1964-70: Economy Flashcards
Why was the DEA a failure, when was it abandoned?
Abandoned in 1966 after rising unemployment and growing inflation.
What were the issues with the creation of the DEA?
No United government support - Brown/DEA Vs Callaghan/Treasury.
How did the failure of the national plan (DEA) contribute to Labours loss in 1970?
It was a failure which made Labours policy’s look weak. Wilson was too busy keeping key personalities happy than giving the best man the job - bad leader. Brown was inconsistent and impulsive and a drunk. Civil servants didn’t know which boss they should listen to.
What replaced the DEA?
Prices and incomes policy - government intervention to set limits on price rises and called for wage restraints in negotiations between unions and employers - aim to limit inflation.
Why did the relationships with TU breakdown after the introduction of prices and incomes policy?
Sterling crisis caused by strikes of seamen and dockers. Wilsons reaction to these strikes was critical and right wing. Trade unionist frank cousins resigned over the incomes policy - highlighted internal labour divisions.
Why did in place of strife contribute to the breakdown of relationship with TU?
Barbara castles in place of strife was controversial and TU found it hard to accept key aspects such as a 28 day cooling off period and an industrial relations court to prosecute those who broke the rules.
Why did the relationship with the TU cause labour to loose the election in 1970?
TU crucial to maintain full employment. In 1969, the TUC negotiated a compromise with Wilson - humiliating climb down by government and highlighted Labours weakness and failure to assert authority.
What did the devaluation crisis do?
Damaged labours credibility as they tried so hard to avoid devaluation. Make governments economic policies look futile e.g second rejection from the EEC in 1967 due to labour being undecided and Wilson being lukewarm.
What happened during the devaluation crisis?
Reduced exchange rate of sterling from $2.80 to $2.40 per £1. Wilson told people the £ was not worth any less.
What did Jenkins do when he replaced Callaghan as the Chancellor?
Raised taxes, tightened government spending and prioritised balance of payments. Jenkins achieved a balance of payment surplus by 1969 and this gave confidence to Labour of victory of the 1970 election.
What were the internal divisions in the Labour Party?
Right and left of the party remained from Gatskell V Bevan. Underlying tensions over Clause IV. Personal rivalries between Wilson Callaghan brown and Jenkins.
What were the tensions between brown and Wilson?
Resentful after loosing leadership election and not made foreign secretary in 64.
What were the tensions between Wilson and Jenkins.
He was a gaitskellite and tried to get cabinet to support devaluation against Wilson.
Why did the divisions between Wilson Jenkins and callaghan highlight his paranoia?
Jenkins and Callaghan would never work together as Callaghan didn’t approve of Jenkins pro European stance or liberalising legislation. Jenkins was critical of callaghans failure to devalue when chancellor.
Why did the labour divisions cause the loss of the 70 election?
Too much of wilsons time was devoted to keeping party unity and abolishing any threat of his position and this took his attention away fro, key economic problems. The left, unions, local government and youth were frustrated so the divisions were likely to carry on in to the 70’s if labour were reelected - unstable
