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7290410
Changing Economic Environmnet
Description
Changing Economic Environmnet
No tags specified
history
edexcel
a level
economy
harold wilson
ted heath
inflation
britain
lectures
britain 1918-1979
ug
Mind Map by
Holly Bamford
, updated more than 1 year ago
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Created by
Holly Bamford
over 7 years ago
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Resource summary
Changing Economic Environmnet
Attachments:
Changing Political Environment
Post war boom
Restrictions and rationing during wartime
Meant that less money could be spent
Accumulated savings and bonds
After 1919 investment grew
Could spend savings
Huge speculative boom
Boom came to an end
Britain's industry declined
Little investment during the war
Foreign competition
The recession 1920-21
Deflation
Gov't spending cut 75%
Interest rates rose
Harder to borrow money
Less money was invested in the economy
National debt rose from 120% of GDP to 160%
Loss of export trade
After WWI Britain was no longer the dominant global economic force
America & Russia
New foreign companies
Declining industries
Tarrffs or Free trade
Tarrifs
Adding tariffs to certain goods that are imported into the country
Advantage: Helps to protect domestic industries
Disadvantages: Prevents consumers from having access to cheaper goods
Other countries apply tariffs to British exports in retaliation
Free Trade
Means that domestic industries have to compete with foreign competitors
Disadvantage: Competitive foreign businesses can out-compete British ones
can cause unemployment and poverty
Advantage: There are no tax on foreign goods
Retrenchment
The policy of spending cuts promoted by Lloyd George
To appease middle class voters
The Geddes Axe
£87 million cut
Mainly from military budget
Some health welfare and housing cuts
The impact of the 1926 General Strike
Led to the Trade Disputes and Trade Unions Act 1927
banned sympathy strikes and mass picketing
Considered a mistake
The depression
Gold Standard
Britain was in debt to America
America had stores of the pound
Pound could lose value
And result in loss in confidence in the currency
MacDonald had to cut benefits or risk devaluation
Split labour party
King George V created National Gov't
Special Areas Act
Gave aid to areas that had the highest unemployment rate.
Hunger Marches
Led to the formation of the National Council for Civil Liberties
limited impact
British exports decline 50%
unemployment rose to 2.5 million
economy shrank 5%
Recovery 1934-39
Removal from the Gold Standard
Cut interest rates
more saving
Inflation could be controlles
Growth averaged 4% a year
Britain's World rule
Declined
1948 IMF loan
Used for general expenses not investment
Overseas conlficts
Expensive
Korean war
Greek civil war
Suez crisis
11945-51 boost in world trade
Nationalism
State control of industries
Aimed for full employment
Waste of money
Managed Economy
Military Expense
State intervention
Increased war production
1939-15%
1940-45-50%
Economic aid
US provide help
1940 Land Lease agreement
Austerity
WWII war debt of £4bn
Damage to trade
US competition
Rationing was reintroduced
Influence of USA
Between 1932 and 1937:
Real incomes rose 19%
GNP rose 23%
Exports increased by 23%
UE fell from 17% to 8.5%
1951-79 Economics
Stop-go Economics
The strategy the government came up with in order to balance inflation and unemployment
1954-64 there was a period of growth
raised taxes and interest rates to slow down inflation
NEDDY
National Economic Development Council and Office
No legal control
Industry and union cooperation
NICKY
National Income Commission
Strikes increasd
Advisory council
Mainly ignored
Problems by 1964
UE at highest levels since end of WWII
1961
gov't refused to devalue pound
Borrows £714mill instead
Harold Wilson and the Economy
Price and Income Act
Technology
IRC
Devaluation
Ted Heath's Horrific Britain
Free markets
Spending Cuts
1975-Dennis 'the eyebrows' Healy
IMF Loan
Monetarism
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