A Sixties Social Revolution?

British Society, 1959-1975

Lesson 2

What were the effects

of post-war prosperity?
LO: To describe the
impact of financial
revival in GB by 1959
 Timeline Recap

1955 1956 1957 1958 1960

Suez Crisis reveals
Eden becomes PM. Britain’s limited Harold Macmillan
Conservatives win world status replaces Anthony Compulsory
CND is founded
general election Eden as National service
John Osborne’s Conservative PM ends
Race riots in
ITV, a second and play Look Back in
Notting Hill,
independent Anger symbolises Macmillan’s “Never Production of the
London
commercial TV attack of “Angry had it so good Contraceptive Pill
channel is launched Young Men” on the speech”
Establishment
Key Profile: Harold Macmillan Activity 1

Born/Died Harold Macmillan (1894-1986) was an Eton/Oxford-

educated intellectual, who had served under Churchill
Education during the war years. In 1920, he married Lady Dorothy
– a member of the aristocratic Cavendish family. By
Image 1958, 35 members of the government were related to
him by marriage, including seven of the nine members of
his cabinet. He deliberately cultivated a distinctive
serious-minded and gentlemanly ‘Edwardian’ image. He
Nicknames wore a top hat and white tie, was a member of five clubs
and frequently appeared on the grouse moors. He was
Key Quotes courteous but astute and his contribution to British
affluence led to nicknames like ‘Macwonder’ and
‘Supermac’. When Anthony Eden resigned in 1957,
For/Against Macmillan became Britain's new prime minister. He
successfully won the 1959 General Election and at first
the government enjoyed an economic boom and stable
prices. In foreign affairs, Macmillan strengthened
Anglo-American collaboration and made attempts to join
the European Economic Community.

“Most of our Macmillan's tradition as a social reformer was reflected

in his "wind of change" speech at Cape Town in 1960
people have where he acknowledged the inevitability of African
never had it so independence. The introduction of the system of life
peerages to the House of Lords and the creation of the
good” National Economic Development Council in 1961 were
other examples of unlikely Conservative measures. In
October, 1963, ill-health forced Macmillan to resign
from office.
 Activity 2
The Stop-go economic cycle

Imports exceed
exports and balance
of payments crisis
Description
Government Controls: A sequence of events that
Rising
imports high interest rates followed from government
and wage freezes
attempts to control the
economy. At first an
Go Stop accelerator would be
applied – as had happened
Increase in in 1958 when hire purchase
demand Demand falls
controls were relaxed – but
when this led to inflation
and overseas imports grew
too much, the brakes were
Controls Output
put on – as in the
removed decreases reintroduction of
restrictions in 1960-1
 Background Reading Activity 3

Although it took some time for Britain to adjust to a peacetime economy after the disastrous war
years, the general pattern of the 1950s was one of continued economic improvement. The last
ration books were thrown away in July 1954, and British people began to enjoy higher standards of
living than ever before.
An increase in overseas trade brought high levels of earnings from exports and investments. There
was a huge expansion in electrical and engineering work along with cars and steel. Nearly 5 million
people were employed in service industries by 1960, one in five, and roughly the same number as in
heavy industry.
Economic growth brought rising wages and, in a state of nearly full employment, most people
enjoyed a spectacular rise in income. However, although ”Supermac” could afford to be reasonably
self-satisfied, this rosy picture hides some less positive developments. The growth in wages was
outstripping the rate of increase in production and this brought inflation. The PM struggled to
maintain growth and employment but keep prices steady- “the 64,000-dollar question”.
Government controls were used to curb excessive inflation and taxation remained high, to control
excessive spending that would lead to an increase in imports, and to pay for the rising cost of
social services.
Although high salaries created a large internal consumer demand, they failed to give
manufacturers any stimulus to increase their export trade and reduced workers’ inclination to work
overtime, which would have helped bolster the export industries. While incomes were high growth
rates were lower than elsewhere.
Macmillan was certainly worried. In a speech in 1957 he said “What is beginning to worry some of
us is ‘is it too good to be true?’ Or perhaps should I say ‘is it too good to last’?”
Overall the period was one of optimism . The British enjoyed more jobs, more money, more goods,
better housing and the provisions of the new welfare state.. Such were the circumstances that
heralded the arrival of the 1960s. Sally Waller 2008
Examining the statistics Visible trade provides income through
the direct buying and selling of goods,
while invisible trade includes shipping,
UK Balance of trade in £m banking, insurance etc
Balance of Balance of Overall trade
visible trade invisible trade balance “In line with rest of
1946-50 -160 +104 -56 Europe Britain enjoyed
1951-55 -345 +326 -19 high growth rates in the
postwar decade”
1956-60 -94 +226 +132
Historian Sally
Waller in 2008
Activity 4
“Britain’s rate of economic
1. What happened to the UK’s overall trade
growth 1950-1970 was ½ to
balance?
3/5ths of that of other
2. What would this suggest? industrialised countries”
3. Do you think politicians would have been Asa Briggs, 1983

Percentage of households
owning consumer goods
pleased with these trade figures? Explain 50
your answer.
40
4. What happened to the ownership of 30
consumer goods? 20
5. Why do you think people disagree in their 10
interpretations of the evidence? 0
Washing Fridges Motor cars
Machines

1955 1965
 A comparison of industrial production, 1950 =100
1952 1955 1957 1959
7 West Germany 126 179 204 225
wage increase (%)

6 France 110 131 156 170

Average annual

5
Italy 117 153 177 202
4
3 Netherlands 103 134 143 158
2 USA 111 124 127 133
1
UK 101 121 123 129
0
1948-1958 1958 1959 1960

Comparison of shares of world trade, %

1950 1951 1959 1962
UK 25 22 17 15
USA 27 26 21 20
West Germany 7 10 19 20
Japan 3 4 7 7 Worker
productivity by
1960, 1950 = 100
Activity 5 180
160

Productivity
Using the information in the tables and what you have read, 140
120
prepare a report on the state of the British economy in 100
1959, including: 80
60
• Outline position, as you see it – with factual support 40
20
• Offer your own explanation of this state of affairs 0
British German French
Consider what measures you would recommend. worker Worker worker
Independent Study

Please read the Guardian article

Harold Macmillan: Unflappable
master of the middle way by
Vernon Bogdanor written just
after Macmillan’s death in 1986.
Be prepared to respond to this
next lesson
Harold Macmillan Unflappable master of the middle way
Vernon Bogdanor The Guardian, Tuesday December 30 1986
Harold Macmillan was prime minister (from 1957 to 1963) in a world very different from our own. It was a world of consensus politics -
now derided as much by Conservatives as by the left. "For me," Mrs Thatcher said in 1981, "consensus seems to be the process for
abandoning all beliefs, principles, values and policies." Yet under Macmillan, employment was neglible and prices stable: government
worked amicably with organised labour, and the living standards of trade unionists increased far more rapidly than they were to do in
the 1970s and 1980s. Affluence and a rising standard of living were taken for granted, and Britain's political and constitutional system
was widely admired as a symbol of stability and ordered progress.
Harold Macmillan dedicated his political career to humanising the Conservative party, and he could say after his election victory in
1959, "The class war is obsolete." By then, the hard-faced Conservatism of the pre-war years, to be resurrected again in the late
1970s, was but a distant memory.
In the 1930s, Macmillan had been one of the few Conservatives to stand out against the narrow orthodoxies of the day in both
domestic and foreign policy. He rebelled against the doctrine that the humiliation and misery of prolonged unemployment were the
product of impersonal forces which governments could do little to alleviate and he allied himself with Churchill in his campaign for
armed resistance to Hitler. Until war came he remained a lone and eccentric backbench rebel. But his fortunes changed when
Churchill became prime minister in 1940. At 46 Macmillan became a junior minister. "You and I owe Hitler something", he told
Churchill. "He made you Prime Minister and me an under-secretary. No power on earth, except Hitler, could have done either." It
needed a world war to bring Macmillan into government, it took Suez (in 1956) to make him prime minister. The crisis itself called
Macmillan's judgment severely into question, for it was he who hysterically insisted that he would pawn every picture in the National
Gallery rather than accept humiliation at the hands of Nasser it was he who pressed for military action without any assurance of
American support: and eventually it was he who, having miscalculated the financial position, threatened to resign if there was not an
immediate cease-fire.
In Harold Wilson's caustic phrase, Macmillan at Suez was "first in, first out." Yet he emerged from the wreckage as a resolute figure.
His rival, RA Butler, always doubtful of the wisdom of armed intervention, only enhanced his reputation as an appeaser.

Entering Downing Street in January 1957, Macmillan succeeded to a grim inheritance, for Suez had left the Conservatives dispirited
and demoralised. He told the Queen that he did not think his administration could last for more than six weeks. Yet recovery was
rapid, and in October 1959 the Conservatives were returned to power. It was the first time in the period of mass suffrage that a
government had actually increased its majority twice in succession.
Macmillan's achievement was partly one of style. A nervous and sensitive man, his public posture of unflappability served to reassure
the electorate that Britain remained strong and secure. Yet, as a radical realist, Macmillan re-orientated British foreign policy,
repairing the "special relationship" with the United States, and, with his "winds of change" speech at Cape Town in 1960, distancing
himself from apartheid. He speeded the process of decolonisation, and was the first British prime minister to appreciate that Britain's
future lay with Europe.
But baulked of his ambition to lead Britain into the EEC by de Gaulle, Macmillan's greatest achievement in foreign policy lay in
hastening the thaw in relations with the Soviet Union in the post-Stalin, post-Dulles world. The nucler test-ban treaty of 1963
represented the culmination of his efforts, eliciting tributes from both Kennedy and Khrushchev to his skill and patience as a
negotiator.

In domestic policy, Macmillan's central concern was to avoid mass unemployment. As MP for Stockton between the wars, he had
learnt "lessons which I have never forgotten. If, in some respects, they may have left too deep an impression on my mind, the gain
was greater than the loss." In the 1930s, he had been an advocate of planning and his book The Middle Way, published in 1938, laid
the foundations for a form of society neither socialist nor classically capitalist, but combining freedom of enterprise with public control
so as to secure the benefits of both.
In 1951 Macmillan had become minister of housing, achieving the target of 300,000 houses a year and so helping to create the
"property-owning democracy" which lay at the heart of Conservative thinking. Yet in economic affairs, the Conservatives seemed the
party of economic liberalism and not planning. Assisted by the fall in world commodity prices and an improvement in the terms of
trade, controls could be removed without inflation resulting. From 1955 onward, however the British economy was bedevilled by a
series of exchange crises which seemed to show that sterling could only be defended in a period of fixed exchange rates through
strict control of the money supply. This was a policy favoured by Macmillan's first chancellor, Peter Thorneycroft, and by his junior
ministers, Nigel Birch and Enoch Powell - the latter providing the doctrinal foundation for polices thought obsolete in the 1950s but
newly-fashionable 20 years later. Macmillan was not impressed. "When I am told... that inflation can be cured or arrested only by
returning to substantial or even massive unemployment, I reject that utterly."

Dismissing the resignation of his entire Treasury term in January 1958 as "little local difficulties", he sought for an alternative which
could ensure both full employment and price stability. That alternative was to be found in the planned pursuit of economic growth,
buttressed by an incomes policy.

In the early 1960s, Macmillan adopted a new approach to the economy. In 1961 Selwyn Lloyd, as chancellor, announced the birth of
Neddy, declaring: "I will deal first with growth in the economy. The controversial matter of planning at once arises. I am frightened of
the word." The move to planning, and the struggle to establish a voluntary incomes policy through the National Incomes Commission,
were an attempt to realise the philosophy of the Middle Way in the very different conditions of the 1960s. Regional planning
machinery was established, "Little Neddies" set up to plan individual industries, and Macmillan's successor, Sir Alec Douglas-Home,
accepted the recommendations of the Robbins Report with its commitment to university expansion.

By the time they left office in 1964, Conservative economic policy had been transformed. In place of the crude attempt to control the
economy through the structure of interest rates, there was a whole complex of economic regulators. In place of the rule-of-thumb
nostrums of the treasury, a planning staff had been established, and economic experts were beginning to be introduced into
Whitehall. In the words of Andrew Shonfield: "It may be said that the intellectual and administrative preconditions for modern
capitalist planning had been created, or were in course of being established". For much of this achievement, Macmillan deserves the
credit.
Until struck down by illness in October 1963, Macmillan seems to have intended to lead the Conservatives into another general
election, one which they might well have won.

During the long years of retirement, Macmillan mostly refrained from public comment on political matters, although he spoke a
number of times in favour of European unity. In 1976 he called, as he had done in the 1930s, for a coalition government to secure
economic recovery. In 1980 he gave a broadcast in which he criticised, in carefully coded language, Mrs Thatcher's policy of deflating
in the middle of a world recession.

He remained a sardonic and good humoured spectator of contemporary affairs, taking pleasure in the various honours which came
his way, especially the chancellorship of the University of Oxford, an office to which he had been elected in 1960 and which gave
ample scope for the display of his characteristic qualities of wit and generosity.

In 1984 Macmillan accepted a hereditary peerage, becoming Earl of Stockton, and his maiden speech in the Lords in November 1984
was a masterly restatement of his Middle Way philosophy while its combination of vision and professionalism delighted the House.

Macmillan's legacy to British politics was complex. The methods of economic management which he advocated were continued bv
the Wilson and Heath administrations, but they did not succeed in stemming Britain's economic decline. Macmillan never confronted
the deeper sources of Britain's economic difficulties, but then neither have his successors.

In foreign affairs, Macmillan was unable to secure a new role for Britain and, although Britain entered the EEC in 1973, it has still not
fully come to terms with Community membership. The hopes which detente aroused remain, on the whole, unfulfilled while
Macmillan's part in returning Russian prisoners of war to Stalin in 1945 will need explanation to his biographer.
Macmillan's failure was in part a result of the ambiguous and indirect methods which he felt bound to pursue. He had to reassure the
Tory right that he was maintaining national prestige while in reality undertaking a policy of colonial withdrawal he had to mouth the
rhetoric of economic liberalism while remaining at heart a dirigiste. Unable or unwilling to confront the electorate directly, he could not
mobilise popular support for his aims and, like Disraeli, the Conservative leader whom he most resembles, he found Britain "a very
difficult country to move," with more disappointment than success attending the attempt.

More imaginative and fair-sighted than most of his generation, Macmillan stood for much that is best in British political life - its
decency and tolerance, its dislike of puritanism and cant. If on occasion he was prone to worldliness and cynicism, he nevertheless
helped to create a society which provided, for the vast majority of British people, a happier and more secure life than they had ever
known. It was an achievement that seemed easier in the 1950s than it does today, at a time when his political successors have
dismantled so much of his legacy.