Impact of Economic, Social, and Cultural Policies in Early 1970s Britain

Britain during the early 1960s and the mid-1970s sought to remove the supply-side impediments towards growth (Oliver & Pemberton, 2006). As per supply-side economics, the key determinant of the economic growth rate depends on the allocation and the efficient use of capital and labour (Farnham, 2000). This reflects the neo-classical macro-economic principles. This essay will analyse the impact of the early 1970s economic, social and cultural policies based on such determinants over the current environment.

According to the supply-side economics, the natural rate of unemployment cannot be defeated by raising aggregate demand. Further, any attempt to address this situation cannot yield results as economic agents in a market place can anticipate and neutralise it. (Farnham, 2000). As per the supply-side economics, the impediments are disincentives to work and investment due to tax system and institutional challenges that affect allocation of resources. Supply-side economics focuses on strengthening employer bargaining power. However, the business needs of productivity and efficiency with reduced labour costs and increased labour flexibility result in unemployment (Farnham, 2000).

The Conservative government in the 1970s supported supply-side economics. It focussed on full employment over the issue of inflation (Oliver & Pemberton, 2006). Keynesian dominated its ideas to manage aggregate demand, output and employment with the aim to maintain employment through economic measures based on national income forecasts through taxation and public spending (Fishbein, et al., 1984). The current policy focus is also on full employment objectives. This seems to be an effect of lesson-learned from earlier periods where there is currently a lesser control of governance. There is a job-friendly environment. There is an increase of labour market flexibility through reducing regulation and secondary-wage costs. Unemployment saw a decrease to 3.8% in 2019 (Sustainable Governance Indicators, 2021).


The government in the early 1970s did not cut public spending or wholesale denationalisation (Oliver & Pemberton, 2006). This is also the case now, but limited to key sectors such as healthcare. Recently in 2019, the Conservative government of Boris Johnson proposed to boost public spending. Comparatively, both the policy frameworks then and now are focussed on employment and public spending with maybe the motive of directing votes to their concerned political parties (Sustainable Governance Indicators, 2021).

The then domestic policy did not yield the desired outcome. Unemployment increased that consequently failed the attempt to disengage intervention on the supply side of the economy (Kirby, 1991; Holmes, 2016). It led to a gradual accumulation of anomalies (Oliver & Pemberton, 2004, p. 429). To meet the problem, the government did not go ahead with its proposed industrial policy. However, this along with a budget of higher public expenditure plans and tax cuts did not stop rising inflation coupled with the problem of stagnating growth (Schulze & Woodward, 1996). The policy measure now is different with the strategy of opening the flexible deregulated market. It has ensured growth in employment. However, as the EU Commission warned, it may be wise to consider earlier experiences that boosting public spending when the growth rate is declining at 1.5% may create new issues.

The challenges faced in the 1970s are lessons learned partly where there is now a policy of flexible and deregulated labour market. The new policy must consider the impact of public spending without considering ways of increasing growth. The stagnant economic growth and inflation during the early 1970 also affected the public services, which were underfunded. The social policies were welfare based with a more active and intervention-based approach (Polanyi, 2001). However, the 1970s period saw political opposition against mixing capitalism and democracy where there is a conflict between priority to maximise economic growth through profitability and investment and to expand welfare programmes. There were deficit resources to sustain both the priorities (Offe, 1982; O’Connor, 1973). The divergence became embedded in institutions and policies. The UK welfare state was primarily focused on income support. It was not generous and comprehensive. It was a residual welfare state (Esping-Andersen, 1990).

The recession of 2008 governments once more resorted to austerity measures. Fiscal was tightened and consolidated (Clark, 2020). A new definition of welfare states came into being where a differentiating redistribution occurred. Welfare recipients became stigmatised. From the late 1970s, there has been an emphasis on lesser state provision, more opening of markets, and higher individual responsibility. The notion of neoliberalism emerged as the influencer of welfare policies (Mooney & Neal, 2010). However, the policies seem to be driven by a capitalist approach with no value for the welfare state. The UK ranked 7th with regard to social policies based on its effective social-benefits system. However, there seems to be a gap in the social areas. For example, higher-education fees are hiked with no reform on student loan policies subjecting students to extreme financial pressure. Support levels for larger families are falling. There is a shortage of affordable-housing affecting urban low-income households. The division amongst class, race and geography is high. Youth unemployment is at 11.9% higher than the overall unemployment rate. At the same time, there has been increased promotion of inclusion of disadvantaged groups and ethnic minorities; of avoiding discriminatory practices; and of socially integrating immigrants with certain reservations in multiculturalism. Funding for social care has been cut. Hospital care is costly. Further, there are long standing disputes over payment and working conditions of junior doctors (Sustainable Governance Indicators, 2021).

The policy issues so far seen seem to be driven by the government decision of less government provisions with higher individual responsibility. Wherever the government spending is, there has been a tighter public spending. This seems to have influenced or been driven by elite political and politicised accounts of the term welfare with emphasis on individual and behavioural drivers of poverty (Patrick, 2020). The effect of such formulation of welfare could be seen in the policies around families. Attempts to address issues over supported families through programmes such as the Troubles Families in 2011 have not resulted in significant betterment in living conditions. The Ministry of Housing, Communities and Local Government in 2019 through its evaluation found more positive results. Overall, the cuts in welfare spending aligned with the national effort of reducing budget deficit have affected key family policy measures affecting particularly single mothers (The Ministry of Housing, Communities & Local Government, 2019; Sustainable Governance Indicators, 2021).

The economic failure in the 1970s resulted in a protest of the older beliefs. It came in the form of the first national Civil Service strike in 1973, and in the decade-long strikes and political violence (Wallenfeldt, 2013). It gave rise to the notion of market as the model of state governance redefining the relationship between state and society, where the market was the new society. This does not mean that the governance was private and self-governing. It was competitive with quasi-governmental institutions competing in a marketplace (Wallenfeldt, 2013). It created conditions for entrepreneurship exposing economic policy to market operation. Even the social sphere was marketised, as seen earlier. The NHS was reformed as an internal market governed by government or public management. The principles of accountability with standards of performance changing the idea of public service to that of private self-management (Wallenfeldt, 2013).

The shift from the welfare-based policies to a more capitalist approach in the 1970s have transformed the social state to a state focused on individual responsibility. It allowed the citizens, firms, and community to freely choose. The policies are guided by politics of choice leading to marketised communities. This new relation of the state and society caused decentralisation of rule focused on self-help activities. Because of this politics of choice, citizens become consumers (Wallenfeldt, 2013). The consumerist approach seems to have led to the gaps in both the economic and social policies stated earlier, for instance reduced larger family support; reduced public spending; higher-education fee; shortage of affordable-housing; to name a few.

The change in the economic and social policies and outlook did not leave the cultural offerings in the UK cities alone. The UK cities were found lacking in their traditional cultural offering (The Government Office for Science, 2014). There were more commercial cultural urban environments in the form of pubs and nightclubs. The 1970s saw the decline of cinema and its audiences with smaller cinemas closed or converted to bingo halls and larger cinemas were either closed or converted to multi-screen cinemas (The UK Film Council, 2002). City migration also led to ethnic restaurants. This symbolised a change in the conservative national food culture with the emergence of eating out. The economic decline in the 1970s and the 1980s affected the already declining city centre. This led to large-scale urban retail remodelling and physical regeneration schemes reconfiguring public and private space. There was a new representation that replaced the town halls and galleries (The Government Office for Science, 2014; Loftman & Nevin, 1995).

The policies in the 1970s were perfect examples of cultural and political concerns regarding public welfare. The government also supported arts for their political interests and to bring about any political and social change. The early 1970s was the political climate of idealism. Even the cultural policy reflected such idealism (Gray, 2007). In the later part of the 1970s, there were political, cultural, and ideological changes (Gray, 2007). Cultural policies were used as instruments to further capitalist objectives. The government adopted an economic approach since the early 1990s towards arts. Culture and arts became alternate public income sources driving economic growth. The policies focussed on private funding to further cultural objectives. This meant less public spending with focus on the opportunities of economic growths and employment through marketised creative industries (The Government Office for Science, 2014)

Since the adoption of market-based economic policies, every aspect of government policies seems to have been driven by a capitalist approach based on the politics of choices. The focus is still on individual responsibilities where the public drive the economic growth, employment growth and promote other socio, economic and cultural policies, The government adopted the cultural policy to further political interest. What is different now, unlike the 1970s, is that by focussing on individual responsibility, the government has found a balance on economic growth and aspects of a welfare state. The cultural sector is used as a tool to bring socio-economic-political change. The arts and culture sector has become an enabling body contributing to the government treasury. This was seen in the establishment of the RDAs during 1998 and 2012 or the preparation of Regional Economic Strategies with focus on investment in the creative industries. The policies started focussing on venture capital funds. Local authorities formed creative clusters in urban locations. All these were done with the objectives of regional growth (DTI , 2001).

Just like the economic and social policy, the cultural policies are also driven by market and market-based ideology. The impact is the same. There is lesser public funding, which goes against the principles of welfare-state. This affected local scale institutions, such as local libraries, and local museums (Pratt & Hutton, 2013). The smallest museums sustained through volunteering. The largest museums and galleries are partly protected and can attract sponsorship. The middle-size museums and galleries have suffered the most in this period (The Government Office for Science, 2014).

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To conclude, after the early 1970s, the government has adopted the approach that opening of the market and keeping it flexible and deregulated will remove economic crises, thereby mitigating the risks of social issues. The discussion so far has found that the UK has gradually increased relying on capitalist approach dependent on the politics of choices and individual responsibilities. The discussion around free-market economy, creative industries, a tighter public spending, elite political and politicised accounts account of welfare state are all demonstrable examples. The common pattern in the socio, economic and cultural policy is public management over private activities with the aim of attaining contributory economic growth and collaterally promoting welfare state principle. However, the gaps in this approach is apparent as this essay has found in the automatic differentiation between people who can afford and those who cannot.


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