Wilson and Callaghan, 1974-79

Wilson’s economic plan

He wanted to resolve the government v. NUM confrontation to end the 3-day week and state of emergency.

National Enterprise board, 1974

Set up by Tony Benn to administer the government’s share holdings in private companies.

1975 - Made a significant investment in British Leyland
1976 - Nationalisation of British ship building and aerospace industries

By 1975, its effectiveness was being questioned, and was contributing to the deficit.

Social Contract

Negotiated in 1973 with Labour and the TUC which would involve voluntary pay restraint by the TUs, in return the government would repeal Heath’s Industrial Act and Pay Board.

Increased pension benefits, food and housing subsidies, tax and parallel cut to defence, and government deficit

Economic Reforms 1974-76

Nationalise the failing car manufacturer British Leyland caused renewed controversy about the role of the government in rescuing ‘lame-duck’ industries.

More formal pay restraint policy for TUs in 1975 cause the Social Contract wasn’t limiting wage demands.

Denis Healey’s March Budget 1974

Highly redistributive and tax-heavy designed to tackle a severe balance of payments crisis and high inflation:

• Income Tax - Base Rate 30%→33%, Top Rate 75%→83%

• Corporation Tax - 40%→52%

• Wealth & Capital - Groundwork for a new Wealth Tax and Capital Transfer Tax

• Price Controls - Stricter controls on corporate profit margins, increased subsidies for working class staple goods.

Denis Healey’s July Mini-Budget, 1974

Stimulus package aimed strictly at cooling inflation and easing the cost of living for consumers:

• VAT - Reduced from 10%→8%

• Fuel Prices - Price cut on road fuel alongside VAT reduction to lower transportation and manufacturing costs

• Rate Relief - Expanded the regional employment premium and provided rate relief to commercial properties to help industry

Sterling Collapse and IMF Loan, 1975-76

Value of the Pound collapsed between 1975 - Oct 1976

• $2.75 = £1 → $1.50 = £1

November 1976 - Callaghan and Healey appealed to the IMF for a loan:

• Granted him £3 Billion to stabilise the economy

• Required him to reduce inflation

Did stabilise the economy and bring some positive economic conditions by 1978

Winter of Discontent, 1978-79

Causes: Autumn 1978, TUC reject the government’s proposed wage increase limit to 5%. Encouraging TUs to put in higher demands and Strike.

Consequences: TUs began industrial action including disrupting transport (ASLEF), along with dustmen and gravediggers.

Results: ASLEF won a 15% increase to wages in December 1978 after a 9 week strike. Resolved in March 1979 with an average 10% wage increase. Public mood damaged due to psychological effects of the WoD.

Led to people feeling Labour were untrustworthy with the economy and when Thatcher called her VoNC in 1979, people supported the Conservatives more than Labour.

Inflation and Unemployment

Inflation: Peaked at 24.2% in 1975 (just before Callaghan), but fell by 1978 to 8.3% due to the tight fiscal controls and the IMF. Surged again after the WoD.

Unemployment: Rose steadily: from 1.25 million in 1976 → >1.5 million in 1979. The focus on reducing inflation led to job losses and economic stagnation.

Causes of the Feb 1974 Election

Due to the OPEC Oil Crisis of 1973, and the Miners’ Strikes of 1973-74 both causing a 3-day week and state of emergency.

Heath felt that the Liberals growth wouldn’t challenge him and instead would disenchant Wilsons voter pool.

Who Governs Britain?

Conservative’s Campaign Slogan used during the Feb 1974 election

Outcome of the Feb 1974 election

Labour - 301 Seats, 37.2% votes

Conservatives - 297 Seats, 37.9% votes

Outcome left a Labour minority government after Heath failed to form a coalition with the Liberals.

Reasons for the Oct 1974 Election

Wilson called an election as he felt he needed more of a majority to pass legislation and had done enough the past 8 months to keep his majority.

Oct 1974 election results

Labour - 319 Seats, 39.2% vote

Conservatives - 277 Seats, 37.9% vote

Labour had a majority and were able to act more freely on policy decisions then they did in February the same year.

Conservatives after the Oct 1974 election - Rise of Thatcher

The October defeat showcased that Heath had become a liability due to his failures in government.

Caused a leadership contest between Heath and Thatcher in 1975 where Thatcher won.

She led the challenge against Wilson and Callaghan in the rest of the 1970s till the VoNC in 1979 which passed and she then challenged for PM in the 1979 election.

Special Relationship with the USA

Wilson and Callaghan were both still keen on the Atlantic alliance.

Callaghan forged a strong personal relationship with Kissinger and negotiated the replacement of Polaris Nuclear Missiles with Trident in 1979 with President Jimmy Carter.

But they completed the withdrawal from East of Suez that began in the 1960s despite US disquiet.

Britain’s relationship with USSR

Détente continued under Wilson and Callaghan but tensions still moderately high due to the Eastern Bloc and the Markov Affair.

Georgi Markov Affair 1978 - Markov was a Bulgarian who defected to the West in 1969 and was outspoken about his criticisms of the Bulgarian communist regime. He was assassinated in London in 1978 supposedly by a poisonous pellet fired from an umbrella. KGB were suspected of being behind it but never proven.

Britain’s relationship with China

Despite not being as close as Heath was with Mao Zedong, Wilson and Callaghan continued to improve UK-China Relations.

By 1979, Premier Hua Guofeng visited Britain as part of a European tour; 1st visit to Britain by a Chinese leader since the Communist Revolution in 1949.

1975 EEC Referendum

Wilson held a referendum on whether the public wanted to be in the EEC. Titled “Do you think that the UK should stay in the European Community (the Common Market)?”

Heath had negotiated Britain into the EEC in 1973 without public vote.

Wilson wanted direct democracy to settle not only a public debate, but also an Parliamentary debate.

Those of the ‘NO’ Campaign, who wanted to leave the EEC due to two reasons:

Bad for workers:

• Michael Foot (Labour)

• Barbara Castle (Labour)

Bad for Britain’s independence:

• Toney Benn (Labour)

• Enoch Powell (UUP)

• Ian Paisley (DUP)

Those of the ‘YES’ Campaign, who wanted to remain in the EEC:

• Roy Jenkins (Labour)

• Ted Heath (Conservatives)

• Margaret Thatcher (Conservatives)

• Jeremy Thorpe (Liberals)

Those in the ‘YES’ Campaign were more broad in-terms of political parties so had better public impression.

Decolonisation and the Commonwealth

Both Wilson and Callaghan deprioritised the Commonwealth as a central pillar of British strategy.

Callaghan did handle the final stages of decolonisation, notably the tense negotiations over independence and majority rule in Rhodesia.

Continued restrictions on immigration from NCW countries, receiving criticism from leaders of Caribbean, African, and Asian Commonwealth nations regarding the rights of their citizens to enter the UK.

1975 EEC Referendum

Wilson held a referendum on whether the public wanted to be in the EEC. Titled “Do you think that the UK should stay in the European Community (the Common Market)?”

Heath had negotiated Britain into the EEC in 1973 without public vote.

Wilson wanted direct democracy to settle not only a public debate, but also an Parliamentary debate.

Those of the ‘NO’ Campaign, who wanted to leave the EEC due to two reasons:

Bad for workers:

• Michael Foot (Labour)

• Barbara Castle (Labour)

Bad for Britain’s independence:

• Toney Benn (Labour)

• Enoch Powell (UUP)

• Ian Paisley (DUP)

Those of the ‘YES’ Campaign, who wanted to remain in the EEC:

• Roy Jenkins (Labour)

• Ted Heath (Conservatives)

• Margaret Thatcher (Conservatives)

• Jeremy Thorpe (Liberals)

Those in the ‘YES’ Campaign were more broad in-terms of political parties so had better public impression.

Outcome of the 1975 EEC Referendum

July 1975

YES = 17 million (68.3%)

NO = 8 million (32.5%)

Despite Wilson successfully avoiding a Labour split, the referendum showed a possibly lack of commitment by the UK to the rest of the EEC nations.

Feminism, 1970-79

2nd Wave ran from 1963-1980 with progress including:

1970 - Initial Women’s Liberation Meetings allowed for Women’s liberal groups to spring across the country

Nov. 1970 - Disrupted the Miss World Contest as it ‘objectified women’

1971 - Women could take out mortgages without a male guarantor

1971 - NHS supply the birth control pill making it more widespread

March 1971 - Liverpool and Manchester see demands for equal pay and 24hr nurseries

1975 - Castles reforms to State Earnings related pension scheme with the Social Security Pensions Act

1975 - Employment Protection Act introduced paid maternity leave & outlawed dismissal on pregnancy grounds

1976 - Rape Crisis Centre opens in London, Domestic Violence Act

1977 - UN inaugurates International Women’s Day

1977 - ‘Reclaim the Night’ Marches

Limitations from Radicals (Separatists) who were against patriarchal oppression, and Socialists who were in favour of financial independence.

Sex Discrimination Act 1975

Passed in 1975, to end discrimination against men and women on the basis of their gender or marital status.

Set up the Equality Opportunities Commission to oversee both the SDA and EPA.

But only 9 investigations in 8 years with only 10% of claims in the workplace successful.

Equality in Trade Unions

TUs were still dominated by men, but by 1977 women’s wages went up to 70% of men’s (from 59% in 1970).

Race and Immigration

1976:

• National Front had 20,000 member and were very active in the Brick Lane and Southall areas of London.

• Race Relations Act - Established the Commission for Racial Equality. NF held marches in response which often led to violence.

• Riots at Notting Hill Carnival injured 300.

Jan 1976 - Aug 1978 - Over 100 incidents including 2 marches and 1/3rd increase in assaults and robberies of Asians and African-Caribbeans. Anti-Nazi League set up to counteract the ‘Paki-Bushing’ which occurred.

1979 - Teacher and Anti-Nazi League supporter Blair Peach murdered in a demonstration blocked by police. The Met took responsibility in 2010.

Youth Culture - Punk Movement

Began in 1975 with British bands like The Sex Pistols, The Clash, The Damned, and The Buzzcocks played loud, fast guitar music with shouty vocals.
Rejected hippy culture and attitude was key reflecting the social alienation many young people felt.

Youth Culture - Skinheads

Developed from Mod Culture at the end of the 1960s. Tended to be working class who were initially apolitical but by the end of the 1970s were linked with the National Front and Football Hooliganism.

Environmentalism

Focus on protecting the planet and its wildlife. Drew on some 1960s issues but by the 1970s it used the counterculture to gain momentum.

CND campaigned against the use of Nuclear Energy with 5 incidents occurring at Sellafield Nuclear Power station between 1975-79.

Outrage in 1975 when it was discovered Beagles in laboratories were forced to smoke 30 cigarettes a day to study the effects. Animal rights protestors carried out violent attacks on pharmaceutical labs from 1973.

The Animal Liberation Front formed in 1976 and used extreme violence: letter bombs were sent to MPs, including Thatcher in 1984.

Greenpeace UK founded in 1977.

Northern Ireland, 1974-79 - Collapse of Sunningdale

The agreement Heath’s government signed to introduce a power-sharing executive collapsed due to the Ulster Workers’ Council Strike began on 15th May 1974.

Collapsed fully on 28th May 1974 after the power-sharing chief exec. Faulkner resigned and Wilson was forced to reinstate direct rule.

Northern Ireland, 1974-79 - HMP Maze

NI prison which began as an internment camp which kept paramilitary detainees.

Divided along paramilitary lines although the site of many protests & violent activates, including hunger strikes, mass escape attempts, and Murder.

Nicknamed “University of Terror” as prisoners learnt how to commit deadlier offenses post-release.

Northern Ireland, 1974-79 - 1975 Election

July 1975 - UUP won the election and were so extreme they revoked the power-sharing convention in 1976.

Northern Ireland, 1974-79 - Special Category Status

In 1976, Wilson revoked status from terrorist prisoners, which meant they were no longer considered political prisoners and would be treated as criminals.

Disliked by Paramilitaries as they believed they were engaged in a war and weren’t criminals.

Northern Ireland, 1974-79 - Blanket and Dirty Protests

In response to losing SCS in 1976, INLA and IRA prisoners refused to wear the prison uniform and instead were either naked or only wore blankets.

In 1978, these escalated as Republican prisoners alleging ill treatment by prison guards refused to leave their cells. This meant they couldn’t “slop out” instead they smeared excrement on their cell walls.

By 1979, >250 prisoners were taking part in the protest and demands were growing for them to regain their political status.