Labour in Office 1974

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Labour in Office 19749
Labour's narrow Commons' majority
Overall majority throughout its five years in office was never more than 3 seats
Heavily dependent on the Liberal MPs which eventually formalised in the '77 LibLab
pact
Inflation
Suffered the worst effects of the rapid inflation that followed the oil price rise of 1973
Decline in the value of money and the growing debt in its trade balance threatened to
make Britain Bankrupt
Pound dropped below $2 in march `76
The IMF crisis
'76 chancellor of the exchequer Healey began negotiating a loan of 3 billion pounds
from the IMF
Terms of loan=major cuts in public expenditure
Healey had to delay a flight to Manila where IMF negotiations were held, in October to
rush to the Labour conference in an effort to preserve party unity
Partially successful
Jeered at when stated that cuts in public expenditure were necessary = long running
feud between left and centre right was fierce as ever
Left: policies indistinguishable from those of the conservatives
Centre right: it was detaching itself from the ordinary British person and was in danger
of stirring troubles with trade union extremists
'79 reduced spending by 3 billion pounds
Stabilised financial situation at the cost of 1.6 million unemployed people in `78
Tony Benn stated later that the Cabinet's decision to give into the demands of
international bankers deprived a supposedly socialist gov of the moral high ground
and so opened the way for the Thatcher revolution
Labour and the unions
Cuts in public expenditure and unemployment resulting from IMF loan= embittered
trade unions and weakened traditional loyalty to the Labour party
Improvements made with the Industrial Relations act in '74 was lost by inability to
persuade the workers to cooperate consistently with it
Wilson seemed to be on cooperative be terms with unions & good relations with Jack
Jones, moderate leader TGWU
Social contract between the gov and unions but there were few examples of unions
restricting their wage claims in accordance with it
The 1975 referendum on Europe
To improve relations with the unions, Wilson opted to renegotiate the terms of
Britain's membership of the EEC

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Wilson began renegotiations in regard to agriculture, budget payments and the
special provisions for commonwealth imports to quieten the left
He was offering the people a real voice in shaping their destiny
MPs were under no instruction from their parties as to which side to take= cross party
divide
Labour were for coming out and Conservatives and Liberals for staying in
Actual referendum was voted more out of fear of the consequences of leaving than
out of enthusiasm for remaining in
Results showed a large…read more

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