Britain chapter 5

Why did Labour win the 1964 election?

• Wilsons Leadership

• Attitudes to conservatives

• Liberal Revival

• Social Change

• Home’s leadership

• Attitude to Labour

Why did Labour win the 1964 election?

• Factor 1: Wilsons Leadership

• Party seemed united as Wilson brought over left-wing rebels expelled under Gaitskell

• Presented as a modern, progressive man - broke off from Etonian leaders - seen as Yorkshire -born average man (despite teaching econ at Oxford)

• Promoted economic growth, YFE and welfare, more housing and better education

• Exploited scandals such as Profumo affair - contrasted Home

But

• lost votes from 1959 - more of a rejection of Tories

• many distrusted Labour due to TU links

• Internal divisions not unsolved

• Middle class disliked commitment to nationalisation

• Inexperience of ministers

Why did Labour win the 1964 election?

• Factor 2: Attitudes to Conservatives

• Blamed for increasing economic issues

• No answers to rising unemployment & inflation

• Out of touch with modern society - Home - aristocratic Etonian

• Sex scandals (Vassall, Profumo)

But

• Home surprised most - came across honest and modest - Wilson had rep for politically cunning

• Tac cuts - Maudling - cut taxes in 1963 & unemployment fell form 900,000 to 300,000 from Feb 1963 to July 1964- gave opinion poll lead in summer

• Overturned some areas in working class due to stance on immigration - Smethwick

Why did Labour win the 1964 election?

• Factor 3: Liberal Revival

• Middle class identified with neither

• Revived 1962

• Overturned 14,200 Tory majority in Orpington by-election in 1962

• Had more investment, publicity and new talent

• Only gained 3 seats but doubled vote (9seats)

• Labour one even fell - so taking votes from Tories - critical

Why did Labour win the 1964 election?

• Factor 4: Change in British society in 1950s

• Rise in culture - satire making fun of politician - That was the Week that was, Private eye → less respect for tradition and culture

• Labour benefited - opinion polls - did better in under 44

• Grammar schools - underprivileged could exceed and gain new opportunities - drive for classless Britain

Issues Wilson faced as PM

1. Labour majority only 4 seats

2. Party promise of modernising society needed to be fulfilled

3. Foreign and colonial issues

4. Senior govt. figures didnt get on

5. Economy

Wilson’s strengths

1. Intelligent/hard working/ detailed memory

2. Optimistic, resilient, patient and calm in crisis

3. Kind, generous and charming

4. Distrusted party ideology - pragmatic solutions

5. Compromised

6. Accepted both wings of party

How effective was Wilson’s leadership

• Parliament majority

  • Increased majority in 1966 from 4 to 96 - appeared purposeful and avoided divisions, and made Heath seem ponderous

• Labour Unity

  • Avoided major divisions, united in opinion over Europe (failed)

• Cabinet Management

  • Avoided split on foreign issues & modernised social policy

  • Gave ministerial roles to MPs with range of opinions - not just supporters

  • Only 4 govt. resignations during time in office

    • BUT often quarrels of personalities

    • Reform of industrial relations - 1969 cabinet fighting

• Social Reform

  • Increased prosperity - lower class divisions and people travelled more

  • More education and SofL improved, demand for equality, Open Uni for adults, new Comprehensive system (caused controversy)

  • Maintained promise of 1963 Robbins Report

    • BUT Traditionalists outraged - promiscuous society

    • Support for death penalty

    • Weak at preventing discrimination (Race Relations Act)

• Foreign/Colonial Issues

  • US Relations damaged (refusal to send troops to Vietnam and 1966 publicly criticised heavy bombing and 1967 failed at trying to broker peace)

  • Failed to get De Gaulle to allow entrance to EEC - veto repeated 1967 - but got party unity over Europe

  • Poor tactic of economic sanctions of Rhodesia & tried to negotiate majority rule with Ian Smith - - risked unity of labour and commonwealth- failed luckily

How did Wilson transform British society in 1964-70

• Social Reform

  • Increased prosperity - lower class divisions and people travelled more

  • More education and SofL improved, demand for equality, Open Uni for adults, new Comprehensive system (caused controversy)

  • Maintained promise of 1963 Robbins Report

    • BUT Traditionalists outraged - promiscuous society

    • Support for death penalty

    • Weak at preventing discrimination (Race Relations Act) - hard to make convictions

• Tightened rules on immigration 1965 + 1968

• New comprehensive system

• Maintained commitment to Robbins Report - believed in scientific and tech advances

• Oct 1967 - abortion legalised

• Junes 1967 - contraceptive poll available by NHS

• May 1970 - Equal pay

Economic issues for Labour (1964)

• Conserves. left BofP deficit - £800m

• Labour wanted firms to invest in new tech to increase efficiency and increase workers wages to incentivise productivity

• Govt NEEDED to:

  • Improve transport network

  • Invest in nationalised industries

  • Ensure well trained workforce

Trade Union Relations 1964 contributions to poor economic performance

BAD

• Inflation - Union leaders threatened strikes to demand wage increases

• Wanted higher wages and resisted pay freezes

But

• High Labour Unit Costs = high price for goods = less exports = BofP worsens

*Labour had to listen to TU - 60% workforce TU members!

1964 economic policy?

DEFLATION

• Callaghan (chancellor of the exchequer) negotiated forge in loans to stop a run of the pound - in return British support in Asia of USA - Borneo to defend commonwealth and help in Vietnam

• Increased taxes on tobacco and alcohol

• Import surcharge temporarily

Economic policy 1965

DEA - Dept. Of Economic Affairs created

• The National Plan - Set to improve economy

• Targets → annual growth of 3.8% over 6 years and increase in exports 5.25% each year

• NBPI - National Board for Prices and Income - ensure wages only increased if productivity did and gave investment funds for modernisation → but had NO POWER

• Treasury didn’t work with DEA and NBPI had no power

• DEA closed 1969 (helped win 1966 election as it seemed DEA had a plan)

• BofP deficit reduced

What economic policy occurred in 1967?

DEVALUATION

• A lowering of the value of the pound - helps deficit as exports increase

• Still economic difficulty and strike action (seaman strike over pay and working hours) - damaged British exports

• Autumn 1967 - 2.5 M unemployed, deficit growing

• Pound devalues 18th Nov from $2.80 to $2.40

• Trade figures improved slowly but still a deficit

• Deflationary measures still needed alongside devaluation

By 1968, chancellor of the exchequer Jenkins - still needed £923m to deal with situation

Wilsons economic record

+ signs of improvement - surplus, IR reduces, £ appreciated

+motorways built in N. England

+ Manufacturing encouraged in South Wales, Scotland, Merseyside, etc

- Labour as short-sighted as Conservs.

-Rate of inflation NOT slowed

-Higher unemployment

-share of world exports declines from 25% to 11% (1950-70)

-Lots spent on military - not spent elsewhere

-TU strike actions

-No continual industrial productivity - deflationary pressures

How successful was the economic policy of labour 194-70?

• Deflation

• National Plan

• Devaluation

Labours response to TU’s

• 1968 - press criticised Wilson - not controlling unions

• Barbara Castle (left wing Labour) Ministry of Employment and Productivity leader - ‘In Place of Strife’

• Said

  • Employees have right to join a union

  • Govt. could order a ballot before a strike - if believed threat to national interest

  • 28 day cooling period If dispute unofficial

  • Disputes between unions could be referred to an industrial commission (legally binding decisions)

  • Financial penalties of decisions NOT obeyed

  • Workers unfairly dismissed entitles to compensation or job back

Consequences of ‘In Place of Strife’

FAILED

• Trade Union Congress and many Labour MPs disliked it

• Resistance led by James Callaghan (Home Secretary)

• 50+ MPs rebelled when debated in HofC

• Over time ‘white collar’ employment grew - private sector discourages TU’s so TU industry declined

How far do you agree that Wilson was an effective PM?

• Economic Policy

• Industrial Relations

• Issues such as cabinet, foreign policy, social issues

Why did Labour lose the 1970 election?

• Labour weaknesses

• Conservative strengths

Labour Weaknesses

• Wilson’s Complacency

  • Too relaxed - expecting to win after 51% approval ratings

  • Trade figures released day before election - damaged Wilsons claims of the economy mending

• Disillusionment of Labour Supporters

  • Labour supporters refused to vote

  • Party membership fell from 830,000 in 1964 to 680,000 in 1970 - number of local activists declined

  • Party too right wing:

    • Party too supportive of USA

    • Too much spent on defence - not enough on welfare - health and education

    • Policy to keep £’s value - only benefitted London + USA

    • W.c made poorer

    • Abandoned commitment to socialism/ WC interests (In Place of Strife)

• Failure of ‘In Place of Strife’

  • Sign of govt failures to improve and modernise Britain

Conservative Strengths

• Conservative proposals

  • APPEALING

  • Join EEC

  • Attempts to control prices and income by law would end

  • Less state intervention - especially if firms loss-making

  • Reform IR’s - decrease strikes causing disruption and inflationary pay settlements

  • * Wilson tried to mock these policies however only drew attention to his own policies novelty

• Health’s leadership

  • Attacked Labour economic policies

  • Inflation increased by 31% by RPI and unemployment increased by over 200,000

  • Press afforded win to Heath’s ‘guts and leadership’

  • When Powell challenged leadership in shadow cabinet - sacked - showed authority and MPs rallied behind Heath - United despite thousands of letters of criticism

How successful was Heath as PM

Aims:

1. Joining EEC

2. Industrial Relations

3. Less State Intervention

4. Strengthen Economy

How successful was Heath as PM

• Economy

• Inflation inherited at 5% - left at 10%

• No change in unemployment

• Days lost to strikes in 4 years double that of Wilsons 6 years

• But during ‘economic blizzard’ - his fault?

• Inherited surplus budget - left a deficit

How successful was Heath as PM

• Joining EEC

• Successfully joins 1st Jan 1973 - both parties still divided

• De Gaulle left - Pompidou wanted them to join (on french terms)

• Labour officially opposed but 69 MPs defied and voted in favour - Gave Heath majority

• heath felt EEC would govt better access to markets and competition would stimulate modernisation and development

• 39 conservs opposed

  • Critics said:

    • Britain had to sacrifice preferential trade with Commonwealth

    • Had to accept EECs policies/ heavy subsidies to french farmers

• Little impact on short term economic progress

How successful was Heath as PM

• Industrial Relation Act

• Industrial Relations Act - Aug 1971

  • Aimed to Balance rights of individuals and those in unions

  • Workers had legal right to join or not a TU

  • National Industrial Relations Court (NIRC) and Industrial Relations Commission (IRC) established

  • TU had to register with NIRC and IRC - would have better rights of recognition by employers

  • Members of registered unions - better protection against unfair dismissal

  • Unregistered TU - liable for claims for damages

  • Act gave govt power to order pre-strike ballot and 60 day cooling-off period

• Failed - unpopular - similar to In place of strife

• TUC told members to de-register

• Act increased bitterness of confrontations between unions and employers

• Complicated TUC negotiations with Heath over r wages and prices

• Union leaders militant in early 1970s hoped to destroy IR act and Heaths govt

• Dock workers legal judgement - released home despite refusing to appear to NIRC - undermined credibility

How successful was Heath as PM

• Industrial relations

• less successful than Wilson

• Frequent strikes due to anger over IR act & inflation

• Why was inflation such an issue

  • Damaged real wages - SofL

  • 1971 - Nixon ended system of fixed ER (since WW2 to stop devalue of dollar making British exports more expensive)

  • 1972 - £ allowed to float freely - poor industrial performance caused depreciation - imports more costly

  • Commodity prices ribose - raw materials, furl, food

  • Heath govt tried to stimulate growth - cut taxes + increased public spending - 1972 budget especially - higher AD - pushed up prices

• Miners Strike Jan-Feb 1972

  • Wanted 47% pay rise - National Coal Board offered 8%

  • Jan 1972 - 280,000 miners strikes - govt declared state of emergency - regular power cuts

• Why were they successful?

  • Scargill & miners organised - co-ordinated flying pickets

  • Violent incidents - Saltley coke depot in Birmingham - 15,000 massed pickets successfully stopped fuel leaving depot - didn’t damage public sympathy either

  • Govt poorly organised - severe winter

• Damaging to govt

  • Encouraged other orders to strike for more pay

  • Added to inflationary pressures

  • Govt looked weak

  • Failure of IR act shown

How successful was Heath as PM

• U-turns

• Jan 1971 - Rolls-Royce aircraft division nationalised - ‘vital’ to defence industry

• Heath not prepared for unemployment to rise due to govt policy

  • Feb 1972 granted £35m to Upper Cycle Shipbuilders - save 3000 jobs

  • New Ministry for Industrial Development set up April - provided aid to industry in deprived regions to stimulate growth and reduce unemployment

  • Statutory policies Nov 1972 - to regulate price and pat increases - destroyed by oil price shock Oct 1973

• Oil price shock - Oct 1973

  • Egypt and Syria - war with Isreal - cut supplies and x4 prices to west - perceived Western support for Isreal

  • Nov 1973 - miners began overtime ban for more pay

  • Heath tried negotiation with leaders - failed - militant miner told Heath aim was to destroy his govt

  • 13th Dec - State of emergency declared - 3-day working week from 31st Dec

    • Electricity provided to industry and businesses only on 3 days a week

    • 50mph on roads to save petrol

    • TV shut 10:30 curfew each night

1974 election

• Conservs - 37.9% - 297 seats

• Labour - 37.1% - 301 seats

How did Wilson and Callaghan deal with Industrial relations 1974- 1979

• Social Contract - Unions agreed to cooperate in trying to control wage increases, govt promised to try keep prices down and provide better welfare benefits, return to free collective bargaining over wages + no statutory incomes policy

• Didn’t resolve nations economic difficulties - wage increased still exceeded inflation - cynics suggested the ‘only give and take in the social contract was that the government gave and the unions took’

• Opinion poll - Jack Jones - leader of the transport workers unions seen as most powerful man in the country

• SC suggested TU and govt had some shared objectives - cooperation lasted till winter 1978

How did Wilson and Callaghan deal with The minority govt

• hard to pass laws

• help Oct 1974 election - 319 seats - gain of 18

• Won nearly 200,000 less voted

How did Wilson and Callaghan deal with Party divisions 1974-79?

• Move to the left - Micheal Foot - Dept of employment and Tony Benn - Secretary of State for industry

• Europe - Wilson promised to re-negotiate terms of EEC + hold a referendum on the issue

  • Contributions to EEC budget reduced - terms announced march 1975 - referendem for June 5th 1975 - Wilson gave cabinet ministers freedom to campaign for either side

  • 2:1 votes in favour of continued membership

How did Wilson and Callaghan deal with Economic difficulties - stagflation?

• Miners strike 1974 settled by 27% pay rise - inflation nearly 30% by 1975 - fuelled higher wage calls - etc

• World recession hit exports + EG

• Unemployment increased from 542,000 1974 to 1.3m in 1976

• Healy (C. Of the exchequer) new dependence on recovery on inflation

  • 1975 budget raised taxes + cut govt spending - reduce money circulation - lower prices

  • July 1975 - formal incomes policy - set £6 per week ceiling on wage increases, a freeze on higher incomes - TUC reluctantly agreed - opposed by left wing MPs

  • 1975 - changed to £4 a week - gradual fall in average level of wage increases from 26% in 1975 to 15% 1976 and 10% 1977

• Inflation dropped but no recovery - poor productivity and high costs - no boost in exports and still high imports - BofP deficit

• 1976 - severe crisis of confidence of the pound - falling value threatened competitiveness and worsen inflation (high import price)

• Band of England bought pounds on foreign exchange - prop up value - threatened use of reserves - threat of national bankruptcy

IMF loan 1976

• $3900m loan - had to cut £2b in spending

Lib-Lab pact 1977-8

• Nov 1976 - Tories 25% lead in an opinion poll → by election losses gave slim majority in Commons weakened

• March 1977 - Callaghan negotiated deal with Lib leader Steel

Winter of discontent

• 1978-9

• Unions disliked Healys policies - wage increase caps at 5% - TU felt they’d abandoned the Social Contract and that they had disproportionately suffered

• Dec - Ford workers won 15% pay rise over a 3-month strike

• Followed by lorry drivers demanding 30% rise - caused petrol shortage and deliveries affected

• More strikes + overtime bans after the National Union of Public Employees wanted a 40% pay increase - rubbish piled, graves not dug - visual impact for press - unsympathetic to Labour and unions

• Callaghan seemed out of touch and complacent - West Indies holiday in Jan - ‘CRISIS WHAT CRISIS?’ Headline

• Strikes settled with pay increases - Labour seemed out of control - TU too much power