A2 History Britain

• The failure of Conservative economic policies
  • - stop go
  • - the failure to modernise
  • - the failure to join europe
• Wilson
• Changes in political culture
• the fall of Macmillan/decline of Macmillan government
• crises and scandals - Profumo affair

• Conservative economic policies
  • stop go
  • not joining europe
  • failure to modernise
• Fall of Macmillan/decline of government
• Crises and Scandals
  • Profumo/Vassall
• changes in political culture
• Labour recovers - Wilson

ADVANTAGES

•  
  • A 'breath of fresh air'
  • Wilson was a dramatic change - state school, Yorkshire accent
  • Wilson had a plan, the 'first 100 days' plan, ready to solve problems, mroe energetic
  • Seemed to be addressing Britain's economic failure - lack of modernisation, relative economic decline
  • He remained commuted to the NHS and welfare spending
  • He believed in the 're-distribution of wealth' 
  • The party dropped its commitment to more nationalisation and more state control

Successes

• Educational reform
  • implementing the Robbins Report (expansion of higher education)
  • Implementing Comprehensive schools
• Welfare Reform
  • abolished prescription charges
  • increased pensions to 21% of earnings
• Health
  • Wilson spent more, 5% of GNP, Family Planning Act 1967
• Social
  • Capital punishment was abolished in 1965
  • Homosexuality was de-criminalised in 1967
  • The Representation of People Act 1969 lowered the voting age from 21 to 18
• Labour Victory 1966
  • Still popular, showed actual change, economy still good

Failures

• The failure to deal with the rise of nationalism
  • In Scotland and Wales, fall behind rest of UK, SNP
• Failure to reform the house of Lords
  • dominated by 'hereditary peers'
• Failure to reform local government
  • not been changed since 19th century
• Failure to reform cental government
  • British civil service were inefficient 
  • recommended changing Oxbridge bias - little changed

Disaster 1: the balance of payments crisis of £800 million

• Maudling launched 'give away budget, Callaghan increased tax to 15% on imports

Disaster 2: the failure of the national plan

• It planned for an increase of Britain's national output by 25% by 1970 and planned for steady growth at 4% per year
• it produced nothing to say how this was to be achieved, still a deficit of £236 million in 1965

Disaster 3: the devaluation of the pound

• They planned to cut people's spending, by raising taxes even more
• But a serious strike by dockers in 1967 made the balance of payments even worse
• In November 67 the government DEVALUED the pound  from $2.80 to $2.40

Disaster 4: Jenkins and Austerity

• He took £623 million in taxes, almost banned taking foreign currency out of the country
• Raised interest rates, Morgan says "Instead of stop-go it would be stop-stop"
• Morgan= "The optimism following Wilson's election victory if 1964 had totally dissolved"

Disaster 5: Trade Unions

Labour lost - they got 288 seats compared with the Conservatives 330 and Liberals 6 b/c...

• Their voters had been disillusioned by the last few years and the turnout slumped from 76% in 1966 to 72% in 1970

• The chaos of recent years was remembered by many and they had another reminder when just 2 days before the vote the balance of payments again went into deficit

• Edward Heath promised that he would do something to curb the unisons and strikes 

• Labours election campaign was poor and lacked energy and drive

• Conservatives under Heath

Strategy

• He tried to end the post war consensus and try a more right wing approach
• free enterprise – reducing the role of the government in the economy, free market
• An end to government intervention in the economy incl. money to prop up failing businesses in order to save jobs
• Much reduced government spending to free it up for private business
• Lower taxes – so people had more of their money to spend
• A ‘hands off’ approach to industrial relations – the government must not get involved in wage disputes but let the employers and workers (unions) fight it out

Selsdon Policies

• 1970 dockers strike – the Employment Minister Robert Carr refused to get involved
• 2.1971 Budget by the Chancellor Anthony Barber planned to promote free enterprise by cutting government spending by £330 million
• Heath appointed John Davis  - the chief of the CBI and he announced a hands off policy
• 1971 they stopped ******* the £ against the dollar and allowed it to float - this led to the ‘Barber Boom’ of the early 70s

• The effects of the Barbour Boom
  • This resulted in higher prices – inflation – which rocketed
  • At the same time unemployment went up to 1 million – the highest since the war

• Bankruptcies

• major British employers were on the verge of bankruptcy – Rolls Royce

• The oil price rise of 1973

• The Arab Israeli war of 1973 saw the price of oil quadruple
• Oil prices in GB went up immediately by 10% and this gave a further boost to inflation and later the price of crude oil increased by 7% which made prices rise even more

• The failure to contorl the TU's and wage demands

• The dock and car workers went on strike for higher wages in 1971 and both won completely
• By the end of 1971 wages increases rose to 20%

Inflation wasat 10% in 1973 (by 1975 it was 25%) and unemployment around 1 million. 

• Rolls Royce was nationalised and they gave £35 million to the save the Clyde shipbuilders

• The government said it would cut what it spent yet they increased public spending - ended spending more than Labour had.eg in 1970 the government spent 42% of GDP but by 1974 it was 48%

• The government said it would not intervene in the workings of business and the economy yet by 1972 it tried 'Corporatism' to control wages

• Most important the government completely abandoned its ‘hands off’ approach to the unions and passed the INDUSTRIAL RELATIONS ACT. It could enforce a ballot of members of a union before a strike and order a ‘cooling off period’ of 16 days before a strike could begin. It could fine or imprison those who broke the rules

• Many unions refused to register with the act
• It provoked a furious reaction from the unions - The TUC threatened to expel any union which signed up to the act
• THE FIRST MINERS STRIKE 1972 - (a) they rejected the government’s pay restrictions and the Industrial Relations Act (b) their wages had fallen behind other industrial workers (18th)
• So the miners rejected an offered 8% pay rise and went on strike in January 1972 and as a result (a)no coal was produced (b)the miners used ‘pickets’, '3 day week'
• 24% pay rise which put the miners back to the top of the league table of industrial workers. The strike was called off after 6 weeks.
• THE PRICES AND INCOMES BILL - It was to limit wage increases by law
• THE SECOND MINERS STRIKE 1974 – the miners resented the limits and their leaders like Scargill were again spoiling for a fight believing that they were invincible

• Heath felt that the public were on his side and the opinions polls showed this in the run up to the election. In the end he was narrowly defeated because:
• (a) Harold Wilson had done a deal with the unions later called the ‘Social Contract’ in which they said they would co-operate with a Labour government if elected and that there would be industrial peace’. This gave labour a boost
• (b) The campaign took place in the middle of the miners strike in the Winter at the time when people needed fuel most
• (c)it also occurred as the oil crisis started to bite  - a 70% increase in the cost of oil
• (d)this in turn made prices and costs rise – inflation headed upwards again
• (e) this in turn created the worst balance of payments deficit in British history of £383 billion
• (f) the Director General of the CBI Campbell Adamson attacked the Industrial Relations Act just 2 days before the election

In the election of February 1974 Labour got 301 seats, Conservatives 296, Liberals 14 and others 23. Heath tried to cling on to power by doing a deal with the Liberals but they refused. 

One year later Edward Heath was ousted as Conservative leader and replaced by Margaret Thatcher.

• Political
  • The Election of February 1974 - no majority, ended miners strike by £103 million pay off
  • The Election of Oct 1974 - Labour won 18 extra seats&won overall majority but only 3 MPs
  • The European referendum 1975 - split over joining EU, Benn and Foot wanted out
  • The Resignation if Wilson 1976 - stepped down as PM in 1976 because if ill health
  • The Lib / Lab Pact/the end of the Lib/Lab Pact
  • Callaghan's gamble 1978 - Callaghan was tempted to call and early election to take advantage but he lost his nerve and decided to wait until 1979 (Winter of Discontent - oops)
  • The vote of No Confidence March 1979 - Labour lost by 1 vote
• Economic
  • Interventionism - solve the problem of the poor performance of industries they set up the 'National Enterprise Board' which would pump money into industry and 'pick winners' 
  • Welfarism - Eg S.Williams as Ed. Minister expanded state ed. and comprehensives
  • Re-distribution - the top rate of tax was 90% and the standard rate was 33%.
  • Cutting spending - he gave away £900 million in a pre election give away in 1975 he imposed a 3% limit in wage rises
• Industrial
  • The end of Wage restraint 1977-79 - In July 1978, a new 5% limit in beg rises 
  • The Winter of Discontent - strikes in the winter of 1978-79, "Crisis what crisis?" 

• Rising unemployment
  • In spite of this (interventionism) unemployment rose to 1.5 million by 1977
• Rising inflation
  • in 1974 wages rises averaged 26%, inflation went up to 28%
• The crisis of 1976 and the end of consensus
  • 'the sick man if Europe', balance of payments crisis caused the value of £ to slump to $1.7

Consequences

• "Britain appeared on the centre stage as an incompetent beggar" (Morgan)
• Healey was determined to cut spending as the IMF demanded to stop excessive spending beyond Britain's means and he began to cut welfare as well as other costs

Recovery after 1976

• The arrival of North Sea Oil- by 1978 9 major oilfield were open in the North Sea and this cut Britain's dependence on expensive imported oil and gave a massive boost to the economy and cured the balance of payments problem
• Wage restraint and cuts began to take effect, inflation fell from 25% in 1977 to 7% by 1978
• The balance of payments yet into surplus and in 1978 of £1000 million