wilson and callaghan 1974-79

Question 1

was the social contract of 1973 effective?

Answer 1

made between the TUC and Labour - unions agreed to control wage increases and govt worked to keep prices down.

was helpful but did not solve the economic problem. they cooperated until 1979

Question 2

how did healey attempt to tackle inflation

Answer 2

1) 1975 budget increased taxes and cut govt spending

2) formal income policy 1975- limited weekly wage increases to £6

Question 3

was healey’s counter-inflationary measures successful?

Answer 3

inflation dropped to 10% by 1977 so yes they were

despite this the economy was still in a poor state and national bankrupty threatened the country

Question 4

what was the effect of the IMF loan

Answer 4

humiliating to Britain as they were generally only needed for smaller poorer countries

the loan was 3.9 billion but required the govt to cut spending by 2 billion.

this deepened the division within the labour party but callaghans efforts preserved the unity

Question 5

how did the winter of discontent 1978-79 occur

Answer 5

TUC believed healey abandoned the social contract through his policies and that employees were suffering from counter inflation measures

National Union of Public Employees went on a huge strike. the lack of public service made the streets fill up with litter

Question 6

how did the winter of discontent affect labour

Answer 6

the state of the country was documented heavily by the press and used against labour.

Callaghan was on holiday during this and photos on the beach in contrast to the litter filled streets presented him as incompetent and out of touch.

This heavily contributed to their loss in the 1979 election