Wilson + Callaghan 1974-1979 (T3) Flashcards
What was the PWC like from 1974-1979?
Under huge strain - Labour faced significant barriers to upholding consensus politics
What was the majority like for Labour after the 1974 election?
They had a tiny majority of 3 seats - they had to rely on the Liberal party
What was the pact between the Liberals and Labour in 1974 called?
The Lib-Lab pact
When did Wilson resign?
1976
Who replaced Wilson in 1976?
Jim Callaghan
What were Wilson and Callaghan remembered for?
- The IMF loan
- The ‘Winter of DIscontent’
How did the 1973 Oil Crisis pose as a problem to Wilson?
After oil prices rose by 70% in ‘73 there was a surge in inflation, the inflation rate was over 20%
How much did oil prices rise by after the 1973 Oil Crisis?
70%
What was Britain dubbed during this time?
‘the stick man of Europe’
In 1975 what did Chancellor Heady do?
He abandoned commitment to full employment
What did Chancellor Heady embrace in 1975 after he abandoned commitment to full employment?
Monetarism in order to limit inflation and balance the budget
What happened when the £ was devalued in 1976?
It reached a record low against the $ in June 1976
When was Britain forced to take an IMF loan?
1976
How much did Britain have to loan from the IMF?
£4bn
What did Britain have to take out such a large loan from the IMF?
To cope with the economic crisis
In return for the IMF loan what did Britain have to do?
Britain had to make huge cuts to public expenditure and the budget deficit
How much did the IMF propose Britain should make in cuts?
There were proposals for cuts of around 20%in the budget - to sort out the deficit
What did Labour do to the Industrial Relations Act?
They replaced it
What did Labour replace the Industrial Relations Act with?
The ‘Social Contract’ - a voluntary prices and wages control agreement
Did the ‘Social Contract’ succeed?
No, it failed as the TU members wanted pay increases
When was the ‘Winter of Discontent’?
1978-1979 –> Industrial unrest culminated during this time
What was the ‘Winter of Discontent’?
A wage freeze (a condition of the IMF loan) led to public workers going on strike
What were the consequences of the ‘Winter of Discontent’?
- Rubbish was uncollected
- Staff walked out of children’s hospitals
- Corpses were left unburied
How did British tabloids affect the public opinion of TUs?
They greatly exaggerated and sensationalised the strike
What was the public opinion after the strikes in the ‘Winter of Discontent’?
It turned decisively against the Labour party and TUs - as the Labour party failed to stand up to the Unions
Why was consensus politics overall abandoned during 1974-1979?
The economic problems faced by Britain
What made consensus policies so difficult during 1974-1979?
Economic problems and huge cuts to public expenditure
What did the IMF crisis reinforce?
A change in policy orientation away from full employment and social welfare - towards the control of inflation + expenditure
Which two important figures ditched Keynesian economics during 1974-1979?
- Callaghan
- Chancellor Heady
What was unemployment like in 1978?`
Unemployment had risen to 1.6 million
What did Callaghan say in a speech?
‘We used to think you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending… that opinion no longer exists’
What did Callaghan say relating the Britain’s spending?
Britain must ‘pay its way’ in the world
