How successful was the 1945-51 labour government

A major crisis was to hit the Labour Government. After loans taken from the USA, they promised to allow the pound to float on the stock market and be able to be converted into international currencies. This however was not as successful as it was thought it should be. Due to the weakness of the British economy, people poured all their money into American dollars, this caused the value of the pound to plummet. Labour realised this was due to their balance of payments, and the supplies didn't equal the production.

To combat this, the government set up the Ministry of Economic Affairs to be controlled by Cripps and also reshuffled the central government. This however didn't solve the problem, and later in that year, Labour started to use the national budget stringently to reduce overall demand in the economy. But the government was wary, and started to take more out of the economy through taxation than put back in with public expenditure. Labour started to take the keynsian approach, which meant total consumption, and the government tightly controlled investment. The second of these methods slowly became dominant and faith was lost in their planning skills.

From 1947, it was felt that a crisis was around the corner and a massive campaign was designed to persuade the public that exports needed to dramatically increase. The government also set up the Anglo-American council, which brought on the adoption of American methods, which were seen as superior in producing more from less. This method was effective, but many people wanted to concentrate on their own business rather than national effort. The ...