Economic Reforms 1974-76 Flashcards
What was the major problem that Wilson had to deal with upon winning march 1974 election?
-surge in inflation due to rush of large wage increase demands deemed necessary to get out of Ind crisis
When did chancellor Healey give a speech and what was it regarding?
-speech Jan 1975 Leeds
-stern warning of dangers - wage inflation caused unemployment + was vital to control public spending
What did Healey do in response?
-published new budget April 1975
-imposed steep rises in taxation + public spending was cut
What did Tony Benn do in 1974 in response to the current crisis?
-set up National Enterprise Board (NEB) in 1974
-to administer gov share holdings in private companies
-give financial aid
What happened to the NEB?
-aim was to increase investment
-but by 1975 effectiveness being questioned
What did the gov do to help enterprises?
-nationalised failing car manufacturer Br Leyland
-but caused renewed controversy about role of gov rescuing ‘lame duck’ industries
What were the problems with the ‘social contract’?
-became apparent social contract not limiting wage increase demands
-so by 1975 formal pay restraint policy introduced
What was the result of this shift in policy?
-divisions within party intensified
-legs wingers Foot + Benn didn’t want put so much pressure on TUs + believed in more state intervention in ind
What happened in march 1976?
-Wilson suddenly resigned from party leader
-unexpected departure gave rise to conspiracies over his resignation
What is the reason behind Wilson’s departure?
-concerns over his health
-promised his wife he would return after two more years
How successful was Wilson in dealing with economic problems?
-his attempts mainly failed
-didn’t solve the due econ situation
-had to make shifts in policy directions that intensified party divisions
