Labour governments of wilson and callaghan

what were the problems facing harold wilson by february 1974?

He had a less prominant position:

• economic- inflation was at 15%

• balance of payment defict was £3 billion

• Trade unions needed to be dealt with

• The situtuion in Northern Ireland was becoming way worse

• he had a minority government so had hard time to try and pass legisaltions

• labour was not united (EEC Application)

• Miner’s strikes - how do they put on electricity

• Wilson was older and less enegertic

What was Wilson’s only solution?

TO CALL A ANOTHER GENERAL ELETION

Who was Micheal Foot

• 1913-2010

• Born in plymouth into a political family

• Studied PPE at oxford

• Joined labour @ age 22

• worked journalist for new statesmen and tribune

• elected in plymouth 1945- lost his seat in1955 and the re-elected for blaney-gwent

• sectartary of state for employement n(1971-1976)

• Became labour leader in 1979 till 1983

what did wilson do to attempt to heal industrial relations

• 1973 (whilist in oppostion) he negiotated the Social Contract with the unions

>repeal the industrial relations act

> end of the 3 day working week and the state of emergancy

• Denis healey - issued 2 new budgets to hepl deal with the economic problems

what was the union’s response to wilson’s attempts to fix industrial relations?

• the agreed to it quickly

• easier to strike

• pay rise

• sympathetic ministers in govt e.g foot and Benn

what was the cycle 1970’s britian was trapped in?

INFLATION → WORKERS WANT PAY RISE → GO ON STIKE → GOV GIVES IN AND GIVES PAY RISE

what was the first economic problem that wilson had to deal with?

Was the large wage increases that were deemed necessary to get out of the industrial crisis that had brought down heath

what did the chancellor dennis healey do in january 1975?

He made a speech in Leeds to give stern warnings of the dangers:

• the wage inflation caused unemployment and was vital for public spending

What was imposed by healey’s budget in april 1975?

A steep rise in taxation and public spending

what was set up by Tony Benn in 1974?

• The national enterprise board whcih was used to adminster the governments share holding in private companies

• give financial aid

what was becoming apparent around NEB by 1974?

it’s effectiveness was being questioned

what did the government nationalise?

• decided to nationalise the car manufacture British layland which caused controversy about the role of the government in resuring ‘lame duck industry’

What was happening with the Social Contract?

• it was not limiting wage demands

What happened to the Social Contract?

• by 1975 a more formal pay restiant was introduced this made the party more divided

What did the left of the labour party do?

Left wingers like Micheal foot and tony benn did not want to put pressure on the unions and they did not want to decrease the lack of state intervention in industry

what did harold wilson do in march 1976?

He resigned as labour party leader and prime minister

what was the british layland?

• founded in 1968 it wa spart of a merger of car manufactors encouraged by tony benn

• part nationlised → UNDER BENN in 1973 after the oil crisis

• full privatised in 1986 as rover birtish company until sold to BMW

• famed for producing poorly designed and poorly maufactured cars campared to rival germany italy and japan

who succeed Harold Wilson?

James (Jim) Callaghan

What was James Callaghan like as a leader?

• a safe pair of hands with long experience

• had good links to the unions

• seen as a ideal leader to maintain the party’s unity

what were the problems that the economy faced throughout 1976?

• poor balance of payments which was putting pressure on the sterling and there were concerns that Britian did not have enough reserves of currency to support it

What did Callaghan do in september 1976?

He gave a speech at the labour party conference where he warned party that the ‘cosy worl’ whereby the government could ensure full employement was gone

• productivity needed to be improved to avoid what he calle d the twins of evil: unemployement and inflation

• He agured that the previous 20 years had failed to sort out the problem this was seen as a critisim of the conservatives and the previous labour party

How did the speech improve Labour’s planning?

The labour party applied ofr an imf loan.

how much did dennis healy get from the IMf?

he got 3 billions pounds in december of 1976

How did callaghan deal with the IMF crisis?

• he handled it well

• the economy handled it well and it recover however it reinforce britian’s image of being in economic decline

How did the left of the labour party and the conservatives react to this?

The conservatives:

• they denounced this as national humilation

The left of the labour party

• saw it as a betrayal,caving in international fianciers.

though callaghan himself maintained unity through the labour party there was still growing leftist millitancy in some public sector trade unions.

how did the north sea improve the economy?

• could extract oil from the north sea which lead to by 1978 9 oilfields being production

• inflation rates fell to 10 percent

• umeployement although at 1.6 million it was falling

• number of days lost to industrial disputes had fallen to ten-year low

what did callaghan have to do by 1977 to make labour have a majority?

• ‘lib-lab pact. This was to help defat his vote of no confidence tabled by the conservatives

• this meant that 12 liberals had to agree to vote with the government and in return promised to move ahead with devolution for scotland and wales.

what were nationlist doing in wales and scotland?

• gaining strength in the 1960’s late

• the accepted this but the majority of mp of the conservative party and many within the labour party were against any form of devolution

what was the devolution act of 1978?

it meant that they could have referndums.

the terms of the referendums were siginifcant as they would need at least 40 percent of the electorate to approve for devolution

what were the devolution results for march 1979?

Scotland:

• turnout: 62%

• Yes: 51.6

• No:48.4%

Wales:

• turnout:59%

• Yes:20.3%

• No 79.7%

These were held on march 1979 the majority of wales diagreeing with devoltion.Whereas in Scotland, more peope voted in favour of devolution but a simple majority was not enough which meant that devolution was defeated

What was the SNP response?

• withdrew their support for the labour party and this prove to be decisive in the aftermath pf the event of winter 1978 to 1979

what was rejected by the TUC in autumn of 1978?

• rejected labour’s propsal for a 5 percent wage restrant

• this enccouraged to put in high demanded by the trade unions

what industries got a 15 percent wage increase?

• ford lorry drivers in december after a nine week strike

What happened after the wage increase of 15%?

this meant that many unions folowed after leading to disruption to:

• transport through strikes by lorry drivers

• train drivers’ unions ASLEF

• outrage by public sector workers suchas: hosptial porters and clerical staffin local councils

• dustmen and grave diggers

how did these strikes impact Britian in winter of 1978 to 1979?

this was a not a serious cahllenge to the british givernmenr as the miners’ strike of 1974. The strikes gave up their attempts and the average pay increase was 10 percent