country's economic problems, 1945-79? (20 marks)
- 1945-51: Attlee (Labour)
- Effects of total war
- Disruption of trade/ American domination
- Nationalisation
- Shareholders compensated by the gov - left little to modernise industry
- Full employment (1947-51)
- Nationalisation
- War debt - £4bn to the USA (£70m/day)
- Arctic Winter (1947) - return of rationing, food shortages
- Marshall Aid of 1948 - £2.7bn
- Failed to reinvest in industry - used for general expenses
- Beginnings of West German/ Japanese economic growth
- Failed to reinvest in industry - used for general expenses
- Global commitments - to German civilians, national service until 1965, wars in Korea/Malaya/Greece
- Disruption of trade/ American domination
- Effects of total war
- 1951-64: Conservative attempts
- 1964
- BOP deficit (rising consumerism)
- Unemployment (highest since WW2)
- IMF loan (1961, £714mn)
- Encouraged borrowing/ consumer goods
- Inflation
- BOP deficit (c. relaxations to consumer credit)
- 1964
- Introduction
- Long boom (until the 1970s) should be seen in a global context
- Consumer boom and relative economic decline (spending more than we earn)
- 50s/60s global economic expansion - new tech applied to civilian industry
- Generally, BOP deficit, devaluation, inflation, TU dispute and unemployment
- Long boom (until the 1970s) should be seen in a global context
- 1964-70: Wilson (Labour)
- Efficiency
- Prices and Incomes Act (1967) allowed wage increaes
- Modernisation through technology 'egalitarian'
- Ministry of Technology (1964) headed by Tony Benn
- Improvement to aviation - Concorder
- Ministry of Technology (1964) headed by Tony Benn
- The IRC - industry efficiency/loans to help/ supported mergers
- Merger failed e.g. British Leyland of 1968 - drained ubsides
- Recurring BOP deficit
- Gradually increasing inflation
- 1967 - devaluation of the pound from $2.80 to $2.40
- Chancellor, Callaghan resigned
- Controversy over 'pond in your pocket'
- Prices and Incomes Act (1966) - statutory wage freeze (6m)
- Prices and Incomes Act (1967) allowed wage increaes
- 1967 - devaluation of the pound from $2.80 to $2.40
- Failure of voluntary wage restraint
- NBPI regulate pay settlements
- Income policy -gov legal powers to limit pay claims
- Efficiency
- 1970-74: Heath (Conservative)
- Rising unepmloyment
- Axed the IRC - role of private industry to modernise
- Inflation (end of the long boom) - 15%
- Rejection of corporatism for free market ideas
- Selson park meeting (abandoned consensus)
- Cuts to spending (council houses/free school milk/ prescription)
- Savings of over £330m
- Cuts to spending (council houses/free school milk/ prescription)
- Abolished the NBPI - ending control/influence on prices/incomes
- Reducing the tax burden
- 1972 'dash for growth; (tax cuts ->low borrowing)
- Huge inflation, exacerbated by OPEC
- Public sector cuts
- Union unrest/ NUM conflict
- Public sector cuts
- Huge inflation, exacerbated by OPEC
- 1972 'dash for growth; (tax cuts ->low borrowing)
- Rising unepmloyment
- 1974-79: Wilson/Callaghan (Labour)
- Inflation (prices rising faster than wages)
- Beginnings to challenge consensus - only led to more inflation
- 1976 IMF loan
- Appeals by government for restraints to wage demands
- Ignored by Unions
- Beginnings to challenge consensus - only led to more inflation
- TU unrest
- Banks lost confidence, £ slumped
- Inflation (prices rising faster than wages)
- Conclusion
- 1945-51: Attlee (Labour)
- Solutions/ Strategies
- Results
- Problems
- Post-war boom (economy grew 4%/year after 1948)
- Beginnings of boosts to world trade
- Beginnings of a BOP deficit (consumerism grew)
- Nationalisation
- Shareholders compensated by the gov - left little to modernise industry
- Full employment (1947-51)
- Marshall Aid of 1948 - £2.7bn
- Failed to reinvest in industry - used for general expenses
- Beginnings of West German/ Japanese economic growth
- Failed to reinvest in industry - used for general expenses
- Stop-go economics (deliberately slowing the economy by raising interest rates/taxes (to discourage borrowing))
- Exports less competitive/ tax payer resentment - lack of consistency
- Impossible to control unemployment/inflation at the same time
- BOP deficit (c. relaxations to consumer credit)
- Economic boom, rising living standards
- Decolonisation - reduced vast expenditure/ new workers brought skills
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