Labour Loss 1970

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  • "The Labour government lost power in 1970 because of its economic policies"
    • Economic
      • Devaluation
        • $2.80 to $2.40 in 1967
        • Situation overdramatised, devaluation could have been passed off as an economic adjustment
          • 1965: £425m private sector surplus
            • 1969: £1326m private sector surplus
            • This shows that Wilson's critical accusations of TUs creating the deficit was wrong
              • Inherited £666m public sector deficit
                • 1969: £924m public sector deficit
          • Inherited £666m public sector deficit
            • 1969: £924m public sector deficit
        • WAP Manser "if there were no gov. spending, there would be no deficit and no BoP problem"
        • National Plan 1964: DEA
          • Aimed to increase industrial production & exports
          • Aimed to control wage-price inflation by voluntary agreements on wages
          • Brown was not qualified for the job
            • Directly in competition with Callaghan's treasury
              • Tapped his phone
              • Refused to sign papers
              • DEA abandoned in 1967
              • Prices & Incomes Board set up instead
              • Had to approach IMF for a $3.9bn loan in 1967,
                • Greatest sum the IMF had ever been asked for
                • He had already reached out to them in 1964 with a £1bn loan
        • Post-Devaluation
          • Jenkins deflationary fiscal policy achieved a BoP surplus but decreased gov popularity
          • Inflation still ran at 12% 1969-70
    • Industrial Relations
      • In Place of Strife 1969
        • Row over this went on for 4 months
        • Seen as a humiliating event for gov
        • Split the party
          • Trade Union leader was supported by Callaghan: 50MPs ready to rebel
      • Wilson imposed spending cuts and wage freeze after his election victory
        • Cousins resigned over this
        • Led to the Dockers' & Seamen's strikes
    • Ireland
      • Intervention in 1969
        • Callaghan's decision in 1969 was initially welcomed by the Catholic communities, eg. Bogside, Londonderry
        • The longer term critical impact of awakening the dormant IRA would not have been a crucial factor in the loss of power
    • International
      • Rhodesia
        • Smith was a rigid persona
        • Denounced everything he said in December 1966 after the meeting on HMS Tiger
        • Wilson's diplomacy was seen as futile
      • Great Power
        • Decolonisation
          • Did not sit well with those clinging on to world power status
          • It had to be done due to the sheer cost of maintenance
          • Healey bring defence budget below £2bn by 1970
            • Accelerated under Jenkins' budget
              • All troops to be withdrawn by 1971
        • Nuclear
          • 1967: Commitment made to upgrade nuclear system
            • Abandoned under Jenkins' 68 budget
          • TSR-2 high tech warplane abandoned
      • Europe
        • Rejection of application in 1967
        • Added to gov. inadequacy with devaluation
      • US: Vietnam
        • Public and parliamentary disapproval of Wilson's inability to condemn the war


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