Post-war Prosperity and Conservative Dominance, 1957-64

Eden stepped down after the Suez crisis in early 1957, on the grounds of serious health reasons. Macmillan took over, although Butler was another candidate - Mac was more popular overall among other reasons.

Inflation rising. Wages ahead of productivity. Run on the pound.
Thorneycroft (chancellor) wanted to implement early version of monetarism. Other cabinet ministers, led by Macleod, disagreed - unemployment and cutbacks on housing. Stop-go argument.
Mac wanted expansionist economy - overruled Thorneycroft's spending cuts - he resigned with Powell and Birch - consensus won.
Mac recovered well.

Britain took lead in forming European Free Trade Area. Not able to match growth of EEC.

Bevanites vs. Gaitskellites. Over opposition to leadership from TUs and nuclear weapons. CND formed 1958. Clause Four.

For many, had been inevitable since Mac came to power. Was able to call election when the economy was good. Majority of 100.

Europe's, especially W.Germany's, growth was far ahead. Trade with Empire and Commonwealth not enough.

Gov. worried about overheating economy. Pay pause to hold down inflation 1961-62 and IMF loan.

Mac set up National Economic Development Council in an attempt to get cooperation between government, employers and unions.

Mac's cabinet reshuffle. Sacked 7 senior ministers. Replaced chancellor, Lloyd, with Maudling - thought to be rising star.

Symbol of failure in economic modernisation. Still stuck in stop-go cycle. Serious setback for Mac's economic plans.