2. Wilson & Callaghan: Politics and economic issues Flashcards
‘74 election - Ted heath failure?
Economy
- High inflation 6-20% by end of his term
- High umem, 1 mil in ‘72 + ‘73
- U-Turn
- Increases in public spending w/out raising taxes = budget deficit.
‘74 election - Ted heath failure?
EEC
Sucsessful application jan 1973
‘74 election - Ted heath failure?
Industrial relations - policy
- aimed to reduce tyrade union power
- limited TU role in workpace.
- Tighter controls on collective bargining.
- legal resitrictions on stricking abilty
- ‘71 industrial relations act = controversial
‘74 election - Ted heath failure?
Industrial relations - 1972 miners strike
- lasted serveal weeks, over pay + conditions.
- distruption and power shortages.
- 3 day week, jan ‘74 = distruption to econ, lifted march, unpopular, falure, reduced electriity demand
‘74 election - Ted heath failure?
Acts
- Immigration act 1971 = controlled, quotas and permits, aided impact.
- Clean air act
‘74 election - Ted heath failure?
NI
- Bloodu sunday = worsened tensions, 13 killed by british army
- IRA support grew
- failed sunningdale agreement.
- violence
- unrest
‘74 election
Why did Heath feel save enough to call it call it?
- Intended central issue of elction = “who governs britain?”
‘74 election
feb - No. of seats
Labour = 301
Conservative = 297
= hung parliment
‘74 election
feb - % of votes
Labour = 37.1%
Conservative = 37.9%
‘74 election
Wilsons less promising position back in gov
- inflation 15%
- deficit 3 billion
- trade unions needed dealing w/
- NI sitch = precarious
- Labour less united
- Minority government
When and why did Wilson feel confident enough to call for another election?
Oct 1974
Voters still accosiated Heath w/ 3 day week + miner conflict
Oct 1974 election result
Wilson won majority, only just 18 gained seats, Conservatives lost 21. Overall majority = 3
Social contract definition
voluntary pay restraint by TU and in return gov would reappeal Heath’s Industrial Act and pay board.
When was social contract negotiated?
1973, while in opposition by Wilson
Why did they do the social contract?
to act quickly + demonstrate that they were better equipt than Conservatives to work w/ TU.
Social contract concequences
- TU sent clear message that gov didn’t want any confrontations.
- agreement quickly reached = NUM allowing Wilson to end state of emergency + 3 day week.
- Tony Benn + Michael Foot (left-wing) put in charge of departments of Industry and of Employment.
- Dennis Healey chancellor issued 2 new budgest (march+july) to deal w/ econ crisis w/out annoying TU.
National Enterprise Board, why was it set up?
1974 under Tony Benn
To administer gov share holdings in private companies
Could also give financial aid
AIM = to increase investment
National Enterprise Board, weaknesses
- By 1975 its effectiveness was being questioned.
- Gov decision to nationalise British Leylnd (car manufacter) caused renewed cries about role of gov in rescuing ‘lame-duck’ industries.
Social contract weaknesses
- becoming apparent was not limiting wage demands.
- caused more formal pay restrait policy to be intro. 1975. = intensified party divisions.
- Michael Foot + Tony Benn = didn’t want to put pressure on unions, believe in more not less state interevntion on industry.
When did Wilson resign?
March 1976
James Callaghan general info
- Attended public school (grammar)
- Couldn’t afford entrance to Oxford
- Worked for Inland Revenue
- Fought in the Navy (WW2)
- Friendly with Unions
- Seen as a ‘safe pair of hands’
- Wont divide the party - seen as ideal for it.
Sept 1976 Callaghan speech about economic situation
- warned ‘cosy world’ of full employment was gone.
- Need for increase in producitivity to avoid ‘evil twins’ = inflation + unemployemnt.
- argued previous govs of 20 years had failed to do so - both parties.
IMF
= International Monetary Fund
* emergency loan.
* axious there may be a run on the pound.
* DEC = Healey recieved 3 billion loan, in return gov had to make big spending cuts.
IMF loan - imrpovements to economy
- Callaghan handled crisis well.
- Economy recovered.
- Improved when North Sea Oil came bout - 9 oil fields in production.
- Inflation fell ‘76 = 17%. ‘79 = 13%.
- Saved from run on the pound.
- Unemployment 1.6mil (while still high, was in delcine).
- No of days lost to industrial disputes fallen to 10 year low.
