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).