In what ways and How successfully did the governments deal with economic change 1918-79? Flashcards
(31 cards)
How was the British economy in the 1920s and what were the key features? Mention trade, debt and inflation.
BAD.
Loss of trade - collapse in trade, lost 20% of merchant ships in WW1, taken over by USA and Japan
- Debt - forced to borrow £850 million to fight the last two years of the war
- Inflation - Increased by 25% by 1918
What was the highest percentage of unemployment in the 1920s?
23%
What was the year of the biggest cuts in the 1920s and what was it coined as?
Geddes Axe 1922 - Taxes raised each year after 1918 from £18 per capita in 1918 to £24 in 1922
What PM introduced protectionism and why in the 1920s?
1923 - Stanley Baldwin -> Duty by Tory gov to protect key industries, Baldwin tried to go further but fears over higher food imports arose.
What were the interest rates like in the 1920s?
High -> expensive for businesses to invest, led to a high exchange rate
What year was the Wall Street Crash?
1929
What year did Ramsey McDonald impose a round of spending cuts and why?
1931 - a loan of 80 million to was quickly being used up
What did Britishness do in relation to the Gold Standard in the 1930s?
They left it -> currency floated and went from $4.80 to $3.40
What was the positive impact of leaving the gold standard in the 1930s?
Led to British exports becoming 25% cheaper -> more competitive
In the 1930s, what were interest rates cut to and from
Cut from 5 to 3.5% -> debt is easier to manage
When were unemployment benefits restored?
1934
In relation to homes, when in the 30s was there a positive change?
1931-34 -> cheaper mortgages, more house building
When did Rearmament start -> what impact did this have on the economy?
1935 -> 15% more work found in the old industries such as steel, iron and shipbuilding
What was the biggest problem of the 1930s?
Unemployment-> never fell below 10% and rose as high as 23% during 1932-33
What in the war led to increased state power in the economy?
Emergency Powers Act 1939 - gave control over industries, labour and rationing -> NATIONALISATION
- Ministries (e.g. Food, Aircraft Production etc) directed the war economy; conscription affected 5.5 million men and women by 1945
Who was John Maynard Keynes?
Popular economist - argued the invisible hand of free market economics doesn’t work in recession. Argued government should invest back into economy instead of increasing taxation -> multiplier effect
How in debt was Britain to the US in the period 1945-64
£4 billion
How much in Marshall Aid did Britain receive in 1948?
£2.7 billion in loans
What were some examples of nationalising acts in the 50s?
The Bank of England Act 1946
Iron and Steel Act 1949
What did Keynesian style public work schemes lead to from 1951-64?
Unemployment reached a low of 300,000
What was Stop-Go economics and when was it employed?
1954-64 -> periods of either increasing inflation or unemployment - oth couldn’t be simultaneously handled so there would be periods of high governments spending followed by decreases.
In the Macmillan government from 57-63, what were NEDDY and NICKY?
NEDDY - management and unions could discuss development of the economy, co-operation encouraged
NICKY - advisory council of economists and experts for the unions and management
Why did Problems in the economy grow by 1964?
- Increase in the demand for imported goods
- Increase in balance of payments problems
- Unemployment highest since the end of the war (878,000)
What were the Price and Incomes Acts of 1966 and 67?
Forced a statutory wage freeze for six months to curb inflation
- the 1967 version allowed wage increases in companies that could prove they were increasing productivity and output
