Flashcards in Wilson And The Labour Government 1964 - 70 Deck (15):
What percentage of people said they had a favourable view of trade unions?
Explain devolution with reference to the 'Lib lab' pact
When was this
In 1977 labour was losing their majority in the House of Commons
Callaghan responded by strengthening the government through the 'Lib lab' pact - which enabled him to defeat the vote of no confidence put forward by the conservatives
The agreement was that, should 12 liberals vote labour in the vote of no confidence, then labour would give devolution to Wales and Scotland
However, Wales and Scotland actually getting devolution was made very unlikely because at least 40% of the electorate needed to approve before it was passed
What is meant by devolution?
The transfer of power to lower levels of government
What is meant by a vote of no confidence?
A vote on whether the government is considered able to continue governing; if it is lost then the government must call for general election
Who were the IMF?
Why was Callaghan criticised for applying for a £3 billion loan?
International Monetary Fund - set up in the aftermath of WW2 to promote economic stability and growth across the world
Callaghan was criticised by conservatives who labelled it a national humiliation and by labour MPs who saw it a betrayal - caving in to international financiers
What was key to Wilson's economic planning?
What was the problem?
Modernisation - Wilson wanted to catch up with more advanced economies such as west Germany and Japan as the affluence of the post war period was not reflected in growth and productivity rates - the economy was trapped by the 'stop go' cycle
What problem did labour immediately have when they came to power in 1964?
There was a balance of payment crisis as the deficit was £400 million
What were the two potential solutions to economic decline?
Why were neither of these favoured by Wilson and Callaghan?
Deflation and devaluation
Deflation - this was the old solution to 'stop go' cycle which Wilson was desperate to escape
Devaluation - Wilson said himself he wanted to prove labour were 'not a party of devaluation'
What was the DEA?
Who led it?
Why did this cause problems?
Department of Economic Affairs
Led by George Brown
- this appointment was problematic because brown has a drinking problem which made him inconsistent and impulsive
- the creation of the DEA undermines orthodox advisory bodies such as the chancellor of the exchequer and economists at the treasury
What happened to as a result of the unpopularity of the DEA?
It was dissolved and George Brown was moved to foreign affairs
What was introduced in 1966?
Was it successful?
Prices and incomes policy introduced to combat inflation
- however there was another sterlings crisis in 1966 partly due to the national strike by the union of seamen
Despite Wilson trying to avoid the policy, when the pound was eventually devalued how much did it decrease by?
Dropped by 14%
Comment on Roy Jenkins role during this time
He replaced James Callaghan as chancellor of the exchequer and found found some success in his new position
He raised taxes and tightened government spending in all areas
In 1969 Jenkins has achieved a balance of payments surplus - this economic recovery was a major role in labour victory in the 1970 general election
Why was there a general election in 1979?
Callaghan lost the vote of no confidence and was forced to call a general election