wilson and the labour governments Flashcards
what were wilson’s prospects in 1964?
labour seemed to be in touch w/ social + cultural trends, modernisation (‘white heat’ of technology) appealing
heath appeared stiff and lacking in personality in comparison to wilson’s more attractive image - led to labour consolidating its position in 1966 elections
was wilson on the left or right of labour?
initially appeared to be on left, bevanite, challenged gaitskell for leadership from the left in 1961
but, had served in gaitskells cabinet, appeared more right in some ways - supported nuclear deterrent + attempted to reform trade unions
what was wilsons image
seen as classless, educated at state secondary school, yorkshore accent. skilled performer on tv
wilson’s personal weakness?
in private, anxious + insecure about leadership, conscious of balancing rivals to remain unchallenged. relied heavily on team of trusted advisers from outside of govt - many felt thid ‘kitchen cabinet’ reinforced his suspicions of party rivalries + prevented ministers from having access to him
what economic problems did labour face in 1964?
modernisation needed - britain lagging behind other countries e.g. west germany/japan
affluence of post war boom not reflected in productivity/growth rates
£800 million deficit
main aim: breaking out of stop-go cycle
what were the two classic solutions to this deficit
deflation or devaluation - wilson and callaghan (chancellor of the exchequer) didnt want to do either
what would deflation do? and what were the problems with this?
would support the value of the pound + prevent inflation
but, deflation = old, tory stop-go approach. fears would prevent lab from meeting manifesto commitments of extra welfare + technology spending
what would devaluation do? and what were the problems with this?
would make imports more expensive + help exporters by making british goods look cheaper in other countries –> would help w/ balance of payment
but, would make britain look weaker in world, and actually weaker as would have to scale back international activities. fears that labour would gain reputation as party of devaluation as had already devalued pound under atlee 1949
what alternative action did wilson take?
thought careful management and planning was the answer - set up department of economic affaires (dea) under george brown
what did george brown set out to do with the dea?
set growth targets, devised national system of economic planning councils. tried to establish voluntary agreement about wages + prices w/ union leaders + civil servants
aim = to secure the restraint needed to prevent inflation rising, and thus avoid stop-go cycles
why did browns econ proposals fail? - dea abandoned 1967
didnt have united govt support (in competition w/ callaghan + trad economists @ treasury)
brown’s impulsivity blamed, + anti-labour civil servants
wilson trying to keep key personalities happy?
purpose of prices + incomes board
to implement prices + incomes policy, which aimed to reduce inflation
significance of national union of seamen strike?
balance of payments issues, led to sterling crisis 1966, frank cousins resigned from labour in aftermath - relationship of govt w/ unions breaking down
what made govt think devaluation unavoidable?
sterling crises 1965 + 1967, 1967 war over oil middle east, dock strike 1967
when was devaluation implemented?
1967, pound dropped by 14%
other deflationary measures, like previous stop-go policies?
defence cuts, hire purchase restrictions, higher interest rates
optics of devaluation?
devaluation crisis damaged labour’s credibility as had tried hard to avoid. second eec rejection few weeks later made econ policies look futile
how did callaghans replacement of roy jenkins improve the economy?
used deflationary methods, raised taxes, cut govt spending, top priority to improving balance of payments
impact of jenkins’ measures
made govt unpopular
by 1969, balance of payments surplus
but, 1969-70 inflation still running at 12%
improvement in econ made labour confident of victory in 1970 election
how were relations w/ trade unions good in early 60s?
pwc aim of full employment + happy unions, opinion polls, 60% in favour of unions, 1964 frank cousins minister of technology, wilson relying on union support for prices + incomes policy
why/how did relations begin to deteriorate?
strikes by seamen and dockers caused problems for govt
union bosses losing control, wildcat strikes
tory opposition announces ‘fair deal at work’
in place of strife policies
28 day cooling off period
govt could impose settlement in demarcation disputes
strike ballots
industrial relations court
reactions to ipos
voters liked
supported by many labour mps e.g. jenkins
hated by unions + left of labour
protest from union leaders e.g. jack jones, backed by 50+ labour mps ready to rebel
row lasted months until wilson gave in - 1969 TUC negotiated face saving compromise - humiliating back down by govt
why were domestic policies limited?
overshadowed by economic, lack of expertise in govt, research + dev expensive - couldnt compete w/ other countries
