The Labour Party in power 1945-51

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Reasons for Labour's victory

The failures of the Conservatives:

  • Previous Conservative governments had not understood the needs of the ordinary working people.
  • The public remembered the Conservative governments inability to deal with the economy during the 1930s - leading to the great depression.
  • The appeasement policy put in place by the Conservative government had failed to prevent war from occuring.
  • The Conservatives election campaign was ill-judged.
  • The government was deemed old fashioned: they would not introduce new social and economic changes that the country needed.  
  • Churchill wasn't seen as a reliable domestic politician. 

Labours advantages:

  • The Labour party presented the zeitgeist of the public.
  • Labour were generally seen as better fitted to carry out post-war construction.
  • Labour figures had gained respect and credibility during the war.
  • The electoral system worked in Labour's favour. 
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Creation of the welfare state

Influences:

  • Beveridge report - identification of '5 giant evils'.
  • The Education Act 1944 - free compulsory secondary education. 
  • Family Allowances Act 1945 - weekly payments for each child after the first.

What did it include?

  • NI - regular financial contributions to a central fund which meant that you could receive payments in times of need, such as unemployment or sickness. 
  • NHS - free medical and hospital treatment regardless of status or income.
  • National Assistance Act - help for those suffering from serious hardships.  
  • Industrial Injuries Act - covered accidents in the workplace
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Resistance to the NHS

  • The resistance of the medical profession delayed the setting up of the NHS by a year.

4 objections to the NHS:

  • Doctors did not want to become mere salaried civil servants of the government.
  • Doctors feared government interference in doctor-patient relations.
  • Doctors were concerned that management boards, run by the NHS, would take away their independence as a practitioner.
  • Doctors saw the NHS as a form of nationalism - which treated the medical profession as an industry. 

Provisions of the NHS:

  • Primary care given by GPs, who would work as independent contractors and be paid for each patient on their books.
  • Dentists and opticians would provide both NHS and private treatment.
  • Hospitals would be run by regional management boards.
  • Maternity care, vaccinations and ambulance services were to be provided by the local authorities.
  • Medical prescriptions would be free.
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Failures of the NHS

  • Working class still did not receive as much.
  • Middle class prospered more, as they had access to the best practices and doctors.
  • People wasted GPs time with trivial complaints - 'dandruff syndrome'.
  • Providing patient care was not being fufilled - many of the managerial and administrative positions did not directly relate to treatment for patients - bureaucracy.
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Nationalisation

  • The government had the right to direct the key aspects of the economy.
  • Nationalisation would bring greater safety, productivity and efficiency.

The Nationalisation programme:

  • 1946 - coal, civil aviation, Cable & Wireless & Bank of England.
  • 1947 - road transport and electricity.
  • 1948 - gas.
  • 1949 - iron and steel. 

The opposition to the nationalisation of steel:

  • It was not owned by the public.
  • It was successful and making profits.
  • Large investments had recently been made into it.
  • It had an excellent record of employer-employee relations.
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Keynesianism

  • The government should use its budgets and revenue powers to raise capital, which it could then reinvest in the economy.
  • A boost in the economy would lead to genuine recovery and growth.
  • Earnings would be spent on goods and services, resulting in the forces of supply and demand being stimulated.
  • The government should not always try to balance the budget between income and expenditure - it should be willing to run deficit budgets. 
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The government's financial problems

By the end of the war, Britain was burdened with the following:

  • Debts of £4198 million.
  • A balance of payments crisis (cost of imports was greater than the profit from exports).
  • Exports had dropped by 60% during the war.
  • The sale of invisible exports declined during 1938-1946.
  • The cost of maintaining overseas military commitments had increased by five times the amount between 1938-1946. Spending 14% of GNP - led to austerity measures e.g rationing & wage freezes.
  • Economic blizzard - fuel shortages, cuts in domestic and industiral electricity supplies, workers were laid off. 

In order to meet the demands of the crisis, a loan was necessary. A loan of $6000 million was negotiated from the USA and Canada. 

  • The hope was that as Britain's economy recovered, the pay back of the loan would be relatively easy. 
  • The recovery never happened, due to the dollar gap. 
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The Marshall plan 1947

After 1945, the only country/economy with sufficient resources was the USA. Concerned with the spread of Communism, and in order to allow their own economy to grow, they adopted a programme to provide dollars to any country that would grant trade concessions to the US. 

  • Europe received $15 billion, with Britain taking 10%.
  • Further tied Britain to the USA.
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Government achievements

  • Indian independence 1947 - during WWII Britain began to realise that the burden of being an Imperial power was too much. 
  • Implemented a large scale nationalisation programme.
  • Created the welfare state.
  • Helped to convince the USA of the need for the Marshall plan.
  • Initiated a major housing programme, resulting in a million new homes being built.
  • Played a key role in the formation of NATO.
  • Started the programme that turned Britain into a nuclear power.
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Reasons for Labour's 1951 defeat

  • The government was worn down by heavy economic and financial difficulties.
  • Serious divisions had developed between the right and the left of the party.
  • A number of the ministers had been working continuously since 1940. 
  • There was resentment among some trade unions at Labour's slowness in responding to workers' demands.
  • The Labour party image was damaged - they were associated with rationing and high taxation.
  • Britain's entry into the Korean war angered the left of the Labour party. 
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