The Affluent society: 1951-1964
Revision notes:
Churchill, Eden and Macmillan as political leaders
- Churchill was a popular war hero who won the snap 1951 election by 27 seats but ultimately
an unsuccessful PM in his second term who was criticised for being more invested in foreign
affairs and his ‘special relationship’ with the USA than domestic affairs. Eden was left as the
acting PM for much of his second term 1951-1955 due to health issues as Churchill was very
rarely in the chamber for debate.
- Eden on arrival in 1955 was hailed as the ‘next big thing’ in British politics due to his vast
experience under Churchill in various government positions, such as the UK’s chief diplomat,
but his tenure was ultimately very disappointing. His domestic policies were weak and the
Suez Crisis of 1956, where the UK, France, and Israel invaded Egypt without forewarning the
USA destroyed the UK-US relationship and the Conservative reputation. Eden resigned citing
‘health issues’ in 1957 after the crisis.
- Macmillan was a popular PM among the public, winning the 1959 election with a majority of
100 seats. He oversaw the development of the affluent society despite limited economic
growth during the period relative to the rest of Europe. He was criticised for failing to
address Britain’s fundamentally flawed economic policy (stop-go) which restricted economic
growth through reactive, rather than proactive, actions. At the end of his tenure his clashes
with de Gaulle in the EEC and mounting scandals meant that he resigned on health grounds.
Domestic policies 1951-1964
- Domestic policies in this period were inspired and driven by the postwar consensus, a set of
multi-partisan agreements surrounding how the UK should be governed in its postwar
recovery regardless of the party in power. An example of this is the Labour chancellor Hugh
Gaitskell and Conservative chancellor Rab Butler being in total agreement during this period.
- Examples of universal policies included the development of the welfare state through the
NHS in 1948, support and backing for the trade unions by giving them a role in government,
implementation of Keynesian economics (low tax high government spending) to stimulate
growth, and the development of a mixed economy where some companies were
nationalised and some were privatised depending on what would be beneficial to the
taxpayer and the government
- Under Macmillan, policies such as the hire purchase scheme took flight during the period of
the affluent society as the scheme gave access to credit for all which enabled the public to
afford luxury durable goods such as cars, washing machines, and televisions. TV ownership
more than doubled in this period as a result of hire purchase.
Internal Labour divisions
- The Bevanite quarrel came about in the runup to the 1951 snap election whereby the left,
led by Aneurin Bevan, and right wing, led by Hugh Gaitskell, of the L.P. were in total
disagreement over Gaitskell’s 1951 budget. The budget proposed the introduction of
prescription charges, the transfer of funds from National Insurance to defence, and the
removal of free dental/eye care through the NHS as it was costing the government too much
, money. These proposals were in direct contradiction to the values set out in the postwar
consensus, hence the party became split between the left and the right hampering Labour’s
electability in 1951. Bevan resigned as Minister for Labour in 1951 after 2 months in office.
- Divisions were reignited in the runup to the 1959 election as Labour were expected to win
following Suez yet another round of disagreements between the Gaitskellites and the
Bevanites hampered Labour’s electability yet again and the Conservatives won with a
majority of 100 seats. The two sides of the party disagreed on revoking Clause IV of the L.P.
constitution which demanded nationalisation, with the right wanting more privatisation and
the left wanting to protect nationalisation.
- Additionally, the two sides disagreed on nuclear disarmament and the nuclear deterrent. The
Bevanites were heavily against nuclear weapons (CND movement) and the deterrent while
the Gaitskellites were heavily in favour of the deterrent.
Reasons for Conservative fall from power in 1964
- Britain’s EEC rejection in 1962 was an embarrassment for Macmillan who was hoping to
perform a U-turn on his initial rejection of the idea of the EEC after accepting that the UK
economy was a disaster and in desperate need of foreign support. de Gaulle personally
vetoed the UK application despite resounding support for British membership from the other
members because he saw Britain as preoccupied with US affairs and a proxy for American
interests in Europe rather than a truly independent nation. The EEC’s purpose was to remove
the focus of trade from the USA and promote European prosperity; de Gaulle did not see
how introducing American influence to the community would help this. The rejection made
Britain and Macmillan look weak on the international and domestic stage.
- Various scandals surrounded the Conservative Party by 1964 such as the Profumo affair and
the scandal surrounding the Duchess of Argyle which brought the party’s reputation into
disrepute and hampered its electability. The Profumo affair was a controversy in 1961 which
involved the Minister of War, John Profumo, being alleged to have slept with 19-year-old
Christine Keeler who was also sleeping with a Soviet official which raised concerns over
classified information being leaked to the Soviets through Keeler. Profumo had to resign but
the damage was done by that point.
- The Conservatives were increasingly becoming the party of old especially in light of Harold
Wilson becoming Labour leader after Gaitskell’s death in January 1963 who was increasingly
focused on technological advancements and advancements in modernisation as opposed to
the traditionalist Conservative government. When Macmillian resigned in 1963, he was
replaced by Douglas Home, an ex-peer who embodied the ‘old boys network’ which had
become associated with the Conservative party. Home appeared out of touch and
aristocratic to the electorate in comparison to Wison which made the Conservatives even
less popular among the public. Home was not electable in the same way Wilson was.
Post war boom
- The world economy had taken a drastic hit during the Second World War; poverty was rising,
housing was obliterated from bombing, and countries were in disrepute. After 1945, the
economy especially in Europe accelerated rapidly and outgrew much of the rest of the world
due to trade agreements being struck between European countries to ensure mutual
, strength. An example of this is the Schumann plan which was a mutual agreement between
France and Germany to trade coal and steel with each other which was designed to boost
German economic growth and to limit the appeal of communism within soviet Russia to
Germany. German economic growth was sat at around 20% per year during the postwar
boom.
- In Britain, loans from the United States totalling around 3.75 billion dollars were invested
into the economy to drive a postwar recovery which was seen through the rebuilding of
houses and infrastructure which was destroyed during the Blitz. Rationing was ended in 1954
by the Conservatives as a result of this recovery and growth was at around 4%, a high
number without context but, compared to other European countries, Britain was starting to
fall behind its allies and competitors.
- The Conservatives continued to ride the postwar wave into the late 50s where the affluent
society emerged, and people became more prosperous on the back of rising government
debt and an emerging credit system which enabled the purchase of luxury goods. The British
postwar boom was only truly seen by the consumer; from a government perspective, the
economy was faltering and Britain was in deep trouble unless the economy was
fundamentally rectified.
Balance of payment issues and ‘stop-go’
- Stop-go economics was the British method of controlling the economy during the period
which involved heavy government control of the economy as the economy was either
‘heated up’ or ‘cooled’ depending on how the economy was performing. If the economy was
too ‘cold’ interest rates were cut and taxation was decreased to try and stimulate growth and
activity; on the contrary, if the economy was too ‘hot’ then the inverse is true and interest
rates would go up and taxation would increase to control consumer spending. The result of
this process was that the economy went in circles and very little fundamental growth was
seen compared to the rest of the world. Britain needed fundamental economic reform.
- Balance of payments was increasingly an issue for the Conservatives as Britain was beginning
to run up a vast volume of debt due to limited exports and a high volume of imports. The
BoP issue was not addressed until Labour and Wilson entered parliament in 1964 which
meant that, for 13 years of Conservative rule, the national deficit was allowed to reach 3.5
billion pounds while continuing to run up more debt because of the need to maintain the
welfare state which mandated high government spending which was simply unaffordable
and unsustainable by 1960.
Rising living standards
- Living standards increased in Britain in line with the establishment of the affluent society in
the late 1950s. Wages had increased by more than double during this period from 8 to 18
pounds while the pound had halved in value, so the British people were, on average, better
off than at the end of the war.
- Additionally, Labour mandated in 1950 that electricity should become a basic and affordable
commodity accessible in all homes across Britain which increased living standards and also
paved the way for greater accessibility to household durable goods such as fridges which
require electricity.
- Housing had become more affordable and accessible during the period as well as Macmillan,
when he was housing minister, managed to build 300,000 houses per year which drastically
Revision notes:
Churchill, Eden and Macmillan as political leaders
- Churchill was a popular war hero who won the snap 1951 election by 27 seats but ultimately
an unsuccessful PM in his second term who was criticised for being more invested in foreign
affairs and his ‘special relationship’ with the USA than domestic affairs. Eden was left as the
acting PM for much of his second term 1951-1955 due to health issues as Churchill was very
rarely in the chamber for debate.
- Eden on arrival in 1955 was hailed as the ‘next big thing’ in British politics due to his vast
experience under Churchill in various government positions, such as the UK’s chief diplomat,
but his tenure was ultimately very disappointing. His domestic policies were weak and the
Suez Crisis of 1956, where the UK, France, and Israel invaded Egypt without forewarning the
USA destroyed the UK-US relationship and the Conservative reputation. Eden resigned citing
‘health issues’ in 1957 after the crisis.
- Macmillan was a popular PM among the public, winning the 1959 election with a majority of
100 seats. He oversaw the development of the affluent society despite limited economic
growth during the period relative to the rest of Europe. He was criticised for failing to
address Britain’s fundamentally flawed economic policy (stop-go) which restricted economic
growth through reactive, rather than proactive, actions. At the end of his tenure his clashes
with de Gaulle in the EEC and mounting scandals meant that he resigned on health grounds.
Domestic policies 1951-1964
- Domestic policies in this period were inspired and driven by the postwar consensus, a set of
multi-partisan agreements surrounding how the UK should be governed in its postwar
recovery regardless of the party in power. An example of this is the Labour chancellor Hugh
Gaitskell and Conservative chancellor Rab Butler being in total agreement during this period.
- Examples of universal policies included the development of the welfare state through the
NHS in 1948, support and backing for the trade unions by giving them a role in government,
implementation of Keynesian economics (low tax high government spending) to stimulate
growth, and the development of a mixed economy where some companies were
nationalised and some were privatised depending on what would be beneficial to the
taxpayer and the government
- Under Macmillan, policies such as the hire purchase scheme took flight during the period of
the affluent society as the scheme gave access to credit for all which enabled the public to
afford luxury durable goods such as cars, washing machines, and televisions. TV ownership
more than doubled in this period as a result of hire purchase.
Internal Labour divisions
- The Bevanite quarrel came about in the runup to the 1951 snap election whereby the left,
led by Aneurin Bevan, and right wing, led by Hugh Gaitskell, of the L.P. were in total
disagreement over Gaitskell’s 1951 budget. The budget proposed the introduction of
prescription charges, the transfer of funds from National Insurance to defence, and the
removal of free dental/eye care through the NHS as it was costing the government too much
, money. These proposals were in direct contradiction to the values set out in the postwar
consensus, hence the party became split between the left and the right hampering Labour’s
electability in 1951. Bevan resigned as Minister for Labour in 1951 after 2 months in office.
- Divisions were reignited in the runup to the 1959 election as Labour were expected to win
following Suez yet another round of disagreements between the Gaitskellites and the
Bevanites hampered Labour’s electability yet again and the Conservatives won with a
majority of 100 seats. The two sides of the party disagreed on revoking Clause IV of the L.P.
constitution which demanded nationalisation, with the right wanting more privatisation and
the left wanting to protect nationalisation.
- Additionally, the two sides disagreed on nuclear disarmament and the nuclear deterrent. The
Bevanites were heavily against nuclear weapons (CND movement) and the deterrent while
the Gaitskellites were heavily in favour of the deterrent.
Reasons for Conservative fall from power in 1964
- Britain’s EEC rejection in 1962 was an embarrassment for Macmillan who was hoping to
perform a U-turn on his initial rejection of the idea of the EEC after accepting that the UK
economy was a disaster and in desperate need of foreign support. de Gaulle personally
vetoed the UK application despite resounding support for British membership from the other
members because he saw Britain as preoccupied with US affairs and a proxy for American
interests in Europe rather than a truly independent nation. The EEC’s purpose was to remove
the focus of trade from the USA and promote European prosperity; de Gaulle did not see
how introducing American influence to the community would help this. The rejection made
Britain and Macmillan look weak on the international and domestic stage.
- Various scandals surrounded the Conservative Party by 1964 such as the Profumo affair and
the scandal surrounding the Duchess of Argyle which brought the party’s reputation into
disrepute and hampered its electability. The Profumo affair was a controversy in 1961 which
involved the Minister of War, John Profumo, being alleged to have slept with 19-year-old
Christine Keeler who was also sleeping with a Soviet official which raised concerns over
classified information being leaked to the Soviets through Keeler. Profumo had to resign but
the damage was done by that point.
- The Conservatives were increasingly becoming the party of old especially in light of Harold
Wilson becoming Labour leader after Gaitskell’s death in January 1963 who was increasingly
focused on technological advancements and advancements in modernisation as opposed to
the traditionalist Conservative government. When Macmillian resigned in 1963, he was
replaced by Douglas Home, an ex-peer who embodied the ‘old boys network’ which had
become associated with the Conservative party. Home appeared out of touch and
aristocratic to the electorate in comparison to Wison which made the Conservatives even
less popular among the public. Home was not electable in the same way Wilson was.
Post war boom
- The world economy had taken a drastic hit during the Second World War; poverty was rising,
housing was obliterated from bombing, and countries were in disrepute. After 1945, the
economy especially in Europe accelerated rapidly and outgrew much of the rest of the world
due to trade agreements being struck between European countries to ensure mutual
, strength. An example of this is the Schumann plan which was a mutual agreement between
France and Germany to trade coal and steel with each other which was designed to boost
German economic growth and to limit the appeal of communism within soviet Russia to
Germany. German economic growth was sat at around 20% per year during the postwar
boom.
- In Britain, loans from the United States totalling around 3.75 billion dollars were invested
into the economy to drive a postwar recovery which was seen through the rebuilding of
houses and infrastructure which was destroyed during the Blitz. Rationing was ended in 1954
by the Conservatives as a result of this recovery and growth was at around 4%, a high
number without context but, compared to other European countries, Britain was starting to
fall behind its allies and competitors.
- The Conservatives continued to ride the postwar wave into the late 50s where the affluent
society emerged, and people became more prosperous on the back of rising government
debt and an emerging credit system which enabled the purchase of luxury goods. The British
postwar boom was only truly seen by the consumer; from a government perspective, the
economy was faltering and Britain was in deep trouble unless the economy was
fundamentally rectified.
Balance of payment issues and ‘stop-go’
- Stop-go economics was the British method of controlling the economy during the period
which involved heavy government control of the economy as the economy was either
‘heated up’ or ‘cooled’ depending on how the economy was performing. If the economy was
too ‘cold’ interest rates were cut and taxation was decreased to try and stimulate growth and
activity; on the contrary, if the economy was too ‘hot’ then the inverse is true and interest
rates would go up and taxation would increase to control consumer spending. The result of
this process was that the economy went in circles and very little fundamental growth was
seen compared to the rest of the world. Britain needed fundamental economic reform.
- Balance of payments was increasingly an issue for the Conservatives as Britain was beginning
to run up a vast volume of debt due to limited exports and a high volume of imports. The
BoP issue was not addressed until Labour and Wilson entered parliament in 1964 which
meant that, for 13 years of Conservative rule, the national deficit was allowed to reach 3.5
billion pounds while continuing to run up more debt because of the need to maintain the
welfare state which mandated high government spending which was simply unaffordable
and unsustainable by 1960.
Rising living standards
- Living standards increased in Britain in line with the establishment of the affluent society in
the late 1950s. Wages had increased by more than double during this period from 8 to 18
pounds while the pound had halved in value, so the British people were, on average, better
off than at the end of the war.
- Additionally, Labour mandated in 1950 that electricity should become a basic and affordable
commodity accessible in all homes across Britain which increased living standards and also
paved the way for greater accessibility to household durable goods such as fridges which
require electricity.
- Housing had become more affordable and accessible during the period as well as Macmillan,
when he was housing minister, managed to build 300,000 houses per year which drastically
