What can the post-war consensus be characterised as a belief in?
- Keynesian economics
- A mixed economy
- Nationalisation of major industries
- The National Health Service
- Commitment to full employment
- A welfare state in Britain; social security and national
insurance - Introduction of nuclear weapons
Why did WW2 set the stage for consensus?
- The National Government proved the Ministers from rival parties could work together and that a broad agreement on key policies could be reached.
- Success of collectivism – an approach where certain problems are tackled by taking away some rights for the common good.
- The war changed the role of government, as the state was forced to take more control– Emergency Powers Act of 1940
- There was a shift from a mainly free-market economy to a more mixed one, where the government used rationing, the Essential Work Order, conscription and censorship all in a bid to engage Britain in a total war– by 1945, 1/3 of citizens were taking in war-related work.
- The led to the Beveridge report in 1942 – in the report Beveridge envisioned a welfare state that could care for a person from cradle to grave. His ideas were hugely popular – the report sold 635 000 copies- and Labour’s promise to fulfil the report was a huge contributing factor in them winning the election.
Why did Labour win by a landslide in the 1945 election: Leadership
- Atlee portrayed himself as a ‘man of the people’
- Though Churchill led the country through WW2 people were unsure whether he was the right leader for peacetime.
- During WW2 Atlee had managed the home front, showing that himself and the Labour party were capable leaders.
Why did Labour win by a landslide in the 1945 election: Campaigns
- Labour broke off the wartime coalition after the war to force an election
- Campaigned on the slogan ‘let us face the future’ and campaign posters centred around the British people (‘Labour for him’ or ‘Labour for her’)
- Atlee spent a lot of time touring the country
- Churchills campaign was lacklustre as he was so confident in him victory after winning the war - Conservative slogan ‘let’s finish the job’
- Churchill’s spiteful ‘Gestapo’ speech was seen as distasteful and poorly judged.
Why did Labour win by a landslide in the 1945 election: Policies
- Labour promised to implement the policies of the extremely popular Beveridge Report
- Churchill rejected the report and did not have a clear strategy for post war recovery.
- Labour’s manifesto seems more specific, ambitious, detailed and thought through
Why did Labour win by a landslide in the 1945 election: Public Mood
- Wanted a change after the harsh war years
- Associated the Tories with the high unemployment of the 20s and 30s and failed appeasement
Atlee Government
1945-51
Key consensus policies were established:
a mixed economy,
universal healthcare,
a welfare state,
full employment,
cooperation with the trade unions.
What was the impact of austerity economic measures in the 40’s?
- 1945: Britain accumulated £4 billion worth of debt to USA
- Was a £700 million deficit
- Attlee Gov embarked upon series of austerity measures: cuts in gov spending, controlling private spending, rationing of goods
- This outraged British public (trade unions - requested to accept a wage freeze or face legal pay restraints)
Harsh winter of 1947
Led to an economic crisis, which hit industrial production, and Britain having to pay for goods in dollars not pounds, making imports more expensive.
Attlee forced to devalue the pound in 1949
Key achievements/policies: The 1944 Education Act
- Introduced universal secondary education. Split into Grammar, Modern and Technical schools
- Created a Government Minister for education
- Raised school leaving age to 16 by 1973
Key achievements/policies: The 1945 Family Allowance Act
Gave weekly payments to support those with children (child benefits).
By 1949 88% of those entitled had applied for it.
Key achievements/policies: The 1946 National Insurance Act
- Paid through by taxes
- Government provides support/’benefits’ in cases of: sickness, unemployment, retirement, maternity, widowhood
- Guardians allowance for orphans
- Grant for funeral expenses
Key achievements/policies: The 1946 National Health Service Act
- Major law that gave healthcare to all
- Paid for by taxes but free at the point of need
- Allowed for the creation of the NHS in 1948 (Bevan)
Key achievements/policies: The Industrial Injuries Act
Provided cover for work accidents
Key achievements/policies: Nationalisation
- Aim: create full employment and to ensure the effective management of key industries, which had been for too long inefficient
- Between 1946 and 49 – coal, civil aviation, cable, wireless, the Bank of England, road transport, electricity, gas, railways, iron and steel, were all nationalised.
Key achievements/policies: Housing
- 700,000 homes destroyed by war
- 1946 New Towns act created new towns, moving people from overcrowded cities
- By 1948 125,000 ‘prefab’ (prefabricated) homes built
- By 1951 1 million good quality council homes built
- 4/5 homes built by the state
Key achievements/policies: Means Testing
Abolished
Key achievements/policies: Improved Education
- 900 primary schools built (for baby boom)
- only 250 secondary schools
- School leaving age raised to 15
Issues with the welfare state
- The BMA were initially opposed to creation of NHS (Bevan persistence got persuaded doctors to work for NHS)
- NHS costs rose yearly - 1949 The Health budget was £597 billion/4.1% of GDP
- Was expensive - Labour rejected Beveridge’s call for welfare payments to be solely funded through insurance
- Nationalisation= gov had to bear the cold of failing industries
Butskellism
- 1951-64 Conservative govts largely accepted Labour’s post-war welfare reforms + approach to managing the economy along Keynesian lines
- Both parties accepted the commitment to full employment and a mixed economy
‘You’ve never had it so good’ - illusion of affluence
1950s seen as period of affluence - consumer spending rose by 45%
Increase was based on ability to borrow money, consequences:
* Growth in inflation (around 4%)
* Increase in imports, which led to an imbalance in balance of payments
Stop-go economics
- Conservative Govts (1951-64) encouraged growth in consumer spending by relaxing laws on borrowing and credit (low interest rates + taxes)
- However, when problems inflation and import prices became serious, controls to slow economy down (raising taxes + interest rates + lowering wages) put in place
- Inconsistent policy towards economic growth=’stop-go economics’, demonstrating that controlling unemployment and inflation was impossible
