Labour government of Callaghan [1976-79]

Question 1

% of workforce unemployed in 1977?

Answer 1

5.7

Question 2

% of workforce unemployed in 1978?

Answer 2

5.7

Question 3

% of workforce unemployed in 1979?

Answer 3

5.1

Question 4

Working days lost In strikes in millions in 1977?

Answer 4

10.14

Question 5

Working days lost In strikes in millions in 1978?

Answer 5

9.28

Question 6

Working days lost In strikes in millions in 1979?

Answer 6

31.19

Question 7

GDP change in % in 1977?

Answer 7

+0.9

Question 8

GDP change in % in 1978

Answer 8

+3.4

Question 9

GDP change in % in 1979?

Answer 9

+2.2

Question 10

Balance of payment [£m] in 1977?

Answer 10

+154

Question 11

Balance of payment [£m] in 1978?

Answer 11

+254

Question 12

Balance of payment [£m] in 1979?

Answer 12

-902

Question 13

What were the Labour government given in December 1976?

Answer 13

A loan from the IMF

Question 14

How much was the IMF loan?

Answer 14

£3 billion

Question 15

Why had Labour applied for the loan?

Answer 15

They were anxious that there would be a run on the pound

Question 16

In exchange for the IMF loan what did Labour have to do?

Answer 16

Had to make spending cuts which disgruntled the left of the party.

Question 17

Run on the pound = ?

Answer 17

Increased nervousness over the value of the pound so investors sell quickly to limit losses causing the price of the pound to decline rapidly.

Question 18

What happened as a result of the IMF loan?

Answer 18

The economic situation wasn’t that dire as the Labour government had feared. Callaghan had coped with the situation quite well and the economy was recovering with a positive balance of trade and upturn in GDP growth.

However it reinforced the image of Britain as being in economic decline. Tories denounced it as a national humiliation.

Question 19

What was the affect of the IMF on the Labour Party?

Answer 19

The left of the party saw it as a betrayal, caving into the international financiers. Although Callaghan kept unity amongst Labour MPs there was rise in leftist militancy in some public sector trade unions and local councils.

Question 20

How did the economic situation improve by 1978?

Answer 20

Economic situation improved as North Sea oil came on stream. By 1978, there were nine oilfields in production, inflation rates fell to 10%. Unemployment at 1.6 million was still considered high but it was beginning to fall. Number of industrial days lost was at a 10 year low.

Question 21

What had happened by 1977 to Labour and how had Callaghan sorted the issue?

Answer 21

Labour’s majority in the House of Commons had disappeared so Callaghan strengthened the government by making the ‘lib-lab’ pact.

Question 22

What could Callaghan do with the ‘lib-lab’ pact?

Answer 22

Defeat the vote of no confidence

Question 23

What had Callaghan promised in return for the ‘lib-lab’ pact?

Answer 23

Promised to move ahead with devolution for Wales and Scotland.

Question 24

What did the 1978 devolution act pave the way for?

Answer 24

With the act being passed it opens the way for referendums.

Question 25

Why did the way the referendums were set up mean that devolution would likely not pass?

Answer 25

A labour MP who opposed devolution inserted a clause which meant that a simple majority wasn’t enough for the vote to pass.

Question 26

Result of the devolution referendum in Wales and Scotland?

Answer 26

Wales - NO - 20.3% yes, 79.7% no
Scotland - NO - 51.6% yes, 48.4% no

Question 27

What did the result in the referendum mean for Labour?

Answer 27

The disappointed Scottish Nationalist MPs withdrew their support from the Labour Party. This was to prove decisive in the events of the winter of 1978-79.