Political and Economic Problems

Economic Problems Between 1951 and 1979

The post-war consensus, a period from 1945 to the mid-1970s, was characterised by an agreement between the Labour and Conservative parties on a mixed economy, commitment to welfare state provisions, and a gradual decline in British economic power.
The 1950s was a period of relative prosperity, known as the ‘Age of Affluence’, but it was followed by an economic downturn in the 1960s and 70s due to several factors.
Britain began to lose its industrial dominance due to growing competition from other countries, particularly West Germany and Japan—which experienced significant industrial growth after the war. This led to a fall in exports and increased unemployment.
Social inequality increased during this period, despite efforts to address poverty through the welfare state.
The oil crisis of 1973 due to the embargo by OPEC countries led to stagflation, a combination of stagnant economic growth and high inflation, which worsened the economic situation in Britain.
Successive governments tried to control inflation through wage and price controls, known as the Prices and Incomes Policy, but this faced substantial opposition from the trade unions.
The end of Britain’s adherence to the gold standard and the devaluation of the pound in 1967 were major economic crises, highlighting Britain’s declining economic standing globally.

The post-war consensus began to unravel in the late 1960s and 70s due to economic challenges and increasing political division.
The Suez Crisis of 1956 highlighted the end of Britain’s role as a colonial power and caused a major political scandal at home.
The Profumo Affair of 1963 tarnished the public image of the Conservative party and marked the end of its 13-year rule from 1951 to 1964.
A series of strikes by coal miners in the 1970s, known as the Winter of Discontent (1978-79), led to major political crisis and eventually the fall of the Labour government in 1979.
The 1970s also saw the rise of political movements advocating for devolution in Scotland and Wales, thereby causing political upheaval.
The era was marked by increasing tension with the European Community (now the European Union), culminating in a divisive referendum in 1975.
The end of the period was marked by the rise of Thatcherism, representing a major shift in political ideology towards neo-liberal economic policies and a retreat from the post-war consensus.