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The Labour Government 1945 -51 - The Welfare State


The Five Giants - Unemployment

In the 1930s unemployment had been very high and many people had suffered in poverty.

The Labour Party's answer to avoiding high unemployment was to nationalise certain industries.

Nationalisation was a long-held belief of the Labour Party, putting people before profit. The principle was that if industry was owned by the people it could be run for their benefit and profit would be shared and not simply pocketed by the individual (as in private industry).

The Labour government made a commitment to full employment and nationalised many key industries in an attempt to fulfil their promise.

Labour introduced 'boards', or public corporations, to run these industries.

These boards were given the necessary freedom to operate outside of government 'interference' and they were only indirectly answerable to Parliament.

Nationalised British Industries

Year Industries Nationalised
1946 Bank of England
1947 National Coal Board
1948 Railways
1950 Iron and Steel
1968 British Leyland Motors
1969 British Telecom

Positive impact

Conditions in many work places improved, especially health and safety due to government management, for example the mining industry. Also, the National Coal Board offered sick pay and holiday pay.

Unemployment was very low in the post–war period.

Negative effects

Although unemployment was low, below 3%, the reason for this was that American loans flowed into Britain.

Many industries were badly run and cost the government - and therefore taxpayers - money. These industries were privatised as they were perceived to be 'failing industries' in the 1980s.

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