Transcript Economic decline – 1950s and 1960s

How did governments face the economic
challenges of the 1950s and 1960s?
Learning objective – to be able to explain
the government economic strategies of
the 1950s and 1960s.
I can describe some of the
key features of the British
government’s economic
policy of the 1950s and
1960s.
Grade D
I can explain the impact
of
the
British
government’s economic
policy of the 1950s and
1960s.
Grade B
I can explain and
assess the economic
performance of the
British government of
the 1950s and 1960s.
Grade A
‘Butskellism’ – the dominant economic
approach of the 1950s and 1960s
 The 1951-64 Conservative governments
largely accepted Labour’s post war welfare
reforms and approach to managing the
economy along Keynesian lines.
 Both parties accepted the commitment to
full employment and a mixed economy.
 Such was the closeness of the economic
policies of Labour and Conservative
governments of the 1950s, The Economist
coined the phrase ‘Butskellism’ to describe
this consensual approach.
 ‘Butskellism’ came from the names of the
Conservative Chancellor, R. A. Butler, and
the Labour leader, Hugh Gaitskell.
‘You’ve never had it so good’ – the illusion
of affluence
 The 1950s was seen as a
period of affluence with
increased consumer spending.
 This increase was based on
the ability for people to
borrow money to spend. This
had significant consequences
–
- Growth in inflation.
- Increase in imports which led
to an imbalance in balance of
payments.
What was stop-go economics?
 The Conservative governments of 1951-64 encouraged
this growth in consumer spending by relaxing laws on
borrowing and credit.
 However, when the problems of inflation and import
prices became serious, controls to slow the economy
down, through raising taxes and interest rates, were put
in place.
 This inconsistent policy towards economic growth was
called ‘stop-go economics’ and demonstrated that
controlling unemployment and inflation was impossible.
What was corporatism?
 It was clear in the 1950s that Britain was lagging behind its world
competitors in terms of economic growth.
 Macmillan’s 1957-63 government decided to follow a corporatism
policy – a managed economy uniting labour, management and
government through corporations to plan and achieve economic
goals.
 NEDDY – The National Development Council and Office. This
provided a platform for management and unions to co-operate with
each other and work towards shared goals. This had no legal control.
 NICKY – the National Incomes Commission. To combat increasing
lost working days and pay demands, NICKY was an advisory body for
unions and management on what the government considered fair
demands.
What was stagflation?
 By 1964, the key economic problem was it was in a period

-
-
of stagflation – where the economy is in stagnation and
coping with rising inflation.
The key causes of stagflation by 1964 were –
Increased consumer spending lead to more imports which
led to a balance of payments deficit leading to threat to
the value of the pound.
Increased borrowing from the IMF.
Rising unemployment.
Task
Stick a copy of this comic
strip on a piece of card and
annotate
it by adding
relevant details beside each
panel.
Use
the
PowerPoint
presentation to help you.
Home learning task
Pair up with another member of the class. Here are two events
that relate to the British economic policy of the 1950s and
1960s. Between each pair, choose who is going to research
which event.
 Devaluation of the pound in 1967.
 Stop go economics.
Your task is to produce a one page summary of the events using
bullet points and divided by sub-headings. This is to be
exchanged with your partner next lesson.