Callaghan 1976-79 Flashcards
Name 2 main economic failures for Callaghan’s government
IMF crisis 1976
The Winter of Discontent 1978
What was the IMF crisis?
Callaghan said at the party conference in 1976 that in order to avoid the ‘twin evils’ of unemployment and inflation (also a run on the pound) they needed an emergency loan from the IMF for £3.9 million.
What were the negative effects of the IMF crisis/loan?
To the nation it made Britain look weak and bankrupt, these negative views were only amplified by Callaghan responding with the comment “crisis, what crisis?”. Also the left resented the influence of international financiers and the Tories could exploit the view of Labour as economically irresponsible.
How could it be argued that the IMF crisis wasn’t too damaging for Callaghan?
Overall he handled the actual crisis well, inflation fell to 10% and unemployment to 1.6 million. It may have been the correct choice for the nation.
What 2 issues did Labour’s small majority in government cause?
A reliance on the Scottish Nationalists
A reliance of the Lib-Lab Pact
How did devolution and scottish nationalists cause problems for Callaghan?
Scottish nationalists initially supported Labour in the House of Commons which helped due to them having a small majority. But in 1978 in order for the devolution acts to pass there needed to be a 40% turnout, in Scotland this turnout wasn’t reached so despite winning the vote 51% in favour it couldn’t pass. After this the SNP withdrew support for Labour.
What was the Lib-Lab Pact and why did it cause issues for Callaghan?
In 1977 the Labour majority of 3 had become just 1 so for more support they organised a pact with the liberals. 12 MPs agreed to vote with the government as long as they went forward with devolution. However in March 1979 this collapsed meaning the government lost a vote of no confidence over devolution.
What caused the Winter of Discontent 1978?
The TUC rejected the government’s suggested wage rise of 5% and decided to go on strike.
Give 3 examples of the groups on strike during the Winter of Discontent
Ford Lorry Drivers went on strike for 9 weeks and got a 15% pay rise
The entire transport union ASLEF went on strike
Also binmen
What were the bad effects of the winter of discontent?
It made the government look weak again compared to the unions and was great ammunition for the Tories in the 1979 election
How could it be argued that the winter of discontent wasn’t that much of a failure?
The industrial action wasn’t as large scale or as damaging as the Miners Strike in 1974 and disputes were settled in March 1979 with a pay rise of 10%.
