Week 3
UK Politics in the 1960s : the problem of decline
Decline was one the key themes of UK politics in the 60s.
The UK witnessed a new centre left consensus emerging.
Defining decline
- Absolute political decline – the UKs decline in great power status from rule of a third of the
world in the 19th century (empire) to the period after 1945 where the US and Soviet Union
- became superpowers. Absolute decline means the UK was less powerful and influential than
it had been in the past, decline in its own influence over time.
Empirical detail that supports this claim – a number of changes that weaken the
cohesiveness of Britain’s empire after 1945 – process of decolonisation. Defining moment
here was the decision to grant independence to India in 1947. India was considered to be
the jewel of the crown, much of the empire territory was organised to defend India, so once
the Atlee govt granted India independences, a lot of the rationale of the rest of the empire
disappeared, because a lot of it had been acquired to defend or gain easy access to India. As
a result, from the 1955s onwards, many other countries formerly members of the empire
were also granted independence. This process continued until the 1960/70s, where the
empire ceased to exist, but was replaced by the commonwealth, - a looser organisation,
designed to show Britain had some influence over the world.
- Relative economic decline – refers to the decline of the UK economy in relation to Britain’s
main industrial competitors at this time. Compared to its past, the UK economy was
prospering, the UK public were as wealthy as they’d ever been, however they were less
wealthy compared to other countries that surpassed Britain’s economic performance,
according to a range of indicators – the UK share of world manufacturing exports. The UK
was known as the workshop of the world, it was the first country to industrialise, and
historically dominated the worlds share of manufacturing exports. But after 1945, Britain’s
share of world manufacturing exports declined significantly compared to the US, France,
Germany and Japan.
the reality of decline compared to the public perception of decline
in relation to the precise timing of the decline there’s a dispute in historical literature about when
Britain actually began to decline. Irrespective of when Britain actually started to decline, the public
perception of decline became apparent at the end of the 1950, the British public increasingly
became aware that Britain was declining, both compared to its past and other countries.
Faced with data about decline and increasing critical comments about British performance
internationally and economically, by 1960, the main UK political parties come to accept that change
is needed in economic policy. These changes were meant to respond to relative economic decline.
By 1960s, ministers began to accept that more than Keynesian demand management was needed to
reverse relative economic decline, more than manipulation of taxes and spending was needed.
Public figures began to argue that Keynesian demand management was missing the point, focusing
on the wrong thing, the problem wasn’t the lack of demand from UK public for goods and services,
problem was supplies of goods from UK markets to the UK public. The supply of goods and services
was seen to be not as good as other countries – problem with supply not demand. – poor design,
, poor management practises compared to other countries e.g., Japan, US. Lack of skills in the
workforce. The public preferred goods from overseas compared to the UK.
So instead of focusing on demand management by the early 1960s. all political parties began to
accept the UK government needed to develop intervention politics, to rectify the poor supply of
goods and services,
ACTIVE government came back in the 1960s. – This development supported the argument that
there was a social democratic consensus around left of centre values and policies.
New commitment to economic planning – consensus embraced by both parties.
Right of centre conservative govt of Harold Macmillan who first experimented with planning in an
attempt to reverse the UKs relative economic decline – developed a new planning authority –
National Economic Development Council. – known as a tripartite forum for consultation between
govt, business and trade unions. (Tripartite – three main stakeholders withing this body – govt,
business and unions) – the idea was that all sides would sit down and come up with an agreement
on future policy needs of the UK economy. Govt would sit down with experts from business, leaders
for the UK workforce and try to plan the needs of the UK economy. Once an agreement has been
made, they detail a plan with implications and policies for each industry with targets for sustained
economic growth that would reverse decline.
Conservatives lost election to the labour party in 1964. – as a result, the initiative didn’t have much
time to make an impact, but it didn’t die down completely. The NEDC continued but was overtaken
by a new initiative developed the labour party.
Labour under Harold Wilson made further commitments to planning for economic growth. Created a
new govt department within Whitehall – the national economic development council. = it has been
an advisory body outside of govt, and some argued this affected its effectiveness. Its more difficult to
have influence outside of govt than inside.
^ department called Department for economic affairs – set up in 1960 - directly responsible for
planning and produced a plan at the beginning of 1965 – contained proposals to make the UK
economy grow by 4% a year from 1964-70.
However, by July 1966, its widely agreed that this national planning experiment had been
undermined and planning gradually went out of favour for the rest of the 60s, thought it came back
in the 80s.
How can this be explained? – the Seamans union went on strike in May 1966, in support of a
reduced work week, which would result in a 17% pay rise. – this caused a panic in the financial
markets and markets worried that if the union was successful in its strike action, this higher wage
settlement would have a knock-on effect leading to similar wage rises in other industries – ad this
would lead to businesses increasing their prices bc workers have more money to spend. – leading to
inflation. This panic led them to selling pounds and investing in currency from other countries
instead- lead to the value of the pound falling.
What did Wilson’s govt do in response?
They brought in policies to reduce domestic demand, to take demand out of the economy bc it
thought that’s what financial markets wanted it to do, the worry about the value of the pound
falling led them to putting their foot down and bringing in tax rises and spending cuts to take
UK Politics in the 1960s : the problem of decline
Decline was one the key themes of UK politics in the 60s.
The UK witnessed a new centre left consensus emerging.
Defining decline
- Absolute political decline – the UKs decline in great power status from rule of a third of the
world in the 19th century (empire) to the period after 1945 where the US and Soviet Union
- became superpowers. Absolute decline means the UK was less powerful and influential than
it had been in the past, decline in its own influence over time.
Empirical detail that supports this claim – a number of changes that weaken the
cohesiveness of Britain’s empire after 1945 – process of decolonisation. Defining moment
here was the decision to grant independence to India in 1947. India was considered to be
the jewel of the crown, much of the empire territory was organised to defend India, so once
the Atlee govt granted India independences, a lot of the rationale of the rest of the empire
disappeared, because a lot of it had been acquired to defend or gain easy access to India. As
a result, from the 1955s onwards, many other countries formerly members of the empire
were also granted independence. This process continued until the 1960/70s, where the
empire ceased to exist, but was replaced by the commonwealth, - a looser organisation,
designed to show Britain had some influence over the world.
- Relative economic decline – refers to the decline of the UK economy in relation to Britain’s
main industrial competitors at this time. Compared to its past, the UK economy was
prospering, the UK public were as wealthy as they’d ever been, however they were less
wealthy compared to other countries that surpassed Britain’s economic performance,
according to a range of indicators – the UK share of world manufacturing exports. The UK
was known as the workshop of the world, it was the first country to industrialise, and
historically dominated the worlds share of manufacturing exports. But after 1945, Britain’s
share of world manufacturing exports declined significantly compared to the US, France,
Germany and Japan.
the reality of decline compared to the public perception of decline
in relation to the precise timing of the decline there’s a dispute in historical literature about when
Britain actually began to decline. Irrespective of when Britain actually started to decline, the public
perception of decline became apparent at the end of the 1950, the British public increasingly
became aware that Britain was declining, both compared to its past and other countries.
Faced with data about decline and increasing critical comments about British performance
internationally and economically, by 1960, the main UK political parties come to accept that change
is needed in economic policy. These changes were meant to respond to relative economic decline.
By 1960s, ministers began to accept that more than Keynesian demand management was needed to
reverse relative economic decline, more than manipulation of taxes and spending was needed.
Public figures began to argue that Keynesian demand management was missing the point, focusing
on the wrong thing, the problem wasn’t the lack of demand from UK public for goods and services,
problem was supplies of goods from UK markets to the UK public. The supply of goods and services
was seen to be not as good as other countries – problem with supply not demand. – poor design,
, poor management practises compared to other countries e.g., Japan, US. Lack of skills in the
workforce. The public preferred goods from overseas compared to the UK.
So instead of focusing on demand management by the early 1960s. all political parties began to
accept the UK government needed to develop intervention politics, to rectify the poor supply of
goods and services,
ACTIVE government came back in the 1960s. – This development supported the argument that
there was a social democratic consensus around left of centre values and policies.
New commitment to economic planning – consensus embraced by both parties.
Right of centre conservative govt of Harold Macmillan who first experimented with planning in an
attempt to reverse the UKs relative economic decline – developed a new planning authority –
National Economic Development Council. – known as a tripartite forum for consultation between
govt, business and trade unions. (Tripartite – three main stakeholders withing this body – govt,
business and unions) – the idea was that all sides would sit down and come up with an agreement
on future policy needs of the UK economy. Govt would sit down with experts from business, leaders
for the UK workforce and try to plan the needs of the UK economy. Once an agreement has been
made, they detail a plan with implications and policies for each industry with targets for sustained
economic growth that would reverse decline.
Conservatives lost election to the labour party in 1964. – as a result, the initiative didn’t have much
time to make an impact, but it didn’t die down completely. The NEDC continued but was overtaken
by a new initiative developed the labour party.
Labour under Harold Wilson made further commitments to planning for economic growth. Created a
new govt department within Whitehall – the national economic development council. = it has been
an advisory body outside of govt, and some argued this affected its effectiveness. Its more difficult to
have influence outside of govt than inside.
^ department called Department for economic affairs – set up in 1960 - directly responsible for
planning and produced a plan at the beginning of 1965 – contained proposals to make the UK
economy grow by 4% a year from 1964-70.
However, by July 1966, its widely agreed that this national planning experiment had been
undermined and planning gradually went out of favour for the rest of the 60s, thought it came back
in the 80s.
How can this be explained? – the Seamans union went on strike in May 1966, in support of a
reduced work week, which would result in a 17% pay rise. – this caused a panic in the financial
markets and markets worried that if the union was successful in its strike action, this higher wage
settlement would have a knock-on effect leading to similar wage rises in other industries – ad this
would lead to businesses increasing their prices bc workers have more money to spend. – leading to
inflation. This panic led them to selling pounds and investing in currency from other countries
instead- lead to the value of the pound falling.
What did Wilson’s govt do in response?
They brought in policies to reduce domestic demand, to take demand out of the economy bc it
thought that’s what financial markets wanted it to do, the worry about the value of the pound
falling led them to putting their foot down and bringing in tax rises and spending cuts to take
