Essay About Chancellor Denis Healey And Economic Events

Political and Economic Events Britain 1970s
DATEPOLITICALECONOMIC1973Social Contract with the TUC. They were sent a clear message that the gov. was not looking for any confrontations. Agree reached with NUM which allowed Wilson to end three-day week.Left-wingers Tony Benn and Michael Foot were put in charge of departments of Industry and Employment. Chancellor Denis Healey issued two budgets, both aiming to deal with the economic crisis without annoying the unions.1974Wilson felt safe enough to call another election by October. The public still associated Heath and the Tories with the three day week and conflict with miners. Wilson won but only just – Labour gained 18 seats and the Tories lost 21. Labour had 42 more seats but their overall majority was only 3.National Enterprise Board set up under Tony Been to administer the government’s shareholdings in private companies. It could also give financial aid. The NEB’s aim was to increase investment but by 1975 its effectiveness was being questioned.1975Social Contract was not working as intended which resulted in divisions in the Labour party. Left-wingers didn’t want to pressure unions.Healey made a speech warning of the dangers of wage inflation – it would lead to unemployment and public spending needed to be controlled. Healey’s budget imposed steep rises in taxation and public spending was cut. 1976James Callaghan gave a speech to the Labour party. Productivity would need to improve to avoid unemployment and inflation. The Conservatives denounced the IMF crisis as national humiliation and most Labour members saw it as betrayal. Wilson resigned.Denis Healey applied for and received a loan of £3 billion from the International Monetary Fund. In return the government had to make big spending cuts. The economic situation was not as dire as Labour feared – Callaghan handled it well.1977The Labour majority in HoC had disappeared so Callaghan strengthened the government by making the Lib-Lab Pact – he was able to defeat the vote of no confidence tabled by the Tories.  Callaghan would grant devolution for Wales and Scotland in the deal. There were a lot of economic changes this year but no specific events. Weekly earnings were up 10%, retail prices were up 16%, 5.7% of people were unemployed, 10.14 million working days were lost in strikes, GDP was up 0.9% and the balance of payments was at £154 million. 1978Lengthy debates in Parliament didn’t stop the devolution Acts for Scotland and Wales being passed which opened the way for referendums. However, the terms for referendums were made so it was likely that devolution would not happen. The referendums were later held in 1979 – Wales voted against devolution and Scotland voted in favour but the rules meant that devolution was defeated.By this time, there were 9 oil fields in production and inflation rates had fallen by 10%. Unemployment was still at 1.6 million but had started to fall and the number of days lost to industrial disputes had fallen to a ten year low. Winter of Discontent: TUC rejected Labour’s proposed wage increase limit of 5% – this encouraged trade unions to make higher demands. Massive industrial unrest in the winter of 78-79.