The Plan aimed to stimulate industrial production and exports by supporting collaboration between the government, employers and trade unions. It predicted an economic growth rate of 3. 8% and a 25% increase in exports by 1970. However, due to the balance of payments crisis, Wilson and Callaghan (Chancellor of the Exchequer), were forced to impose IEEE million worth of cuts and to increase taxes. This is shown in Source 9 when it states that there will be “no tax cuts for time being”. Therefore, the National Plan was cut and instead of being art of a plan for economic groom, it became a plan to cut wages.
The statement in Source 7 could also be a reference to the balance of payments crisis that the Labor government was experiencing as there was a large difference in the money the UK was receiving from exports and the money they were spending on imports. This was made worse by how much stronger the dollar was than the pound as every El was worth $2. 80. In 1964, there was an account deficit of IEEE million due to the balance of payments crisis. Britain was spending too much on defense and not enough on industry.
This as because Britain was changing from an industrial economy to a post- industrial one, which meant that the manufacturing industries were shrinking and the service and finance industries were expanding. Due to these economic difficulties, Wilson approached the International Monetary Fund (MIFF), which was a scheme intended to prevent countries from going bankrupt, and asked them for a loan of El billion in 1964. However, Wilson had to ask the MIFF for another loan in 1967, and he realized that this was only a temporary solution.
This statement from Source 7 could also be referring to he devaluation of the pound in 1 967, which was what Wilson had to therefore resort to. The pound was consequently reduced from 52. 80 to $2. 40 and this resulted in an increase in prices as mentioned in Source 9 when it says “postage up”, “fares up” and “milk up”. However, Source 9 was written by the “Daily Telegraph, a right of centre newspaper’ in “July 1 970”, which suggests that it may be over-emphasizing Laborer’s failures to make the Conservative government of 1 970 seem more effective.
In an attempt to save face, Wilson assured the public in a television broadcast that this did not mean that ‘the pound here in Britain, in your pocket or purse or in your bank, has been devalued”. However, this was not received well by the public. The devaluation of the pound was viewed as a huge economic failure by the public as well as some people in the Labor Party. Source 7 also states that “several key industries – coalmining, shipbuilding, textiles and railways – continued to shrink”.
This is supported by Source 9 when it mentions the “dock strike” and the word “jobless” as these industries becoming smaller “caused unemployment to iris?’, as stated in Source 7. These strikes were a result of tension between Wilson and the trade unions as the unions didn’t like the controls on wage and salary increases that Wilson had imposed due to his fear of inflation and the balance of payments deficit. In 1 966, Wilson imposed a six month wage freeze, a price freeze and set up a Prices and Incomes Board to regulate pay settlement, which angered the trade unions further.
Frank Cousins, the leader of Britain’s largest union, the TIGHT, resigned as Minister of Technology in protest to the creation of the Prices and Incomes Board. In 1966, the National Union of Seamen went on strike with the aim of securing higher Wages and reducing the working week from 56 hours to 40 hours. The strike was widely supported by union members and caused great disruption to shipping. The disruption of trade made the balance of payments crisis worse as goods were not being exported and threatened to undermine the Government’s attempts to keep wage increases below 3. %. The strike ended seven weeks later. In 1 967, the Dockers go on strike and goods for exports pile up at the ports. In October the trade deficit reaches Multimillion. The damage of this strike to the reputation of the Labor government is highlighted as Source 9 mentions the “dock strike”. Therefore, in 1 969, Wilson published the White Paper, “In Place of Strife” which aimed to prevent future strikes. The Paper proposed a series of legal restrictions regarding the workers’ rights to strike.
However, the Cabinet did not approve and “In Place of Strife” never got beyond the White Paper stage. The economic difficulties that the Labor government faced lead to Britain being known as “the sick man of Europe” due to its slow growth compared tit the other European countries and its economic problems. Despite this, the Labor government did achieve some economic successes between the years 1964 and 1970. The balance of payments crisis was no where near a bad as Wilson thought it was.
In the private sector of the economy, there was no deficit as Wilson had feared, but a substantial profit. The profit in the private sector reached E 1326 million in 1969 which meant that Britain’s overall balance was a profit of IEEE million. Source 8 states that “Laborer’s economic difficulties were managed very effectively by the new Chancellor, Roy Jenkins, who achieved a healthier balance Of payments situation”. In 1 968, Jenkins had increased taxes by IEEE million and then by IEEE million later in the year.
In 1 969, he again raised taxes by IEEE in order to limit consumption. By May 1969, Britain’s overall balance of payments was in surplus due to the growth in exports and the drop in overall consumption. In July 1969, Jenkins announced that the size of Britain ‘s foreign currency reserves had increased by almost El billion since the beginning of the year. Furthermore, the Labor party introduced many social reforms between 1964 ND 1 970 that were seen to be very successful by most people.
Source 8 supports this view the most strongly as it states that “important social legislation was passed in 1967 and 1968”. One of the acts it highlights is the “Abortion Act” of 1967 which legalized abortions by registered practitioners. It was highly controversial as some moralists saw the Act as the state condoning the murder of innocents whilst most feminists saw it as a huge step towards the liberation of women as it gave them “the right to choose”. The “Sexual Offenders Act’ is also mentioned in Source 8 which creaminess homosexuality between TV. O men, if they were both over 21 . However, the Act only applied to England and Wales and did not cover the Merchant Navy or the Armed Forces. The final piece of legislation that Source 8 highlighted was the “Race Relations Act” which made it illegal to refuse housing, employment, or public services to a person on the grounds of color, race, ethnic or national origins. The Act also created the Community Relations Commission to promote “harmonious community relations”. Source 8 emphasizes that all of these Acts were crucial in “modernizing outdated saws and attitudes”.
There were mixed opinions regarding Laborer’s social reforms. Some people felt that the reforms were too liberal and contributed to a “permissive society’ (a society in which social norms become increasingly liberal). One person who was very opposed to the reforms and the social liberalism was Mary Whitehorse. Mary had very traditional Christian beliefs and was averse to the rapid social and political changes being made by the Labor government. Despite this, the social reforms were strongly supported by a lot of people as they showed greater acceptance.