Discussion of the Major Problems Faced by the UK After World War II
The post-war era is a key moment in British economic history. These
decades came to be viewed as a golden age. Immediately after the war,
all available resources were needed for: the re-conversion from war to
civilian production, re-construction of capital stock, and the
recovery of living standards. It was important that the decisions
made by the Government would help improve the economy, as it was very
weak at that time. Some of these decisions, which were in the form
of policies, helped better the economy and without them, the economy
may not be the way it is today.
This essay will explore analyse and the UK economy during the 1960’s
and 1970’s. The major problems, main policy targets and instruments,
and overall economic performance will be compared and contrasted over
the two decades.
The Conservative government were in control of the economy from 1960
until 1964 before the Labour Government were elected in 1964.
Similarly, the economy in the 1970’s began under the control of the
Conservative government until 1974. The labour government then took
over until 1979. And finally, the Conservative government were
elected again in 1979.
The 1960’s started with a Balance of Payments crisis in a rather
slow-moving economy. Economic activity did pick up again in the
second half of the year until mid 1961, but it did not help the
Balance of Payments. In July 1961, the Bank of England feared a
continuous drain on reserves and expected demand to carry on rising.
They feared that the spare margin of capacity that they had left would
gradually disappe...
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...e UK to deflate the economy to squeeze out inflation.
But cuts in Public Expenditure ran counter to government commitments
to the Trade Unions to expand the Welfare State. This led to an IMF
crisis, which in turn led to an intense political debate within the
Cabinet. The squeeze on public spending was eased by the gradual
expansion of UK’s North Sea oil, which generated considerable tax
revenues from 1976.
Controlling the growth of public expenditure was one of the main
policy issues in 1960’s but it was not the central concern that it
became in the 1970’s when the PE/GDP ratio rose from 51% in 1970 to
1971 to 58% in 1974-1975. Workers were asked to treat the increases
in the social wage as the equivalent to the cash earnings. The
planning aspirations of 1964 Labour government were scaled down in the
1970’s.
Firstly, the ‘U-turn’ policies of 1971 to 1972 demonstrate clearly the lack of control that is evident throughout Heath’s premiership. Cracks were beginning to develop after these policies, which indicate a rough start to Heath’s reign. This is evident as the economic U-turn established that there was a growing number of unemployment and a growing inflation record that reached over one million. There were cuts in taxation and lows interests increased borrowing and house prices. Compared to a period of ‘affluence’ in Wilson’s government especially with his social policies, there is unprecedented change as the inflation demonstrated that the retail prices rose by 8.6% between 1970 to 1973 which acclimated to the U-turn policies in 1971-1972 which demonstrated a retreat from the free market and principles that had to be outline to maintain full employment leading Heath to give state aid to key industries including Rolls Royce. However, the ‘U-turn’ policies demonstrates largely that Heath had been seen by the public that he was too willing to give up on his aims and objectives, lacking a clear sense of direction indicating that the failures situated in his government led people finding him unreliable as a PM.
Whiteside, Noel and James Gillespie. "Deconstructing Unemployment: Developments in Britain in the Interwar Years," The Economic History Review, Vol. 44, No. 4. (Nov., 1991), pp. 665-682.
After World War II, many countries have serious problems in almost all areas, political, social and economic. At one of the winners of the major issues after the war were the German question and the reason for the conflict between them, and led to the division of Germany and Europe.
"World War II". Encyclopædia Britannica. Encyclopædia Britannica Online. Encyclopædia Britannica Inc., 2013. Web. 05 Nov. 2013. .
Who started the World War 2?. World war 2 , also known as Second World War is a
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______. In: Moggridge, Donald. ed. 1980. The Collected Writings of John Maynard Keynes: Activities 1941-1946. London: Macmillan.
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Encl. "World War I and the Economy." January 2001. Encyclopedia.com. Electoronic. 24 October 2013. .
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time you heard the siren go off you had to stop what you were doing
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