Economics

Question 1

What is the overall argument

Answer 1

• overwhelmingly negative either with scare amounts of positive and successful action to counteract this
• in words of Vernon Begdanor Britain looked for ‘planning’ and towards ‘Europe’ both of which labour promised. Once again became clear that the majority of labour action was poor

Question 2

First point1: economic status on the world stage plummeted

Answer 2

• failed to join EEC with De Gaulle vetoing request in 1963 and again 1967
• not overly negative as it satisfied pro European’s with the clear attempts and eurosceptics with its failure
• however, Britain’s share of world exports fell from 16% 1960 to 11% 1970

Question 3

Point 2: Domestic economic climate

Answer 3

• W determined not to take easy way out with devaluation to deal with £800 balance of payment deficit
• Wilson didnt want voters to associate with ‘easy way out’ of economic problems
• Autumn 1964 Callaghan COE negotiated foreign loans+ over next 9 months deflationary measures: increase tax on taboco and alcohol

Question 4

What was the flip side to Callaghans deflationary measures ?

Answer 4

• British bases in far east maintained
• British forces to fight in Borneo supporting Malaysia from is Indonesia
• US demanded continue support in Asia
  FOREIGN POLICY DICTATED BY ECONOMIC NEGOTIATION

Question 5

When and why do the government go back on their hardline against devaluation ?

Answer 5

18 November 1967 , pound devalued from $2.80 to $2.40

• social policy impacted as raising of school leaving age 15-16 differed to 73 instead of 71
• undermining their social initiative
• deviated foreign policy as Jan 1968 Brit gov announced withdrawal of forces from beyond the Suez Canal by 1971 except Hong Kong and Persian Gulf
• Jenkins tried to balance this with increased tax of £923 million in 1969 but it was too late

Question 6

Point 3: the failure of the national plan
General info

Answer 6

• September 1965 peak of labour economic initiative announced the disastrous national plan
• two aims
• increase 5.25% exports each year
• annual 3.8% growth rate next 6 years
• hoped to counteract balance of payments deficit

Question 7

Point 3: National plan Wilson creating new things

Answer 7

• new ministry department of economic affairs and the NBPI national board of payments and incomes
• ensured wages increase only accompanied by increase in productivity to try and make British export goods more competitive in price than foreign products

Question 8

Point 3: National plan failures and clashes

Answer 8

• treasury’s deflationary measures clashed with DEA and were uncooperative with the new ministry
• NBPI no power to enforce its wage restraints and simply lead to a worsening of relations with the unions which undermined their foundational relationship
• showed lack of coordination within labours economic strategy and a failure to deal with the economic climate.

Question 9

Point 3: National plan benefits ?

Answer 9

The deflationary measures reduced the balance of payments deficit
Prevented a run on the pound

Yet critics pointed out that despite this there was government struggled to impose wage restraint and the DEA and treasury persuaded contradictory measures