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The Welfare State

The Welfare State

The Second World War devastated Great Britain. The conflict decimated towns and cities, obliterated industry, and nearly half a million Brits lost their lives. The destruction of the Second World War tabled new priorities on Britain's political agenda. Healthcare, housing, education, and employment benefits were now necessary policies in post-war Britain. While there had been calls for a so-called 'Welfare State' since the early 1900s, the Second World War provided the required impetus for such policies to transpire. Let's discuss the origins, circumstances, and policies of the Welfare State and then analyze its long-standing effect on British society.

Welfare State

The welfare state is a system of government in which the state protects the economic and social welfare of its people.

The Welfare State Timeline

Below is a timeline that explains the developments and establishment of the modern Welfare State:

YearEventDescription
1601
Elizabethan Poor Law
Relief was given to people unable to work due to age, disability, or illness.
1834
New Poor Law
Ensured that workers were housed, clothed, and fed. Furthermore, children in workhouses received schooling.
1908
Old Age Pensions Act
Introduced pensions for over-70s.
1909
Labour Exchanges Act
Created Labour Exchanges.
Development and Road Improvement Funds Act
Provided funds to improve and repair highways.
Trade Boards Act
Established a minimum wage.
1911
National Insurance Act
Protected workers against loss of earnings if sick and provided unemployment benefits.
1925
Widows', Orphans, and Old Age Contributory Pensions Act
Gave pensions to over-65s and introduced widow's benefits.
1942
William Beveridge published 'Social Insurance and Allied Services'.
Coined the "Beveridge Report", it served as the blueprint for the Welfare State.
1944
Butler Act
Promised 'secondary education for all'. The Act raised the school-leaving age and implemented primary and secondary education.
1945
The Family Allowance Act
Provided child benefits to families.
1946
National Insurance Act
Provided financial protection for the unemployed and sick.
1948
National Health Service Act
Established comprehensive health care for people in England and Wales.

The Origins of the Welfare State

The term 'Welfare State' initially described Labour's post-war social policy. However, the origins of the Welfare State date back to the early 1900s with Liberal Prime Minister Herbert Asquith's reforms between 1908 and 1910.

The Welfare State H. H. Asquith StudySmarterFig. 1 - H.H. Asquith

Here's a brief look at the welfare policies enacted by Asquith's Liberal government:

Welfare PolicyDescription
1908 Old Age Pensions ActProvided income for the over 70s. Individuals over 70 were given 5 shillings a week, and couples over 70 were given 7 shillings 5 pence per week.
1909 Labour Exchanges ActSaw the creation of labour exchanges that were tasked with helping the unemployed find employment.
1909 Development and Road Improvement Funds ActProvided funds to construct and repair roads across the United Kingdom.
1909 Trade Boards ActEstablished a minimum wage for industry and low-paid workers.
1911 National Insurance ActEstablished unemployment benefits and sick pay.

The Establishment of the Welfare State

After the Second World War, Clement Attlee's Labour government introduced a series of measures to tackle social inequality. These policies established the modern Welfare State in Great Britain. Such policies emanated from a wartime report on social welfare by British economist William Beveridge. Here's a brief overview of Beveridge:

  • Name: William Beveridge
  • Born: 5 March 1879
  • Background: Trained as a lawyer before becoming a Liberal politician. In the early 1900s, William Beveridge helped Chancellor David Lloyd George establish the Old Age Pensions Act (1908) and National Insurance Act (1911).
  • Why he's important: Published the Beveridge Report, which led to the establishment of the modern Welfare State.

The Beveridge Report

During the Second World War, William Beveridge headed a committee tasked with investigating social welfare in Britain. Beveridge's committee identified five fundamental problems in British society which prevented people from bettering themselves; he entitled these problems 'The Five Giants'.

The Five Giants were:

  • Disease.
  • Ignorance.
  • Idleness.
  • Squalor.
  • Want.

The Welfare State World War Two Destruction StudySmarterFig. 2 - Norwich after bombing

William Beveridge's findings were published in 1942 in a report entitled 'Social Insurance and Allied Services'. The hugely popular 'Beveridge Report' sought to rectify The Five Giants, outlining social security for British people 'from the cradle to the grave'. The report, which ultimately led to the establishment of the modern Welfare State, called for a system that would be:

  • Comprehensive – The system must comprehensively cover all issues 'from the cradle to the grave'.
  • Compulsory – All social insurance would be compulsory, and all workers must contribute.
  • Contributory – Workers would contribute a proportion of their wages.
  • Non-means tested – Available to everyone regardless of financial situation.
  • Universal – Available to all.

Labour Reforms 1945 - 1951

Between 1945 and 1951, the Labour government introduced a series of social welfare policies. These policies were designed to combat Beveridge's 'Five Giants'. Let's look at how each Giant was tackled.

Five GiantsPolicies
DiseaseLabour introduced the National Health Service Act in 1948. The policy established free access to healthcare (hospitals, doctors, dentists, and opticians), allowing poorer people access to healthcare for the first time. Despite its initial success, yearly NHS expenditure had risen to nearly £360 million within two years.
IgnoranceThe 1944 Education Act provided all children with primary, secondary, and further education.
IdlenessLabour nationalized the steel, coal, iron, electricity, railway, and gas industries. This helped keep unemployment relatively low.
SqualorThe New Towns Act (1946) created 12 new towns to tackle overcrowding. This was followed by the Housing Act (1949), which established council houses and gave homeowners financial assistance to make housing improvements.
WantIn 1946, Labour introduced the National Insurance Act, which provided financial protection for those sick and unemployed. Two important Acts followed the National Insurance Act. The Industrial Injuries Act (1946) compensated those injured at work. The National Assistance Act (1948) provided financial assistance to unemployed people who had not contributed to the National Insurance scheme.

The Welfare State William Beveridge StudySmarterFig. 3 - William Beveridge

The Welfare State during Thatcherism

Conservative leader Margaret Thatcher was elected Prime Minister in 1979. Throughout her 11-year premiership, she dismantled many of Labour's post-war social welfare policies.

Economic Policies

Margaret Thatcher followed Friedrich Hayek's economic theory of monetarism – the belief that governments should control the amount of money in circulation. In 1979, to curb inflation, the Thatcher government raised the base interest rate to 30%.

Despite the introduction of this policy, inflation hit 20% in 1980. This led Thatcher's government to increase taxes and slash public spending. While this policy curbed inflation, unemployment hit 9.6%.

Trade Unionism

In 1980, the Thatcher government passed the Employment Act. This policy limited the number of people who could join a picket line and banned 'secondary action'. This policy was followed by the Employment Act of 1982, which banned political strikes and made trade unions financially accountable for damages that resulted from industrial action.

Secondary Action

When a group goes on strike to support workers from a different employer than their own.

The Welfare State Margaret Thatcher StudySmarterFig. 4 - Margaret Thatcher

Housing

The Housing Act of 1980 allowed tenants to buy council houses at a reduced rate. By 1987, over 1 million tenants had bought council homes. While the 'aspirational' working class heralded the policy, councils could not reinvest funds into building new houses. This led to the depletion of council houses across the United Kingdom.

The Poll Tax

In 1989, the Thatcher premiership introduced the Poll Tax in Scotland. The Poll Tax was a flat-rate, fixed tariff for adult residents. Before the introduction of the Poll Tax, households had paid an amount based on the value of their property.

The introduction of the Poll Tax meant that individuals living alone saw a decrease in their taxes, but large households saw a substantial increase. The Poll Tax was introduced throughout Britain the following year.

Privatization

In 1982, Margaret Thatcher sold off the National Freight Company to its employees. As her leadership continued, Thatcher became bolder in her bid to sell off nationalized companies. Starting with British Telecom in 1984, Thatcher then privatized British Gas, British Steel, British Airways, British Petroleum, and British Coal.

The Welfare State under Thatcher: Historiography

Margaret Thatcher's relationship with the Welfare State splits historians into two camps:

  • Those who believed that Thatcher's policies were dictated by the circumstances in which she worked.
  • Those who believed that Thatcher's policies were dictated by her own political and economic beliefs.

This historiographical dispute is known as the Structure VS Agency debate.

Structuralist Historiography

Structuralists believe that a person's actions are dictated by the circumstances in which they operate. In the case of Thatcher, structuralists believe that Thatcher had no choice but to dismantle the Welfare State. They believe Thatcher's choices were dictated by high public expenditure and crippling economic difficulties.

Thatcherism was a political process of narrating the troubles facing the British economy and society in the 1970s.1

- Stuart Hall 1983.

Thatcherism could thus be viewed as a product of the economic context of the 1970s.2

- E. H. H. Green, 1999.

Agency Historiography

Agency refers to the ability of an individual to act independently. Those on the agency side of the debate believe that Thatcher's choices were dictated by her own political and economic beliefs.

Margaret Thatcher's decisions were taken with reference to a few deeply, even passionately, held personal convictions and beliefs.3

- Sir Bryan Cartledge 2003.

She likes everything to be clear-cut: absolutely in favor of one thing, absolutely against another.4

- Francis Pym 1984.

The Welfare State Summary

It's interesting to note that the two most significant post-war British leaders are Clement Attlee – the founder of the welfare state, and Margaret Thatcher – the enemy of the welfare state. Aside from a sense of bitter irony, this observation demonstrates the predominance of social welfare in both UK politics and British society.

While at opposite ends of the political spectrum, both Attlee and Thatcher created a lasting impact on politics that transcended Labour/Tory ideology. Conservative leader Winston Churchill increased welfare spending during his second term, and New Labour continued many of Thatcher's themes throughout Tony Blair's premiership. While the significance of Attlee and Thatcher cannot be disputed, one question remains: Whose welfare legacy remains more apparent in Britain today?

The Welfare State - Key takeaways

  • The origins of the Welfare State date back to the Asquith government of the early 1900s. Asquith's Liberal government introduced pensions, national insurance, and a minimum wage.

  • The devastation and destruction of the Second World War prompted Welfare reform to be revisited in 1945.

  • The Labour government under Clement Attlee government drew upon the Beveridge Report to create a comprehensive social policy.

  • Attlee's welfare policies included the establishment of a National Health Service, free education for children, and financial assistance for those sick or unemployed.

  • Throughout the 1980s, Conservative Prime Minister Margaret Thatcher attacked the welfare state; however, historians disagree whether Thatcher's dismantling of the Welfare State was due to the economic circumstances at the time or her own personal views.


References

  1. Stuart Hall, The Politics of Thatcherism (1983)
  2. Ewen Henry Harvey Green, Ideologies of Conservatism: Conservative Political Ideas in the Twentieth Century Ideologies of Conservatism: Conservative Political Ideas in the Twentieth Century (2002), p. 214.
  3. Sir Bryan Cartledge 'Margaret Thatcher: Personality and Foreign Policy' in S. Pugliese, The Political Legacy of Margaret Thatcher (2022), p. 158
  4. Francis Pym, The Politics of Consent (1984)

Frequently Asked Questions about The Welfare State

Welfare State is a system of government that protects the well-being of its citizens, particularly those in need.

The origins of the Welfare State can be traced back to the 1900s when the Liberals under Herbert Asquith established several social policies such as pensions, minimum wage and national insurance.

The Welfare State was established by Clement Attlee's Labour government after The Second World War. The post-war Labour government established several social policies such as the National Health Service, national insurance, and education for all. 

During The Second World War, the Beveridge Report outlined five problems (The Five Giants) in British society. The devastation caused by The Second World War prompted these problems to be addressed.

Conservative leader Margaret Thatcher was elected Prime Minister in 1979. Throughout her 11-year reign, she dismantled many of Labour's post-war social welfare policies. 

Final The Welfare State Quiz

Question

What percentage of the male population got married in 1938 and 1940 respectively?


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Answer

77% and 48%

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Question

When did the Macmillan government begin and end?

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Answer

Macmillan became PM in 1957, replacing Eden and he resigned in 1963.

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Question

What was Macmillan’s involvement in the Suez Crisis?

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Answer

He encouraged the invasion of Egypt, despite being advised to not take action until after the US Presidential election. This caused damage to Britain’s relations with the US.

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Question

What is the term for the relationship between Britain and the USA?

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Answer

‘The special relationship’.

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Question

Why was 1959 a high point for Macmillan?

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Answer

1. The Conservative Party won the general election for the third time.

2. The economy was still booming.

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Question

What speech is Harold Macmillan famous for?

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Answer

 ‘The Wind of Change’.

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Question

What is Macmillan’s most famous quote about the post-war British economy?

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Answer

‘Most of our people have never had it so good’.

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Question

What are the two important takeaways from ‘Most of our people have never had it so good’?

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Answer

1. ‘The Age of Affluence’: this was a time of economic growth: there was an increase in the average wages, high housing rates, and high standards of living.

2. Macmillan was also acknowledging that this period of economic growth was unsustainable, which led to the implementation of ‘Stop-Go’ economic policies.

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Question

What was Macmillan’s approach to economics?

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Answer

Stop-Go economics:

- The ‘Go’ phase: expanding the economy with low interest rates and increasing consumer spending. This leads the economy to ‘overheat’.

- The ‘Stop’ phase: this phase ‘cools down’ the economy through higher interest rates and spending cuts. When the economy cools down, controls are removed so that the economy can naturally increase.

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Question

What were the embarrassing scandals and problems of Macmillan’s government?

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Answer

  1. The application put forward by Macmillan to join the EEC was vetoed by de Gaulle.
  2. Britain’s problems with the balance of payments led to financial instability.
  3. Macmillan desperately dismissed seven members of his cabinet.
  4. The Profumo Scandal exposed the Conservative Party as corrupt and thereby ruined the reputation of the Macmillan government and the international relations he worked to repair during his premiership.

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Question

What was the impact of the problems and scandals during Macmillan’s government?

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- The Conservative Party became unpopular, as they were exposed as corrupt and out-of-touch.

- Damaged special relationship with the US.

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Why did Macmillan resign?


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For health reasons. He was suffering from prostate problems.

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What is Macmillan’s reputation?


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Answer

Originally seen as a hero, he would go on to be seen as ruthless and his traditionalism would make him lose favour with the public for being out-of-touch.

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Who replaced Macmillan?

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Answer

Alec Douglas-Home

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What were Harold Macmillan's beliefs?

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Answer

  • As a One-Nation Conservative, he believed in government intervention and paternalism.
  • Believed in the post-war consensus.
  • Believed in the nuclear deterrent, but also believed the US was too rigid in their approach to the Cold War.
  • Believed in invading Egypt during the Suez Crisis.
  • Believed in the special relationship with the US.

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Question

When was Alec Douglas-Home Prime Minister?

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Answer

He was Prime Minister from 19 October 1963 to 16 October 1964. He served two days short of a year.

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Who supported Douglas-Home’s candidacy?

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Prime Minister Harold Macmillan who wanted Douglas-Home to replace him.

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What position in government is Douglas-Home’s legacy, and why?

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Foreign Secretary:

  • He negotiated the Partial Nuclear Test Ban Treaty with the US and USSR with astuteness and composure.
  • He was competent in his support to Prime Minister Harold Macmillan, backing Britain’s accession to the EEC and US defiance of Soviet threats of nuclear attack.

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Question

What is resale price maintenance?

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Answer

Resale price maintenance is the system in which manufacturers set the prices for the sale of their goods.

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What is the purpose of resale price maintenance?

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Price-fixing protected manufacturers, particularly during and after the wars, as they could set the prices to keep their industry and its workers afloat.

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Who came up with the Resale Prices Bill (1964)?

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The President of the Board of Trade, Edward Heath.

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Why was the Resale Prices Bill introduced (1964)?

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Answer

The bill was introduced to benefit the economy, allowing competition between businesses by letting them set their prices.

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Why should Douglas-Home not be credited with passing the Resale Prices Bill (1964)?


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He was incompetent when it came to economics. The bill was passed under his government, but it was the work of Edward Heath.

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Why was Douglas-Home seen as incompetent?

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He was inexperienced in domestic politics and economics.

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To whom did Douglas-Home lose the 1964 election?

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To Harold Wilson, the leader of the Labour Party.

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Why did Douglas-Home lose the 1964 general election?

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  • Disillusionment with the conservatives was growing. They were seen as corrupt, unworldly aristocrats.
  • Douglas-Home was incompetent.
  • Harold Wilson was more likeable and competent.

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When did the Suez Canal Crisis take place?

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Answer

From 29 October to 7 November 1956.

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Why did Egypt become a protectorate of Britain?

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Answer

There was a nationalist revolt in Egypt in 1882. The British military was sent in to curb the revolt.

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When the Suez Canal Crisis happened, what conflict was taking place?

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Answer

The Cold War, which began in 1946 and ended in 1991.

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Question

Who was President of Egypt from 1954 to 1970?

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Answer

Gamal Nasser.

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Why did Britain see Nasser as a threat?

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He nationalised the Suez Canal, limiting Britain’s access to its colonies and the region’s oil.

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Why were the Soviets a threat to the Suez Canal in the eyes of the British?

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If the Soviets won over Nasser, it would compromise the security of the Suez Canal, and Britain would lose access to it.

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Why did Nasser nationalise the Suez Canal?

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The US and Britain had withdrawn their offer to fund the Aswan Dam, once they learnt of Nasser’s deal with the Soviets.

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Which three countries were involved in a conspiracy against Egypt?

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France, Britain, and Israel.

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What was the secret meeting between Britain, France, and Egypt called?

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Answer

The Sèvres Meeting. It took place on 22 October 1956.

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How many Egyptian soldiers were killed in the Suez Crisis, and how many British?

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Answer

Six hundred Egyptian soldiers were killed, compared to just twenty-six British soldiers.

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Why didn’t Eisenhower want Britain and France to invade Egypt?

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He was facing re-election at the time. He also believed an invasion would push Egypt further towards Soviet influence. Plus, he wanted attention focused on Soviet-occupied Hungary.

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When did the UK announce a ceasefire?

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 6 November 1956.

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What were the consequences of the Suez Crisis for Britain?

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  • It lost millions of pounds in the first days of the invasion.
  • It ruined the special relationship with the US.
  • It severely diminished its status as a world power. Henceforth, it would be seen as subservient to the US.

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What percentage of the male population got married in 1938 and 1940 respectively?

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Answer

72% and 40%

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Britain is no longer part of NATO.

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Answer

True 

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Rationing ended in Britain in the year _____.

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1954

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 Commonwealth nationals did not face discrimination whilst in Britain. 


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True 

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 _____ became Prime Minister at the 1945 general election?


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Clement Attlee

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There are five main ethnic groups in twenty-first century Britain. 


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Answer

True 

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_____% of Britons were active church-goers in the 1990s.

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14

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The Commonwealth is the legacy of the British Empire. 


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True 

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The UK became a Member of the European Union in _____.

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Answer

1973

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Question

Britain was not part of the League of Nations.


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Answer

True 

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Question

What are the two reasons that historians present to support the idea that the Swinging Sixties started in 1964 and not 1960?

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Answer

1. This was the end of the Conservative government and the start of the Harold Wilson ministry.

2. Social and cultural change sped up from 1964 onwards.

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