Modern Britain

Between 1945 and 2007, Britain transformed in many different areas. The welfare state was introduced, immigration increased, and class divisions ceased to exist as they once had. The power and position of Britain also shifted drastically during this period; Britain's Imperial rule declined with the independence of many colonies and on the other end of its foreign relations, it entered into union with Europe. Economically, Britain shifted from manufacturing with deindustrialisation to providing services, and although the country continually faced inflation and recessions, the general living standard was much higher by the end of the period. Let's find out how all this happened.

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Table of contents

    The Making of Modern Britain: timeline

    To explore the history of modern Britain, we will be breaking it up into the following periods:




    The post-war Labour government


    Conservative governments


    The Sixties


    The End of the post-war consensus


    Towards a new consensus


    New Labour

    The Labour Government, 1945-51

    The 1945-51 period was very important as it redirected Britain after WWII, and it was the Labour Party that led the country during this time. Labour won a large majority in the 1945 election, and Clement Attlee replaced wartime Prime Minister Winston Churchill.

    Modern Britain Children in London during the Blitz StudySmarterFig. 1 - Children in London during the Blitz - Britain needed to rebuild from WWII.

    How did Labour come to power in 1945?

    The Labour Party was founded in 1900 and had become the chief opposition to the Conservative Party – Britain’s oldest political party – in the 1920s. Whilst the Conservative Party sat on the centre-right of the political spectrum, Labour sat more on the left.

    The public believed that Labour was more capable of providing the necessary post-war reconstruction than the Conservatives – why?

    • People felt that the inter-war Conservative governments had not understood the needs of ordinary people.
    • The Conservatives had been unable to alleviate the Great Depression in the 1930s.
    • The public did not feel Churchill would make a successful peacetime politician.
    • Labour members of the wartime coalition had gained popularity (Attlee had been Churchill’s Deputy Prime Minister).

    What did Labour change in Britain?

    Key changes in the Labour government in this period included:

    • The introduction of the welfare state, notably introducing national insurance in 1946, and the National Health Service in 1948.
    • Nationalising the key industries of coal, civil aviation, cable and wireless, gas, the Bank of England, and iron and steel, to increase efficiency and make work environments safer.
    • Adopting the economic theory of Keynesianism, which advocated for increased government expenditure to boost the economy, increase people’s earnings, and create demand. This artificially created demand would lead to the recovery of the economy.

    Keynesianism became the dominant economic theory after WWII and remained so until 1979.

    Welfare State

    A system in which the state plays a key role in protecting the economic and social well-being of its citizens.

    National Insurance

    A system of compulsory payments by employers and employees to fund government assistance to those who are facing unemployment, sickness, etc.


    Moving aspects of the economy from private to government control

    The post-war consensus

    Although these measures were introduced by Labour, the Conservatives also supported certain aspects. This is an example of the post-war consensus- the general alignment of the main political parties on major issues from 1945 until the 1970s.

    Modern Britain Commemorative plaque for William Beveridge StudySmarterFig. 2 - The Labour Party introduced the welfare state based on recommendations given by Sir William Beveridge.

    What foreign policy did Britain adopt?

    After WWII, the Cold War between the United States and the communist Soviet Union began to emerge.

    Foreign Secretary Ernest Bevin committed Britain to support the US against communism; Britain even entered the Korean War in 1950. This set the precedent for Britain’s Cold War policy, which would continue through most of the 20th century.

    Britain also became a founding member of the North Atlantic Treaty Organisation (NATO) in 1949 along with the US and other Western European nations. Its purpose was to provide collective security against attacks by the Soviet Union.

    There was a fundamental disagreement within the Labour Party about which side Britain should cooperate with. The left of the party criticised Attlee’s pro-US stance. This was because they believed Labour’s aim should be to replace capitalism with socialism, whilst the mainstream of the party was happy to work within the existing political system.

    Another key development was India’s Independence in 1947- previously referred to as the British Empire’s “Jewel in the Crown”, the granting of independence to India marked the beginning of the decline of the modern British Empire.

    What problems did the government face?

    Britain was hugely in debt and faced a balance of payments crisis, meaning the cost of imports was outweighing income from exports. Although now in peacetime, the government also increased spending on defence in light of the development of the Cold War. It was committed to creating a nuclear deterrent, which became a heavy financial commitment.

    One of the responses to financial problems was that trade unions were used not to ask for higher wages - Labour had traditionally protected union interests, so this was particularly resented.

    Trade Union

    An association of workers in a trade or profession which works to protect, and advance, their rights and interests.

    The Conservative Governments, 1951-64

    Labour's problems led to a Conservative victory in 1951, which was followed by two more. The Conservative Party were in power until 1964 – let’s find out what they did.

    The Churchill and Eden Administrations

    Winston Churchill became Prime Minister for the second time in 1951 and oversaw a number of important developments:

    • The denationalisation of steel - a key point that the Conservatives had criticised the post-war government for
    • The end of rationing
    • The detonation of Britain’s first atomic bomb in 1952
    • The end of the Korean War in 1953

    Labour policies were largely continued, demonstrating the post-war consensus.

    In 1955, Anthony Eden became Prime Minister. His time in office was defined by one event: the Suez Crisis.

    The Suez Crisis - one of the most important events in 20th-century British history

    In 1956, the leader of Egypt Gamal Abdel Nasser nationalised the Suez Canal, which was important to Britain’s trade interests. As a result, Britain, along with France and Israel, invaded Egypt. This was condemned by the US, the United Nations (UN), and the Soviet Union.

    Britain was forced to withdraw due to economic pressure from the US and the UN, lack of international support, opposition at home, and a fall in the pound as international investors made large withdrawals.

    The Crisis can be considered the last act of British imperialism and proved that Britain could no longer act alone in the post-war world. Eden stepped down as Prime Minister soon after.

    The Macmillan Administration

    The majority of the population experienced higher living standards under Howard Macmillan, who was Prime Minister from 1957 until 1963. In July 1957, Macmillan famously said “most of our people have never had it so good”, which in many ways was true.

    However, his administration was criticised and faced many problems:

    • The Conservative stop-go tactics attempted to stabilise the economy. This meant they made it easier to borrow money when the economy was performing poorly, and harder to borrow money when consumption was high. Critics accused them of not having a stable economic policy.
    • The economy did not have a high growth rate and spending on defence remained very high
    • Unemployment figures remained high.
    • The Conservatives under Macmillan oversaw the conversion of education from selective to comprehensive (schools that do not select students based on academic achievement or other selection criteria) - many in the party disapproved of this.
    • An increase in immigration led to social tensions, such as the 1958 Notting Hill Riots.
    • Britain's application to join the European Economic Community (EEC) was vetoed by French President Charles de Gaulle in 1963.
    • Macmillan's reputation became tarnished by scandal, particularly involving officials accused of spying for the Soviet Union, exemplified in the 1963 Profumo Affair. Macmillan resigned in this same year and was replaced by Alec Douglas-Home.

    Did you know? Macmillan was a supporter of granting independence to Britain's African Colonies. This is demonstrated in his famous Winds of Change speech.

    The Sixties

    In 1964, the Labour Party won the general election under Harold Wilson. The Labour victory was due to Conservative scandals, high unemployment, and the more liberal image of the Labour Party.

    The Sixties are often referred to as the Swinging Sixties, as the period saw the liberalisation of attitudes against conservatism. It was a youth-driven cultural revolution that saw the emergence of new art, music, and fashion. This was reflected in government reforms of the time on issues such as discrimination, abortion, divorce, and sexual orientation as a result of pressure from various social protests.

    An exception to these reforms was the 1968 Commonwealth Immigration Act, that restricted immigration to allow only those with existing family connections.

    Britain's economic progress was somewhat stagnant during this period. Britain was spending a huge amount of money on defence and not investing enough to stimulate industry, this exacerbated tensions with trade unions.

    Military defence was a divisive issue in the Labour Party. Those on the left wanted to abandon the nuclear deterrent, and the Campaign for Nuclear Disarmament began in 1958. Unilateralism – giving up nuclear weaponry without other countries – was briefly adopted as a Labour policy in 1960 before being abandoned in 1961.

    History of Modern Britain: The Beginning of The Troubles

    A period of violence known as ‘The Troubles’ began in Northern Ireland in the 1960s.

    • In 1921, Ireland was divided between the South and North, and the South became its own republic in 1949 whilst the North was part of the UK.
    • Conflict emerged in Northern Ireland between unionists and republicans.
    • Simplistically, unionists believed that Northern Ireland should remain part of the UK and were generally Protestants.
    • Republicans, usually Catholic, believed Northern Ireland should become part of a united Ireland.
    • These opinions were caused by the Protestant majority in Northern Ireland, which meant Protestants were able to dominate the best housing, jobs, etc.

    In the mid-60s, a civil rights campaign began to end discrimination by the Protest majority. Violent clashes began in 1969, and the government sent the British Army to Northern Ireland. The Irish Republican Army (IRA), which was committed to creating a united Irish republic through violence attacked troops as representatives of the British government.

    It became clear that the only way to end the unionist-republican violence was through genuine power-sharing, but this would not be easily achieved. The British Army would remain in Northern Ireland until 2007.

    The End of the Post-War Consensus

    Many viewed Wilson’s government as a disappointment, and in 1970 the Conservatives returned to power under Prime Minister Edward Heath.

    When Heath took office, he intended to adopt a new style of government by reducing government spending was reduced and cutting taxes. His economic policies backfired, leading to an increase in council house rents, an increase in inflation, and a decline in industrial production. In 1972, Heath announced the government was returning to controlling incomes and prices.

    Poor relations with unions continued, and in 1971, Heath attempted to restrict workers' rights to strike. The National Union of Miners (NUM) won a huge wage increase in 1973 by striking, which was a huge defeat for Heath.

    Bloody Sunday

    In January 1972, British troops killed fourteen people in North Ireland during an attempt to stop a march against internment without trial, all fourteen people were Irish Catholic. This was known as Bloody Sunday.

    In March 1972, Britain took over the governance of Northern Ireland as a temporary measure, but it lasted for 35 years. The 1973 Sunningdale Agreement was a brief attempt to establish a power-sharing Northern Ireland executive but this collapsed in 1974, and the violence continued.

    Modern Britain Bloody Sunday mural StudySmarterFig. 3 - Bloody Sunday mural in Derry painted in 1997.

    Entry into the EEC

    When De Gaulle retired in 1969, Britain was invited to reapply for membership and became a member in 1973. Whilst this gave Britain access to European markets, it had to sacrifice its economic relationship with the Commonwealth which had provided Britain with cheap food.

    People began paying higher prices for food, and Britain also had to impose VAT on most commodity goods.

    The 1973 Oil Crisis

    Until the early 1970s, Western countries had enjoyed a stable supply of cheap oil, but this changed when countries began to take control of their own industries. They reduced oil supplies to Western countries and raised prices, which had a devastating effect on Britain’s economy even though it was now in the EEC.

    This situation, along with the impacts of union strikes, led to a Labour victory in the 1974 election.

    Labour 1974-79

    Harold Wilson once again became Prime Minister in 1974, but this time he inherited the economic issues that followed the rise in oil prices. To get a loan from the IMF in 1976, Britain was required to cut public expenditure, which was not supported by many Labour members. The government did however cut spending, stabilising the economy but increasing unemployment.

    Labour had a small majority so needed support from other parties. In 1977, Labour made a pact to consult liberals on important issues if they voted in line with the government.

    Another area that was not going well was Northern Ireland – power-sharing was not working, and IRA attacks in Britain led to the Prevention of Terrorism Act in 1974.

    In 1975, Wilson offered a referendum on membership in the EEC – the public voted to stay in, but the implications were not properly explained. Shortly after this, Wilson retired in 1976 and was succeeded by James Callaghan.

    Callaghan’s time in office was characterised by a series of failures:

    • Union strikes were rife and increased after Callaghan announced a limit on wage rises. Strikes often ended in wage rises for workers.
    • On 22nd January 1979, 1.5million public service workers went on strike in response to public expenditure cuts. Strikes continued, known as the Winter of Discontent.
    • On 28th March 1979, the government lost a vote of no confidence and had to call an election. The Conservatives won the election under Margaret Thatcher, and Britain entered a new era.


    Margaret Thatcher had a new vision for Britain and had a large enough majority to introduce radical change. Her government can be considered part of the New Right – a conservative movement that attacks Keynesian economics and large state power, whilst emphasising traditional social values. So, what exactly did the "Iron Lady" do?

    • Monetarism: Monetarism was a theory that concluded government spending caused inflation. Thatcher cut spending, which had the desired effect but also caused job losses. In 1981, riots broke out among black youths due to poor job prospects in inner cities, and feelings of discrimination.
    • The Falklands War 1982: Argentina seized the Falklands in April 1982 although the vast majority of residents wanted to remain as a British territory. Thatcher led Britain against Argentina, and her victory hugely boosted her popularity, which had begun to decline.
    • The Miners' Strike: Britain's coal industry had been experiencing hardship throughout the century so Thatcher’s government intended to close unprofitable mines. The Miners’ Strike began in 1984 and lasted for a year before the miners were defeated. It was a success for Thatcher who aimed to weaken the power of unions but led to job losses and social disruption.
    • Supply-side economics: By the mid-1980s, the government changed policies from monetarism to supply-side economics, which aimed to incentivise people by letting them keep more of their income.
    • Deregulation: Deregulation meant removing financial and legal restrictions on industries. For example, credit controls were abolished, and council house tenants were able to buy their rented homes.
    • Privatisation: Privatisation involved selling nationalised industries to private buyers and investors. This enabled more British people to become shareholders and provided the government with more money.
    • Northern Ireland: In 1985, under the Anglo-Irish Agreement, the Irish Republic recognised Northern Ireland as part of the UK, and Britain proclaimed its support for civil rights for all in Northern Ireland. Armed struggle continued.
    • Europe: Thatcher was concerned about Britain’s membership in the EEC – she saw the protectionist organisation as outdated in the new age of globalisation and considered Britain’s budget payments too high. Despite this, she ended up taking the country into closer union with Europe through the 1986 Single European Act.


    A policy of restricting international trade through various government regulations


    Process of international interactions between governments, companies, and people

    Modern Britain Margaret Thatcher StudySmarterFig. 4 - Margaret Thatcher.

    The UK-US special relationship

    Thatcher's actions in the Falklands impressed US President Ronald Reagan, and this was a period during which the US and Britain enjoyed a ‘special relationship’.

    This special relationship was demonstrated in the 1986 Westland Affair. When Defence Secretary Michael Heseltine proposed saving British helicopter company Westland by making it part of a European association, Thatcher chose an alternative proposal which sold it to a US company.

    Thatcher was also instrumental in the end of the Cold War through collaboration with Reagan.

    Towards a New Consensus

    This period 1987-97 saw the fall of Thatcher and the realignment of the Labour Party.

    The fall of Thatcher

    A key element in Thatcher’s downfall was the introduction of the poll tax. It was a flat-rate tax to fund local services and was introduced in Scotland in 1989, and in England and Wales in 1990. This faced huge opposition, even within the Conservative party, and millions of people refused or avoided paying the tax. On 31st March 1990, there was a huge anti-poll tax demonstration in Trafalgar Square. The tax was withdrawn in 1991.

    Modern Britain Poll tax riot in London, 1990 StudySmarterFig. 5 - Poll tax riots on 31 March 1990 in Trafalgar Square, London.

    Thatcher also gave a speech in Bruges in 1988 which criticised the EEC for considering moving towards a centralised Europe. She took Britain into the Exchange Rate Mechanism (ERM) – a monetary union with Europe – in 1990 despite her anti-Europeanism. In 1990, Foreign Secretary Geoffrey Howe criticised Thatcher’s anti-European stance and resigned – this was a huge defeat for Thatcher.

    Thatcher faced rising opposition from within her own party, and there were feelings that the Conservatives would not win the next election with her as the leader. In 1990, she faced a leadership contest and though she won the first round narrowly, she withdrew from the race as she no longer had the support of her party.

    John Major

    John Major became Prime Minister in 1990, and his time in office was mainly concerned with foreign affairs. His policies were based on the ‘Citizen’s Charter’, which detailed a less tough version of Thatcherism.

    • He cooperated with the US during the 1991 Gulf War, helping to end the occupation of Kuwait by Sadam Hussein.
    • He signed the Maastricht Treaty which took Britain into an even closer union with Europe – it was at the point that the EEC became the European Union (EU). The Treaty however faced opposition in Parliament – when it was not ratified, Major made accepting the Treaty part of a formal vote of confidence in the government. This made the government look desperate.
    • Regarding Northern Ireland, a ceasefire was reached in 1994 but violence returned soon after.
    • After winning a leadership election in 1995, Major also involved Britain in events in Bosnia. Britain contributed to NATO attacks on Serbian forces to prevent their genocide of Muslim Bosnians.
    • A series of scandals revealed about members of the Conservative party weakened Major's reputation.

    The Conservatives lost the 1997 election in the heaviest defeat of any government in the century, due to concerns around Europe, scandals, and Major’s leadership. Additionally, New Labour had emerged.

    New Labour

    New Labour was first led by Tony Blair and comprised of several key elements: the abandonment of nationalisation, legal restrictions on unions, and no mention of socialism.

    Domestic Policy

    Blair relied on spin doctors during his time as Prime Minister – these were advisers that presented policies in a favourable light. They also provided Blair with ways to promote New Labour through terms such as ‘Cool Britannia’, which was used to describe how in touch Labour was.

    Key developments included:

    • Reforms to the House of Lords
    • The creation of the Scottish Parliament and Welsh Assembly as devolved governments
    • The 1998 Good Friday Agreement established a power-sharing government in Northern Ireland. The violence ended completely in 2006, and in 2007, the British Army finally withdrew.

    Gordon Brown was Chancellor of the Exchequer under Blair. He gave large amounts of money to public services, especially the NHS, and many more people found employment in the public sector. Although employment grew, such a high percentage of people working for government agencies undermined democracy.

    In terms of social change, Britain developed an ageing population, which led to increasing demands on welfare services and higher taxes for working-aged people. Tensions around immigration and multiculturalism also increased. In 2001, there were riots in Bradford, Manchester, and Oldham between racial groups. In 2006, the Religious Hatred Act protected people from being attacked for their religion. The period also saw the growth of civilian movements such as environmentalism.

    Foreign Policy

    Key international events under Blair included:

    • Renewed military intervention against Serbia in 1999
    • The Blair Doctrine: introduced in 1999, the doctrine stated that the best way to defeat tyranny was through force if diplomacy was not an option.
    • 9/11: The 2001 attacks on the World Trade Centre in New York led to the start of the war on terror. Blair was a close ally to the US and sent British forces to support the US in Afghanistan against the terrorist Al-Qaeda.
    • Iraq: Blair imposed sanctions on Iraq along with the US in 1998 against Saddam Hussein. In 2003, the countries invaded Iraq against international land and domestic opposition; by 2004, Sadam’s forces were broken, and the US and Britain began to occupy Iraq.
    • The London Bombings: In 2005, 56 people were killed and many more were injured by bomb attacks by Islamist terrorists.
    • Europe: Labour became committed to union with Europe. 80% of new laws introduced under Blair were influenced by the EU. Blair advocated a ‘third-way’, which involved states retaining sovereignty but collaborating on matters of common interest. In 2004, Britain signed a treaty establishing a European constitution.

    Involvement in the Iraq War is a lasting legacy of the Blair administration and led to mass demonstrations for peace throughout Britain. Despite this, the Labour Party was re-elected in 2005, and Gordon Brown became Prime Minister in 2007.

    Modern Britain - Key takeaways

    • From 1945 to 2007, Britain's society transformed with the introduction of the welfare state, increased immigration, liberalisation during the Sixties, and the weakening of trade unions.
    • In terms of international relations, the era of the British Empire ended and many colonies were given independence, particularly under Macmillan. Britain entered into a union with Europe but this divided opinions - we can now see the background of the issues that eventually led to Brexit in 2016.
    • Scotland, Wales and Northern Ireland gained power over many of their own affairs with the creation of devolved assemblies. The Troubles in Northern Ireland were a key issue for the government from the 1960s into the 21st century.
    • After World War Two, the Conservatives and the Labour Party were generally aligned on most issues but this changed in the 1970s with Heath and more notably Thatcher's radical reforms.
    • Control of the government has gone back and forth between the Labour and the Conservative party throughout Modern British history; by the end of this era, Labour had realigned itself and resolved many of its historical issues.
    • By the end of the era, the war on terror dominated Britain's international policy.


    1. Fig. 1 - East London during the Blitz of WWII ( by Sue Wallace ( Licensed by CC BY-SA 2.0 (
    2. Fig. 2 - Sir William Beveridge plaque ( by Spudgun67 ( Licensed by CC BY-SA 4.0 (
    3. Fig. 3 - Bloody Sunday mural in Derry, Northern Ireland ( by Keith Ruffles ( Licensed by CC BY 3.0 (
    4. Fig. 5 - Poll Tax riots 31 March 1990 on Trafalgar Square, London ( by James Bourne ( Licensed by CC BY-SA 4.0 (
    Frequently Asked Questions about Modern Britain

    What is meant by Modern Britain?

    Modern Britain refers to the transformation of Britain from the end of World War Two - in the case of this article, this period continues until 2007, but Britain is still transforming today!

    When did Britain become modern?

    Modernity is a process, so there is not a specific date that this happened. British modernisation began in the 18th century with the Industrial Revolution and continued as Britain built its empire. The period of Modern Britain however usually refers to post - WWII as this is when Britain transformed into the country we know today.

    What is modern British culture?

    Modern British culture has a lot of influences from different cultures due to the immigrants that have come to Britain over the years. Culture in Britain now is a combination of these influences and Britain's history.

    When did Modern Britain start?

    Modern Britain is considered to have begun after World War Two ended in 1945.

    Test your knowledge with multiple choice flashcards

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

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

    Britain is no longer part of NATO.


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