2.5 Wilson and the Labour governments, 1964-70 Flashcards
When did Harold Wilson become PM?
1964
What did Wilson promise in his campaign?
Britain would catch up with ‘the white heat’ of technological change
When was Labour able to consolidate its position with further election victory?
1966 - gave it a sizable majority of 110
Why was Heath no match for Wilson?
Wilson a better political tactician, was able to portray a more attractive image to the voters.
Heath came across as stiff + lacking in personality
Where had Wilson been seen to be, ideologically?
on Left of Labour Party - Bevanite, resigning in 1950 over prescription charges
However had also served in Gaitskell’s cabinet
What political move secured him as the Left’s obvious candidate in the future?
He challenged Gaitskell for leadership in 1961
parts of Wilson’s image that made him seen as classless
First PM educated at state secondary school, smoked pipe, spoke with Yorkshire accent. Relaxed, skilful performer on TV
What did Wilson rely on in his leadership?
relied heavily on team of personal team of trusted advisers. Dominate by personality of Marcia Williams - his ‘personal political secretary’ - ‘kitchen cabinet’
By 1964, what was widely accepted?
that Britain was lagging behind other countries like West Germany + Japan
What was a key aim of Wilson’s economic policies?
to break from ‘stop-go’ cycle
How large was the deficit that Labour had inherited?
£800 million
What were the two classic solutions to the deficit?
deflation - stop-go (would break from Labour’s manifesto pledges)
devaluation - might gain Labour reputation as party of devaluation (Attlee, 1949)
How did Wilson initially set about combatting the deficit?
New Department of Economic Affairs - led by George Brown (establish voluntary agreements about wages + prices with TU leaders, industrialists, civil servants)
- did not have united government support - virtually in competition with Chancellor Callaghan + Treasury
- DEA abandoned in 1967
What did the Government bring in instead of the DEA?
a prices + incomes policy - Frank Cousins (trade unionist) resigned over it
What is a prices and incomes policy?
government intervention to set limits on price rises, and to call for wage restraint in negotiations between TUs and employers
When had the Labour governments survived sterling crises?
in 1965 and 1966
What happened in 1967 to negatively affect the economic situation?
outbreak of war in Middle East - affecting oil supplies
major national dock strike, Aug 1967 - affecting balance of payments
How much did Labour drop the value of the pound by in 1967?
by 14% to 2.40 US dollars
As well as devaluation, what other economic policies did Labour pursue?
- defence cuts
- hire purchase restrictions
- higher interest rates
(deflationary policies that looked little different from the ‘stop-go’ policies of previous Tory governments)
What damaged the Labour government’s credibility, particularly economically?
devaluation crisis, after trying so hard to avoid devaluation
+ second EEC rejection
- made government’s economic policies look futile
Who replaced Callaghan as Chancellor in 1967?
Roy Jenkins, who had been strongly in favour of devaluation in 1964
What methods did Jenkins use?
deflationary methods
- raised taxes
- tightened up government spending in all areas of the economy, giving top priority to improving the balance of payments
Effects of Jenkins’ deflationary economic policies?
- made government unpopular
- by 1969, Jenkins had achieved a balance of payments surplus
- however, by 1969 to 1970, inflation was running at 12%
In opinion polls in the 1960s, what percentage of people said they had a favourable view of the unions?
nearly 60%
