british economy 1945-79

View mindmap
  • 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)
        • 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
        • Global commitments - to German civilians, national service until 1965, wars in Korea/Malaya/Greece
    • 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)
    • 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
    • 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
        • 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
      • Failure of voluntary wage restraint
        • NBPI regulate pay settlements
        • Income policy -gov legal powers to limit pay claims
    • 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
        • 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
    • 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
      • TU unrest
        • Banks lost confidence, £ slumped
    • Conclusion
  • 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
  • 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

Comments

No comments have yet been made

Similar History resources:

See all History resources »See all Britain transformed, 1918-97 resources »