The Post-War Consensus - Economy (AQA complete notes 2/16)

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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  • Created by: tom baker
  • Created on: 08-10-15 22:30

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Page 1

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The
Post-War
Consensus?
1951-1964
­
Economy


The
growth
of
the
economy
and
the
rising
living
standards;
problems
of
the

balance
of
payments
and
`stop-go'
policies;
economic
motives
behind
the

application
for
membership
of
the
EEC
in
1961

Attlee
1945-51

Hugh
Gaitskell


- Keynesian


Achievements

- Keynes
negotiated
£2.2
billion
loan…

Page 2

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o Expanding
welfare

o Military
defence
scheme

o Nuclear
weapons

- Churchill
had
a
low
opinion
of
Butler
and
indeed
economic
affairs
(T.O.

Lloyd).



Achievements


- Post
1952
the
national
income
increased
for
the
next
three
years.

o National
income
was
40%
higher
in
55
than
50.

o World
economy…

Page 3

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!Increased
export
prices
caused
by
the
Korean
war
was

short
lived.

o By
1955
£400
million
deficit
again.

- Encouraged
investment

o 1953
Budget
gave
investment
allowances
for
firms
spending

money
on
new
equiptment.

Issues


- Defence
expenditure
was
very
high.

o Caused
mainly
by
the
Korean
war.

o 30%…

Page 4

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- Balance
of
payments
deficit
(from
Labour)
dealt
with
through
credit

squeeze,
raising
interest
rates
and
controlling
imports.

- Economy
took
a
turn
for
the
better
52
to
54,
so
income
tax
cut
and

reduction
of
bank
rate,
for
expansion.

- 1955
to
56
there
was
inflation
so
Butler
increases…

Page 5

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Eden
1955-57


R.A.
Butler

(See
above)

Harold
Macmillan

- Keynesian

o `Less
faith
in
laissez-faire
than
his
predecessor'
­
Sked
and
Cook

o Assisted
trade
unions
in
his
policies


- Saw
movement
to
Chancellor
as
`demotion'

- Wasn't
too
pleased
to
be
Chancellor


Stop-go
Method


- February
and
April
1956…

Page 6

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investment
thwarted
attempts
to
improve
productivity.
He

lacked
a
long-term
vision.


! Eden
didn't
really
understand
actions
at
the
Treasury.
He

moved
Macmillan
there
because
Macmillan
was
more

pliable
than
RAB.
Then
he
moved
Selwyn
Lloyd
to
the

Foreign
Office
because
Selwyn
Lloyd
was
pliable
too.
Both

men
lacked
the…

Page 7

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o Raised
interest
rates
and
purchase
tax

o Profits
taxed
raised
to
12.5%.

o Introduced
a
`pay-pause'
on
public
employees.

o Bank
rate
up
to
6%,
then
7%

- 1961
crisis

o New
sterling
crisis

o IMF
loan

- 1962
(Please
stop)

o Tax
increases
on
Sweets
and
soft
drinks…

Page 8

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- Set
up
EFTA

o Increased
trade
with
some
countries.

o Not
as
successful
as
EEC
though.

- Attempted
to
join
the
EEC.



Issues



- 1957
non-resident
sterling
convertible
on
current
account
(liberalisation

attempt).

o Try
to
make
city
compete
with
New
York.

o Fundamentally
ineffective

- 1957
financial
crises…

Page 9

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o 1957
£500
million
deficit


o By
1964
there
was
an
£800
million
deficit


- Increasing
strikes

o 1962
­railway
workers
postmen
and
nurses.

o Working
days
lost
to
strikes

! 1957
­
8.4
million
(highest
in
1950-69
period)

! 1964
­
2.2
million

! Around
5
million
days
a…

Page 10

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o Not
as
wealthy
as
other
nations
(product
per
head)

! 1958
was
worse
off
per
head
than
US,
Sweden
Australia
ect.

! By
1963
it
had
increased,
but
been
over
taken
by
France

and
Germany.

o Fundamental
failure
to
rebuild
industry

! No
coordinated
attempted
to
modernise
old
stable…

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