BRITISH HISTORY 1945-1990

DEBT:

During world war two, USA gave many loans to the Britian. By 1945, Britain owed the USA £4198 million - costing the government £70 million each day. 

TRADE AND PRODUCTION:

British GDP shrunk by 25%. There was also a balance of payments problem, essentially Britain was spending far more overseas than it was earning from other countries. The balance of payments were caused by:

• a decline in british trade - shrunk by 66%
• 2% of british industry was producinggoods for export in 1945
• military spending increased by 400% between 1938-1946.

INFRASTRUCTURE:

WW2 destroyed a great deal of Britain's infrastructure. 4 million homes were destroyed, leaving 2.25 million people homeless. 20% - schools and hospitals destroyed.

THE BEVERIDGE REPORT:

Beveridge report - 1942 - a plan for a welfare system. Proposed a system of social insurance that all working people would pay into, which would provide for them when they were unemployed or sick.

FULL EMPLOYMENT:John Maynard Keynes proposed a new econmic approach which he claimed would help goverments ensure full employment. Keynes argued that econmic growth by could be stimulated by spending money and cutting taxed during recessions - keynesianism.

EDUCATION:

1944 - Education Act. The Act set up a 'triparite' system of grammar schools, technical schools and secondary school designed to teach different skills. 11+ determined which schools students would attend.

In 1945 Labour had won a landslide victory - it was unexpected for several reasons.

• Churchill was an extremely popular wartime leader.
• Cons party had bigger election budget than Labour - Cons = £780 on election campaigns whereas Labour = £595.
• Election was based on an out of date electoral register - over represented older voters who tended to vote Cons.

Labour - 47.8% (% of vote in 45') 393 seats       Conservatives - 39.8% (% of vote in 45') 213 seats

PERCEPTIONS OF CONS:

• Voters associated the cons party with the interwar depression, believing that they had failed to solve Britain's econmic and social problems.
• Unpopular as they had backed the policy of appeasement.
• Tended to view the cons party for the rich and priviledged.
• Older voters blamed the cons for failing to build 'a land fit for heroes' after WW1.
• Cons stressed Churchill's personaled popularity rather than policies.

PERCEPTIONS OF LABOUR:

The Labour party benefitted from the public desire for change. A 1945 Gallap Poll showed the 56% of voters wanted extensive change.

• Voters tended to see the Cons as a party of the past.
• Voters saw the Labour party as the most likely to bring radical reform.

Labours manifesto 'Let us face the future' was also closer to the publics desire for a more egalitarian Britain.

• Voters believed that Labour would be more likely to introduce policies that would help ordinary people rather than protecting the privileges of the rich.

The first past the post electoral system and the distrubution of Labours vote meant that Labour needed fewer votes to win each seat than the Cons.

SOCIAL SECURITY:

Labour attempted to produce a 'national minimum' standard of living through a series of laws, establishing new econmic rights.

• The Family Allowance Act (1945) - provided child benefir for each child, but the eldest.
• The Industrial Injuries Act (1946) - provided financial cover for people who were injured at work.
• The National Insurance Act (1946) - established a universal system of benefits, including unemployment benefit, sickness benefit, maternity benefit and pension. Funded by National Insurance contribution made by employers, workers and the Government.
• The National Assistance Act (1948) - abolished poor law and established a welfare safety net for all those living in poverty, those unable to work due to disability and single parents.

HOUSING:

The New Towns Act (1946) & The Town and Country Planning Act (1947) aimed to build 400,000 new homes every year. Though shortages of labour meant that only 230,000 homes were built in 1948.

HEALTH AND EDUCATION:

The National Health Service Act (1946) established goverment provision of health care, free at the point of delivery. Brought in July 1948, and brought all existing hospitals together into a national network - NHS.

The Butler Act - raised the school leaving age to 15 in 1947. Government recruited 25,000 new teachers, and increased the spending on education.

THE IMPACT OF THE WELFARE STATE:

• Labour succeeded in establishing a univeral right to a minimum standard of living.
• National Insurance Act didn't account for the cost of living - benefits so small that 2.5 million people were relying on the National Assistance Act by 1951.
• Bevan tended to prioritise health reform and neglect housing.
• By 1951, 1 million new homes had been built but reports showed that 750,000 people wre without adequate housing.
• NHS - successful!! Employed - 18,000 GPs who wrote 187,000 prescriptions, treated 8.5 million dental patients and distrubuted 5.25 million glasses.
• The NHS cost £250 million - Bevans cabinet demanded cuts - gov introduced vharges for dental and glasses to save money.

Between 1945-1951, Labour created a mixed economy. Gov policies reflected the key priorities of creating full employment and solving Britains balance of payments deficit.

NATIONALISATION: GOVERNMENT BOUGHT THE INDUSTRIES FROM EXISTING OWNERS

• 1946 - Coal Industry, Nationalisation Act - COST GOV £164 MILL
• 1947 - Electricity Act, Transport Act (buses, railways) - COST GOV £1000 MILL
• 1948 - Gas Act - COST GOV £265 MILL
• 1949 Iron and Steel Act.

Labour felts that nationalisation achieved the goal of establishing 'common ownership of the means of production'. Hoped to ensure full employment by controlling key industries and the Bank of England.

THE DOLLAR CRISIS:

Cost of war left Britain econmically dependent of the USA. Pres Truman decided to end US Economic Aid as he didn't want to fund the new socialist gov. Gov had to negotiate the Anglo-American Loan. Gave Britain $6000 million.

THE DOLLAR CRISIS:

USA demanded that Britain should make sterling fully convertible to dollors by mid 1947. Anticipating that the price of the pound would decline, foreign countries sold their stocks of sterling. Britain was forced to buy stocks of sterling to stablise the pricem costing £645 million during 1947-1949.

• 1949 - devaluation of the pound.

In 1949 the exchange rate dropped to $1:£2.80.

AUSTERITY:

Large balance of payments deficit from the war. Austerity measures such as food rationing was introduced to try and solve this. Rationing goods meant that Britain could import less and export more. Under Stafford Cripps (chancellor 47-49) rationing was more severe than wartime rationing. e.g 1946 bread was rationed for the first time.

Labour tried to control imports by agreeing a wage freeze with major trade unions in 1948.

HOW SUCCESSFUL WAS LABOUR'S ECONOMIC POLICY:

• 1945-1951 industrial production increased by 33%
• 1948-1950  economy grew by 4%
• 1945-1950 exports increased by 77%
• 1948 - no balance of payments deficit.
• 1947-1950 unemployment never rose above 300,000.

Ther were very few attempts to reform government-controlled industries. Gov had less money available to invest in industrial modernisation since they spent so much in mationalising industries.

MAN OF THE PEOPLE:

• Atlee wasn't a gifted speaker, but he had a ordinariness about him that appealed to working class voters. Atlee's down to earth style helped to make radicalism of the new government's meausre less threatening for many voters.
• By 1951, Atlee's sensible style was less appealing.
• Public had associate the Labour Gov with 'greyness and dullness'

ATLEE AND THE ESTABLISHMENT:

• Atlee was unwilling to support wide-ranging consitutional reform
• Atlee's traditional outlook meant that he failed to recognise the significance of movement in France and Germany towards Eurpoe integration.
• Failed to put Britain at the heart of moves towards the creation of the European Economic Community.

PARTY UNITY:

The party was dominated by Bevan, Cripps and Morrison.

PARTY UNITY:

• Bevan was pushing for more spending on projects such as the NHS.
• Cripps and Morrison wanted to keep control of spending and after 1948 stopped advocating for major reform.
• By 1951 it became difficult for Atlee to ensure unity.
• Atlee was unable to prevent Bevan's resgination in protest to charges for dental and glasses work.

CRITICISMS OF ATLEE:

• Left wing Labour members were critical of Atlee's aproach to nationalisation - argued that the gov should of placed nationalised industries under workers control.
• Left were aso critical of Atlee's decision to support he USA during Korean war - argued that war was too expensive, money should've gone to welfare & healthcare.
• Cons opposed the nationalisation of iron and steel - argued that nationalisation didn't significantly improve industries, so steel would of been better in the private sector.

STANDARD OF LIVING:

THE WORKING CLASS:

Standard of living for working class had improved. Through, full employment, low inflation, increased welfare by 1950 working class incomes had risen by 9%.

THE MIDDLE CLASS:

The middle class benefited less from Labour policies. Many felt their standard of living had been hit by the lack of consumer goods; furniture, petrol and cars. Middle class incomes had dropped by 7% between 1938-1950.

RATIONING:

The gov used some of the $3000 million it gained in marshal aid to ensure that rations were maintained at their established level. In Nov 1948, Harold Wilson (president of board of trade) abolished the rationing of toys, cutlery and pens. By April 1949, bread, sweets and chocolate were no longer rationed. 

POST WAR CONSENSUS:

1950 - Labour had won a second landslide victory, though Atlee only gained a commons majority of six, so in 1951 october he called for another election hoping to win a larger majority.

• Labour did will more votes in this election, but due to the first past the post system it gave the Cons a majority of seats in the commons

Between 1951-1964, the Cons won three elections and Britain was governed by four prime ministers:

• 1951 - Winston Churchill (cons = 48.0% lab = 48.8%)
• 1955 - Anthony Eden (cons = 49.7% lab 46.4%)
• 1957 - Harold Macmillan
• 1963 - Alec Douglas-Home

BUTSKELLISM:

The new Cons government of 1951 continued many of the policies initiated by the Atlee government, including:

• a commitment to full employment through keynesian economic management.
• high levels of state-funded welfare
• a mixed economy.

REASONS FOR CONSENSUS:

• Although the Cons won a parliamentary majority in 1951, Labour won more votes, so Cons leaders recognised the election result was not a mandate for radical change.
• The Cons realised that they risked losing the next election uf they ended the welfare state or abandoned the commitment to full employment
• Keynesianism seemed successful for economic growth
• Important figures in the Cons government like Butler and Macmillan were committed to the welfare state and full employment.

LIMITS OF THE CONSENSUS:

• Nationalisation was the least popular aspect of Labour's achievments.
• Since rail nationalisation failed to improve services many people were convinced that nationalisation could not solve the economic problems.

SO..... Cons felt like they could denationalise industries such as iron, steel and road haulage.

RAB BUTLER?

Butler was responsible for the 1944 Educatoin Act. He was a One Nation Conservative - he believed that the government should persue policies that helped the whole nation rather than the rich.

He supported many of Labours policies including the introduction of a mixed economy and protection of the rights of workers.

During 1951-1955 Butler continued to support policies on welfare and full employment.

Cons domestic policy mainly continued the high levels of state intervention initiated by the previous Labour goverment. Cons achieved there goals of maintaining full employment, building new houses and continuing welfare.

FULL EMPLOYMENT:

Cons leaders were committeed to maintaing full employment.

• In 1951 there were 367,000 unemployed and when unemployment started to rise in 1952, the gov responded with public work schemes, such as tidal barrage across the River Severn.
• Between 1952-1955 unemployment never rose over half a million.
• In 1955-1956 unemployment never exceeded 300,000
• THOUGH unemployment increased again in 1958-1964, and in 1963 it peaked at 878,000.

HOUSING:

• Harold Macmillan (the housing minister) kept the promise of rebuilding 300,000 houses a year as said in the 1951 cons manifesto. After 1954 this slowed down, but during 1952-1964 they built 1.7 million new homes.