1a: A changing political landscape: The rise of consensus politics and political challenge, 1945-79

• Consensus = term used to describe the broad agreement between both parties on the running of the economy & the development of the welfare state.
• Both Labour & Conservatives up to the early 1970s believed in:
• Attempting to achieve full employment, even if this allows inflation
• A mixed economy, with heavy industry, railways, etc, in state ownership
• A welfare state & national health service
  
• Cooperation between gov, industry & trade unions in managing wages & prices
• Consensus was to the moderate left of the political spectrum - policies devised by Labour were continued by Conservatives, esp. commitment to full employment.
• Both parties endorsed a foreign & defence policy which was to the right of the political spectrum, with Britain confronting the USSR in the Cold War & investing in nuclear weapons.

• May 1945 - Labour wanted to withdraw from the coalition following the defeat of Nazi Germany → election called July 1945.
• Churchill believed he would be rewarded for his wartime service & his manifesto focused heavily on foreign policy, however there were bitter memories of Conservative pre-war govs & Churchill's 'gestapo' claim did not help.
• The Labour manifesto 'Let us face the future' promised action on housing, jobs, social security & a national health service.
• Labour won a landslide victory - Labour +239 seats, Conservatives -219 seats.

• Labour's main popular reforms:
• Establishment of a National Health Service
• National Insurance Act
• National Assistance Act
• 1949 Housing Act
• 1944 Education Act
• Labour won 1950 election but lost 78 seats due to 1949 House of Commons (Redistribution of Seats) Act - reduced no. of Labour safe seats by redrawing constituency boundaries.
  
• Overall size of WC was shrinking (78% identified as WC in 1931, 72% in 1951) - more people considered themselves MC so were less likely to vote Labour or be members of a trade union.
• Main causes of dissatisfaction w/ Labour:
• Rationing - wartime food & fuel rationing continued after the war & items not restricted in the war e.g. bread became rationed in peacetime
• Austerity - Labour seemed unable to revive Britain's struggling economy in the immediate post-war years
• Taxation - standard rate of taxation in 1949 was 45% & the top rate of marginal tax for high earners was 90%

• Following 1950 election, Attlee found it increasingly difficult to control Labour gov - by 1951 he was exhausted & many of his most able ministers fell ill or died e.g. Ernest Bevin died 1951.
• The party was also divided over budget cuts - Britain's involvement in the Korean War → huge increase in military spending & in 1951 Hugh Gaitskill announced an 'austerity budget' which involved introduction of prescription charges for glasses and dentistry - Aneurin Bevin resigned over this.
• Attlee lacked the authority to defuse the feuds within Labour so called an election in Oct 1951 which Conservatives won, despite Labour getting 250,000 more votes than Conservatives - Conservatives won 26 more constituencies than Labour.

• Anthony Eden = relatively young & popular politician who served as Churchill's foreign minister during the war.
• He called a general election in May 1955 to ensure he had a strong mandate - election showed Britain approved of Conservatives' management of the economy.
• July 1955 - Britain had lowest unemployment figures in recent history (215,000 unemployed).
• The Suez Crisis forced Eden from office.

• Since 1947 the Suez Canal was used to ship oil to Britain, Europe & USA, however the nationalist president of Egypt, Gamal Abdul Nasser, stated that the canal should be in Egyptian hands & he would pay British shareholders a fair price for it.
• Eden reacted w/ suspicion & hostility & when Nasser occupied the Canal Zone on 26 July 1956, his close relationship w/ USSR convinced the British that the canal would fall into Soviet hands.
• Eden agreed in secret to participate in France & Israel's invasion of the Suez Canal Zone - he was motivated by a desire not to be humiliated by Nasser as he knew his standing in Conservative Party depended on presenting a strong image as an international statesman.
• 5 Nov 1956 - invasion began & Eisenhower felt deceived that he had not been consulted on Britain's intentions & reacted angrily, threatening to sell USA's reserves of British currency & collapse the value of the £.
• Britain was forced to withdraw from Egypt & Eden resigned Jan 1957.
• Outcome of the Suez Crisis was a significant reduction in British world power & a recognition that it could no longer act independently w/o seeking US approval.

• Macmillan gov was v. popular due to a mixed economy; rising living standards; low unemployment; declining social inequality - Conservatives increased their majority in 1959 election.
• In 1959 3 right-wing MPs (Chancellor Peter Thorneycroft, Nigel Birch & Enoch Powell) resigned as they believed the gov was spending too much - they were convinced that inflation, not unemployment, posed the greatest threat to the economy & their resignations were embarrassing to the gov however made little impression on the public in a period of low unemployment & fairly low inflation.
• By 1962 the Conservatives' popularity was declining - perceived as out of touch due to large no. of UC cabinet members.
• 'Night of the Long Knives' - Macmillan fired 7 ministers from his cabinet & replaced them w/ younger men due to the Conservatives' image as ageing & privileged - early 1960s were dominated by youth culture & JFK was a young, popular president.
• Macmillan's actions were briefly seen as ruthless but showed that he was capable of taking action.
• High profile spy scandals also rocked the government.

• John Vassall - Between 1952-62 Vassall (a naval attaché at British embassy in Moscow) was blackmailed by the KGB (security agency for Soviet Union). He passed on large quantities of top-secret information on the British Royal Navy & was caught when Soviet spies defected to the West & gave MI6 Vassall's name.
• Harold 'Kim' Philby - One of Britain's most senior intelligence agents who defected to the USSR in Jan 1963. In 1955 (as Foreign Secretary) Macmillan had publicly announced that he had investigated & exonerated Philby therefore it was hugely embarrassing to Macmillan when this was revealed. Because of the Official Secrets Act, Philby's important role in the MI6 wasn't revealed until 1968.
• John Profumo - In June 1963, the secretary state for war admitted to having had an affair w/ Christine Keeler. He had previously denied the affair to Macmillan, who believed him. It was also revealed that he had a relationship with a Russian attaché, Yevgeny Ivanov, & the press focused on the spy angle of the story (though it is doubtful there was any security risk).

• In his first few days in office, Wilson discovered Britain's economic problems were worse than they thought -  previous chancellor of the exchequer left the country w/ £800m budget deficit.
• Wilson had promised to improve pensions & build 500,000 new homes a year, as well as maintain Britain's military presence overseas (accounted for 20% of all Britain's spending in 1960s) but his only other option was to devalue the £ in 1967 - he initially didn't want to do this & it was a huge embarrassment for the gov, leading to Callaghan resigning as chancellor.
• Wilson's gov achieved significant social & educational reforms in its 6 years in office:
• Series of new universities & polytechnics built; The Open University was established; Laws on abortion, homosexuality & the death penalty were liberalised
• Much of this was undermined by the economic problems faced & there was a widespread feeling that the promises of the Wilson years were unfulfilled.
  
• Wilson's gov declined in popularity towards the end of the 1960s as unemployment began to grow & no. of days lost to strikes increased.
  
• Wilson became suspicious of popular gov ministers (e.g. Roy Jenkins, James Callaghan, Barbara Castle) & morale in his cabinet declined due to this mistrust.
  
• 1969 - Barbara Castle proposed legislation to curb no. of unofficial strikes but Wilson feared that Callaghan would use this to replace him → the legislation was never enacted & Britain endured a decade of rising strikes & union unrest partly because of this.

• Heath wanted to break w/ the post-war consensus & bring about radical political change - he referred to it as a 'quiet revolution' & believed that by removing the state from people's lives they would become more enterprising.
• His first budget from Chancellor Anthony Barber featured tax cuts & gov spending cuts & Heath ended Wilson's incomes policy, believing wages should be set by the market, not gov.
• The Barber budget (1972) was known as the 'Barber Boom' because of the large tax cuts - the budget fuelled inflation & failed to cure Britain's growing economic problems → Heath forced to increase intervention in the economy over the rest of his time in office.
• By 1974 there had been two miners' strikes & Heath faced criticism from the opposition & his own party - Wilson accused Heath of attempting to ***** away union rights/critics within the party saw Heath as a 'traitor', betraying the promises made at the 1970 Selsdon Park meeting.
• Several Conservative MPs formed the 'Selsdon Group' within the party - dedicated to introducing free markey policies & reducing state intervention.
• In the second miner's strike (winter of 1973-74) Heath declared a state of emergency & a three-day week → called a general election in Feb 1974 - wanted election to be a referendum on union power & asked voters 'Who runs Britain?' in an election broadcast.
• Heath was defeated - reflected lack of confidence in his ability to manage the unions, inflation & economic decline.

• First priority was to end union unrest by repealing the Industrial Relations Act, but instead the gov attempted to return to the corporatism of the mid-1960s by developing a 'social contract' - gov would offer subsidies to the cost of living in return for unions agreeing not to pursue excessive wage claims.
• Wilson attempted to present his gov as conciliatory towards unions - Wilson's gov ended the miner's strike but the new policy of the social contract did nothing to deal with inflation, which was the underlying cause of the strikes.
• Wilson's party was divided between 3 factions:
• Centre right: inc. Wilson, Callaghan & Denis Healey. Held similar ideas to moderate left of the Conservative Party - in 1975 Chancellor Healey embraced monetarism & abandoned the post-war commitment to full employment.
• 'Soft' left: led by Michael Foot. Foot was a pro-union politician but did not support Tony Benn's radical economic ideas.
• 'Hard' left: led by Tony Benn. Benn shifted towards more extreme left-wing thinking throughout the 1970s & believed that Britain should become a 'siege economy' in response in the 1976 IMF crisis.

Siege economy - Economy in which imports & exports are controlled & export of capital is limited - e.g. to protect the value of the currency.

• Callaghan was from the centre right of Labour & began to abandon key aspects of the post-war economic consensus - caused him to clash w/ Tony Benn at cabinet meetings.
• Callaghan thought Britain had used borrowing to live beyond its means for decades & this had resulted in a loss of confidence in Britain and the £ on international currency markets.
• Benn proposed leaving the EEC & believed Britain could cut herself off from the global economy - Benn became↑ marginal figure within the cabinet & his economic arguments were seen as unworkable & extreme.
• Despite the internal divisions, Callaghan remained v. popular w/ the electorate as opposed to Conservative leader Thatcher, who had low opinion poll ratings.
• It was widely believed Labour would win at the next general election however a winter of strikes caused Callaghan's poll rating to slump - March 1979 one poll found 69% were dissatisfied w/ gov's performance, but still only 45% of those polled thought Thatcher was performing well as leader of the opposition.
• 1979 election saw Conservatives win w/ a sizeable majority & Thatcher became PM.