Presentation on theme: "Did Britain Really Never Have it so Good? Lo – to assess whether the claim that Britain had never had it so good was legitimate Write definitions for these."— Presentation transcript:
Did Britain Really Never Have it so Good? Lo – to assess whether the claim that Britain had never had it so good was legitimate Write definitions for these words: -Dollar Gap -Inflation -Mixed economy -Real wages -Interest rates -Deflation Ext. Can you think of positive or negative effects of these events?
v So far economically... Was Britain better off in 1955 or 1951? Is there a turning point? 1. In 1951 there was a dollar gap - because of the Korean war America did not have much money, so they could not buy British goods with American dollars. This meant that Britain didnt many dollars to buy imports itself. 2. To make sure Britain didnt run out of dollars to buy the essential imports, especially if things got worse and America bought even less, Butler restricted how many imports people could buy and stopped them taking much money out of the country (restricted to £50). 3. Butler raised the bank rate so it was more expensive for other banks to borrow off the bank of England (the interest rates were higher). This again meant Britain could keep hold of its precious dollar reserves. Britain was also struggling to afford the Korean War. 4. In 1953 when the Korean War ended Britain could afford more imports again and America could buy more of Britains exports again. 5. As things were looking so much better for Britain and it had some more money, Butler could cut income tax and purchase tax. 6. In 1955 there was a boom and Britain was buying too many imports – they were worried they would run out of money again. Butler should have raised taxes to stop this. However, with an election coming up he decided not to.
Did Britain Really Never Have it so Good? Lo – to assess whether the claim that Britain had never had it so good was legitimate Britain had never had it so goodBritain did not actually have it so good Cut and stick your card sort and then answer the question. Bare in mind Macmillan stated it in 1957!
Conservatives continued to follow a mixed economy and a loose form of Keynesianism The government were very worried about inflation (everyone wanting to buy things and the prices of goods going up too quickly). To stop this they rose interest rates to reduce borrowing, restricted imports to stop people spending too much, and increased taxes to control spending. If it was looking like the opposite would happen and demand would fall, following the principles of Keynesianism, the Chancellor would lower taxes and interest rates so that people would keep buying goods.