British history revision part 2

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Labour in Office 1974 ­ 1979
Following the first election of 1974, there were three factors which hindered the new Labour government
from the start;
A lack of majority in the House of Commons.
Rapid inflation following the rise in oil prices
The struggle with the Trade Unions.
Party unity and the question of EEC membership.
Wilson Again.
Wilson was not so self confident or perhaps cocky as in previous years
. He was happy to take more of a back seat, maybe because his cabinet contained some
outstanding individuals, but maybe he was tired.
He was only 58 years old, young by Prime Ministerial standards, but he seemed much older
Despite his problems, Wilson was still a formidable politician and able to run rings around
Heath, and Margaret Thatcher, his successor after 1975
However, he had run out of ideas about how to solve the growing economic crises and had no
stomach for another confrontation with the trade unions, as Source B makes clear.
The Splits in Wilson's Government.
Wilson recognised that his major focus needed to be on keeping the party united.
This was no easy feat. Since the bid in 1968 to join the EEC, the Labour Party had moved
position and was largely anti European.
Some very influential members, led by Roy Jenkins, were pro European.
Wilson was not a Euro enthusiast, but he was convinced that leaving the EEC would be a
disaster. His Foreign Secretary, Jim Callaghan, was of the same mind.
The 1975 Referendum on the EEC.
Wilson decided on a referendum among the public, with Cabinet members free to campaign on
whatever side they saw fit.
managed to renegotiate Britain's terms of membership of the EEC and hence calmed union
concerns that the EEC was a `capitalists club'
managed to gain better terms for Britain in regard to agriculture, budget payments and
Commonwealth imports.
took place in June 1975.
There was no party loyalty involved, with politicians of all parties free to campaign according to
their own consciences.
The people of Britain voted to stay in the community by 64.5% to 35.5%.
There were huge, and persuasive argument on each side, but the bottom line was whatever the
economic benefits to being a member, these were largely made irrelevant by the worsening
economy as a result of the increase in fuel prices
Both sides in the referendum focussed on the economic issues, rather than try to decipher the
political implications for national sovereignty and freedom.
Because the result was a reflection of the will of the people, this solved the problems of the
divisions within government, as the anti Europeans had lost the argument and their position
was not in keeping with the wishes of the British people.

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Tony Benn and Michael Foot were two very prominent left wingers in Cabinet
Benn wanted to nationalise more of industry. For him, it was to be a difficult time in his
relationship with Wilson and he was perpetually being moved away from the centre of power in
the government.
Michael Foot was responsible for relationships with the unions and thus played a vital role
There was also a talented younger generation coming through, led by David Owen and Shirley
Williams.…read more

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The tax rate grew, peaking at 83% on earned income and 98% on unearned income.
In May 1975 an American commentator on CBS said that; `Britain is drifting slowly towards a
condition of ungovernability.' The population began to fall as many bright young things
As the 1970s progressed, many large British companies found themselves unable to cope in a
more competitive world.…read more

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In September the pound came under huge pressure again in the face of massive selling on the
international markets and Callaghan and Healy decided they needed another massive loan to
prop it up.
This time the only body who was still willing to lend more to Britain was the IMF ;had been set
up to help failing third world countries, and thus appealing to it was a national humiliation.…read more

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By 1978 there were 13 million members of trade unions, the biggest being the Transport and
General Workers Union with 2 million members alone.
Trouble began with Ford factories where the TGWU backed a demand for 17% pay rises, which
they got
Fireman followed with 22%. Lorry drivers went on a nationwide strike until they got 17% - 20%.…read more

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The Conservatives message got through, especially in the South of England. Labour's share of
the vote fell to 37% nationwide, their lowest since 1931. The Conservatives gained 43.9%, far
less than Ted Heath received in 1970.
Thatcher's election victory is often portrayed as a decisive moment and a definitive statement
by the British public who had had enough of Consensus Politics.
If that is so, it was a decisive comment by the English, and those in Southern England at that.…read more

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As the leader of the failed negotiations to Britain's entry into the EEC in 1961, Heath was
convinced of the need for Britain to be a member.
The Labour Party in 1964 was less convinced, but gradually the pro Europeans in the cabinet
such as Roy Jenkins held sway and the economic arguments began to make sense.
Despite a series of promising meetings, De Gaulle insisted that Britain remove itself from the
`special relationship' with the USA if she were to be granted membership.…read more

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Methodist, and the ideas of self reliance and hard work stayed with her
follower of monetarist economics, a rebirth of classical liberal ideas on the moral right of the
free market individualism
influenced by the economist Friedrich von Hayek and the Conservative politician Keith Joseph
followed their path by agreeing that the role of government was not to involve itself in the
welfare of it's' citizens, but to provide the conditions by which individuals were free to make
their own decisions and choices
distrusted trade…read more

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Drys were those who believed that the role of the state had to be smaller and were suspicious of
Keynesianism and the unions.
Thatcher removed as many wets from positions of influence as quickly as she could, but before
1983 she needed their support in cabinet.
They were all gone after 1983.
Thatcher's Style of Government.
She was a tough person, but she also relied on a close and loyal band of advisers
She did not encourage discussion within cabinet and she often ignored it.…read more

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These changes had a profound effect on the already weak economy
The increased prices of goods due to higher levels of VAT pushed up inflation to 21.9% by the
end of 1980.
Cuts to government spending and support for nationalised companies was also cut, but not as
far as Thatcher had hoped was possible.
Other free market changes introduced included the abolition of the Price and Income
Commission and ending controls on the movement and value of currency.…read more


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