Wilson and Callaghan's Government 1974-1979 Flashcards
Labour won the election in February 1974, but had to call another one for October. Why was this?
Labour only won 4 more seats than the Conservatives > formed a minority government
What agreement did Labour reach with the Trade Unions Congress (TUC) in 1973 whilst they were in opposition?
The Social Contract
What did the Social Contract outline?
- Unions agreed to co-operate to control wage increases
- Government promised to keep down prices and provide welfare benefits
- Free collective bargaining and no statutory incomes policy
Which two cabinet appointments represented Labour’s ‘drift to the left’?
- Michael Foot as Secretary of State for Employment (1974-1975) and Deputy Leader (1976-1980)
- Tony Benn as Secretary of State for Industry (1974-1975) and Secretary of State for Energy (1975-1979)
How did Wilson manage Labour divisions over Europe?
He held a referendum on the issue in 1975 and allowed his Cabinet members freedom to campaign for either side.
Why did Wilson resign in 1976?
He was aware that his normally excellent memory was beginning to fail him.
What was Stagflation?
Low economic growth with high levels of inflation (25% in mid-1975)
How did the Labour government settle the miners strike in 1974?
29% pay increase
Who was chancellor from 1974-1979?
Denis Healey
What measures did Labour introduce to tackle inflation?
- 1975 budget increased taxes and cut spending.
- July 1975: £6 per week ceiling on wage increases
- 1976: £4 per week ceiling
What % did wage increases fall to by 1977?
10%
When did Callaghan become Prime Minister?
1976
Why did Britain ask the International Monetary Fund for a loan?
The pound’s value was plummeting risking bankruptcy
How much was the IMF loan?
$3900 million
Why did the IMF loan trigger a rift in the party?
£2 billion worth of spending cuts had to be implemented = angered the left of the party
Why was the Lib-Lab pact made from 1977-1978?
By-election losses reduced Labour’s small majority to a minority. The Liberals agreed for 13 MPs to support Labour.
Why did the Social Contract end in 1978?
Many unions disliked Healey’s counter-inflation policies believing he had abandoned the Social Contract
How did the ‘Winter of Discontent’ begin?
Ford workers won a 15% pay increase after a 3-month strike triggering further strikes for pay increases
Which other industries went on strike during the ‘Winter of Discontent’?
- Jan 1979: Lorry drivers demanded a 30% pay rise
- National Union of Public Employees demanded a 40% increase representing dustmen and gravediggers
How did Callaghan deal with Scottish and Welsh Nationalism?
Promised referendums for devolution in Scotland and Wales - both of which did not pass
Why was an election called in 1979?
Callaghan lost a no-confidence vote in Parliament by 1 vote. The Scottish Nationalists, Irish Unionists, Liberals and Conservatives allied to vote against Labour.
