The End of Consensus - Economy (Modern Britain AQA complete notes 6/16)

These notes are for the 'Making of Modern Britain' course on AQA and as such follow the spec, although would be useful for all modern britian courses. They contain hystoriography, detail and explanations. 

The notes are devided into the sections of the spec, therefore there are 16 documents (as there are 4 areas (politics, economics, society, and foriegn policy) and there are 4 periods (Post war, Wilson + heath, Thatcher, and Blair)). 

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Preview of The End of Consensus - Economy (Modern Britain AQA complete notes 6/16)

First 493 words of the document:

The
End
of
Consensus
­
Economy
The
impact
on
the
economy
of
government
interventions,
1964-1973;
the
oil-price
crisis
of
1973
and
the
end
of
the
long'
post-war
boom'
Harold
Wilson
1964-70
Issues
to
confront
(causes
of
economic
decline)
- Lack
of
investment
- Over-spending
in
defence
- Cost
of
two
world
wars
- Borrowing
from
the
USA
- Fixed
exchange
rate
- Stop-go
economic
policies
- Failure
to
deal
with
inflationary
pressures
- Welfare
state
was
expensive
- Balance
of
Payments
deficit
o Consumerism
­
foreign
goods
- NATO,
UN
and
commonwealth
commitments
- Not
being
in
the
EEC
- Trade
unions
o Blocked
modernisation
o Inflationary
pay-rises
Department
for
Economic
Affairs
­
George
Brown
- Created
by
Wilson
when
he
became
Prime
minster.
- The
aim
was
apparently
to
create
a
long-term
economic
plan.
o Similar
to
European
systems.
o Exchequer
and
DEA
meant
to
have
equal
standing.
- Led
by
George
Brown
(deputy,
and
left
of
the
party).
o Some
think
it
was
to
move
him
out
of
the
way.
o Drunkard.
- The
role
clashed
with
that
of
the
Treasury.
- Meant
to
be
responsible
for
o Long-term
planning
o Physical
resources
o Incomes
policy
o Economic
growth
o Regional
and
industrial
policy
- Consultation
with
industry
and
unions
led
to
the
`national
plan'
o Government
didn't
all
support
it.
o The
plan
was
fairly
left
wing.
- Plan
was
ambitious.
o Aim
for
4%
growth
rate.
o Increase
GDP
by
25%
by
1970.
o Required
200,000
more
workers
that
seemed
possible
to
find.
- The
plan
was
abandoned
by
July
1966.
o Would
have
failed.

Other pages in this set

Page 2

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Based
on
inaccurate
assumptions
about
the
state
of
the
economy.
- Established
Prices
and
Incomes
bill.
o Gave
the
government
power
to
require
wage,
price
or
dividend
increases
to
be
submitted
to
Prices
and
Incomes
Board.
Decrease
spending
Cuts
- Defence
o 1965
5.9%
of
GDP
o 1970
4.8%
of
GDP
- Army
o 1960
260,000
men
o 1970
170,000
men
James
Callaghan
­
Chancellor
of
the
Exchequer
(1964-67)
Prices
and
Incomes
- 1965
National
board
for
Prices
and
Incomes
(NBPI)
created.…read more

Page 3

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Crisis
and
Solution
(deflationary)
Crises
1964
- Speculators
in
Europe
attempted
to
make
money
by
selling
sterling,
lowering
its
value
and
then
buying
sterling.
- The
bank
of
England
was
forced
to
sell
dollars
so
that
it
could
buy
sterling
to
keep
its
value
high
so
that
the
speculators
would
make
a
loose
and
not
a
profit.
o $3000
million
recue
credit
(loan)
from
the
USA.
1965
November
(emergency)
Budget
- Aim:
Cut
imports
and
inflation
by
making
spending
more
expensive.
- 2.…read more

Page 4

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£500
million
package
o Hire
purchase
repayments
tightened
o £50
a
year
per
person
overseas
travel
o 10%
increase
in
purchase
tax
! Wine
! Tobacco
o Legally
binding
wage
freeze
for
6
months
! 6
months
of
severe
restraint
o (Note:
deflationary
action
worked
against
national
plan.)
- Bank
rate
raised
May
1966
- Selective
employment
tax
o Taxed
tertiary
industries
more
than
manufacturing.
o W.D
Rubenstein
`Even
by
the
normal
standards
of
the
Wilson
Government,
this
tax
was
especially
foolish'.…read more

Page 5

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The
Arab-Israeli
War
(6-days)
had
pushed
up
the
cost
of
oil,
and
closed
Suez
! Increased
the
balance
of
payments
deficit.
! Claimed
to
be
not
very
significant
by
Sked
and
cook.
o Serious
dock
strikes
in
London,
Liverpool
and
Merseyside.
o October
1967
had
seen
worst
monthly
trade
deficit
in
British
History.
o Government
said
they
were
entering
the
EEC.
! Needed
Sterling
to
be
on
par
with
EEC
currencies,
so
it
was
assumed
Sterling
was
being
devalued.
(Main
reason,
sked
and
cook.…read more

Page 6

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Alcohol
· Tobacco
o Unemployment
Increase
! Regional
divides
· Scotland
and
Wales
saw
more
of
it.
Roy
Jenkins
-
Chancellor
of
the
Exchequer
(Nov
1967
­
1970
Election)
IMF
conditions
- Said
IMF
had
created
no
conditions
- This
was
false,
and
was
shown
to
be
the
next
day
- Home
consumption
had
to
be
cut
by
£750
according
to
the
IMF.…read more

Page 7

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Action
1968
- Petrol
and
alcohol
taxes
up
again.
- Purchase
tax
was
increased
- Import
deposit
scheme
in
place.
- 1986
March
Operation
Brutus
o The
plan
to
Lockdown
Capital.
! Never
implemented.
! Showed
how
fearful
of
crisis
they
were.
February
1969
- Bank
rate
at
8%
- £340
million
taxation
increase
o Mainly
through
an
increase
in
selective
employment
tax.
1969
Economy
working
- Exports
were
up
by
30%
on
1964
levels.
- Balance
of
payments
was
in
surplus
by
£445
million.…read more

Page 8

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Historiography
- R.K.
Webb
o `[The
selective
employment
tax,
higher
on
service
sector]
alienate[d]
the
business
community
further
and
to
damaged
the
governments
reputation
with
consumers
as
the
public
was
made
aware
of
how
the
tax
pushed
up
prices.'
- W.
D
Rubenstein
o `Roy
Jenkins
proved
to
be
a
successful
Chancellor.'
o `[Wilson's
government]
economic
record
was
poor,
and
was
made
worse
by
Wilson's
own
hyperbolic
rhetoric.'
- T.…read more

Page 9

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February
£35
million
in
aid
from
government.
! Glasgow
Chief
Constable
worried
about
unemployment
and
crime
in
the
areas,
as
unemployment
already
1
million.
o 1972
March
Ministry
for
Industrial
development
created
with
£315
million
budget
for
aiding
ailing
regions,
through
industrial
investment.
! An
action
cheered
by
Labour.
- Privatisation
o Thomas
Cook
sold.
o Lunn
Poly
sold.
o State
owned
public
houses
in
Scotland
and
Carlisle
sold.
o BOAC's
Western
African
routes
were
transferred
to
private
airlines.…read more

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Anthony
Barber
­
Chancellor
of
the
Exchequer
1971
April
Budget
- Tax
cuts
of
£550
million
o Cut
in
cooperation
tax
by
40%
o Half
selective
employment
tax
o Reduction
in
surtax
- Welfare
o Increase
in
tax
allowances
for
children
o Family
income
supplement
(FIS)
would
be
given
to
poorer
families,
to
help
them
out.
! Against
Labours
claims.
! Worked
in
Heaths
`targeted
welfare'.…read more

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