Political and economic problems

Political and economic problems

Conservative Supremacy 1951-64

  • Economic prosperity played a big role in consolidating Conservative power during this period, mainly due to their successful management of the economy.

  • Rationing ended in 1954 which marked the end of the austerity period and brought relief to many households.

  • Stop-Go economics: frequent switches between economic expansion and contraction led to investment uncertainties and hindered long-term planning. Despite this, public and private sectors still saw significant overall growth.

  • Dealing with trade unions was a constant issue. The Conservative party generally maintained a policy of compromise, aiming to avoid labour disputes and to maintain higher wages.

  • The Suez Crisis in 1956 led to a sharp critique of the Conservative leadership and a dent in Britain’s international reputation.

Labour Interlude 1964-70

  • The Labour government faced a severe balance of payments crisis shortly after coming to power, which led to the controversial decision to apply for a loan from the International Monetary Fund.

  • The decision to devalue the pound in 1967, due to economic instability, was politically damaging for the Labour government.

  • Industrial unrest was higher under Labour, with a significant number of working days lost to industrial actions.

  • The Labour government pursued a modernizing agenda, but its efforts to reform the economy were hampered by financial constraints and lack of time.

Conservative Return 1970-79

  • The first years of the Conservative return marked a period of economic stagnation and high inflation, leading to discontent and industrial disputes.

  • The Oil Crisis of 1973, triggered by an oil embargo by OAPEC countries, caused a severe increase in oil prices and further economic instability.

  • The Three-Day Week, introduced in 1974 to conserve electricity during a miners’ strike, was a drastic measure that highlighted the severity of the crisis.

  • A policy of fiscal restraint, including cuts in public expenditure and a freeze on pay increase, led to industrial action against the government.

  • The Winter of Discontent in 1978-79, characterized by widespread strikes in the public sector, was a key factor contributing to the electoral defeat of the Labour government in 1979.