WILSON 1964-70 CHAPTER 5 Flashcards
what happened in 1967 November
2 things
Devaluation crisis
Rejection of Britain’s application to join the EEC
1964 GENERAL ELECTION RESULTS
seats - who had the sight majority
CONSERVATIVES 304
LABOUR 317
When Harold Wilson was elected PM in 1964 labour seemed more in touch with the social and cultural trends of the 1960s - one of Wilson’s most effective campaign speeches had promised Britain would
catch up with the technological change.
1966 GENERAL ELECTION RESULTS
seats and votes for
CONSERVATIVES
LABOUR
LIBERAL
CONSERVATIVES 253 41.9
LABOUR 363 47.9
LIBERAL 12 8.5
WILSON’S IDEOLOGY AND LEADERSHIP
- Initially appeared on the left
how?
resigned in 1950 over prescription charges (Bevanite).
WILSON’S IDEOLOGY AND LEADERSHIP
wilson * did not seemed to be of the left
why?
supported nuclear deterrents and attempted to reform trade unions.
WILSON’S IDEOLOGY AND LEADERSHIP
Seen as classless: image removed from the Old Etonian style of Eden, Macmillan & Douglas-Home
Wilson was the first PM toooo
educated at state secondary school, smoked a pipe, and spoke with a Yorkshire accent. He was a skilful performer on TV.
WILSON’S IDEOLOGY AND LEADERSHIP
- However, in private he was anxious and insecure about his leadership - relied heavily on
think kitchen cabinet
a personal team of advisers from outside the government and civil service – many economic advisers and inner circle MPs also took part in the informal discussions in the kitchen at 10 Downing Street. Many people felt this ‘kitchen cabinet’ reinforced his suspicions of party rivalries and prevented ministers from having access to him.
ECONOMIC POLICES AND PROBLEMS (INCLUDING DEVALUATION)
By 1964, it was widely accepted that Britain was lagging behind other countries such as West Germany and Japan - the affluence of the post-war boom had not been reflected in productivity or growth rates – Britain’s economy seemed to be trapped in
stop-go policies leading to inflation, runs on the pound and balance of payments crises.
ECONOMIC POLICES AND PROBLEMS (INCLUDING DEVALUATION)
- Devaluation
would make
imports more expensive and help exporters by making British goods cheaper in other countries, in turn helping balance of payments.
However, it would make Britain look weak in the world and it would have to scale back its activities around the globe. Wilson also feared that the Labour Party would gain the reputation as the party of devaluation (Attlee had devalued the pound in 1949).
ECONOMIC POLICES AND PROBLEMS (INCLUDING DEVALUATION)
- The two solutions for this problem were
deflation or devaluation, however Wilson and his Chancellor of the Exchequer, James Callaghan did not want to do eithe
ECONOMIC POLICES AND PROBLEMS (INCLUDING DEVALUATION)
- Labour had inherited a balance of payments deficit of
£800 million.
ECONOMIC POLICES AND PROBLEMS (INCLUDING DEVALUATION)
- Deflation
would lead to…
would support the value of pound and prevent inflation but it was the old stop-go approach. It would also stop Labour from meeting its manifesto commitments: extra spending on welfare and technology.
ECONOMIC POLICES AND PROBLEMS (INCLUDING DEVALUATION)
- Wilson believed that problems could be solved by careful management and planning
george brown set up
- Department of economic affairs (DEA) - set growth targets and devised a national system of economic planning councils.
ECONOMIC POLICES AND PROBLEMS (INCLUDING DEVALUATION)
george brown also tried to establish voluntary agreement about wages and prices with industrialists, trade union leaders and civil servants to secure
the restraint needed to prevent inflation rising which the government would then need to stop with controls.
ECONOMIC POLICES AND PROBLEMS (INCLUDING DEVALUATION)
- Brown’s economic proposals came to nothing -
why?
no united government support as the DEA was in competition with the Chancellor and the economists at the treasury.
ECONOMIC POLICES AND PROBLEMS (INCLUDING DEVALUATION)
Some blamed Brown foe being inconsistent, and some blamed the old fashioned, anti-labour civil servants at the treasury and the bank of England who they felt,
undermined Brown’s efforts by refusing to pass papers.
ECONOMIC POLICES AND PROBLEMS (INCLUDING DEVALUATION)
- In 1966, Wilson moved brown to the ministry of foreign affairs and thus the DEA was
abandoned in 1967.
ECONOMIC POLICES AND PROBLEMS (INCLUDING DEVALUATION)
- Instead, a prices and incomes policy was established to keep down inflation, implemented by a Prices and Incomes board.
what was it?
government intervention that limits price rises and calls for wage restrictions
ECONOMIC POLICES AND PROBLEMS (INCLUDING DEVALUATION)
- The National Union of Seamen strike partly causes a sterling crisis in 1966
effect?
defeated by the government but many leftists shocked by Wilson’s critical attitude to the strikers.
ECONOMIC POLICES AND PROBLEMS (INCLUDING DEVALUATION)
Frank Cousins’ resigns from the cabinet over the incomes policy - relationship between
the government and unions start to break down.
ECONOMIC POLICES AND PROBLEMS (INCLUDING DEVALUATION)
- Labour survived the sterling crises in 1965 and 1966, however in 1967,
2 things hgappened that affected the BOP
an outbreak of war in the middle east affected oil supplies, and a major national dock strike in August 1967 affected the balance of payments.
ECONOMIC POLICES AND PROBLEMS (INCLUDING DEVALUATION)
- The government decided devaluation could no longer be avoided - the pound dropped by
14%, there were defence cuts and hire purchase restrictions were introduced with higher interest rates.