Two formative periods in post-war British politics
The first period was led by the Labor Government from 1946 to 1951 whose Prime Minister was Clement Attlee. This government set up a certain number of policies based on Keynesianism and Welfare State. This post-war settlement put in place a system of full employment and a system of social services. Within this context, Attlee’sgovernment undertook the nationalization of major industries and public utilities and the creation of the National Health Service. The Conservatives were opposed to Keynesianism in the first place, but then this settlement was accepted by all parties.
From this period to the early 70s, there was a global consensus/agreement between the Conservatives and the Liberal Democrats. But during the 1970’sthere was a worldwide depression which led to the disensus.
The second period was led by Prime Minister Margaret Thatcher, from 1979 to 1990. She set up a new set of policies which is called ‘Thatcherism’.
> Two consensus: Keynesian welfare State and Shumpeterian workare state
1946-1951: Clement Attle
1955-1977: Anthony Eden
1957-1963: Harold Mac Millan
1970-1974: Edward Heath
I – The First Period : the Keynesian Welfare State.
Keynesian welfare state
A welfare state is a concept of government where the state plays a key role in theprotection and the promotion of the economy and social well-being of its citizen. It is based on the principles of equality of opportunity, equitable distribution of wealth and public responsability. It was characterized by :
Concept of a mixed economy : full collectivist ideas, full capitalistic model. Private and public sectors are both remained. The state has nationalized all means of production andencouraged the ‘laisser-faire’.
Full employement : the employement rate has to be maintained below 3%.
Demand-side economics system : the state invests by adjusting interest rates. It is called the ‘Stop and Go System’ ( the goal is to create a lot of production and when inflation becomes important the system stops) .
The Keynesian Welfare State and its decline.
1942 : William Beveridgewrote the Beveridge Report. He actually was the first one to talk about a welfare state. The 5 giants to fight are : disease, ignorance, squalor, want and idleness. Everybody is entitled to allowances, insurances, assitance, retiring pension, ... This impulsion brought people together.
1944 : the Butler Education Act said that school is mandatory from the age of 6.
1956 : With the Suez crisisthere was the beginning of distrust
At the same time, Japanese have a growth of 8% whereas Britain only 4.
1957 : Prime Minister Harold MacMillan scraped the relationship between UK and the USA.
1958 : Rediscovery of Poverty. Some people had difficulties to survive which means that the Welfare State policy failed.
MacMillan introduced the Earnings-related Scheme. It is a system of pension fund.The Welfare State system had provided a retirement pension to people.
> This was the reintroduction of capitalism in the economy. At the end of the 1950’s, we realized that the fabulous and idealistic system wouldn’t be sufficient for the United Kingdom to survive in a very competitive worldwide economy.
In the 1960’s, the new industrialized countries such as Japan and Taiwan grew in power andrepresented a threat. The industry started to suffer from its ‘lame-ducks’.
> the de-industrialization became necessary.
In the 1970’s : vietnam war, big financial problem, unemployment and it became obvious that the world was so interrelated ( interdependant) and Britain couldn't remain isolated.
1970 - 1974 : the new Prime Minister is Edward Heath and he tried what we call the ‘U-turn...