Do You Agree with the View That the Conservative Party’s Policies in the Years 1951-59 “Hindered the Country’s Economic Development”?

Topics: Economics, Inflation, Harold Macmillan Pages: 4 (1264 words) Published: January 27, 2013
The Conservative Party which was leaded by Winston Churchill (1951-55) and Anthony Eden (1955-57) and Harold Macmillan (1957-63) between the years 1951-59 wanted, according to their manifesto in 1951, to stop all further nationalisation. The Iron and Steel Act will be repealed and the Steel industry allowed resuming its achievements of the war and post-war years. To supervise prices and development we shall revive, if necessary with added powers, the former Iron and Steel Board representing the State, the management, labour, and consumers. They also wanted to free the people from austerity and housing shortages. Macmillan introduced the stop and go economy. If the domestic consumption and the prices rose too quickly (and the economy appeared to be “overheating”) the government put on the “brakes” by increasing taxes and raising interest rates. This would make it more difficult to borrow money. The other way around would be, when the production and the exports declined, and the economy appeared to be a “downturn”, the government pressed the “accelerator” button by cutting and lowering the interest rates. This would make it easier to borrow money. There was also the “Stop-Go” approach. This approach was to try and solve the main two problems of maintaining economic growth which were keeping inflation low and making sure there was a healthy balance of payments. But this policy was not coherent. The budgets were used to buy votes and it also caused mixed success. One result was “Stagflation” (Stagnation and Inflation). It was a failure to invest in the long term R & D (Research and Development). Britain also started to lag behind because of the heavy defence expenditure and the expensive nuclear arms development programme. Also 35 per cent of the Research and Development were spent on the defence. But this face the rise in living standards (50%) and material prosperity, the wages raised ahead the pries, there was a greater availability of a credit, house buying grew...
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