(!) 2:5 Wilson and the Labour governments - Content Flashcards
What year did Labour win the election, resulting in Harold Wilson becoming Prime Minister?
1964
How many seats did Labour win in the 1964 election?
317
How many seats did the Conservatives win in the 1964 election?
304
What did Labour focus on in their 1964 manifesto?
Abolishing prescription charge
Support for the CND, nuclear non-proliferation
More privatisation where appropriate
Expansion of the welfare state
End colonialism** and create legislature against racial discrimination to support Commonwealth immigrants
Overall a new Britain that more of a face of socialism, pushing for change
What did the Conservatives focus on in their 1964 manifesto?
> Very much a continuation of their strategies, especially their economic strategies
> More economic growth and stability, more trade
> Were okay with Commonwealth countries gaining independence but were eager to arrange trade with them
The 1964 election result can be described as more of a Conservative loss rather than a Labour victory. Why?
The amount of votes and seats won by Labour didn’t change much, but the Conservatives’ votes and seats decreased massively
How many votes did the Conservatives lose in comparison to the previous election?
2 million votes
Why might people not have voted for the Conservatives in 1964?
> Distrusted them after public scandals (e.g. Profumo affair)
Rejection from the EEC
Douglas-Home lacked charisma and was seen as an out-of-touch aristocrat
What was Harold Wilson’s personal image?
A great moderniser and very down to earth. Seen as classless - the first prime minister educated at state secondary school, unlike the Old Etonian style of Eden, Macmillan and Douglas-Home.
However, what evidence is there that Wilson wasn’t as popular as he appears?
He was heckled by the crowd at some of his speeches
What had Wilson promised in one of his most effective campaign speeches?
That Britain would catch up with ‘the white heat’ of technological change
How did Labour further consolidate its position in 1966?
It won another election victory that gave the party a sizeable majority
How many seats did Labour win in the 1966 election?
363
Who was the new leader of the Conservative party, replacing Douglas-Home?
Heath
Even though Heath came across as more modern looking, he was no match for Wilson. Why?
Wilson was a better political tactician and was able to portray a more attractive image to the voters. In contrast, Heath came across as stiff and lacking in personality.
What side of the Labour party did Wilson appear to be on?
Initially, he was on the Left, as a Bevanite, but later served in Gaitskell’s cabinet, on the Right. When he went up against Gaitskell for party leadership in 1961, this made him appear on the Left. However, his personal views supporting nuclear deterrent and reforming the trade unions made him appear on the Right.
What was one of the key priorities of the Labour government when they came into power?
Modernisation of the British economy; reorganising it to break out of the cycle of ‘stop-go’
By 1964, it was widely accepted that in terms of economy, Britain was lagging behind countries like…
West Germany and Japan
While the post-war boom had a great impact on living standards, it was not reflected in…
productivity and growth rates
Britain’s economy seemed to be trapped in a cycle of…
‘stop-go’ - where bursts of prosperity always led to inflation, runs on the pound and regular crises over the balance of payments
When they came into power, Labour inherited a deficit of…
about £800 million
What were the 2 classic economic solutions to this kind of problem?
Deflation or devaluation
Which 2 prominent Labour members did not want to follow through with either of these options?
Wilson and Callaghan
Who was James Callaghan?
Wilson’s Chancellor of the Exchequer
What were the advantages of deflation?
Deflation would support the value of the pound and prevent inflation
What were the disadvantages of deflation?
Deflation was the old ‘stop-go’ approach that Wilson was determined to break away from. It may also have prevented the Labour government from fulfilling its manifesto promises: spending extra on welfare and technology
What were the advantages of devaluation?
Devaluation would help to level out the balance of payments: it would make imports more expensive and help exporters by making British goods cheaper in other countries.
What were the disadvantages of devaluation?
Devaluation would force Britain to scale back its trading activities around the world, as well as making Britain appear weak. Also, the previous Labour government had devalued the pound under Attlee in 1949, so doing this again could give Labour the reputation of ‘the party of devaluation’.
Rather than deflation or devaluation, Wilson was convinced that Britain’s economic problem could be solved with…
careful management and planning
What did Wilson set up and when?
The new Department of Economic Affairs (DEA) in 1964
Who led the DEA?
George Brown
What did Brown do?
> He set growth targets
> He devised a national system of ‘economic planning councils’
> He tried to establish voluntary **agreements about wages and prices **with industrialists, trade union leaders and civil servants
What were the aims of Brown and the DEA?
To secure the economic restraint needed to prevent inflation rising. In this way, the ‘stop-go’ cycle of the 1950s could be avoided.
How did Brown and the DEA fail?
They were not united with the government and didn’t have government support. In fact, they were somewhat competing with Callaghan and the orthodox economists at the Treasury.
In 1966, Wilson moved Brown to…
the Ministry of Foreign Affairs
In what year was the DEA abandoned?
1967
What did the government try next?
A prices and incomes policy (set limits on wage rises and encourage wage restraint) to keep down inflation. This was implemented by a Prices and Incomes Board.
What caused another sterling crisis in 1966?
A long and bitter strike by the National Union of Seamen.
How did the government react to this strike?
They defeated the strike, forcing the strikers to return to work. However, **Wilson was extremely critical **towards them, which resulted in Frank Cousins resigning from the cabinet over the prices and incomes policy. This was the start of the break down of the relationship between the Labour government and the trade unions.
So overall, the government survived the two sterling crises of 1965 and 1966 without having to use…
deflation or devaluation
However, what caused disruption to the balance of payments in 1967?
> An outbreak of war in the Middle East affected oil supplies
> There was a major national dock strike in August 1967
Therefore, Labour was forced to…
devalue the pound
The pound dropped by…
14% to 2.40 US dollars
The government also implemented some deflationary policies:
> Defence cuts
> New hire purchase restrictions
> Higher interest rates
How did Wilson explain the devaluation of the pound to the British public in a television broadcast in November 1967?
“That does not mean, of course, that the pound here in Britain, in your pocket or purse or in your bank, has been devalued.”
“We shall now be able to sell more goods abroad on a competitive basis”
“The goods that we buy from abroad will be dearer, and so for many of these goods, it will be** cheaper to buy British”**
What humiliation did the Labour government face a few weeks after the devaluation?
Britain’s second application to join the EEC was rejected (1967)
Why did this rejection make the Labour government’s economic policies look useless?
The primary reason to join the EEC was for the economic benefits - most of the Labour party did not actually want to join and so Wilson was hesitant.
Who replaced Callaghan as Chancellor of the Exchequer?
Roy Jenkins
What deflationary methods did Jenkins implement?
> He raised taxes
He restricted government spending
He gave to priority to improving the balance of payments
Although these tough measures were unpopular with the public, what did Jenkins achieve?
He achieved a balance of payments surplus by 1969
But by 1969 to 1970, inflation was still running at…
12%
The improvement of the economic situation from 1969 was a key factor in…
making Labour confident of winning the 1970 general election
All governments, including Conservatives and Labour, saw it as essential to satisfy and maintain a positive relationship with…
the trade unions
