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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…

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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.

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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…

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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…

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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…

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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…

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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…

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a conviction politician; that is that she had strong views on principles and these were at the
core of her policies.
brought up a 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…

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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…

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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…


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