Labour governments of Wilson [1974-76] Flashcards
Times of Wilson and Callaghan as PM?
Harold Wilson [1974-76]
James Callaghan [1976-79]
Inherited problems from the conservatives = ?
-Inflation was at 15%
-Balance of payment deficit was at £3 billion
-Problems with the Trade unions
-Precarious Northern Ireland situation
What was Labour’s overall majority from the 1974 election?
3 seats
What did having a majority of 3 seats do to Labour?
Labour had a minority government.
Minority government = ?
Having to rely on other parties for support in order to pass through Legislation in parliament.
Where did Labour get their support from?
Liberals
What was the liberal-labour pact?
‘Lib-Lab’ pact
How seats did the liberal party have?
18
How did the ‘lib-lab’ pact help labour?
Gave labour a working majority of 21.
What was a weakness of Harold Wilson during this tenure?
Wilson himself was older less energetic and had lost some of his political prestige and power.
Why did Wilson resign in 1976?
Wilson suddenly resigned in 1976 and the reasons cited were issues over health and a promise that he had made to his wife that he would step down after a further 2 years in the job.
What had Wilson negotiated whilst in opposition?
In 1973 whilst in opposition he had negotiated the social contract with the trade union congress [TUC].
Social contract = ?
Voluntary pay restraint by the unions and in return the government would repeal Heath’s industrial act and pay board.
What message had the Trade unions been sent by Labour?
Trade unions were sent a clear message that the government didn’t want to enter into a confrontation with them.
What did Labour do to the trade unions in general?
Followed the policy of appeasement. Tried to keep the Trade unions as happy as possible.
How did Wilson end the state of emergency and the 3 day working week that was inherited from Ted Heath’s government?
Wilson reached an agreement with the national union of miners which allowed the emergency to stop.
What did Labour do to further appease the trade union with department appointments?
To appease the trade unions and keep them on board two left wingers within the Labour Party were given big roles. Tony Benn and Michael foot were put in charge of the departments for industry and employment.
What did these appointments do for trade unions?
These appointments gave large power to the trade unions in key working areas - employment and industry.
What did Wilson do to get the country out of industrial crisis?
Large wage increases for industrial workers.
What did the rush of wage increases do?
Caused a surge in inflation
What was the aim of Denis Healey’s first two budgets?
The budgets first in March and then in July were both aiming to tackle the economic crisis without annoying the trade unions. Again appeasing the TUs.
What did the 1975 April budget do?
Rise in taxation coupled with a cut in public spending.
What was set up in 1974?
National enterprise board [NEB]
Who headed up the NEN?
Tony Benn
What did the National enterprise board do?
Administer government shares and holdings in private companies and to provide funding. The scheme was done to increase investment. However by 1975 it’s effectiveness was being questioned.
What ‘lame-duck’ decision by Wilson was seen as a failure?
Government decision to nationalised further failing industries and companies such as car manufacturer British Leyland caused renewed controversy about the role of the government rescuing ‘lame-duck’ industries.
What happened to the social contract?
Became apparent that the social contract was not limiting wage demands. By 1975 a more formal pay restraint policy was set up.
What did this policy shift away from trade unions do to the party?
Shifts in policies angered trade unions and also created further divisions within the labour party, the left wingers Benn and Foot didn’t want to put much pressure on the trade unions and they believed in more government intervention in the economy.
% of workforce unemployed in 1974?
2.6
% of workforce unemployed in 1975?
3.9
% of workforce unemployed in 1976?
5.3
Working days lost in strikes in millions in 1974?
14.75
Working days lost in strikes in millions in 1975?
6.01
Working days lost in strikes in millions in 1976?
3.31
GDP change in % in 1974?
+0.2
GDP change in % in 1975?
-1.6
GDP change in % in 1976?
+2.3
Balance of payment [£m] in 1974?
-3565
Balance of payment [£m] in 1975?
-1671
Balance of payment [£m] in 1976?
-1404
