The economy under Attlee’s government

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  • Created on: 28-01-13 10:42
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The economy under Attlee's government
To promote efficiency and social justice
'46 Coal, civil aviation, cable and wireless, BofE
'47 road transport, electricity
'48 gas & railways
'49 iron & steel
Of all the industries above , all were struggling & short of investment
APART from steel & iron which were profit making industries
Tory took the steel defence to fight against the Labour party after
their disastrous 1945 election defeat
Passing the Parliamentary Reform Act 1949 stopped the Tories from
using their majority in the House of Lords from blocking legislation
Based on keeping a steady level of demand for goods and services
Focused on keeping employment high
Only agency with enough power to keep demand high was the
Use budgets to keep D high, artificial boost to economy= multiplier
Gov should be prepared to run up debts & borrow money in the SR to
stimulate the economy
Financial Problems
Debts of £4198 million from the war
Balance of payments crisis as exports had dropped by 60% during
the war
Cost of maintaining military commitments had increased 5 times since
1938 by 1940s it was spending 14% of GNP on defence
Committed to developing nuclear power
$6000 million loan from US and Canada
Austerity measures: rationing, few consumer goods, no luxuries, to
help keep inflation low
Voluntary wage freeze for trade unions
Forced to devalue the $ from $4 to $2.80
The Marshall Plan 1948
US realised it would be vital to stimulate the economies of countries
to enable the US to grow
Offered dollars in exchange from trading concessions
10% of aid to Europe was given to Britain
Tied Britain to USA and capitalism


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