Macmillan - economic Flashcards
What happened to credit?
Borrowing and purchasing on credit was more available to nearly everybody
What were the impacts of increased credit?
People on regular wages could buy more ostentatiously. Increase in the number of consumers and a consequent increase in production to meet this increase in demand.
What was the impact of consumerism?
Meant that working-class incomes often exceeded lower middle-class
How did the average weekly wage of the adult male worker change between 1951 and 1964?
More than doubled from £8 and 6 shillings in 1951 to £18 and 7 shillings in 1964
What was “budget politics”?
Accused of using the budgets as a political weapon in an attempt to win votes through pushing populist politics.
Give an example of budget politics.
In 1959 and 1963 just before elections, Conservative chancellors pushed budgets full of tax cuts and raised interest rates, causing a boom in consumer spending despite issues of runaway inflation.
What were the consequences of the tax cuts in 1963?
British businesses could not keep up with demand, causing a boom in foreign imports. The result was an £800 million balance of payments deficit by the end of 1964.
What was meant by a “Stop-Go” policy?
No long term economic policy. Government was stuck in a cycle of raising and then lowering taxes and interest rates in an attempt to control the economy and inflation.
What was “Stagflation”?
Describes when the economy is stagnant, but inflation persists.
What was the significance of “stagflation”?
Showed how Macmillan and the Conservatives could not handle the pressures of running a modern economy and caused financial issues for the general population.
What was Britain’s industrial growth like compared to other countries?
Industrial growth increased by 2.3%, slower than rivals France, Italy and West Germany - all increased by over 4.3%
What caused Britain’s slow industrial growth?
Caused by the cost of defence, expenses such as naval bases, or a nuclear weapon development programme - 40% of its Research and Development budget on defence
What happened to unemployment under Macmillan?
Rose throughout the late 50s and peaked in his final year.
By 1964, how much was Britian spending on defence?
£1.7 billion on defence, 10% of its GDP
