1. Heath: economic and political issues Flashcards
1970 election
Result w/ seat numbers?
Conservative win
43 seat majority
1970 election
Why Labour may have expected to win?
- The government had already passed it’s difficult times
- Wilson was a master campaigner
- Economy was recovering—balance of payments surplus
- Heath’s unpopularity
- Labour’s social reforms (open university/ Abortion etc.)
1970 election
Why Labour may have expected to lose:
- Devaluation—the pounds value decreased, humiliating for Labour/ following Attlee’s government
- “In Place of Strife— regulate trade unions
- EEC rejection— humiliating for Britain’s prestige
- The Troubles- N. Ireland riots / terrorism
1970 election
Why the Conservatives expected to win:
- Heath was hard working,
conscientious and had a image of competence - New ideas about the post war consensus
- Heath’s stance against Enoch Powell’s anti- immigration speeches- shows he is moral
1970 election
Why labour lost/ weaknesses
- Trade unions – series of wildcat strikes and in place of strife
- Balance of payments, attempts to restructure the economy
- Devaluation
- EEC 1967 rejection
- Disillusionment with Labour failure to deliver on promises of 1964 – Labour blown off course
- Wilson magic worn off – indecisive leadership
- Tension within party continued over trade union stance and ideology (Clause IV ghost)
Why conservatives won/strengths 1970 election
- Heath had greater strengths than accounted for and was not Establishment
- Refusal to include immigration in campaign
- Conservative record 1951-1963 – positive party record
- Decrease in Liberal share of the vote – voters return to Tories?
Heaths background, ideology and leadership:
- Born to be a builder, studied at grammer school.
- Remove gov interference, free-market thinking.
- Quiet grumpy, rude, not as popular as other leaders.
Selsdom man
- ‘Selsdon man’ became a symbolic anti- Keynesian, pro free- market individual.
- More free market policies:
- Tax cuts
- reduce gov support for ‘lame duck’ industries
- reform trade unions
- reduce public spending
- Plans formalised at Selsdon Park Conference Jan 1970
Harold Wilson quote about Selsdom man policies
“Selsdon Man is designing a system of society for the ruthless and
the pushing, the uncaring, you’re out on your own”
Anthony Barber
Chancellor of Exchequer 1970-74
Barber boom policies
- Cuts in public spending and tax cuts - to encourage investment.
- Scrapping of the prices and incomes board
- Cuts in subsidies paid to local authorities
Barber boom criticisms
- Abandoning the mixed economy
- Weakening the welfare state
- Undermining the principle of full
employment
Putting economic calculation before social improvement - Rents went up
- Inflaton not accompanie by growth = unemployemnt rising = stagflation
Stagflation
- Unemployment w/ high inflation + stagnent growth, went against Phillips curve.
U-turn
- As stagflation increased inflation to 15% by the end of 1971 and industrial output decline, Heath lost confidence in his policies.
- He announced that the government would return to controlling prices and supporting ‘Lame Duck’ industries.
- Rolls Royce was nationalised in 1971 and shipbuilders on Upper Clyde were also support with £34 million from the government
- 1973 = unemployment down to 500,000.
OPEC oil crisis
Oct 1973
* Yom Kipper War in Middle East.
* Prompted OPEC to decalre an oil embargo.
* Exports suddenly stopped.
* £ of oil rocketted 4x usual levels.
* Context for National Union of Miners to demand new pay rise in Nov 1973
What problems led to the Industrial relations act 1971
- a dockers’ strike
- large pay settlement for dustmen
- postal workers strike
- ‘go-slow’ by power workers which led to power cuts.
Industrial relations act 1971
- Similar to Barbra Castles In Place Of Strife.
- Abolished Nation Board for Prices and Incomes.
- Set up Industrial Relations court.
- Provided for strike ballots + ‘cooling off’ period before official strikes could begin’
Results of Industial relations act 1971
- Trade Unions Congress (TUC) + Conference of British Industry (CBI) opposed it.
- 1972 = major strikes by miners, ambulence drivers, firefighters, civil servants, hospital staff, power workers & engine drivers.
National Union of Miners (NUM) strike, date, reasons and events
- started 9th jan 1972 during harsh winter weather.
- reasons: to gain wage increase and highlight number of pit closures.
- Use of flying pickets, particularly by Yorkshire miners, led by Arthur Skargill stopped the movement of coal around the country.
NUM strime outcomes
- By 9th feb, gov declared a State of Emergency as schools were closed.
- 1.2 million workers laid off.
- Itset up the Wilberforce Committee to examine the miners demands and announced 3 day-week to save electricity.
- Wilberforce Committe came down on miners side + NUM leader Joe Gormley was able to negotiate a generous wage settlement.
3 day week
- this to save electicity instead of giving in to the miners.
- meant that: business and commercial premises could only open for three working days per week/ electricity blackouts left ordinary people without light and heating/ many people
were left sitting in darkness with no opportunity to cook, listen to the radio, watch TV or
even read a book
o Heath hoped that this would reduce Britain’s need for fuel and allowed the government to
survive longer than the strikers
o He also passed the Industry Act in 1972, that tried to involve the government, the TUB and
the CBI in agreeing wages, prices and benefits
Industry act 1972
Aimed to involve the government, TUC and CBI in agreeing wages, prices, investment and benefits.
- was heavily criticied by some on the right of Conservative party e.g. Enoch Powell
Number of strikes and workung days lost 1971-4
- 1971 - 2,228 - 13,551,000
- 1972 - 2,497 - 23,909,000
- 1973 - 2,873 - 7,197,000
- 1974 - 2,922 - 14,750,000
Results of strikes and 3 day week
- NUM gained 21% pay increase, nearly 3x orginal offer.
- Emboldened - went to strike again ‘74 for more money.
