Economy 1951-64 Flashcards
(40 cards)
Why was the 1951-64 Conservative govt fortunate?
They came into power in 1951, just as the effects of postwar recovery began to show.
How much did the population increase between 1951 and 1961 (the baby boom)?
5%
By 1955 how many people were unemployed?
Only 200,000
What did Butler do just before the 1955 election?
As Chancellor, he announced a ‘giveaway budget’ including £134m in tax cuts.
What was the main underlying problem with the British economy?
Productivity. British workers in 1960s were about 25% more productive than in 1950 but this was much less than France and W. Germany.
How did UK’s share of world markets change from 1950 to 1962?
Decreased from 25% to 15%.
West Germany increased from 7% to 20%.
What were the stages of the ‘stop-go cycle’?
- STOP: High interest rates, wage freezes
- Demand falls
- Output decreases
- GO: controls removed
- Demand rises
- Increased imports
- Balance of payments deficit
(cycle repeats)
Who was Macmillan’s chancellor?
Peter Thorneycroft.
He believed in ‘monetarism’ and wanted spending and tax cuts. Cabinet divided over this in Summer 1957. Eventually, Macmillan refused to support spending cuts and Thorneycroft resigned over it.
When did Britain first apply to join the EEC?
1961
What were the main challenges faced by the British economy during the period between 1951-1964?
- British companies were not meeting the demand on domestic market
- As the government tried to maintain high value of pound, British products were more expensive than those from other countries
- Most money was invested abroad because people did want to risk investing in Britain with constantly changing interest rates
- No long term investment or improvement was made in Britain
- Negative balance of trade.
Define term balance of trade.
The difference between countries’ imports and exports.
What were the main downsides of using stop-go policies for British economy?
- It offered no long-term economic strategy
- It caused stagflation (stagnation and inflation at the same time)
- Discouraged long term investment due to volatility of interest rates.
How much was the overall wage rise within the period of 1951 to 1964?
For the average male worker increase was from £8.30 in 1951 to £18.35 in 1964.
What was the main criticism of implementing go phase during years 1958 and 1959?
- Growing demands for products led to higher wages demands, met by government, and this led to inflation.
- Thorneycroft wanted to implement stop phase but was overridden due to upcoming elections. He resigned in January 1958.
Define term stagflation.
A combination of inflation and stagnation at the same time. The industry is in decline and yet there is growing inflation creating worst of both worlds.
What was the percentage of yearly government spend on defence under Conservative government?
10%
In what year did the rationing end in Britain?
1954
Why was Britain in 1950s sometimes described as property owning democracy?
A society in which as many people as possible are encouraged to buy property; a principle that owning a property is an essential part of democracy.
What were the two main aims for the Keynesian economic policies?
The government should use its budget to:
- invest in the economy
- provide full employment.
(Budget deficit in this scenario was not a problem.)
What year saw highest unemployment during the period of 1951 to 1964?
1963, with 878,000 people.
What year saw the lowest unemployment during the period of 1951 to 1964?
1956 with 297,000.
What evidence suggests that there was period of genuine affluence in British society in the period 1951 to 1964?
- There was a rise in real wages (they rose 72% from 1951 to 1963) and availability of credit, meaning that people could afford more than ever before
- Number of cars rose from under 3 million to 7 million within the period
- TV sets rose from from 340,000 to 13 million.
- Working week was reduced from 48 hours to 42.
- Quality and access to housing hugely improved during the period and most people had access to central heating, hot water and indoor toilet.
What evidence suggests there were limits to affluence during the period 1951 to 1964?
- There was a significant rise in unemployment towards the end of the period
- Most of the goods were bought using hire purchase calling to question the actual purchasing power of middle and working classes.
- The government wanted to avoid strikes and so it gave in to trade unions wage demands meaning the unions became increasingly powerful.
What are the main criticisms of Macmillan’s economic policies?
The policies were mainly focused on improving standard of living rather that creating economic growth and rise in production, therefore did not resolve some of the key issues experienced by British economy, for example GDP in Britain rose only by 2.3% from 1951 to 1964 whereas in France it rose by 4.3%, in Germany 5.1%.
