The Sixties (1964 - 1970) Flashcards
Describe the economy in 1964
- Inherited budget deficit of £750 million
- Balance of payments deficit of £373 million
- 1964 Sterling Crisis
List the measures taken to resolve the 1964 Sterling Crisis
- Bank rate raised to 7.5%
- Surcharge on imports
- Income tax rise
- Loans from US and IMF
Describe the economy in 1965
- 30% Capital Gains Tax and Corporation Tax
- Unemployment 1.5%
- Market recovers and pound strengthens
Describe the economy in 1966
- Balance of Payments Surplus £127 million
- Wages 11% higher than in 1964
- Selective Employment Tax boosts manufacturing
Negatives:
- Seaman Strike damages exports
- 1966 Sterling Crisis
Describe the economy in 1967
- Cuts to defence budget
- Dockers strike
- Trade deficit = £107 million
- Run on the pound, cost = £500 million
- Pound devalued, $2.80 to $2.40
Describe the economy in 1968
- Jenkins replaces Callaghan as Chancellor
- £932 million of cuts
- Taxes rise on petrol, alcohol, tobacco and high earners
Describe the economy in 1969
- £340 million tax rises
- Balance of Payments surplus = £500 million
Describe the economy in 1970
- Inflation at 12%
- Balance of Payments surplus = £800 million
What were the causes of the 1964 Sterling Crisis?
- Callaghan’s autumn budget kept election promises to increase pensions and abolish prescription charges
- Gold reserves dwindling
- Resisting devaluation
What were the causes of the 1966 Sterling Crisis?
- Seamen’s strike (damaged exports, caused run on the pound and damaged the exchange rate)
- Monthly trade deficit doubled
- Cousins resigned in protest over governments income policy
How was the 1966 Sterling Crisis resolved?
July Package:
- Bank rate at 7%
- Cuts in government spending
- Higher purchase restrictions
- Complete freeze on wage and price increases
Short term success, long term failure
What was the DEA?
Department for Economic Affairs
The National Plan:
- Published September 1965
- Goal of 4% economic growth per annum
- Ignored by government
DEA collapses and Brown is moved to the Foreign Office
Describe the effects of the Seamen’s Strike
- 1966
- Damaged exports
- Major cause of 1966 Sterling Crisis
- By June, monthly trade deficit doubled and Cousins resigned over the governments income policy
Describe the effects of the Unofficial Dock Strikes
- September 1967
- Damaged exports at a critical time
- October monthly trade deficit = £107 million
- A cause of devaluation
Describe Mad Friday
- 6th December 1968
- Run on the pound (loss of $100 million)
- Rumours (Wilson’s resignation, Queen’s abdication, further devaluation)
Describe the Trade Dispute Act
- 1965
- Closed a loophole in 1906 Act
- Liked by the trade unions
Describe In Place of Strife
- 1969
- White paper by Barbara Castle
- Divided cabinet and infuriated unions
- TUC voted it down 8 million votes to 846,000
- Bill humiliatingly withdrawn
3 penal provisions:
- 28 day conciliation pause
- Imposed settlements in inter-union disputes
- Enforcement of strike ballots
List some rivals of Wilson
- Brown (lost leadership to Wilson, did not make foreign secretary in 1966)
- Jenkins (Gaitskellite, tried to get cabinet to support devaluation)
- Callaghan
What was the kitchen cabinet?
- Wilson’s close friends and personal advisers forming an unofficial cabinet
- Enemies and rivals in actual cabinet in order to maintain party unity
Describe the Donnelly-Wyatt Revolt
- 1965
- 2 right wing backbenchers (Wyatt & Donnelly)
- Refused to support the renationalisation of the steel industry
- These 2 votes were sufficient to block the nationalisation Bill
- Forced Wilson to delay steel nationalisation until after 1966 election
What were Labour’s campaign points in the 1966 election?
- They were better at handling the economy
- They would join EEC
- Conservatives were divided over oil sanctions in Rhodesia
What was the effect of the second 1966 election results?
Gave Labour a big enough majority to secure a full parliamentary term without third party support
Describe Wilson’s attempted reform of the House of Lords
- Attempted restructure in 1968
- Hereditary peerage would be replaced by a 2 tier system of appointments
- All peers entitled to vote would be appointed by the PM
- Opposed by both right and left
- 1969, bill withdrawn
Describe Wilson’s attempted reform of local government
- Reedcliffe-Maud Report 1969, suggested country should be divided into 8 provinces with 3 metropolitan authorities
- Met with much resistance and nothing came of it