How successful was Labour's economic record?

1945-51

Full employment (3)

First priority achieved between 1947-51

The total number of unemployed reduced dramatically to just under 300,000

Unemployment never again became a major issue in Britain until the late 70s early 80s

Loans (4)

There was £21 billion war debt

Attlee sent economist Keynes to Washington who negotiated a £2.2b loan from the USA which saved Britain from financial ruin in 1946

By 1947, USA agreed to send Marshall Plan Aid to Europe

Britain was its biggest recepient - recieved roughly $3.3b

Nationalisation (3)

The Attlee government nationalised about 20% of the economy eg. coal, railways, road transport, steel

Cost them over £2b

Made achieving full employment easier because they could prop up industries and ensure employment remained high

Austerity Britain (4)

Continued rationing and shortages

Many foods remained rationed until 1954 and the Daily Mail referred to this as the “most unpopular policy in the history of British Isles”

Churchill used this as a frequent attack against Attlee’s Labour

He claimed this is what socialist intervention did to a country

Devaluation of the pound (4)

Decision made by key economics Ministers Sir Stafford Crips, Wilson and Gaitskell

Devalued by 30% from $4.03 to $2.80

Showed the tricky economic position Britain was in and symbolised Britains economic decline

Highlighted how the USA was becoming the economic powerhouse

What was a benefit of devaluing the pound?

Made exports more competitive

World Trade (4)

Boosted world trade and reduced its balance of payment deficit

% of world trade dominated by Britain grew from 17% in 1939 to 20% in 1950

Exports grew by nearly 80% between 1939-50

This was due to 3 factors: Nationalisation, Lack of exports and devaluation

Consequences of nationalisation (3)

Little money left to modernise the industries they nationalised

These industries lacked the dynamic edge, production and machinery that lots of other economies had

This underinvestment would be an issue that plagued Britains industries until the Thatcher era

Economic growth (4)

Grew dramatically by 4% each year after 1948

Some historians say that this is an example of how socialist styled planned economics could work

Others say that post-war revival after the 30s and early 40s was inevitable

With less intervention and fewer controls, Britain would have achieved higher growth figures