Post-war Conservative Rule
‘51:aged 77, Churchill lost pop. vote;won 311:295. He retired in April 1955. His successor, Eden, called an election.
‘55 election: Con slim majority increased to 58 [Link] prosperity, living standards+Labour split caused this
Bevan, Wilson and Castle criticised rearmament to keep up w/ US+USSR; publicly,Labour supported the
programme
Eden waited long to be PM, but lack of control over his cabinet, Suez +poor health caused him to resign in Jan ‘57
Chancellor of the Exchequer Harold Macmillan chosen as successor in preference to RAB; was PM ‘57-’63
Macmillan: a ‘one-nation Tory’ like Disraeli, ‘leading + dominating revolution instead of opposing it’
Macmillan: great social awareness; as Housing Minister ‘51-’54, built more houses per year than Labour gov’ment
Party morale restored after Suez; all forgotten by Oct ‘59 election; economic boom; ‘Super-Mac’ wins easily 365:258
However, Mac couldn’t hide that UK was no more a great power; Empire mostly gone; ‘63: refused entry to C Market
Home prosperity till 60s; Jan ‘63: 900k u’oyed; in 1963, due to health, Mac resigns; Douglas-Home PM till loss in ’64
Positive Conservative Achievements
Churchill instantly ended Labour austerity; all rationing, restrictions on building, limits on hire-purchase sales and
even on the right to strike ended; income tax reduced
1951-63: wages ↑72%, prices ↑45%; more consumer goods affordable, e.g TV sets: 340k→13mil; cars: <3→7mil+
Wage increase in part due to Monckton, M of Labour, giving in to union demands for higher wages to avoid strikes
Because of this, unions became more powerful, especially during full employment+prices rose faster than in Europe
MoHousing Mac outdid Labour;Churchill gave order to build 300k;‘53:327; ‘54:354k;mid-50s:end of housing
shortage
Benefits extended;Mental Health Act ‘59:mental illness regarded as physical;‘62:unrealised plan to build 90 hospitals
Agricultural help in form of grants+subsidies; ‘60/61: £100mil+ given farmers by gov; production+efficiency increase
Education under the Conservatives
6k schools + 11 unis built; expansion of existing unis; Robbins Report accepted in ‘63 - uni places double over 10yrs
‘59: Labour for introducing universal comprehensive education; Cons supported grammar school for most of rule
By 1963, Conservatives began to recognise the pros of comprehensive schooling; support for grammar lessened
Other achievements: first motorway in ‘59, ‘62 Ministry of Science established, Colleges of Advanced Tech. set up
Critics: Labour did better considering they had less time; Con gov’ment began to be further criticised as time went
on
Stop-go
Cons failed to find way to stimulate economic growth while keeping inflation low+balance of trade favourable
Conservative Chancellors of the Exchequer tried to limit spending to allow more freedom, known as ‘stop-go’
First Chancellor of the Exchequer
‘51: RAB, Churchill’s Chancellor, inherits a £700mil balance of payments deficit
The deficit was due to an increase in raw material prices due to Korea, which made importing costlier for UK
∴RAB introduced a ‘stop’(reduction in demand);inceasd bank rate2→4% to discourage loans+strictly limited imports
‘52: £300mil balance of payments surplus; not due to Butler’s stop but due to short-term increase in import prices
‘52: trade surplus; import prices return to old levels while UK exports fall and continue to sell at same prices
Deficit would’ve fixed itself wo/ a ‘stop’; it reduced investment at a time when it could have helped industry grow
‘53-’54: Butler operates ‘go’ phase; cuts bank rates, encourages investment and expands industry
Result:full employment, export increase + economic boom; situation so good that Butler cut 6p off income tax in ‘55
However, employment led to wage rises, increased demand for consumer goods and ∴ rising prices (inflation)
‘55: exports reduced due to no. strikes; balance of payments sees another deficit
Butler tries to reduce home demand by raising purchase tax and hire purchase deposits,so soon after income tax
cut
Second Chancellor of the Exchequer
Butler replaced by Mac as Chancellor; Mac ‘stops’; raises bank rate to 5.5% to make money borrowing more costly
This ‘credit squeeze’ (reducing spending to check inflation and reduce imports) led to favourable trade balance in ‘56
Macmillan becomes PM in January 1957
Third Chancellor of the Exchequer
‘57:new Chancellor Thorneycroft; risks a ‘go’ phase; tax+credit restrictions reduced, leading to export boom
Simultaneously, more available to spend, leading to demand increase and thus inflation, increase in prices + imports
Price rises led to wage demands and strikes; exports affected and balance of payments again at risk
‘58 Thorneycroft reduces expenditure to reduce inflation; Macmillan opposes cuts on social policy; Thorney resigns
Fourth Chancellor of the Exchequer
‘58: new Chancellor Amory; ‘59: proposes in budget to cut taxes, relax credit controls + allow wage increase
Budget causes consumer boom, flood of imports and unhealthy trade balance; 1960: Amory ‘stops’ economy again
Fifth Chancellor of the Exchequer
This stop didn’t work; new Chancellor Lloyd increased interest rates; put 10% purchase tax + raised import duties
By the early 60s, these repeated stops were holding back industrial expansion; Britain lagging behind Europe
Thus, UK applies for European Economic Community (refused by France)
Conservatives first failed to join EEC during its founding in 1957; unfortunate results for British production + exports
‘62: Nat Economic Development Council set up to bring gov, business and unions together to discuss production
targets and wages and encourage central planning
Lack of Conservative investment into industry
Conservative ‘stops’ discouraged industrialists from long-term investment; gov invested too much money abroad
Too little invested into key industries; too much into defence and making the H-Bomb to keep up with USA+USSR
Textiles declined in part due to Portuguese, Japanese + Indian competition; shipbuilding also in part due to Japan
Aircraft, car and chemical industries expanded but production costs were high, thus British goods were costly to buy
Exports didn’t boom as much as they would have w/o competition, therefore it was hard to keep costs down
Unemployment an issue, especially in North England + Scotland (‘63: 900k)
EEC rejection, economic stagnation + final ‘go’ period & surge in imports led to record £748mil b.o.p deficit in ‘64
‘Insufficient Conservative expenditure on social services’
High unemployment led critics to say Conservative policies favoured the better-off and left the North struggling
The increase on welfare state expenditure was ‘a natural consequence of population increase’ (Kevin Jefferys)
Despite an increase in houses for the better off, council house building was neglected
Impoverished local authorities forced to build unsatisfactory tower block flats for everyone else
How Conservative failures helped Labour
Labour wins in October ‘64; Wilson had reunited Labour after Gaitskell’s divisive view on retaining nukes
Wilson presented attractive programme of improved welfare, modernization and economic planning
Wilson also encouraged scientific & technological d’ment + managerial revolution to help UK catch up in global race
Cons devoid of ideas after 13 yrs in power; Labour no longer obsessed w/ nationalisation (party of the future)
Conservatives still quite popular though; Labour wins narrow victory (317 Labour : 304 Cons and 9 Liberals)
Assessment of Conservative Rule
Conservative rule saw increased prosperity and so-called ‘affluent society’, as economists put it
Critics: ‘affluent society’ developed from improvements in world trade and had little to do with government policy
Economists: ‘stop-go’ hindered economic development and prevented far greater prosperity (13 wasted years)
Failure to join EEC at its beginning in ‘57 perhaps the biggest missed opportunity
Macmillan’s failure to join EEC in ‘63 in part due to prioritisation of ‘special relationship’ with the USA
