Harold Wilson and the Economy Flashcards
Why did Labour manage to win the 1964 election?
Wilson was young and dynamic compared to Home and Tory Establishment and was confident in the media
Wilson often threw shade at Home and his lack of economic understanding
Bevan and Gaitskell were now dead so issue of the split was no longer a problem
Labour exploited public mood of change with slogan of ‘13 years of Tory misrule’
What were the results of the 1964 general election?
Labour received only 13 more seats than Tories
Lower turnout for tories as more were voting Labour and Liberal
Labour and scientific development
Wanted to produce more scientists
Must do better to keep them in the country
Must make more intelligent use of them once their trained than previous scientists
Must reorganise more purposely to national production effort
How was Wilson different to previous PMs?
Compared to previous upper class predecessors, he seemed like an outsider
Hard for him to convince B’s powerful elite of his worth as not taken seriously enough
Wasn’t privately educated, went to grammar school
What was the ‘White Heat of Technological Revolution’?
Was an attempt to portray his govt. as modernising and to move away from traditional Etonian politics-very vague
What was included with the ‘White Heat of Technological Revolution’?
Ministry of Technology set up in ‘64 with TU leader Frank Cousins as leader but he resigned not long after as not enough progress
How successful was the Ministry of Technology?
Within 2 years modernisations had been made but not necessarily ‘white heat’
64% of households had washing machines by ‘71
‘Office-boy’ image
Developed this image after following Bevan by resigning from Attlee’s govt. and gave him reputation of being ‘Nye’s little dog’ and was deemed disloyal by Bevanites due to his rapid return to prominence
Harold Wilson as an outsider
Conspiracies that he was a communist spy and many though he didn’t belong as he wasn’t a stereotypical politician
He was a paranoid man who in times of trouble became preoccupied with idea he was being undermined by plots
Marcia Williams and Wilson
Williams was a loyal and valuable advisor to Wilson, was head of political office
Used her expertise + ability to keep Wilson on how toes, making him a better politician
However there were rumours that the two were having an affair
What was the National Plan?
1964 introduced by Wilson with aim of increasing exports and replacing imports to solve balance of payments crisis, whilst continuing with the post-war consensus
In order to do this, Department of Economic Affairs was created to set growth targets and create economic growth councils
How successful was the National Plan?
Started well, encouraging cooperation between govt., business + trade unions but most targets weren’t met and the plan was quietly abandoned in ‘67
There was also rivalry between James Callaghan and the DEA
1966 general election
Labour managed to impress the electorate enough by appearing dynamic and modernising and increased majority over Tories to 110 seats
What were the results and figures of the National Plan?
Was predicted to increase British growth rate by 3.5% over 9 years, transforming social and economic life
Really saw 2.7% growth per year
40% increase in exports from ‘63 - ‘70 which helped with balance of payments
Turned £800 million debt Wilson inherited to surplus by ‘70
Why did Wilson have to devaluate?
Borrowed £1 billion from IMF in ‘64, by ‘67 he saw that money issues were big and couldn’t ask for bigger loan
Also an outbreak of war in Middle East putting strains on oils supplies, also dock strike in ‘67 contributing to devaluation
Was reluctant to devaluate as sign of economic weakness
The devaluation itself
Put off devaluation and publicly blamed TUs for the countries poor economic strike saying the economy had been improving, only to be ‘blown off course by seamen’s strike’
Devalued from £2.80 to £2.40, meant imports would be more expensive and public would make British exports cheaper in other countries
Wilson eventually announced this on TV
Second attempt to join EEC
Due to economic pressures, Wilson and Foreign Minister Brown attempted to join EEC in Nov ‘66
Went on tours of European cities to gain support but nothing much had changes since last time and De Gaulle said ‘non’ for the second time
Why did Wilson appeal to the Left of the party?
Was originally thought on be on Labour left, having resigned with Bevan over prescription charges in ‘50
Launched leadership bill against Gaitskell in ‘61
Why did Wilson appeal to the Right of the party?
Served as Gaitskell’s shadow cabinet
In favour of Britain developing nuclear weapons
Attempted to reform TUs in ‘69
What would have deflation involved?
It would support the pound by preventing inflation but was the stop-go approach which was what he was trying to avoid
What other cuts did Labour make after devaluation?
Made defence cuts, introduced hire purchase restrictions ans increased interest rates
In effect, Labour combined devaluation with the old deflationary measures of stop-go economics
Who was Roy Jenkins and what did he do?
Replaced Callaghan as Chancellor in ‘64 and used deflationary measures but cutting govt. spending in all areas and by ‘69 Jenkins had achieved a balance of payments surplus
What had the relationship between govt. and TUs been like pre ‘66?
Hadn’t caused many problems and due to few strikes, Wilson created a matey ‘beer and sandwiches’ approach to meeting union bosses but after economic struggles,
Frank Cousins also meant good relationship
rising inflation meant Wilson wanted to bring TUs into line more, also had been seamen’s strike
Who was Barbara Castle and what did she introduce?
Was Employment Minister and very left wing
She introduced ‘In Place of Strife’ in ‘69
What was included in ‘In Place of Strife’?
28 day cooling off period before a strike could go ahead
Govt. would be able to impose a settlement whe TUs were in dispute with each other
Strike ballots could be insisted on
Setting up of industrial relations court
What was the response to ‘In Place of Strife?’
TUs were appalled and many Labour MPs (inc. Callaghan) threatened to rebel
In they end they backed down and were nationally made fun of
Wilson and railways
Halted unpopular railway closures which had seen the closing of 1000 miles of British railways which had been an attempt to increase car ownership and save money but had been met with great protest
This was popular among public
Economy from 1964-1966
Economy performing encouragingly with govt.’s plan to temporarily tax imports being successful
Unemployment was low and living standards were generally high
Although inflation had increased by 9%, wages had increased by 11%
Economy from 1966-1970
Wilson had gained majority he needed but numbers started to take a downward turn and failure of dealing with TUs and devaluation meant economy wasn’t great
Was the British economy entirely Labour’s fault?
No, Tory Chancellor of the Exchequer apologised to Callaghan when he took over saying ‘Sorry old cock to leave it in this shape’
