Wilson 1974-76 Economy Flashcards
Possible question: “To what extent was Wilson’s economic performance successful 1974-76?” Name 2 main areas of success and failure
+ Trade union relations
+ Preventing inflation
- Stagflation
- Recession
Name 3 positive examples of Wilson’s relations with trade unions
Ended the miners’ strike in 2 days by repealing the Industrial Relations Act and ending prices and pay board
Introduced Health and Safety at Work Act 1974
Social Contract 1974 - wage restraints negotiated with the TUC and then again in 1975 they agreed with the TUC that wages couldn’t increase more than 10% (not broken until April 1976)
Name 2 examples of Wilson trying improve productivity/prevent inflation
His March 1974 budget made sure to balance deflationary measures like a 3p increase to income tax and a new 10% VAT on food luxuries with increased benefits and £500 million food subsidies.
Benn was Minister for Industry and set up the National Enterprise Board to increase investment in industry
Define stagflation
High inflation combined with high employment and diminishing productivity
Name 3 examples of Wilson’s actions leading to stagflation
Miners’ strike settlement led to a 24.1% wage increase and the Social Contract had failed as nurses went on strike and gained a 30% pay rise.
Unemployment reached 1.5 million in 1976
Wages rose by 25% 1973-74 but productivity only by 2% (this made people question the effectiveness of the NEB)
Why did a recession loom by July 1974 and how did Wilson address this?
The March budget had gone too far with its deflationary measures so in the July 1974 budget there were inflationary measures like decreased VAT by 8% and reduced Local Rate (council tax).
What happened suddenly in 1976?
Wilson resigned
Was the October 1974 election a success for Wilson?
Yes it was he gained 18 more seats and the Conservatives lost 21, this was probably due to Heath still being associated with the 3 day week.
What were the drawbacks for Wilson at the October 1974 election?
He still only had a working majority of 3 which was very small and would cause problems later.
What happened to the Conservatives after the 1974 election?
Several backbench MPs tried for a leadership contest but as Powell had left the party and economic theorist Keith Joseph left the race this left a gap for Margaret Thatcher who ran against Heath and won.
