Wilson and Callaghan's Government 1974-1979

Question 1

Labour won the election in February 1974, but had to call another one for October. Why was this?

Answer 1

Labour only won 4 more seats than the Conservatives > formed a minority government

Question 2

What agreement did Labour reach with the Trade Unions Congress (TUC) in 1973 whilst they were in opposition?

Answer 2

The Social Contract

Question 3

What did the Social Contract outline?

Answer 3

• 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

Question 4

Which two cabinet appointments represented Labour’s ‘drift to the left’?

Answer 4

• 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)

Question 5

How did Wilson manage Labour divisions over Europe?

Answer 5

He held a referendum on the issue in 1975 and allowed his Cabinet members freedom to campaign for either side.

Question 6

Why did Wilson resign in 1976?

Answer 6

He was aware that his normally excellent memory was beginning to fail him.

Question 7

What was Stagflation?

Answer 7

Low economic growth with high levels of inflation (25% in mid-1975)

Question 8

How did the Labour government settle the miners strike in 1974?

Answer 8

29% pay increase

Question 9

Who was chancellor from 1974-1979?

Answer 9

Denis Healey

Question 10

What measures did Labour introduce to tackle inflation?

Answer 10

• 1975 budget increased taxes and cut spending.
• July 1975: £6 per week ceiling on wage increases
• 1976: £4 per week ceiling

Question 11

What % did wage increases fall to by 1977?

Answer 11

10%

Question 12

When did Callaghan become Prime Minister?

Answer 12

1976

Question 13

Why did Britain ask the International Monetary Fund for a loan?

Answer 13

The pound’s value was plummeting risking bankruptcy

Question 14

How much was the IMF loan?

Answer 14

$3900 million

Question 15

Why did the IMF loan trigger a rift in the party?

Answer 15

£2 billion worth of spending cuts had to be implemented = angered the left of the party

Question 16

Why was the Lib-Lab pact made from 1977-1978?

Answer 16

By-election losses reduced Labour’s small majority to a minority. The Liberals agreed for 13 MPs to support Labour.

Question 17

Why did the Social Contract end in 1978?

Answer 17

Many unions disliked Healey’s counter-inflation policies believing he had abandoned the Social Contract

Question 18

How did the ‘Winter of Discontent’ begin?

Answer 18

Ford workers won a 15% pay increase after a 3-month strike triggering further strikes for pay increases

Question 19

Which other industries went on strike during the ‘Winter of Discontent’?

Answer 19

• Jan 1979: Lorry drivers demanded a 30% pay rise
• National Union of Public Employees demanded a 40% increase representing dustmen and gravediggers

Question 20

How did Callaghan deal with Scottish and Welsh Nationalism?

Answer 20

Promised referendums for devolution in Scotland and Wales - both of which did not pass

Question 21

Why was an election called in 1979?

Answer 21

Callaghan lost a no-confidence vote in Parliament by 1 vote. The Scottish Nationalists, Irish Unionists, Liberals and Conservatives allied to vote against Labour.