British economy notes 1951-2007
- Created by: LU,KTGFVW
- Created on: 24-05-16 17:41
British economy notes 1951-2007
1951 – 59:
· The conservative government where lucky in its timing, coming to power just as economic recovery started to show
· From 1952, most economic indicator pointed upwards
· Men’s weekly wages where increasing
· There was a boom in house and car ownership
· There was construction of over 300,000 homes per year
· The new towns planed by labour in the 1940s
· Food rationing completely ended in 1954
· There was an increase in the ownership of consumer goods
· In the run up to the 1955 election butler was able to boost conservative election prospects with a ‘give away’ budget that provided the middle classes with £134 million in tax cuts
· In the summer of 1957 there was a major financial crisis
· Inflation was rising because wages were running far ahead of productivity
· There was also a run on the pound, with the danger the pound would devalue against the us dollar
· Macmillan favoured expansionist economic policies
· This crisis did not do lasting damage to Macmillan’s position, which had improves dramatically by 1959
· The pound regained its value against the dollar
· The economy expanded so much that the budget of April 1959 provided tax cuts of £370 million
· The general air of consumer affluence reflected in the budget is generally accepted as the key factor in Macmillan’s comfortable re-election in 1959
1960 – 1963:
· The age of affluence did not come to an end in the early 1960s but the government faced difficulty and frustration in its economic policies
· Hopes of radical modernisation of the economy never really occurred
· The intended transformation of Britain’s infrastructure made stuttering progress
· By the late 1950s, it was becoming clear that economic growth in Europe was leaving Britain behind and that trade with the empire and commonwealth was not sufficient to keep up
· Macmillan reversed his party’s previous policy and decided that it was essential for Britain’s economy to be joined with Europe’s
· In 1959, Britain took the lead in forming the European free trade area but the new organisation was not able to match the economic growth of the EEC
· In 1961 the Macmillan government submitted Britain’s application to join the EEC
· 3 key economic factors where behind the application:
o Boosting industrial production for a large scale exporting market
o Increasing industrial efficiency because of competition
o Economic growth would be stimulated by the rapid economic expansion already racing ahead in the EEC
· The 1961 application was a symbol of the sense of failure in bringing about economic modernisation
· The British economy was still growing and living standards were still going up – but the cycle of ‘stop-go’ economics had not been broken
·…
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