2. Wets ‘One Nation’, Keynesian (previous PMs Macmillan, Home and Heath). More consensus. Not prepared for tough measures if it would lead to unemployment. E.g. Carr and Walker (who had left the Shadow Cabinet on Thatcher’s election). Willie Whitelaw, Ian Gilmour, Lord Carrington, Francis Pym, Jim Prior. Dries Uncompromising measures necessary before Britain recovered its economic position. Monetarism. Sacrifice unemployment for lowering inflation. E.g. Thatcher, Keith Joseph, Geoffrey Howe, Angus Maude and John Biffen. You can see some of these people’s faces on page 14-15.

3. Consensus politics had been the norm since WWII. This meant both Labour and Conservatives were in agreement over policies such as the introduction of the welfare state, the NHS and nationalisation of industry. ‘One Nation’ Conservatism (left wing, ideas) were happier with consensus politics. ‘One nation’ Tories believe in the unity of all the different groups within the country and social equality of opportunity. Some Conservatives were starting to break away from both consensus and One Nation Toryism, blaming it for Britain’s economic woes. Heath was a ‘One Nation’ Tory, although some historians argue that it was not his One Nation view but actually aloofness from backbenchers that lost him his leadership battle with MT.

4. Consensus Governments agreeing to: Commitment to Keynesianism- tax cuts and boost state spending. Acceptance and some encouragement of the role of the trade unions. Mixed economy- place for state ownership of utilities, intervention and planning in the economy. Welfare state. Promotion of greater equality through social engineering. Conviction Quite different.

5. John Maynard Keynes: Economist, effectively ended laissez-faire economics with his belief that government intervention could solve struggling economies. Named one of the 100 most influential people of the 20 th Century by Time Magazine.

6. People buy stuff Increases demand for stuff. Increases jobs making and supplying stuff. Jobs/ wages rise. People want to spend wages.

7. People save money Demand for stuff is lessened. Jobs making and supplying stuff decrease. Unemploy- ment rises, wages lower. People don’t want to spend wages if they have them.

8. People save money Demand for stuff is lessened. Jobs making and supplying stuff decrease. Unemploy- ment rises, wages lower. People don’t want to spend wages if they have them. Injection of government funds Jobs in public sector/ welfare increase. Keynes recommends...

9. People save money Demand for stuff is lessened. Jobs making and supplying stuff decrease. Unemploy- ment rises, wages lower. People don’t want to spend wages if they have them. Injection of government funds People buy stuff Increases demand for stuff. Increases jobs making and supplying stuff. Jobs/ wages rise. People want to spend wages. Jobs in public sector/ welfare increase.

10. This was the view that the reason for inflation was the willingness of government to create an excessive money supply- NOT wage increases. Therefore wage increases should be controlled (never popular with voters). Wage increases were seen as happening due to excessive trade union power- the trade unions need squishing. This would mean that their agreement would not be required in economic policy and power would return to managers and governments. Conservatives liked this- especially traditional Conservatives who wanted “Britain as head of a great empire run by all-knowing Tories”.

11. People save money Demand for stuff is lessened. Jobs making and supplying stuff decrease. Unemploy- ment rises, wages lower. People don’t want to spend wages if they have them. Public sector spending controlled, cutting taxes. Profit motive returns Welfare state dependency reduced- incentives to work increased More people return to work (increased profits can be reinvested)

12. People save money Demand for stuff is lessened. Jobs making and supplying stuff decrease. Unemploy- ment rises, wages lower. People don’t want to spend wages if they have them. Public sector spending controlled, cutting taxes. Profit motive returns Welfare state dependency reduced- incentives to work increased People buy stuff Increases demand for stuff. Increases jobs making and supplying stuff. Jobs/ wages rise. People want to spend wages. More people return to work (increased profits can be reinvested)

13. The new thinking meant that public spending would be controlled, which would mean cuts in taxes and more profits and incentives to enterprise. Inefficient state monopolies in nationalised industries would be sold into the private sector and opened up to private sector disciplines- reducing state subsidies and eventually generating tax revenue. Welfare state would be reformed- increasing incentives to work and removing or reducing dependency- containing public spending. Radical- and Heath and other one nation Tories didn’t like it. Neither did the old style Tories.