• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

What were major problems facing the UK after World War II? What policies did the Government use to resolve these problems? And, how was Britain performing economically?

Extracts from this document...

Introduction

What were major problems facing the UK after World War II? What policies did the Government use to resolve these problems? And, how was Britain performing economically? 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. ...read more.

Middle

All major oil consuming countries experienced increasing inflation caused by the high oil price rise, it was reinforced in the UK by the depreciation of the pound. In the UK, Prices and Incomes policies became the central policy instrument in the fight against inflation. From 1976, these were added by the new instruments of 'cash limits' on public spending and targeting of monetary aggregates. The manufacturing industry had fallen after 1961 to a low in 1963, however, it did improve and by the end of a decade the industry had increased to a peak. Under the control of the Labour in 1964, the government developed an industrial policy, this was to make the industry more efficient and competitive through government intervention. A National plan was developed to set targets for each industry and help was to be provided towards their achievements. The government created a new department, the Ministry of technology in 1964, and a new agency, the Industrial Reorganisation Corporation (IRC). The Ministry of technology was to bring advanced technology and new processes' to the UK's industry. The IRC was directed by an independent group of businesses men and had �150 million of Exchequer finance to lend or to invest in reorganised industrial units. Another problem facing the 1960's and the beginning of the 1970's was unemployment. Unemployment had been falling since 1959 and was down to 1.33% in June 1961. ...read more.

Conclusion

It also accounted for nearly three quarters of the increase in output over those years. The increase in exports continued throughout the 1970's and by the end of the decade it had reached an all time high. It had exceeded the increase in imports even though they were larger than any other decade. The 1970's was also a decade of policy discontinuities. The biggest change was the failure of the Bretton-Woods adjustable peg exchange rate system in 1972 and its replacement by floating exchange rates. In 1976, the Labour Government required the IMF to meet a large external deficit and to restore confidence in sterling. However, the IMF needed the 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. 1 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Marked by a teacher

    Would It Be Economically Beneficial to Britain to Introduce An Obesity Tax?

    5 star(s)

    On the other hand if we actually look into this we can see a strange and not widely publicised fact that Britons seem to be eating less than they used to as Figure 3 below shows. You can see that in 1974 the UK consumed over 2,500 calories per person

  2. Discuss the policy options the Australian Government can use to achieve external stability

    capital and financial account (as well as having negative impacts on the domestic economy), which in the longer term may raise NFL and therefore, the net income deficit and the CAD. Additionally, financial inflow is likely to cause an appreciation of the Australian dollar, which will erode the competitiveness of export and may put further pressure on the CAD.

  1. Retailing In India - A Government Policy Perspective

    Consumer research shows that households in metropolitan cities are gravitating towards supermarkets and other modern retail channels. On the supply front, a number of organized retailers have entered the trade in the last 5 years. These include large Indian business groups such as the Tatas, RPG, the Rahejas and Piramal, as well as MNC brands in apparel, footwear and durables.

  2. Was the Marshall Plan the cause for the successful economic recovery in post war ...

    This meant that while converting debts, the value of monetary assets owned by the public diminished. However, the banks were forced to raise interest rates, which encouraged people to save more money and which in the long run was indeed beneficial for them and even motivated them to stay out of debt.

  1. Economic Solutions to the Problems Facing Sudan

    Next there is the problem of education. With only 37% of the population able to have a full education (Primary, Secondary and Tertiary) there is a major problem where the education of the general population is concerned. The next step for the development of Sudan is to improve education.

  2. Split Votes: A Nation Divided on the Marijuana/Drug Legalization Debate

    This has been the strongest argument thus far because of this combination. They use an economic market system to maximize the utility, or happiness, of the public. Unlike the neoclassical economists, the MRP is showing that there is more to this issue than the monetary costs and benefits legalization can produce.

  1. What effects have interest rates had on economic indicators like GDP, Inflation ,Unemployment and ...

    When interest rates are low it is cheaper to borrow, which leads to higher consumer expenditure and higher investment in machines and buildings by firms. The overall increased demand helps creates jobs and helps reduce unemployment. Conversely, higher interest rates have the opposite affect and lead to unemployment.

  2. what are the problems of trying to compare living standards

    Also high income countries might have higher social costs, such as pollution and stress levels. These are not accounted for in GDP figures. Imputed rent is the economic theory of imputation applied to real estate. In owner-occupancy, the landlord-tenant relationship is short-circuited.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work