Britain in the postwar world

1. Britain in the postwar world

2. Britain at war’s end • Exhausted but victorious • Labour government elected in 1945 – first time with a majority • Nationalizes several industries: • Rail, coal, gas & electricity, trucking, iron and steel • Establishes universal welfare state on the basis of Beveridge report: • Flat rate benefits, flat rate premiums for old age pensions, unemployment insurance • Establishes National Health Service – system of socialized medicine

3. Post-war consensus – 1950s and 1960s • Agreement between Labour and Conservatives on • Mixed economy, managed by gov’t to ensure full employment • Desirability of welfare state to ensure minimum levels of subsistence • Consensus reflects: • Conservatives’ acceptance of most of Labour’s nationalizations • Labour leadership’s recognition that most of its goals can be achieved in the context of a mixed economy • Agreement on tools of Keynsian economics – demand management • 1950s as time of relative prosperity: • Harold MacMillan: ‘you never had it so good”

4. Economic problems: the 1960s • Slower rates of economic growth • Frequent strikes, problematic labour relations • Strong trade unions, craft-based, frequent jurisdictional disputes • Aging industrial plant reflecting • Earlier industrialization • Relative lack of wartime destruction

5. Attempted Solutions • Attempt to imitate French economic planning in the early 1960s: • Establish National Economic Development Council (NEDC), attempt to elicit cooperation from unions and employers • Attempts by both Labour and Conservatives to regulate trade unions • “Battle of Downing Street” (1969): Labour fails to regulate unions – backbench rebels – law is not passed • Conservative government passes Industrial Relations Act in 1971 • Trade unions refuse to comply with provisions for registration, regulation • Attempt to join European Community (vetoed by De Gaulle)

6. The 1970s: fading consensus • Context: increasing economic problems • Major industries – steel, shipbuilding, air craft in need of state subsidies to continue operating • Hyper-inflation as result of energy crisis • Parties’ response: • Labour, increasingly divided, moves to the left – re-embraces state ownership, socialism (but party divided at all levels • Conservatives under Margaret Thatcher, move to the right -- reject state ownership or extensive involvement in the economy

7. Prelude to Thatcherism • Heath government (1970-74) • Attempts to regulate unions – fails • Attempts to avoid subsidies to declining industries • Miners strike 1974 – results in new election • Labour governments (1974-79) • Harold Wilson (1974-76) & James Callahan (1976-79) attempt Social Contract with trade unions: • Unions agree to restrict wage demands, provide labour peace in exchange for longer term benefits • Social contract succeeds in damping down wage demands from 1976-78 • Wave of strikes – winter of discontent – breaks out in 1979

8. Thatcher and Thatcherism • Margaret Thatcher ousts Heath as leader of Conservatives in 1975 • Thatcher’s vision – an end to the “nanny-state” – a neo-liberal view • State to withdraw from the economy • Foster enterprise culture • Promote market relationships • Preference for monetarism (regulation of money supply rather than Keynsianism)

9. Thatcher’s policies • Privatization of nationalized industries • Elimination of subsidies to declining industries • Curb trade union power • Regulation of trade unions • 1984 miners strike • Trims welfare state (but doesn’t eliminate) • Attacks bastions of Labour Party power: • Sale of council (public) housing • Restrictions on local council taxation and spending • Reserved attitude toward the European Union – favour larger market • Oppose any form of federal Europe

10. Transformation of the party system • Conservative Party abandons postwar stance (one-nation conservatism) and embraces neo-liberalism – • Favours a weak state – except in the administration of justice • Labour initially moves further to the left • Re-embraces socialism in early 1980s • Following election defeats in 1979, 1983, 1987 begins move back toward centre • Liberals Democrats (Liberals and Social Democrats) gain votes in the centre • But few seats under single-member plurality system

11. Transformation of British society • Decline of industrial north • Increased wealth of south – especially areas around London • Eventual recovery of British economy • Prosperity of financial and business centre in the south • A cheap labour zone – able to attract new plants on basis of lower labour costs • Sharp disparities in the distribution of wealth

12. Labour’s return to power • Thatcher ousted by her own party in 1990 • Replaced by John Major • Labour begins slow march to centre under • Neil Kinnock – 1983-1992 • John Smith – 1992-1994 • Tony Blair –1994-present • Blair brings Labour back to power by remaking the party

13. New Labour vs. Labour • Abolition of point IV of party constitution (public ownership of means of production – • promote a ‘third’ way: social liberalism rather than socialism • New emphasis on inclusiveness • Reaching out to marginal or excluded groups replaces redistribution of wealth • Mimics Conservatives on spending • Fiscally sound New Labour instead of ‘tax and spend’ • Emphasis on ‘private finance initiatives • Tough love in administration of justice, response to refugees, asylum seekers