CONSERVATIVE ECONOMIC
POLICIES
Task
• In groups you must reproduce the diagram on
Conservative economic policies 1951-64
• You must all produce a diagram
• Only one person is allowed to look at the
diagram at one time and feedback to the rest
of the group
• You will only have a limited amount of time
Import controls-£50 limit
on travel allowances
Bank rate raised
1955: But Butler cuts
income tax and purchase
tax as there is a election
coming
1953: Income tax
and purchase tax cut
1951-Balance of payments and
huge defence commitments
1955: Pots and
pans budget on
kitchen utensils
1955: boom and too
many imports
Increase in exports
to USA
R. A. Butler (1951-55)
1962-National
Economic
Development
Councils created
(NEDDY)
Composed of 6
trade unionists, 6
industrialists, 2
independents and 3
Cabinet ministers
Macmillan
1955-57
Selwyn Lloyd
1960-62
Wages rise
faster than
productivity
1961-purchase tax
raised and bank rate
raised to 7%
Pay Pause introduced
Economic
Policies
Heathcoat-Amory
1958-60
1959-economic recovery
results in giveaway budget
Thorneycroft 195758
Wanted to bring
down inflationincomes had risen by
75%
Income tax cut in an election
winning budget
Demanded halt to
increasing government
spending
Thorneycroft
resigns when
Macmillan
opposes this
Chancellor
Policies
Butler: 1951-55
Balance of payments crisis and huge defence commitments led to raising of the bank rate and
import controls (£50 limit on currency that could be taken out of the country). Exports to the USA
led to an improved situation-in 1953 income tax and purchase tax were cut. A boom and too many
exports should have led to stop policies but instead cuts were made to purchase and income tax as
there was a general election. This led to a pots and pans budget were taxes were introduced on
kitchen utensils.
Macmillan: 5557
n/a
Thorneycroft:
1957-58
Incomes had risen by 75%. Thorneycroft wanted to cut back on government
spending to prevent inflation but resigned when Macmillan opposed this as
he did not want more unemployment (which cuts would produce).
Heathcoat
Amory: 1958-60
An improvement in the economic situation in 1959 led to a ‘giveaway
budget’. Income tax was cut for example.
Selwyn Lloyd:
1960-62
In 1961 income and purchase tax were increased. A pay pause was also
introduced. This was because wages were rising faster than productivity. In
1962 National Economic Development Councils (NEDDYS) were introduced
(they were largely useless).