Society transformation 1951-64

• Post-war boom

  • average weekly wage went from £8.30 in 1951 to £15.35 in 1961
  • working hours decreased - work time to pay for weekly basket of basic food items = 3 hours in 1957
  • food rationing ended in 1954
  • worldwide recovery = increase in global trade
• Balance of payments issues

  • economic growth = dangers of increased consumer demand causing Britain to import more than it exported
  • run on the pound - govt had to use foreign dollar gold reserves
  • danger that economy would grow faster than increases in productivity = inflation
• Historians have talked about " the 3 C's "

  • Consensus
  • Consumerism
  • Cold War
• economic developments

  • post-war boom
  • balance of payments issues
  • stop-go economics
• What are stop-go economics

  Economy slowed too much = govt encouraged growth by lowering interest rates + wages rose

  economy overheat + inflation = govt raised interest rates + froze wage increases --> demands fell
• Impact of stop-go economics

  Partly successful

  • real wages increased = avg £8.60 in 1951 increased to £18.70
  • unemployment mostly low
  • Britain becoming more classless and meritocratic - rising social mobility
  • Post- Suez - stop-go was weak so Powell and Thorneycroft (tory members) proposed a form of monetarism
  • this meant cuts to house building, welfare, public services
  • but this helped Sterling recover against US dollar = govt was able to make tax cuts in 1959
  • however Britain's growth was sluggish compared to competitors e.g. France, West Germany