(Economic challenges) Creation of a managed economy, 1939-1951

Question 1

What was the intention behind creating a managed economy?

Answer 1

To manage wartime economy

Question 2

What is a managed economy also known as?

Answer 2

A planned economy

Question 3

Why did the managed economy continue after WW2 until 1951?

Answer 3

To set up recovery from WW2.

Question 4

After appeasement, Britain started rearmament in 1939.
What measures were taken?
(2)

Answer 4

15,000 aircrafts produced in 1940, rising to 47,000 in 1944.

6,000-8,000 tanks produced each year of WW2.

Question 5

How is rearmament evident in the country’s GDP?

Answer 5

Military expenditure:
1939 = 15% of GDP
1945 = 51%

Question 6

What had become a huge feature of monetary policy?

Give evidence.

Answer 6

Borrowing

Britain accumulated £4 billion+ of debt with USA, with interest amounting to £70 million every day.

Question 7

Borrowing became a huge feature of monetary policy.

What did this result in?

Answer 7

Permanent pressure on value of the pound, leading to devaluation in 1949.

Question 8

Employment - what was issued by Ernest Bevin in 1941?

What did this do?

Answer 8

The Essential Work Order

People in essential fields like coal mining weren’t allowed to leave jobs for any reason & it was difficult for employers to dismiss them.

Question 9

Employment - what was introduced in 1939?

What did this do?

Answer 9

The Control of Employment Act

Allowed semi-skilled workers to work in industries previously viewed as skilled, like some areas of shipbuilding.

Question 10

Employment - what were the 2 pieces of legislation introduced regarding employment to create and maintain a managed economy?

Answer 10

The Control of Employment Act 1939

The Essential Work Order 1941

Question 11

State intervention - how did state intervention change?

Answer 11

Grew

Question 12

State intervention - what provided the blueprint for the NHS?
What did it do?

Answer 12

The Emergency Medical Service

Gave the govt the right to direct voluntary & municipal hospitals across Britain.

Question 13

State intervention - the National Blood Transfusion service was created.
What was the purpose of this?

Answer 13

Get people to donate blood to help civilians & the military & set social precedent of people taking an active role in the healthcare of others.

Question 14

WW2 austerity - what did rationing do to the class system?

Answer 14

Levelled fashion across classes

Question 15

WW2 austerity - how did the quality of life change?

Answer 15

It became more drab.

Question 16

Explain how Britain’s economy grew more and more dependent on overseas aid.

(5)

Answer 16

Dec 1940 - Britain’s cash reserves spent.

Lend-Lease Agreement

US supplies brought to Britain by ‘Liberty Ships’.

After WW2, John Maynard Keynes negotiated £2.2 billion loan from US & Canada - not enough.

GB received £6 billion from Marshall Aid in 1948.

Question 17

A post-war consensus can be characterised by a belief in what?

(5)

Answer 17

Keynesian economics

Mixed economy

Nationalisation

Commitment to full employment

Welfare state

Question 18

How did the National Government & WW2 set the stage for consensus? (3)

Answer 18

Proved leaders from rival parties could work together & reach agreements.

Changed the role of govt - had to take more control, eg Emergency Powers Act 1940, which contained provisions for reacquisition of land & detention without trial.

Shift from free-market to mixed economy, where govt used rationing, Essential Work Order, conscription & censorship to engage GB in total war - society became more collectivist.

Question 19

How did the success of collectivism (WW2) set the stage for consensus?

Answer 19

Showed an approach where tackling certain problems by taking away rights for the common good is effective.

Question 20

How did the changing role of government as a result of WW2 set the stage for consensus?

Answer 20

The state was forced to take more control. The Emergency Powers Act of 1940 contained provisions for the reacquisition of land and detention without trial.

Question 21

How did the shift from the free market economy to a more mixed one (WW2) set the stage for consensus?

Answer 21

The govt used rationing, the Essential Work Order, conscription & censorship to engage Britain in a total war so society became more collectivist.