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Britain's Welfare State, 1951-79

During Winston Churchill's second tenure as prime minister (1951-55) unemployment and inflation remained low and the annual economic growth ratedwas reasonably high – at around 3 percent. A 1951 Gallup poll recorded a clear thumbs down for all nationalized industries apart from coal, which had long been regarded as a special case.

During the Churchill administration the trucking, iron and steel industries were privatized, but other industries remained nationalized. So too did the nation's comprehensive system of "cradle to grave" social insurance and health care. Two changes in health care came in 1952 with a prescription charge of one shilling and a £1 flat rate fee for ordinary dental treatment.

Prime Minister Anthony Eden

Churchill was followed by Anthony Eden as prime minister in 1956, and he was followed by fellow conservatives Harold Macmillan and Sir Alec Douglas-Home until 1964. During the conservative reign both the national debt and Britain's share in international trade and manufacturing continued to decline. Under the conservatives, economic growth rate remained about half that of Germany or France.

Christopher Hitchens, by the way, describes this as a time of,

...hectic and greedy modernistic metamorphosis: tearing up the old railway line and cutting great new swaths of motorway through hill and forest and dale; licensing the commercial principle in everything from televisions to elections, contemptuous of tradition; handling the skylines and harbors of our grand and blitzed old seaports to builders and speculators who swiftly made them unrecognizable to the veterans who had made those place names honored and famous. (Hitch-22, p. 43)

The Labour Party returned to power in 1964, with Harold Wilson as prime minister, until 1970. Regarding health care, prescription charges were abolished in 1965 but reintroduced in 1968. Britain's old and inefficient industries were still creating a balance of payments problem, which Wilson had inherited – with labor unions unwilling to reduce their wage demands. Britain's economy went into recession. British economists had been advocating devaluation of the pound to meet the reality of Britain's position in the economic world, and Wilson had been resisting, but he finally gave in and devalued the currency by 15 percent.

The conservatives returned to power in 1970, with Edward Heath as prime minister. Richard Nixon as President of the United States and the U.S. was burdened by economic difficulties, his devaluation of the dollar in 1972 and the recession beginning in 1973. In 1972 the Heath administration tried to reflate the economy, which has been described as giving a new impetus to inflation. Then came the Yom Kipper War in October, 1973, and a quadrupling of oil prices, which has been described as pushing Britain's inflation to 16 percent in 1974. Britain under Heath was suffering from economic stagnation and a re-emergence of high unemployment.

Harold Wilson returned as prime minister in 1974, followed by his fellow Laborite James Callaghan in 1976. Callaghan tried to combat inflation through wage restraint, but this was rejected by the trade unions in a succession of strikes over the winter of 1978-79 known as the Winter of Discontent. The labor unions were again sabotaging their political leaders. Disgust with the trade unions rose as did support for the conservatives.

In 1979, Callaghan was out, and the conservative Margaret Thatcher became prime minister.

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