To what extent was the period between 1951 and 1964 a ‘Golden Age’ for the economy? Essay
To what extent was the period between 1951 and 1964 a ‘Golden Age’ for the economy?
To what extent was the period between 1951 and 1964 a ‘Golden Age’ for the economy? Howard Macmillan’s words ‘… most of our people have never had it so good’ became an important symbol of the time when Britain seemed to be in a Golden Age. The British people were optimistic and there was affluence within society. There were however examples of the underlying problems which include how Britain was performing compared to other European competitors, how the government failed to control public spending and the failure to modernise British Industry. The period of 1951-64 is seen as being a Golden Age due to many factors which directly prove that.
These include living standards rising steadily due to incredibly high rates of employment with an average rate of only 2% unemployed. This is due to a post war boom and because servicemen within World War 2 were promised full employment when they were to come home. This was a promise the government was not willing to break. In 1954, under Churchill, Rationing had also come to an end which showed that Britain was pulling away from post-war austerity. The wages of a male worker increased to a high £18.35 on average by 1964.
Technological advances such as washing machines, cars and televisions were being bought with disposable income and personal spending was increasing. Class divisions also seemed to be blurring and this was due to the same opportunities being available to all people such as education. Howard Macmillan’s promise to build 300,000 houses per year was also easily kept with 1.7 million houses built by 1964. The words that MacMillan said and became a symbol of the period of 1951 to 64 can also be seen as a warning.
They are also interpreted as maybe the conditions of prosperity and affluence were too good to be true. Although many people did not notice at the time there were underlying problems. The promise of full employment was made by Labour was carried on by the Conservative government and it became apparent that this was not that easy to achieve. Between 1951 and 64 the lowest number of workers that were unemployed was 297,000 in 1956. In 1951 the number was 367,000 which shows that there was a decrease in the unemployment rate in those 5 years. However, after 1956 the unemployment rates started increasing and reached a high of 878,000 unemployed workers in 1963.
Even though unemployment seemed to be low there were still over 250,000 people unemployed during the ‘Golden Age’ and it was close to a million by the end of it. There were also key events in the period of the ‘Golden Age’ which put a toll on the recovering war economy. An example of one is the Suez Crisis which occurred under Anthony Eden’s government in 1956. This crisis did not receive much support from the British public and was opposed greatly by the National Council of Labour. This opposition was due to the public not wanting to be involved in a war again, especially as the economy was improving and people’s lives as a result of that.
The crisis increased the British debt to £564 million which links to the unemployment rate increasing after 1956. The crisis also showed that Britain could not do anything like this again without American support which is a failure in terms of British credibility. In 1960, Britain also signed on to the Convention on the Organisation for Economic Co-operation and Development in 1960. However Britain failed to grow in the industrial sector.
There was increasing unemployment in this sector and it decreased from 36% in 1955 to 35% in 1966 and 31% in 1979. Britain’s increasing amount of employment was seen in the services sector and this was due to increases in the population which meant more hospitals and schools, for example, were needed so more people were employed there. Another issue that was on the mind of politicians was that Britain was not performing as well as its competitors.
The Gross Domestic Product percentage growth during the ‘Golden Age’ was highest for Italy at 5.6% while Britain had the lowest in comparison to three other European countries at a percentage of 2.3%. This was mainly due to the spending in the defence sector. This spending was to maintain the naval bases and to fun other types of defence research such as nuclear weapons.
Compared to the European countries Britain was spending the most money on research and development and that was 10% of the GDP. In 1963 for example Britain had spent 34.5% of its research and development fund on defence whilst Italy only spent 2.6%. Also due to this increased spending in the defence sector as well as the service sector expansion, the manufacturing industry wages of a worker in Britain were lower that France and Germany.
The money used fo research and development could have been used instead for economic research which would have caused the industry to grow. The average wages of a manufacturing worker in 1963 in Britain was £1.61 per hour while in Germany it was £2.95. However that can also be blamed on the budget policies adopted by Macmillan’s government. For example stagflation was a situation in which industry declined but inflation still increased.
This was due to the ‘stop-go’ policy when the government would adopt the ‘go’ policy by cutting the taxes and lowering interest. The period of 1951 to 1964 is regarded by many as a ‘Golden Age’ and it certainly felt like it to the British public who were living through it. There was affluence within society, standard of living was improving and the class system was seemingly becoming more and more blurred. However the public did not see the underlying problems as they would not have been much of an issue to anyone. The ‘Golden Age’ can be related quite well to the social situation in that period.
In terms of an economic ‘Golden Age’ it seems as if it was only to keep up appearances and it was not built on proper foundations. The budget policy, ‘stop-go’ and stagflation policies of the government caused cracks in the ‘Golden Age’ economic façade to show. Examples of this are shown within the industrial sector. This sector had also failed due to too much of Britain’s research fund was being spent on defence which caused it to fall behind its competitors in a post war era.