Was the Labour Government 1974-79 successful?
- Created by: hastr010
- Created on: 15-05-18 21:18
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- How successful was the Labour Government of 1974-79?
- Minority Government
- Wilson chose to hold another election but the results were still slim
- Relations with Trade unions
- Labour and TUC reached an agreement called the social contract which the unions agreed to co-operate to control wages
- there would be a return to free collective bargaining over wages.
- did not solve the economic difficulties as wages continued to exceed the inflation rate, however it brought a degree of control to the unions.
- Labour and TUC reached an agreement called the social contract which the unions agreed to co-operate to control wages
- divisions over Europe
- Wilson promised to negotiate terms of British membership of the EEC and hold a referendum on the issue. the new terms suggested that Britain's contribution to the budget would decrease
- Wilson allowed the cabinet to campaign for either side; resulted in a 2:1 split in favour of membership
- this buried the issue of membership and showed the party to have unity
- Wilson's resignation
- 1976 Wilson resugned due to memory loss - Callaghan replaced him
- Economic difficulties
- Stagflation
- Labour gov. gave miners 29% wage increase to settle strike, however it caused inflation to increase
- Inflation increased to 30% by 1975 - unions were still demanding a larger pay rise creating further inflation.
- World recession hit British exports which caused unemployment to boom - to 1.3million
- Chancellor exchequer said the economic recovery depended on:
- 1975 budget increasing taxed and cutting gov.spending in order to reduce prices
- formal incomes policy setting £6 a week ceiling on wage increases
- then narrowed to £4
- inflation dropped but economic recovery didn't as poor productivity led to small exports
- Labour gov. gave miners 29% wage increase to settle strike, however it caused inflation to increase
- 1976 - IMF loan
- Callaghan asked IMF for a loan of £3900 million
- gov. spending had to decrease by 2 billion but Callaghan had prevented a severe economic crisis
- Callaghan asked IMF for a loan of £3900 million
- Stagflation
- Lib-Lab pact 1977-78 - on opinion polls Labour were 25% behind Tories so made a deal with liberals for support in the government
- Winter of Discontent
- 1978-9 - multiple strikes from different workers unions - form the discontent of Healey's policies.
- Minority Government
- Conservatives won the 1979 election by 1 vote - the people had lost faith in Tories and Labour
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