Harold Wilson’s Government 1964-70

1. Harold Wilson’s Government 1964-70

2. Wilson’s vision “ The Britain that is going to be forged in the white heat of this revolution will be no place for restrictive practices or for outdated methods on either side of industry. In the Cabinet room and the boardroom alike, those charged with the control of our affairs must be ready to speak in the language of our scientific age”

3. So what does this mean? • Modernise Britain using technology • Strengthen the economy by improving the balance of payments • Develop the welfare state • Work with the trade unions.

4. Who were Wilson’s key people? George Brown – Department of Economic Affairs 1964 -67 James Callaghan – Chancellor 1964-67 Tony Benn – Minister for Technology 1965 – 70 Roy Jenkins – Chancellor 1967 - 70

5. Government Position in 1964 • The economy was worse than the Conservatives had admitted. The balance of payments had a deficit of £400 million. • The £ had a fixed rate against the $. It had been devalued in 1949 by the Attlee Government to £1 = $2.80. • The unions were starting to become disillusioned with the country’s economic progress, particularly in comparison with the EEC. 2 million working days were lost in strikes in 1964.

6. What should the Wilson Government do? • Maintain strength of £ in the money market. • Restrict Imports. • Improve relations with labour (the trade unions and workforce) • Forge a “New Britain in the White Heat of Technology” and begin major technology projects. • Continue with “Full Employment” policies but end “Stop-Go” economics. • Reduce the gap between rich and poor and make Britain a more equal and “fair” society. • Scrap prescription charges.

7. Government position in 1965 • The Balance of Payments deficit was reduced to £250 million • 2.9 million working days lost in strikes. • The Post Office Tower in Central London was opened. • The Department of Economic Affairs was set up, led by George Brown. This organisation aimed to establish better long term planning. It released a “National Plan” that forecast 4% economic growth per year by investing more into technology. • Circular 10/65 was issued by Anthony Crosland, the Education Secretary. This recommended that local education authorities abolish grammar schools. The eleven plus was no longer compulsory for all students.

8. What should the government do? • Call a new general election • Continue with current economic policies. Give greater power to George Brown at the DEA. • Maintain control of wages through discussions with the trade unions. • Wilson decided that in 1966 Britain should once again apply to join the EEC again.

9. Government Position in 1966 • The Wilson Government was re-elected with an increased majority of 96. • http://news.bbc.co.uk/onthisday/hi/dates/stories/march/31/newsid_4693000/4693142.stm • The Balance of Payments deficit was reduced in the first part of 1966 but in May 1966 a strike by the National Union of Seaman paralysed trade. • Ports and docks around the country became increasingly congested as ships were brought to a standstill by protesting members of the National Union of Seamen. • Exports and the value of the pound fell sharply. The strike lasted for almost a fortnight.

10. What should the government do? • Wilson’s government declared a state of emergency a week after the nation's seamen went on strike. The emergency powers allowed the government to cap food prices, allowed the Royal Navy to take control and clear the ports and lifted restrictions on driving vehicles to allow for the free movement of goods. http://news.bbc.co.uk/onthisday/hi/dates/stories/may/23/newsid_2504000/2504227.stm • Public spending was cut and taxes were raised in 1966 Emergency Budget. • Led to housing programme being cut • Raising of school leaving age to 16 was postponed • Plans to increase state pensions were abandoned. • Prescription charges that had been scrapped in 1964 were re-introduced in 1967. • The high value of the £ led to calls for devaluation but Wilson personally refused and so the government delayed. Wilson believed devaluation would damage British prestige. Wilson remembered the 1949 devaluation which had been so bad for Attlee’s Labour government. • Relations with the Trade Unions became increasingly strained. In July 1966, wages were legally frozen for a period of six months. This freeze lasted over 12 months. This was a continuation of Conservative pay freezes and led to a decline in relations with the Unions. 2.4 million days were lost in strikes. • The Ministry of Economic Affairs was scrapped.

11. Government Position in 1967 • The Balance of Payments went into deficit again. (£250 million deficit) • Wage freeze continued. • Working days lost went up to 2.8 million. • The Department of Economic Affairs had gone. • The Cabinet had to decide: Should we devalue the pound or not? • In July 1967, the Chancellor, James Callaghan said “Those who advocate devaluation are calling for a reduction in the wage levels and the real wage standards of every member of the working class in this country…Devaluation is not the way out of Britain’s difficulties.

12. What should the government do? • Devaluation – November 1967, by 14%. • In his broadcast to the nation, Wilson said “This does not mean that the pound in your pocket has been devalued”. • http://news.bbc.co.uk/onthisday/hi/dates/stories/november/19/newsid_3208000/3208396.stm • Edward Heath, leader of the Conservatives, said “Three years of Labour Government had reduced Britain from a prosperous nation into an international pauper.” • Publicly it looked weak and was unpopular. • De Gaulle vetoed Britain’s application to join the EEC for a second time. • Callaghan, the Chancellor, and Roy Jenkins, the Home Secretary, swapped jobs.

13. Government Position in 1968 • Working days lost in strikes went up to 4.7 million. • Barbara Castle, a popular left wing figure, was appointed the Secretary of State for Employment by Wilson. • The balance of payments deficit stabilised at £250 million. Britain’s export trade increased due to devaluation.

14. What should the government do? • Reform the trade unions and prevent them from striking as much. • Continue to hope that devaluation would lead to further improvement in British exports.

15. The growing power of the Trade Unions in the 1960s. • The growing influence of the trade unions in the 1960s involved more than just working days lost in strikes. 1. Wildcat strikes These are sudden unofficial strikes. They are not organised by a trade union, but union members might be involved. Wildcat action can start because of what seems to be a small problem, like the length of a tea break or the treatment of one worker. They might start small but if workers are angry with their bosses the strikes can spread fast and cause a lot of problems. 2. The Closed Shop • A closed shop is a business or industrial establishment whose employees are required to be union members. 3. No ballots for strike action • Workers could simply ‘walk out’ without having to hold a vote on whether the union should go on strike. 4. The lack of a cooling off period • A period of time before a strike takes place that enables discussions to take place about the issue that is causing industrial unrest. 5. No damage liability • Unions would not be held financially liable for the damage caused by people on strike. There were regularly battles between picketers and strike breakers.

16. Government Position in 1969 • Working days lost in strikes went up to 6.9 million. • The Balance of Payments at last had a surplus of £387 million. • The government published a white paper (recommendations for parliament to discuss) called “In Place of Strife”. This proposed that ballots (votes) should be compulsory before a strike could take place. • This was popular with the public but threatened to cause a split in the Labour Party. It was bitterly opposed by James Callaghan and other trade unionists within the party.

17. What should the government do? • Wilson and Castle had to eventually back down to pressure from their own party and the trade unions. • “In Place of Strife” never became law. • Instead he signed a solemn promise with the TUC to monitor strikes. • The Trade Unions felt Labour was too tough but the public felt they were too weak.

18. Government Position in 1970 – Voted out in the 1970 general Election • Wilson lacked conviction. He had to try and keep Labour divisions together. • Believed in plots against him • Lacked direction • Short term opportunism • “Power slipped through our fingers because we were saying nothing very useful to people” Tony Benn. • http://news.bbc.co.uk/onthisday/hi/dates/stories/june/19/newsid_3829000/3829819.stm

19. Achievements of the Wilson Government • “It had a significant impact on social attitudes and the lives of the ordinary individuals” • Open University 1969 • Comprehensive schools 1965 • Permissive Society Legislation – • 1965 Theatre Censorship & Death Penalty Abolished • 1967 Legalisation of Abortion & homosexuality (between consenting adults in private) • 1967 Family Planning Act. • 1968 Franchise extended to 18yr olds • 1969 Divorce Reform and Matrimonial Property Act. • 1970 Equal Pay Act • Laws to tackle perceived problems caused by immigration: • 1965 & 1968 Race Relations Act • 1968 Commonwealth Immigration Act

20. Gap between rich and poor narrowed through – • Raising up the poor rather than lowering the rich • Benefits increased rather than increasing tax. • High incomes 1/3 • Lowest incomes 104%