1974-1979 Flashcards
what were labours main problems when they came to power in feb 1974
-narrowness of their overall majority (hung parliament, relied on liberals votes)
-effects of inflation after oil crisis (value of pound/b of p threatening bankruptcy)
-struggle with trade unions
-wilson now older and less energetic
-disunity, needed to balance competing views to ensure other parties support-manifesto said they’d ‘redistribute wealth’ and ‘make working people better off’?
what economic problems did wilson inherit
-inflation 15%-forced into public spending cuts
-b of p=£3bil befecit
-british industry not producing enough goods to export at the right price so foreign competitors had a larger market share (GDP one of lowest in europe)
how did wilson try to deal with unions and was it effective
-1973 negotiated the social contract with the TUC
(a loose contract/not law to work with them but also give them rules)
-intially gave them an electoral advantage?seen to be working with them? but wasn’t effective in limiting wage demands therefore inflation
what was done to deal with the economy
-the national enterprise board (NEB) was set up in 1974 under tony benn to administer govs share holdings in private companies and increase investment (eg nationalised failing car manufacturer british leyland=controvsery)
-april 1975 healey set a budget to rise taxes/cut public spending after in jan warning of dangers of inflation in speech
why was the joining of the eec divided and what happened
-militant left wing eg tony benn wanted to withdraw as they regarded it as a capitalist club/scared of europe becoming federal,loose their sovereignty
-right wing eg roy jenkins wanted continued membership
-benn suggested a referendum arguing the terms agreed were not good enough, wilson agreed to maintain party unity/ clarify he would win, 5th june 1975 67.2% (17mil) voted in favour of continued and 32.5% (8mil) voted against =convincing majority/margin of victory
-week before labour sent a leaflet around encouraging them to vote stay and the campaign was well financed by business leaders-415,419 company chairmen voted to stay/ people too scared to leave?
what is fait accompli
describe an action which is completed before those affected by it are in a position to query or reverse it (people voted to stay in eec out of fear of leaving)
why was the eec not that beneficial
-benefits outweighed by inflation
-increased costs with no real trade
when did wilson resign
april 1976
name 3 facts about callaghan
-older than wilson
-from the right of the party
-inspired confidence even though he was never in higher education
why was the left angered by their economic policies
goes against traditional labour policies, angered left/unions, argued they were following conservative policies shaped by international finances
-looked weak
what economic problem did callaghan face
-the pound fell to $1.57 and the us treasury secretary offered a loan of $5.3bil that needed to be repaid by dec 1976 but they couldn’t
-denis healey was forced to ask the IMF for a loan of £3bil in sep 1976 which was agreed if britain made spending cuts of £3bil, healey made cuts of £2.5bil and taxes on alcohol/tobacco -tried to prove this was essential in in a labour conference in september
what helped recover the economy
britain gaining advantage of producing her own north sea oil, north sea oil came ashore in 1975
=end of 1977 they were able to repay most of the loan and had a surplus b of p
why was the left angered by their economic policies
what was the lib lib pact and why did it happen
-by jan 1977 their majority was 1
-for survival Callaghan made a pact with lib leader david steel
-liberals would vote with labour in return they could see the proposed new bills before they were introduced to decide if they’d support them
-steel wanted proportional representation but nothing came of it
-callaghan promised to do devolution for scotland and wales so he set up the 1978 devolution acts to open the way for referendums but in the terms a clause states more than 40% of the electorate had to approve it which made it unlikely to happen so devolution was defeated
-success in prolonging gov?less independance?
what is proportional representation
an electoral system in which parties gain seats in proportion to the number of votes cast for them (bad for labour if liberals had it because they’d loose seats)
what is devolution
Devolution is when a central government transfers powers to a local government (each has the right to make their own laws)
