UK History - Section 4 Labour governments of Wilson and Callaghan

What was the attempt to solve the problem of inflation being at 15 % ?

• Social contact - aimed to constrain wage demands and was negotiated with the TC whilst in opposition - came into effect

What was the attempt to solve the problem of productivity remaining weak and the balance of trade deficit being at £3 billion ?

• Tony Benn set up the ‘National Enterprise Board’ (NEB) to run the states interest in companies and provide aid - including public subsidy when necessary

• In 1975, Denis Healey (Chancellor) raised taxes and cut public spending

What was the attempt to solve the problem of the industrial relations being poor ?

• Agreement with the NUM which brought an end to the strike and 3 - day week

Why was there a hung parliament and what was the attempt to solve it ?

• Labour government did not have a overall majority

• In October, Wilson called another election and the Labour government won a small majority

What was the attempt to solve the problem of the Labour party being divided ?

• Wilson balanced his cabinet between left - wingers (like Tony Benn and Michael Foot) and right - wingers (like Denis Healey)

Which issues highlighted the issues in the Labour party ?

• Labour Party’s majority was very small and disappeared by 1977

• Social Contract failed to constrain wage demands

• Concern over the use of public subsidy to rescue lame duck industries (like British Leyland in 1975)

• Fears over the extent of the balance of payments crisis led the Labour government to approach the International Monetary Fund (IMF) for an emergency loan

What was starting to improve the economic situation by 1978 ?

• Discovery of oil in the North Sea which helped bring down inflation to 10 %

• Improved balance of payments

• Number of unemployment and industrial disputes were falling

What was the progress of devaluation (5 stages) ?

• March 1977 - Labour loses its majority in parliament

• Labour forms Lib - Lab pact with Liberal party. Liberal MP’s agree to support the Labour Party in Parliament and in return Labour agrees to allow Scotland and Wales to hold referendums on devolution

• 1978 - Devolution Acts passed, but include a clause that requires 40 % of the electorate to support devolution for it to pass

• 1 March 1979 Referendums held - In wales, the majority of those who voted wanted devolution but because it was less than 40 % of the whole electorate, devolution was defeated

• Scottish Nationalist MP’s were disappointed and would no longer support the Labour government in parliament. This and the end of the Lib - Lab pact in August 1978 meant that the Labour government was now a minority government

What caused the Winter of Discontent (1978 - 1979) and what was the consequence of it ?

• In Autumn. 1978, the TUC rejected Labour governments proposed wage limit increase of 5 % as some got 15 %

• Strikes - sometimes unofficial and during one of the coldest winters on record

Who was involved in the strikes during the ‘Winter of Discontent’ ?

• Ford Lorry drivers

• Train drivers

• Hospital porters

• Dustmen

• Gravediggers

Why and when did the ‘Winter of Discontent’ finish ?

• March 1979 as there was an average 10 % wage increase

Why was the Labour government forced to call a general election in March 1979 ?

• The Labour government had no majority and lost the support of small parties

• Lost a vote of no confidence in the House of Commons

Who and how was the Conservative Party supported in the March 1979 general election ?

• Media

• Winter of Discontent dominated the election

What were the consequences and negatives now ?

• Reputation of trade unions were damaged

• Labour Party looked out of touch and incompetent

• The disruption damaged the economic growth

Who won the March 1979 general election and with how much majority ?

• Conservative Party

• 43 majority