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  2. Post-war Britain • The Loss of Empire • a. India • b.Egypt • The Search for Economic Well-Being • Conservative Rule • Industrial Decline • The Thatcher Revolution • Attempts at Peace in Ireland • Conservative Decline and the Rise of New Labour • Labour’s Return to Power • Labour’s Second Term • Labour’s Third Term

  3. Post-War Reconstruction • The immediate post-war period was one of severe privation. More than 4 million houses had been destroyed or badly damaged; the result was an acute shortage of housing, especially after soldiers returned from the war. Commodity shortages meant the continuation of wartime rationing. Rationing also had to be extended to include items that had not been rationed during the war. • For the first time since the 18th century, Britain became a debtor nation. The loans it had taken out from foreign nations to finance the war exceeded the money it could raise in taxes and other revenues. Without U.S. and Canadian aid, Britain would have defaulted on its considerable debts. Even so, the flood of wealth out of the country was considerable. The winter of 1947 was probably the lowest economic point of the century. Fuel shortages, gas rationing, inadequate food and shelter, and one of the coldest seasons on record all added to the nation’s problems. Unemployment reached 2.3 million, and the monetary crisis worsened.

  4. On the political scene, to the surprise of the world, Churchill was swept out of office when his Conservative Party lost to the Labour Party in the elections of 1945. The Labour government relaxed restrictions on trade unions and embarked upon a program of nationalization. This program resulted in government ownership of the Bank of England and of the coal, electricity, and gas industries. The government consolidated the railroads into British Rail and the airlines into British Overseas Airways Company (BOAC). The most controversial takeovers were the iron and steel industries, which were profitable private enterprises. The government immediately encountered the difficulties of effectively running complicated industries, many of which were badly in need of modernization. Efforts to make these businesses profitable and competitive in the international market were hampered by outdated equipment and inadequate facilities. • In 1948 the most far-reaching of Britain’s social welfare programs was established. The National Insurance Act of 1946 consolidated benefits involving maternity, unemployment, disability, old age, and death. The National Health Service, set up in 1948, provided free medical service for Britons. British socialists now boasted that citizens were cared for “from cradle to grave.” However, the price tag for both programs was far greater than anyone had anticipated, and the government immediately cut back on some services.

  5. The Loss of Empire • After the war, Britain still played an important role in international affairs. In 1945 it became a permanent member of the Security Council of the United Nations. (The United Nations, or UN, is an international organization of countries that was founded in 1945 to promote world peace and cooperation.) As a member of the UN, Britain served as one of the countries that continued to occupy and rebuild Germany. The new Labour government attempted to maintain Britain’s role as a world power by supporting a large overseas military presence in both the British colonies and Europe and by continuing a high level of military spending. • Tensions grew between Communist nations under the leadership of the USSR and capitalist countries led by the United States. Britain developed its own nuclear weapons and cooperated closely with the United States in a policy that relied on using the threat of nuclear attack to discourage aggression by potential enemies. For many Britons, the USSR replaced Germany as the national enemy.

  6. India • In India a movement for independence had been gathering momentum for decades. Although the British concluded that they could no longer rule in India, they did not feel that they could simply abandon their centuries-old ties. India was religiously divided, and the two largest groups—Hindus and Muslims—were increasingly antagonistic toward each other. The attempt to create one dominion of India was undermined by the demand of the Muslims for their own separate state. • After the war, the Labour government abandoned efforts to mediate the conflict and resolved to end the British presence in India as quickly as possible. The government opposed colonialism and felt little political attachment to India. The costs of continued peacekeeping were also keenly felt at a time when there was rationing at home. A heroic effort by the last governor-general of India, Louis Mountbatten, created what appeared to be a workable division between largely Hindu India and Muslim Pakistan, which has since split into the nations of Pakistan and Bangladesh. The British withdrawal in 1948 resulted in increased religious tensions and a terrible civil war. The civil war resulted in the deaths of between 250,000 and 500,000 people, among them Gandhi, who was assassinated by a Hindu extremist opposed to the division of India. The abandonment of India was a blow to British prestige and the beginning of the total disintegration of the empire.

  7. Mohandas Gandhi Mohandas Gandhi Indian nationalist leader Mohandas Gandhi spent his life campaigning for human rights in India. His strategy was to use a combination of passive resistance to and no cooperation with the British, who ruled India. Gandhi said his techniques were inspired by the Russian writer Leo Tolstoy, by American writer Henry David Thoreau, and by the teachings of Jesus Christ. In 1947 Gandhi’s pacifist efforts brought an end to British rule in India.

  8. Egypt • The next crisis for the empire occurred in Egypt, where British domination of the Suez Canal sustained Britain’s role as a world trader. Even before the war, British troops had withdrawn to a zone around the canal, and Britain had ceased its once active role in Egyptian government. Relations were complicated by the creation in 1948 of a Jewish state, Israel, in British-controlled Palestine. Both Arabs and Israelis accused the British of taking the other’s side, and both wanted Britain out of the Middle East. • In 1956 Egyptian leader Gamel Abdel Nasser seized the canal. Britain, with military assistance from France and Israel, attempted to retake the canal and almost succeeded in doing so. However, the United States and the USSR, who were caught unaware by the Suez crisis, insisted that British, French, and Israeli forces withdraw from the canal area. The Suez crisis saw Britain lose all of its influence in the region and raised at home the idea that Britain was no longer a great power.

  9. During the 1960s colonies throughout the world rapidly acquired their independence. In 1961 South Africa withdrew from the Commonwealth after controversy developed within the Commonwealth concerning apartheid, South Africa’s policy of racial segregation. Other African territories became self-governing states and joined the Commonwealth of Nations. Ghana, Nigeria, Uganda, and Kenya—all large African states under British control—developed into republics and adopted British forms of parliamentary government, law, and finances. • The Commonwealth provided an international sphere of influence for Britain during world crises and remained an important economic union. Although Britain was no longer a superpower, the country’s traditional role in Africa and the Middle East made it an obvious mediator of conflict. London remained the financial center of choice for petroleum-rich states as well as the educational center for the sons of the ruling elite in the former colonies. The Commonwealth tied together the member nations by automatically granting British citizenship to citizens of Commonwealth countries, a policy that ended in 1983. British emigration to the former colonies of Canada, Australia, and New Zealand remained a significant dimension of its population history as did the even higher immigration into Britain from its former Asian and African possessions. This immigration created racial tensions in Britain’s largest cities. While the Race Relations Act of 1968 prohibited discrimination, racial violence increased, especially among youths

  10. Gamal Abdel Nasser Gamal Abdel Nasser led a nationalist movement in 1952 that ousted the Egyptian monarchy and transformed Egypt into a republic. Nasser became leader of Egypt in 1954 and subsequently negotiated an end to Britain’s 72-year occupation of Egypt. He was president of Egypt from 1956 until his death in 1970. His accomplishments included the construction of the Aswān High Dam, the institution of land reforms, a program of industrialization, and the restoration of Egyptian self-government. Nasser also pursued policies of Arab unity and socialism.

  11. The search for economic well-being • Conservative rule • In 1951 the Labour Party lost its majority in Parliament, and the Conservative Party regained control. The Conservatives led the nation toward renewed prosperity. They returned the iron and steel industries to private ownership, but left intact the major components of the welfare state. Tight government control on imports and on government spending, high rates of income tax for the wealthy, and investment in new industries such as automobiles and chemicals finally created a surplus in British trading accounts. Private enterprise led the growth of what was being called “the affluent society.” The value of the goods that workers could buy with their wages rose by 40 percent during the 1950s. Two symbols of affluence—cars and televisions—soon became so common that the government undertook a program of motorway expansion. In addition, private investors created the first independent television network to compete with the government-owned British Broadcasting Corporation (BBC).

  12. The accession of young Queen Elizabeth II in 1952 provided a ray of light toward a brighter future, as did the extraordinary accomplishments of British sportsmen around the world. In 1953 a British expedition scaled the world’s highest mountain, Mount Everest; another British expedition crossed Antarctica; and in 1954 British athlete Roger Bannister became the first person to run a mile in less than four minutes. In the early 1960s, British popular culture swept the world. For a time the United Kingdom replaced the United States as the leader in fashion, style, and especially music, with popular music groups such as the Beatles and the Rolling Stones emerging as the dominant rock groups of the day.

  13. Industrial decline • Almost imperceptibly, Britons came to realize that their nation was in decline during the 1960s and 1970s. Early recovery from the war led to an optimism that could not be sustained as other European countries staged their own revivals. Despite being severed in two, Germany emerged once again as an industrial and trading power. Under the energetic leadership of Charles de Gaulle, France charted a course of independence from the United States by refusing to join the North Atlantic Treaty Organization (NATO), a defensive organization formed by the United States and a number of European countries to counter the military strength of the USSR. • For a time, de Gaulle managed to keep Britain out of the European Economic Community (now the European Union), an organization designed to promote economic integration among European nations. De Gaulle vetoed Britain’s membership applications in 1961 and 1967, largely because of Britain’s close ties with the United States. Britons themselves remained split over closer ties with the continental powers. It was not until 1973 that Britain finally became a member of the European Community.

  14. By the mid-1960s Britain was mired in an economic slowdown. Massive dock strikes in both 1966 and 1967 severely affected British exports. In an effort to prevent the flow of money out of the country, the government devalued the currency. Devaluation lowered the value of British currency in relation to foreign currency, making it less expensive for Britain to pay its foreign debts. It gave a boost to British exports by making British goods less expensive on the foreign market. However, it also made imported products more expensive for British citizens and lowered international confidence in Britain’s currency. • Industries in which Britain had been dominant for centuries were decaying rapidly. Shipbuilding, textiles, coal, and steel, all of which had been bywords of Britain’s Industrial Revolution, were no longer competitive. Each was beset with low productivity, high labour costs, and outdated plants and machinery. Industrial relations between workers and employers were at an all-time low, as workers staged hundreds of strikes, work stoppages, and deliberate slowdowns.

  15. Crisis came in 1973 when oil-exporting nations in the Middle East dramatically cut shipments to pro-Israeli nations following the Arab-Israeli War. Oil prices quadrupled, forcing British industries to use more coal. This was the opportunity for which miners had waited. Miners were dissatisfied because they opposed the government’s wage controls as well as the policy of closing down unprofitable mines at the cost of miners’ jobs. Now the miners introduced a ban on working overtime and finally began an all-out strike to pressure the government to abandon its policy of legislating limits on wage increases. In response, Prime Minister Edward Heath introduced emergency legislation that limited the working week to three days and instituted national electrical power cuts to minimize the amount of coal used in power plants. • The election of 1974 was fought on whether government would restrain the unions. The Labour Party won a narrow majority by promising not to interfere with the unions. With legal limits removed, the unions won wage increases. Workers now had more money to spend, while the amount of available goods on the market remained the same. As a result, prices for products began to rise, and double-digit inflation ensued. Food prices rose 20 percent in 1973 alone. • Wages and prices spiralled out of control. Only a supply of oil drilled from the North Sea off the coast of Scotland saved Britain from a crisis over the payment of its foreign debts. Even with the new supply of oil, the government raised taxes on income and on consumer goods to finance raises in wages that had been negotiated with union members in nationalized industries. The taxes left less and less for reinvestment. In 1979 an arrangement between the Labour Party and the unions to keep wage demands moderate broke down, and another round of strikes took place

  16. The Thatcher revolution • The Conservatives capitalized on the situation to win the election in 1979 under their newly chosen leader, Margaret Thatcher, Britain’s first female prime minister. Thatcher was a strident Conservative, and she was determined not to give in to the unions or change from the course she had charted to revive the British economy. Thatcher based her policy on the theory of monetarism. This theory involved strictly controlling the money supply to reduce inflation, lowering tax rates to encourage investment, and minimizing government intervention in industry to remove restrictions on the expansion of businesses.

  17. The Thatcher government began privatizing industry, relaxing government regulation, and removing government subsidies. This was strong medicine and initially led to an even more rapid decline. By 1981 both interest rates and unemployment reached post-war highs, and a growing number of British firms faced bankruptcy. Pressure mounted to reverse government policy, and even members of Thatcher’s own party threatened to revolt. Thatcher refused to abandon her policies. • A political crisis was averted only after war broke out when Argentina invaded the Falkland Islands, a British dependency in the South Atlantic that is also claimed by Argentina. The Falkland War released a mood of defiance in Britain in the wake of decades of international setbacks. Following Britain’s victory in the war, the Conservatives won a resounding electoral victory in 1983. However, their 150-seat majority came almost entirely from the southeast, where the benefits of monetarism were felt most.

  18. The successes of Thatcherism were tempered by the new social divisions it created. Scotland, Wales, and northern England all became economic backwaters; their industrial bases were in ruins, and an entire generation of workers was unemployed. Moreover, the new wealth that monetarism created—in the financial industry, real estate, and technology—led to many displays of luxury among the newly rich. The new wealth contrasted sharply with the loss of income experienced by many inner-city residents and unemployed middle-aged males. Conservative support slipped in the polls, and members of the party revolted against Thatcher, who resigned in 1990.

  19. Attempts at Peace in Ireland • In Ireland, the uneasy settlement that had kept Northern Ireland part of Britain exploded in the late 1960s. In 1968 Northern Ireland’s Catholic minority launched a series of protests against discrimination in employment and housing. The protests led to increasing violence between Catholic and Protestant groups. British troops were sent to keep the peace in cities such as Belfast, which had large concentrations of Catholics among the majority Protestant population. These troops became the target of violence, and guerrilla warfare followed. Beginning in 1973 the Irish Republican Army (IRA) targeted prominent sites in England, bombing subway stations, department stores, and tourist locations.

  20. For the next 25 years Catholic and Protestant paramilitary groups waged a deadly battle. Catholics fought to create a single Ireland; Protestants fought to maintain union with Britain. Almost every effort toward peace was sabotaged by acts of violence by one side or the other. By the early 1980s, hunger strikes conducted by IRA prisoners in Northern Ireland heightened political tensions and fuelled fears that the province’s moderate Catholics would become radicalized. These concerns led the British government to pursue a policy of close cooperation with the Irish government to achieve peace in Northern Ireland. In 1985 Thatcher and Irish prime minister Garret FitzGerald signed the Anglo-Irish Agreement, which gave Ireland a consultative role in the administration of Northern Ireland. • Anglo-Irish cooperation provided fresh momentum to the peace process, and in 1993 the British and Irish governments issued a joint peace proposal called the Downing Street Declaration—a document intended to form the basis for peace negotiations. In an important breakthrough, the IRA announced in 1994 that it would suspend its paramilitary operations in favour of peace talks. However, British demands that all-party peace talks could not proceed until the IRA began disarming were rejected by the IRA, and in 1996 the IRA broke its cease-fire with a renewed campaign of violence.

  21. IRA Cease-Fire The Irish Republican Army (IRA), a paramilitary organization dedicated to fighting British rule in Ireland, laid down its arms on August 31, 1994, to promote a peaceful settlement with Britain. Gerry Adams, head of the IRA’s political arm, Sinn Fein, said the struggle to end British rule in Ireland had entered a “new phase.”

  22. Conservative Decline and the Rise of New Labour • Thatcher’s Conservative successor as prime minister, John Major, inherited a badly divided party, a country that had grown tired of Conservative rule, and a major dispute over the European Community, which was moving toward greater integration. In 1991 the major European powers agreed on the Maastricht Treaty, which created the European Union (EU) and took the next steps toward the establishment of a single economic union. The treaty tied the exchange rates of European currencies together and proposed to create a single, unified currency, the euro, in 1999. It was proposed that monetary policy follow the lines that had already been adopted by Britain. However, other aspects of the EU’s social and economic policy were bitterly opposed by Thatcherite Conservatives as being too favourable toward labour and too expensive for the government. John Major John Major was elected prime minister of the United Kingdom in 1990 as leader of the Conservative Party. He served until 1997, when he was defeated by the Labour Party headed by Tony Blair.

  23. Major worked hard to keep his own party together and to maintain the loyalty of key ministers. There was widespread expectation that Labour would return to power in 1992, but Major surprised the pollsters and many in his own party when the Conservatives won re-election. However, voters soon lost confidence in the Conservatives. In the following year the government’s approval rating sank to just 18 percent despite strong economic growth and a new peace initiative in Northern Ireland. • The loss of the 1992 elections had a profound impact on the Labour Party. For nearly a decade, Labour had been attempting to moderate its policies and distance itself from ties to the unions. It developed a new platform that would build upon Britain’s economic recovery, but that would also allow a more equitable distribution of the new wealth that was being created. • In 1994 the Labour Party elected Tony Blair, a young lawyer, as its leader. Under the title New Labour, Blair insisted that his party abandon its nearly century-old commitment to creating a socialist state. Blair benefited immediately from a series of scandals involving Conservative ministers and Members of Parliament. The public spectacle surrounding Prince Charles and Princess Diana, whose marital infidelities were openly discussed on national television and who were finally divorced in 1996, also hurt the Conservatives, who were strong supporters of the monarchy. Despite the continued economic boom—by 1996 inflation had nearly disappeared, unemployment was the lowest in Europe, and growth the highest—Labour led the Conservatives in polls by a significant margin.

  24. Labour’s Return to Power • The general elections of 1997 gave the Labour Party the greatest landslide victory of the century and its largest-ever majority of 179 seats in the Parliament. The Conservative Party suffered its worst electoral defeat of the century, and John Major resigned as party leader. As the United Kingdom’s youngest prime minister since the 19th century, Blair seemed to speak for a new generation and a new Britain. In 1994 British lawyer Tony Blair became the leader of the British Labour Party. He worked extensively to reorganize the party and to increase its popularity. In 1997 the Labour Party won a landslide victory in British national elections, and Blair became prime minister

  25. Blair attempted to maintain his centrist approach to government against the demands of the traditional Labour constituencies for social justice and the redistribution of wealth. In a bold beginning, he made the Bank of England independent of government. This move was designed to prevent monetary policy from being affected by political issues. In addition, he supported Parliament’s decision to reconstitute the ancient parliaments of Scotland and Wales, giving them more regional control and political independence. • Blair also worked closely with Irish prime minister Bertie Ahern to revive the stalled peace negotiations in Northern Ireland. In April 1998 a new peace accord was signed that had strong backing from the British and Irish governments. Known as the Good Friday (or Belfast) Agreement, the accord authorized the creation of a semiautonomous assembly for Northern Ireland to replace direct rule of the province by the United Kingdom. The accord won overwhelming endorsement from voters in Ireland and Northern Ireland, and in December 1999 the United Kingdom formally transferred power to the new provincial assembly. However, an impasse between Catholic and Protestant groups over the pace of the Irish Republican Army’s disarmament forced the United Kingdom to suspend the assembly in February 2000. Provincial rule was restored in May, but the disarmament issue remained unresolved and a source of persistent political tension.

  26. Under Blair, the United Kingdom continued to play an active role in the European Union (EU). However, Britain’s strong economy and monetary policy provided little incentive to accept the unified European currency, the euro. Blair’s government backed away from its commitment to a complete economic union with the other EU countries because of the cost. In addition, the economic union had always been unpopular with many Britons. In early 1998 Blair announced a wait-and-see attitude toward monetary integration, an attitude that he maintained even as 11 EU countries officially adopted the euro in 1999. • In another move to modernize and streamline the government, in November 1999 Blair made good on a campaign promise to strip many of the hereditary peers in the House of Lords of their right to sit and vote in Parliament. The House of Lords Act eliminated all but 92 of the more than 750 seats held by hereditary members of Parliament’s upper house.

  27. The Labour Party won its second consecutive landslide victory in the June 2001 general elections, gaining the largest majority ever held by a British party in its second term. The elections were an enormous victory for the Labour Party and the centrist policies of Blair, who won a second term as prime minister. Soon after the elections the impasse over the pace of IRA disarmament again threatened to derail the peace process in Northern Ireland. The British government briefly suspended the provincial assembly on two more occasions in mid-2001 to prevent the government’s collapse. Blair welcomed an announcement by the IRA in October that it had begun to disarm, as did key Protestant leaders, and the assembly resumed operations the following month. However, continued conflict among Northern Ireland’s political parties led the British government to reimpose direct rule of the province in 2002. Following the suspension, Blair and Irish prime minister Bertie Ahern renewed negotiations in an effort to restore operations of the provincial assembly. Labour’s Second Term

  28. In the wake of the September 11 attacks on the United States in 2001, Blair proclaimed that the United Kingdom would stand “shoulder to shoulder” with the United States in the effort to root out global terrorism. More than 100 British citizens were among the thousands of people who died in the attacks. Blair began an intensive round of diplomatic negotiations that took him to many European capitals and to a host of Muslim countries—including Egypt, Oman, and Pakistan—to build international support for action against the terrorists. In October the United Kingdom sent British forces to participate in the U.S.-led assault on Afghanistan’s Taliban regime, which was accused of harboring terrorists. Additional British troops were deployed to Afghanistan in December 2001 and March 2002. • As the conflict in Afghanistan subsided, the Labour government maintained its strong support for U.S foreign policy, including a possible U.S.-led war against the government of Iraqi leader Saddam Hussein. Blair—following the lead of U.S. president George W. Bush—accused Hussein of stockpiling weapons of mass destruction and of posing a serious threat to regional and global security, and he offered to contribute British military forces to a preemptive U.S.-led attack on Iraq. Blair’s position put him at odds with the leaders of many European countries, including France and Germany, who preferred to work through the United Nations (UN) to ensure Iraq’s disarmament. Blair alsッÿaced intense oーÿosition from many Britons, including members of the Labour Party, who opposed military action against Iraq. In March 2003 British forces joined the U.S.-led invasion of Iraq, despite a failure to secure a UN resolution explicitly sanctioning the action. The subsequent failure to find weapons of mass destruction The Labour Party won its second consecutive landslide victory in the June 2001 general elections, gaining the largest majority ever held by a British party in its second term. The elections were an enormous victory for the Labour Party and the centrist policies of Blair, who won a second term as prime minister.

  29. Labour’s Third Term • Labour’s Third Term • Blair called a general election in May 2005. The Labour Party won its first-ever third consecutive victory, giving Blair a third term as prime minister. Labour won 356 seats, giving it a solid but much reduced majority in the 646-seat House of Commons. Analysts said Labour’s slimmer majority reflected voter discontent with Blair’s decision to support the U.S.-led invasion of Iraq. The Liberal Democrats, who opposed Britain’s involvement in the war, increased their representation in the House of Commons, winning 62 seats. The Conservatives, who waged an aggressive campaign, picked up 33 seats, bringing their total to 197.

  30. Post-war Britain • The Loss of Empire • a. India • b.Egypt • The Search for Economic Well-Being • Conservative Rule • Industrial Decline • The Thatcher Revolution • Attempts at Peace in Ireland • Conservative Decline and the Rise of New Labour • Labour’s Return to Power • Labour’s Second Term • Labour’s Third Term