After Churchill, people could see a clear recovery in the economy, although in comparison to Europe and the USA, the revival was moving at a slow pace. Nevertheless, improvements were in occurrence, for instance rationing books had finally been discarded, leaving society with many more economic freedoms. Also, Macmillan, the fourth consecutive Conservative minister, followed the financial strategies of his fellow members. Examples of these were Butler’s theory to operate a mixed economy and the policy of Keynesianism. The aims of these policies were to avid extreme inflation and deflation by a series of government adjustments. If inflation rose too quickly, the government introduced measures to slow it down. These measures included, raising interest rates to prevent borrowing and increasing import controls to limit purchases from abroad, with the intent of reducing the trade gap. Alternatively, if demand was low, the Chancellor of the Exchequer at the time would introduce ‘a giveaway’ budget whereby taxes and interest rates were lowered. The Conservatives maintained these economic policies from 1957 right up until 1964. The ‘give away’ budgets were criticised however, as they were said to be attempts to ‘buy votes’.
In 1959, Heathcoat Amory introduced a range of tax cuts in hope to boost government support. This tactic proved inappropriate and he adopted deflationary measures including tax and interest rate rises, cuts in public spending, as a result, in an attempt of limiting wage increases. To regain lost popularity, Macmillan returned to an expansionist budgetary policy in 1963, whereby taxes and interest rates were once again lowered. As a consequence, a boom in consumer spenditure began. Demand for goods could not be met and so consequently the import of foreign manufactures rose. The net result was that by 1964, Britain had a balance of payment deficit of over £800 million.
Stop-go and stagflation was introduced due to Britain’s lack of economic strategy. The indicated the failure of governments to develop policies that encouraged a constantly performing economy. The policy of stop-go was that when consumption and rises rose too quickly, the government should intervene to take control. Macmillan’s government continued to follow stop-go economics.
Despite any criticisms, Macmillan was determined to portray the message that Britain had never had it so good. Perhaps it is due to his positive attitude which kept his popularity high and in turn, as a result, living standards thrived. For instance, wages rose more than prices, therefore people could buy more luxuries with their money. The average ale adults wage increased from £8.30 in 1951 to £18.35 in 1964. As a result, confidence in Macmillan remained high.
Macmillan was a strong leader for many reasons. For one thing he was confident and portrayed this confidence to the public through media; as long as confidence remained high, economics thrived. He presented the Conservatives as a party of the future through media use too. Secondly, he was decisive; he immediately pulled out of the Suez affair as he knew Britain was not going to get what they wanted the way Eden was going about things. In addition, something that gained him much popularity is that he delivered on promises. In 1951 the Conservatives had pledged the party to build 300,000 houses a year and Macmillan achieved this comfortably. In 1953, a total of 327,000 were built and a further 354,000 in 1954; a remarkable achievement. Also, the fact his rivalling party, Labour were divided amongst themselves, whilst Conservatives showed unity, helped him to remain in power, as unity results in strength and confidence, whilst division creates doubt. Finally, Macmillan got rid of the British Empire which saved enormous amounts of money. Though Britain was criticised for doing this, as they were said to be abandoning their empire, ultimately it was the right thing to do as too many extreme promises were made and Macmillan knew these could not be kept without risking the welfare of Britain themselves. Also, the empire wanted freedom and therefore it was impossible for Britain to ‘abandon’ them; they were just providing their colonies with the freedom they craved.
Overall, the financial problems which Britain faced did not prevent the vast popularity from gaining material goods. This meant the people’s confidence in Conservatives was high as their government were able to sustain this. I believe that the economic circumstance at the time Conservatives came to power did suffice have an element reason as to how the party stayed in power for so long. This is because they were not in a major economic difficulty and thus confidence was relatively high. Therefore, all the Conservatives had to do was maintain the optimism and adjust elements of finance that needed assistance. Macmillan does deserve a lot of the credit for the Conservative reign of thirteen years, and rightfully earned the nickname “Supermac”. He cut income tax in the 1959 budget, he had industrial production racing ahead and unemployment was falling. The sharp rise in living conditions moved Britain forward in worldwide circumstances and enabled the Conservatives to stay in power between 1951 and 1964.