University of Biskra

Division of English Teacher : Mrs. Zerigui

Course : British Civilisation Level : Master one (Civ. &Lit.)
Student’s name : Sayah Ahmed Khalil Group : 01

Second Semester Test

- In an essay, discuss the post-war austerity policies and its implications on both the
economy system and social life in UK.

Essay:

On 8 May 1945, Victory in Europe was celebrated with universal joy and relief across
Britain after six years of conflict and sacrifice. However, the country and its people still faced
many challenges. One of the main challenges facing the UK after World War II was the
economic position of the country and the social life The national debt had risen, one in three
houses had been destroyed by bombing whilst factories and shops had also been destroyed in
large numbers, Britain suffered military and civilian deaths during the war. Many others were
physically and mentally scarred by the war and unable to resume normal life. This period saw
the end of the British Empire. Its position in the world has deteriorated as it became
impossible to compete with the US economy, wartime rationing had to be continued due to
shortages of food and raw materials. This period in UK history is often called the Age of Austerity. In
this essay, we will discuss the austerity policies and its implications on both the economy system and
social life in UK.

Austerity is a set of political-economic policies that aim to reduce government budget

deficits through spending cuts, tax increases, or a combination of both. ... The measures are
meant to reduce the budget deficit by bringing government revenues closer to expenditures. In
UK the years of the Attlee government between 1945 and 1951 are commonly regarded as
years of austerity, symbolised above all by the policies of Stafford Cripps, Chancellor of the
Exchequer. The 1940s austerity policies was driven by two imperatives: to correct the balance
of payments, and to invest in order to expand the economy. Contemporary arguments about
the balance of payments focused on the private sector and the current account, the slogan of
‘export or die’ obscuring the extent to which foreign exchange was flowing into overseas
military spending and foreign investment. But within this framing of the issue, policy was
highly successful, with the payments position corrected, until the onset of the Korean War
brought further problems. The improvement in the current account was greatly aided by the
inability of the devastated economies of Germany and Japan to fully compete in expanding
world markets, and by devaluation of the pound in 1949. But, while conditions were
undoubtedly favourable, the political commitment to correcting the payments position, despite
the consequent starving of the powerful demands of the home market is striking.
 The 1940s is the rapid post-war growth of the economy which resulted increased revenues
(despite lower tax rates) and reduced expenditure on employment-related social security due
to austerity policies, the labour government vigorously introduced a programme of reform and
reconstruction despite post-war austerity and financial instability. Education and housing
issues were addressed as well as the nationalisation of disorganised pre-war industries. Gas,
electricity, coal and (controversially) the relatively efficient iron and steel industry were all
brought under government control, along with both railway and road transport infrastructures.
In social life austerity was rationing essential by avoiding the unimportant things in everyday
life such as: food, clothing, fuel and other commodities had been vital during the Second
World War, also during the war the coalition government decided that they would try to
improve life for the British people after the war. Sir William Beveridge produced a report in
1942 that identified ‘Five Giants’ that needed to be addressed to improve life for the British
people: (want)the lack of the basic things needed to live, like food, (ignorance) the lack of a
proper education, (disease) the lack of proper medical care for everyone, (squalor) poor living
conditions, (idleness) not having a job

The general conclusion from this discussion is that ‘austerity’ aimed at ‘rebalancing’ the
economy in favour of exports and investment and away from consumption is easier in
circumstances of excess demand, where government has leverage to direct resources in the
desired direction. In a situation of excess supply, taking resources out of public consumption
and from the incomes of the poor does nothing directly to encourage the growth of exports or
investment.