WILSON/CALLAGHAN CHAPTER 10 Flashcards
political/econ
POLITICAL, ECONOMIC, AND INDUSTRIAL PROBLEMS AND POLICIES
Wilson found himself in a much less promising position than 1964 economic situation was awful:
3 REASONS WHY
- Inflation at 15%
- Balance of payments deficit £3 billion.
- Trade unions need to be dealt with.
POLITICAL, ECONOMIC, AND INDUSTRIAL PROBLEMS AND POLICIES
Wilson found himself in a much less promising position than 1964 political situation was awful:
4 reasons
- NI situation precarious.
- Labour party less united than ever.
- Wilson older and less energetic.
- As a minority government, labour had to depend on support from other parties to get legislation through parliament.
POLITICAL, ECONOMIC, AND INDUSTRIAL PROBLEMS AND POLICIES
- October 1974 Wilson safe enough to call a new election.
why did heath lose and what majority did Wilson get?
- Voters associated Heath with the 3-day week and conflict with miners Wilson won his majority (just about) labour had 42 more seats than the conservatives, but their overall majority was just 3.
OCTOBER 1974 GENERAL ELECTION RESULTS
CONSERVATIVES
LABOUR
LIBERAL
SEATS and % OF VOTES
CONSERVATIVES 277 35.9
LABOUR 319 39.2
LIBERAL 13 18.3
INDUSTRIAL RELATIONS 1974-6
- In 1973, while in opposition, Wilson had negotiated the Social Contract
what was this?
(involved voluntary pay restraint by the trade unions – in return the government would repeal Heath’s industrial act and pay board) with the TUC.
INDUSTRIAL RELATIONS 1974-6
- Trade unions told government not looking for confrontation agreement with NUM quickly reached, and Wilson ended
which 2 things
the State of Emergency and the 3-day week.
INDUSTRIAL RELATIONS 1974-6
- Left wingers Benn and Foot put in charge oof departments of industry and employment.
- Denis Healey made Chancellor
what did he do
issued 2 budgets aiming to deal with economic crisis without annoying the unions.
ECONOMIC REFORMS 1974-6
- Problem: surge in inflation due to the rush of large increases that were deemed necessary to get out of industrial crisis that brogh down Heath.
- so in 1975,
what happened
chancellor Healey’ budget imposed steep rises in taxation and public spendings were cut.
ECONOMIC REFORMS 1974-6
- The national enterprise board (NEB) was set up in 1974 under Benn to
administer the government’s shareholdings in private companies. It could also give financial aid.
ECONOMIC REFORMS 1974-6
- 1975 - NEB’s effectiveness being questioned – the decision to nationalise
which company caused controversy
the failing car manufacturer British Leyland caused renewed controversy about the government recuing lame-duck industries.
ECONOMIC REFORMS 1974-6
- The social contract was not limiting wage demands - a more formal pay restraints policy introduced by 1975.
these shifts in policy
did what
intensified party divisions left wingers did not want to put pressure on the unions and also believed in state intervention in industry.
ECONOMIC REFORMS 1974-6
- March 1976 Wilson suddenly
did what
resigned as leader of the Labour party.
CALLAGHAN’S PREMIERSHIP, 1976-9
strengths of callaghan
2
- Had good links to the unions and seen as an ideal leader to maintain party unity.
CALLAGHAN’S PREMIERSHIP, 1976-9
- 1976 poor balance of payments putting pressure on the sterling - concerns that Britain did not have
enough reserves of currency to support it.
CALLAGHAN’S PREMIERSHIP, 1976-9
- Callaghan gave a speech where he suggested productivity needed to be improved to avoid high unemployment and inflation it was made to help prepare the party that the government was planning to
do what
apply for an emergency loan from the International Money Fund (IMF) as there were fears about a run on the pound.
CALLAGHAN’S PREMIERSHIP, 1976-9
- Healey received a loan of
how much and what did this mean
£3 billion the government had to make big spending cuts in return.
CALLAGHAN’S PREMIERSHIP, 1976-9
- Callaghan handled the IMF crisis well and the economy recovered.
however this
reinforced the image of Britain being in economic decline: conservatives denounced it as national humiliation, left wing of labour saw it as betrayal.