Economic Policy 1951-1964

Why was the economy growing quickly in the period of 1951-1964?
Because of the post war boom, Britains economy was recovering from the second world war. People felt richer as wages went up.
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When did food rationing come to an end?
1954
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What allowed consumers to buy more?
Productivity went up leading to full employment which then meant higher wages and there was also tax cuts. These both meant people could buy more encouraging investment and even more growth.
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What happened in the post war boom?
Productivity rose, increased investment, higher employment, higher wages, higher demand and consumption, growth in business confidence, increased investment.
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What was the reality of the post war boom in terms of economic growth?
Economic growth was not as strong as that happening in other countries.
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What were the downsides of the post war boom?
Danger that the increased demand would lead to Britain importing more than it exported causing a balance of payments crisis and a run on the pound. Also danger that the economy would grow faster than increases in productivity leading to inflation.
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What did the conservatives government do to counter the issues of the post war boom?
They introduced 'stop-go' economics.
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What is 'stop-go' economics?
When the economy slowed down too much the government encouraged growth by lowering interest rates and allowing wages to rise
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What demonstrated Britains underlying weaknesses within the economy?
The Suez Crisis, 1956.
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What did some members of the Conservative party (Peter Thorneycroft and Enoch Powell) argue in terms of the economy?
They argued that rather than managing the economy by managing demand, the government should control the money supply (a form of monetarism).
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What would the government need to do to control the money supply?
Limit government spending which would mean cuts to house building, welfare and public services.
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What did people think of limiting government spending?
Likely to be unpopular with the electorate and in the end Macmillan didn't support this.
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When did the economy grow at its fastest?
Between 1960 and 1964.
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What was the government forced to do when it became too difficult to keep the economy stable?
In 1961 the government had to apply to the International Monetary Fund for a loan and was forced to introduce a pay pause to keep inflation low.
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When and why was the National Economic Development Council set up?
It was set up in 1961 to plan economic growth.
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When and why was the National Incomes Commission set up?
It was set up in 1962 to manage wages and prices.
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When did Britain apply to the EEC?
1961
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When did Britains application to the EEC get denied?
1963
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When was steel and transport denationalised?
1953
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When was steel and iron nationalised?
1951
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When was the financial crisis?
1956
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When was the EFTA created?
1960
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Other cards in this set

Card 2

Front

When did food rationing come to an end?

Back

1954

Card 3

Front

What allowed consumers to buy more?

Back

Preview of the front of card 3

Card 4

Front

What happened in the post war boom?

Back

Preview of the front of card 4

Card 5

Front

What was the reality of the post war boom in terms of economic growth?

Back

Preview of the front of card 5
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