Unit 1.2 Flashcards
Harold Wilson
MP- 1945-83
PM- 1964-70 , 1974-76
Labour Party leader - 1963- 76
He linked Labour Party to modernisation in contrast to what were described as the wasted years of the Conservative government. This modernisation was reflected in Wilson’s image. He was seen as classless, an image far removed from the Old Estonian style of Eden, Macmillan and Home. He was the first PM educated in state secondary schools ,smoked a pipe and spoke with a Yorkshire accent. Also relaxed and a skilful performer on TV. 1964- Labour won 317 seats to conservative 304 (44.1% to 43.4%). 1966- won 363 seats to 253 ( 47.9% of votes to 41.9%). Initially he had appeared on the left of Labour Party. He had born a Bevanite, resigning in 1950 over prescription charges. Also served in Gaitskill cabinet but challenged him for leadership in 1961. He lost, but this made him an obvious candidate in the future. He supported Britain’s nuclear deterrent and attempted to reform the trade unions. In 1966, Conservatives replaced Home with a more modern looking heath, however, Heath was no match for Wilson, who was a better political technician and was able to portray a more attractive image to voters. In contrast, Heath was stiff and lacking in personality. In private Wilson was anxious and insecure about leadership. He was conscious about balancing potential rivals, so he would remain unchallenged. Wilson was heavily reliant on personal team of trusted advisors from outside the government and civil service. Wilson’s team was dominated by personality of Marcia Williams, his personal political secretary. Others who took part in informal discussions in the kitchen at 10 Downing Street included. Economic advisers and a few Inner Circle MPs. Many believed this kitchen cabinet re-informed his suspicion of party rivalries and prevented ministers from having access to him.
Individuals and their approaches to economic and industrial relations- Wilson
Wants to reform trade unions. Wants to avoid devaluation or deflation despite wanting to reorganise economy and break out of stop go cycle
Individuals and their approaches to economic and industrial relations- James Callaghan
Had excellent links to the trade unions, also did not want devaluation or deflation. Centre right of the party
Individuals and their approaches to economic and industrial relations- George Brown
Set up DEA ( Department of Economic Affairs), set growth targets and devised national system of ‘economic planning councils’, Tried to establish voluntary agreement about wages and prices with industrialists, trade union leaders and civil servants. Aim was to secure the restraint needed to prevent inflation rising which the government would need to stop with controls. In this way stop go cycle could be avoided.
Individuals and their approaches to economic and industrial relations- Roy Jenkins
right of party. Strongly in favour of devaluation in 1964. Replaced Callaghan as Chancellor, used deflationary methods. Raised taxes, tightened up government spending in all areas of economy , gives priority to balance of payments. Made him unpopular but works
Individuals and their approaches to economic and industrial relations- Barbara Castle
believed strongly in trade union movement but also convinced of the need for it to act responsibly. In Jan 1969 provided her white paper, In Place of Strife. Knew it would be controversial, describing it as political suicide. She also put through the Equal pay act as Secretary of State for employment
Individuals and their approaches to economic and industrial relations- Jack Jones
Instrumental in defeating In place of strife in 1969. He was an extremely powerful union leader of Transport and General workers union who protested against Castles proposals whilst supported by over 50 Labour MPs who were ready to rebel
Individuals and their approaches to economic and industrial relations- Tony Benn
More left of party. Took over as Minister of Technology from Frank Cousins in 1966, department performed better under Benn but in some ways all labours domestic policies were overshadowed by economic problems.
Economic issues - Why was it a problem?
-Largely accepted Britain lagging behind others counties such as Japan and West Germany by 1964.
-Affluence of Post War Boom had not been reflected in productivity or growth rates
-Britain’s economy seemed to be trapped in cycle of stop go with bursts of prosperity always leading to inflation , runs on the pound and regular crisis over the balance of payments.
-Labour inherited a deficit of about £800 million.
-Wilson and his chancellor of Exchequer, James Callaghan, did not want to use devaluation (make Brit look weaker in the world, scale back activities abroad also) or deflation ( old stop-go approach) as economic solutions.
Economic issues - Evidence of Failure
- DEA- Wilson believed that better planning could, in the long term, make British industry more competitive. He created a new ministry - the Department of Economic Affairs (DEA) - to devise a plan to modernise and improve Britain’s economy. The National Plan was published in September 1965 and set two ambitious targets for British industry.
~An annual growth rate of 3.8 per cent over six years.
~An increase in exports of 5.25 per cent each year to wipe out the balance of payments deficit.
Unfortunately, the National Plan never had much chance of success. There
were three main reasons for this.
* The Treasury jealously guarded its role as the government’s economics
ministry and did not co-operate with the DEA.
*The recommendations of the National Plan for government spending were undermined by the Treasury’s deflationary measures to solve the immediate economic difficulties
* The DEA had no power to enforce its decisions. It relied on the co-operation of the trade unions, who did not support a policy of wage restraint.
As a result of in-fighting, the Department of Economic Affairs was wound up in 1969. Nevertheless, the National Plan contributed to the Labour Party’s victory in the March 1966 general election because it suggested that the government had a coherent vision for the future.
Economic issues - Evidence of Success
- Deflationary measures - The Chancellor’s deflationary measures had reduced the balance of payments deficit and prevented a run on the pound, but critics were already pointing out that the government was struggling to impose wage restraints and that the DEA and the Treasury were pursuing contradictory policies.
-Devaluation- On 18 November 1967 the pound was devalued. Instead of being worth $2.80, it was now worth $2.40. The trade figures were stubbornly slow to improve and the substantial balance of payments deficit remained. Nor did devaluation prevent cuts in spending. Roy Jenkins replaced Callaghan as chancellor but, despite devaluation, concluded that severe deflationary measures were still needed to cure the balance of payments crisis.
-In January 1968 the government announced that all British forces east of Suez (apart those in from Hong Kong and the Persian Gulf) were to be withdrawn by the end of 1971.
-Prescription charges, abolished in 1964, were reintroduced.
- The raising of the school-leaving age from fifteen to sixteen was deferred from 1971 to 1973, a change that undermined the educational reform the Labour government had believed essential to its plan to modernise Britain.
In the budget of March 1968 Jenkins, determined to overcome the balance of payments deficit, delivered another hefty dose of deflation, increasing taxation by £923 million. During 1969 there were signs of improvement. The balance of payments at last showed a surplus, the value of sterling rose and interest rates were reduced.
- In Autumn 1964 ,the chancellor of the exchequer, Jim Callaghan, negotiated foreign loans to prevent a run on the pound , over the next nine months, introduced series of deflationary measures which included higher taxes on tobacco and alcohol, and a temporary import surcharge.
Industrial relations - Why was it a problem
Since the war, all governments, Conservative as well as Labour, had seen it as essential to maintain full employment and to keep the unions happy. Wilson had hoped to improve industrial relations and win trade union support for his efforts to modernise Britain but the economic difficulties of the 1960s opened a rift between the government and the unions. Wilson became convinced that:
~Strikes for higher pay, many of them unofficial, were disrupting production, forcing up labour costs and contributing to inflation and Britain’s poor export performance.
~Industrial relations needed to be more strongly regulated if the government’s efforts to control prices and wages were to succeed.
It was particularly difficult for the Labour government to reform industrial relations because the trade unions were their traditional allies and provided he Labour Party with most of its money. Their block votes at Labour Party conferences could often prove decisive in determining party policy. The trade unions also exercised considerable economic power:
* The closed shop requiring workers to join a particular union enhanced union bargaining power.
*Strikes in nationalised industries could cause disruption throughout the country.
In 1966 and 1967, industrial relations with the trade unions began to deteriorate. Strikes by the seamen and the dockers caused economic problems for the government. These strikes also seemed to demonstrate that old-style union bosses were losing some of their control. A lot of strikes started with ‘wildcat’ strikes by local activists who would not take orders from the top.
Industrial relations - Evidence of Failure
- No evidence of success
- By 1968 Wilson was worried by press criticism of his failure to tame the unions and by the Conservatives’ announcement of a plan to reform industrial relations. In April he asked Barbara Castle, a Cabinet colleague from the left of the party, to lead the newly established Ministry of Employment and Productivity and reform industrial relations. In January 1969 Castle’s proposals, called In Place of Strife, were published. The principal proposals were:
- Employees would have a legal right to join a trade union.
- The government could order a ballot to be held before a strike if it believed there was a serious threat to the national interest.
- In an unofficial dispute the government could order a return to work for a 28-day ‘cooling-off period.
- Disputes between unions could be referred to an industrial commission whose decision would be legally binding.
- There would be financial penalties if the commission was not obeyed.
- Workers who were unfairly dismissed would be entitled to compensation Or to get their jobs back.
The TUC and left-wing Labour MPs were incensed by ‘In Place of Strife’. As one trade union leader put it, legal sanctions would introduce the taint of criminality into industrial relations. More than 50 Labour MPs rebelled when In Place of Strife’ was debated in the House of Commons.
Resistance within the party, the TUC and even in the Cabinet led by Home Secretary Jim Callaghan, caused Wilson to back down, A face-saving formula vas devised by which the TUC gave a ‘solemn and binding undertaking’ that it would monitor strikes and disputes and offer considered opinion and advice: The failure of In Place of Strife’ contributed to the fall of the Labour government in 1970 and convinced many outside the Labour movement not only that trade unions had too much power, but that their resistance to change was a major obstacle to economic progress.
As traditional industries declined and white collar employment grew, some of the largest and most powerful unions lost members . There was an increase in the membership of unions representing workers in the expanding public sector of government administration, health and teaching, but this was not matched by the private sector where many employers discouraged union membership.
Developments and Economic pressures of the following areas 1964-70: Concorde
The Concorde was a supersonic passenger carrying commercial airline. It was built in the 1960s and eventually retired in 2003 by both of its founding countries. There was only 14 Concorde aircraft that went into service and was built as a joint venture between the UK and France. The Concorde could fly 100 passengers and a crew of nine from NYC to London in an average of three hours and 30 minutes. Estimated to cost £70 million, which is around 1.39 billion. The programme experienced huge cost overruns and delays, and the programme eventually cost between £1.5 and £2.1 billion in 1976 (£9.44 billion-13.2 billion in 2019). This extreme cost was the main reason the production run was much smaller than expected. The per-unit cost was impossible to recoup, so the French and British governments absorbed the development costs.
Developments and Economic pressures of the following areas 1964-70: Defence spending
The 1966 Defence White paper was a major review of the UKs defence policy initiated by Labour Government under Harold Wilson. The document was centred around the need to support NATO in Europe and make commitment that the UK would not undertake major operations of war expect when in cooperation with allies. Within the document the Government decided on significant reductions in defence budget, with the government wanting to reduce public spending due to wider economic problems. Such as Devaluation of the pound.
Developments and Economic pressures of the following areas 1964-70: Colour TV
The UK Promoted a very good but expensive form of TV, however the USA had a more cheaper form of colour TV which meant the US sold more than the UK . Colour TV sets did not outnumber black-and-white sets until 1976, mainly due to the high price of early colour sets. In March 1969, there were only 100,000 colour TV sets in use in the UK; by the end of 1969 this had doubled to 200,000, and by 1972 there were 1.6 million.
Developments and Economic pressures of the following areas 1964-70: Rocket Development
The Black Arrow was a British satellite carrier rocket developed during the 1960’s and was used for four launches between 1969 and 1971 with the final flight on the 28th October 1971, being the only successful orbital launch to be conducted by the United Kingdom placing the Prospero satellite into low Earth orbit. The project was temporarily put on hold by the Labour Government to reduce expenditure but was eventually continued following another election. It was retired after only four launches after the rocket program was cancelled in favour of using American Scout rockets which had been offered at a reduced cost by the US. The Ministry of Defence calculated the Scout to be cheaper than maintaining the Black Arrow program, but once the Black Arrow was cancelled and the UK rocket program was scrapped, the offer for low coast launches on the US Scout Rocket was withdrawn.
In 1955, Britain began developing a long-range liquid-fuelled missile, the Blue Streak programme. Designed to deliver nuclear weapons, as part of Britain’s independent nuclear capability, work focused on producing an intermediate range missile. n 1960, however, the Blue Streak programme was scrapped. The British Cabinet Defence Committee were reluctant to spend an addition £600m on top of the £65m already spent for a delivery system that proved to be militarily inadequate after testing. The main problem with the Blue Streak was that it was launched from fixed sites, which took up to thirty minutes to prepare for launch. Vulnerable to Soviet attacks and suffering from escalating costs, Britain’s independent nuclear missile programme floundered.
How Wilson solidified his position as leader
The divisions between the Left and the Right in the Labour Party remained in the period after 1964. However, after the death of Bevan, the leader of the Left, in 1960 and Gaitskell, the leader of the Right, in 1963, Wilson had emerged as a conciliatory leader of the party. Wilson’s concentration on the Labour Party as the party of technological modernisation united both the Left and Right of the parties and minimised underlying tensions such as that over Clause IV.
Wilson, personal rivalries within party
there were personal rivalries between Wilson and his most powerful cabinet colleagues. Wilson always feared that he might face a leadership challenge from Brown or Callaghan or Jenkins. Brown was hugely resentful that he had lost the leadership election to Wilson and was further disappointed that he was not made Foreign Secretary in 1964. Wilson was rumoured to have undermined Brown’s reputation by keeping a record of any embarrassing incidents that he was involved in once he had been reshuffled to the Foreign Office. Wilson was also suspicious of Jenkins, a Gaitskellite. He did not really support Jenkins’ liberalising legislation as home secretary. When the seaman’s strike of 1966 caused a sterling crisis Jenkins tried to get the cabinet to support devaluation. Wilson interpreted this as a plot to replace himself and Brown with Callaghan and Jenkins.
This highlights Wilson’s paranoia as it was highly unlikely that Callaghan and Jenkins would work together. Callaghan did not approve of Jenkins’ pro-European stance nor of his liberalising legislation; Jenkins was critical of the failure to devalue when Callaghan was Chancellor and was a supporter of the trade union legislation that Callaghan helped to block.
Criticism of Wilson for focusing on internal Labour issues
It is possible to criticise Wilson as in some ways it appears that too much of his energy and attention was devoted to trying to keep the party united and in stopping any of his colleagues from being able to threaten his position. Wilson did not face any obvious challenger from the left of the party but those who were more left-wing in the unions, local government and young people were frustrated by his government and this made it likely that the divide between the Left and Right would re-emerge in the 1970s.
Roy Jenkins
Strong pro European and considered to be on the right of the Labour Party. He entered Parliament as a Labour MP in 1950. Under Wilson he served as Home secretary 1965-67 and chancellor of Exchequer from 1967-70. In 1981 he went on to found and lead the Social Democratic Party (SDP). Used deflationary methods- rises taxes and tightened up government spending in all areas of the economy , achieved a balance of payments surplus in 1969.
George Brown
Came from a working class trade unionist background and was on the right of the party. He had a number of shadow cabinet and cabinet roles and was deputy leader of the Labour Party between 1960-70. He was defeated by Wilson in the leadership elections of 1963. Many people regarded him as unpredictable as he had a serious alcohol problem, frequently clashed with cabinet colleagues. He resigned in 1968 after a row with Wilson
James Callaghan
Associated with the centre right of the party but with excellent links to the trade unions. Wilson appointed him as chancellor in 1964, later on , he served as both foreign secretary and home secretary . Callaghan succeeded Wilson as PM in 1976. Callaghan didn’t want to use devaluation or deflation
The beginning of the troubles in Northern Ireland- When did Ireland officially become split into 2
Northern Ireland had been created in 1922, after the Irish War of Independence of 1919 to 1921. Ireland was partitioned between 6 counties in the north of Ireland that would remain part of the United Kingdom and other 26 counties which would be the Irish Free State, what would become the Republic of Ireland.