CONSERVATIVE ECONOMIC POLICIES

Task

• • • • In groups you must reproduce the diagram on Conservative economic policies 1951-64 You must all produce a diagram Only one person is allowed to look at the diagram at one time and feedback to the rest of the group You will only have a limited amount of time

Import controls-£50 limit on travel allowances Bank rate raised 1953: Income tax and purchase tax cut Increase in exports to USA 1951-Balance of payments and huge defence commitments R. A. Butler (1951-55) 1955: But Butler cuts income tax and purchase tax as there is a election coming 1955: boom and too many imports 1962-National Economic Development Councils created (NEDDY) Composed of 6 trade unionists, 6 industrialists, 2 independents and 3 Cabinet ministers Selwyn Lloyd 1960-62 Wages rise faster than productivity 1961-purchase tax raised and bank rate raised to 7% Pay Pause introduced Macmillan 1955-57 1955: Pots and pans budget on kitchen utensils Economic Policies Heathcoat-Amory 1958-60 1959-economic recovery results in giveaway budget Thorneycroft 1957 58 Wanted to bring down inflation incomes had risen by 75% Demanded halt to increasing government spending Thorneycroft resigns when Macmillan opposes this Income tax cut in an election winning budget

Chancellor Policies

Butler: 1951-55 Macmillan: 55 57 Balance of payments crisis and huge defence commitments led to raising of the bank rate and import controls (£50 limit on currency that could be taken out of the country). Exports to the USA led to an improved situation-in 1953 income tax and purchase tax were cut. A boom and too many exports should have led to stop policies but instead cuts were made to purchase and income tax as there was a general election. This led to a pots and pans budget were taxes were introduced on kitchen utensils.

n/a Thorneycroft: 1957-58 Incomes had risen by 75%. Thorneycroft wanted to cut back on government spending to prevent inflation but resigned when Macmillan opposed this as he did not want more unemployment (which cuts would produce).

Heathcoat Amory: 1958-60 An improvement in the economic situation in 1959 led to a ‘giveaway budget’. Income tax was cut for example. Selwyn Lloyd: 1960-62 In 1961 income and purchase tax were increased. A pay pause was also introduced. This was because wages were rising faster than productivity. In 1962 National Economic Development Councils (NEDDYS) were introduced (they were largely useless).