The End of PWC 1970-79

• In the general election of 1974, there was a hung parliament where no party had an overall majority. This political crisis meant that the voters were not enthusiastic about either of the two parties.
• The devaluation of the pound in 1967 showed that Labour could not be trusted with the economy and there were strikes and discontent.
• The 1970 Conservative Party Manifesto made lots of economic pledges to make them look influential and powerful. It was not liberal.
• The Selsdon Park Policy Programme meant that...

  • There was improved law and order.
  • There was trade union reform
  • There was an end of public subsidy to 'lame duck' industries
  • There were cuts to public spending
• During the Selsdon Park Policy Programme, the improved law and order meant that...

  • the school leaving age was raised to 16
  • the local government was reorganised.
• The end to 'lame duck' industries meant that...

  • Investments were made into modernising industries.
  • Unemployment fell to 500,000
• 'Lame duck' industries are industries that are unable to compete and survive without the support from the state.
• Chancellor Anthony Barber introduced cuts to public spending and encouraged investments.
• The cuts to public spending led to the Barber Boom. There was a stagflation where there was...

  • A rapid rise in inflation
  • A rise in unemployment (1 million)
  • Stagnant economic growth.
• The National Union of Miners demanded a huge new pay rise in 1973. This increased tensions with the government.
• In response to the National Union of Miners, the government introduced the Industrial Relations Act. This reduced the trade union's power and created cooling off periods before strikes could happen.
• In 1974, the government created the Three Day Week. Fuel was rationed, speeding had a 50mph limit and TV's closed at 10:30pm.
• The aim of the Three Day Week was to conserve electricity in response to industrial action threats.
• In 1971, Anthony Barber proposed to replace purchase tax (a tax on luxury goods) with Value Added Tax (VAT). He also added relaxed exchange controls on the purchase/ sale of foreign currencies by local residents. Both were prerequisites to membership of the EEC and as a result, Britain joined the EEC in 1973.
• Between 1971-1972, Heath's famous 'U-turn' took place. He went against this own policies of free enterprise and less government intervention.

  • Rolls Royce was nationalised
  • The government poured £35 million in to prevent Upper Clyde Shipbuilders from going bankrupt.
• In 1972, Barber changed the fixed exchange rate to a floating exchange rate. The currency price was therefore set by the demand and supply in the world market. The pound immediately plunged on the market. The pound lost value and imports grew more expensive.
• 1973 Oil Crisis due to the Yom Kippur War:

  • Arab countries declared an oil embargo on countries supporting Israel during the war.
  • Oil exports stopped and the price of oil rocketed to four times its usual price.
  • There were severe shortages of fuel for industry and transport.
• In 1971, Northern Ireland troubles meant that 300 people were interned (locked up without a trial). This alienated the nationalist communities especially if 95% of Catholics were innocent.
• The Bloody Sunday in Northern Ireland was on the 30th January 1972.
• The Bloody Sunday in Derry meant that wrongful people were shot by the British soldiers. Northern Ireland Civil Rights Association had organised a march to protest internment. As a result, 480 people were killed.
• Heath stated that Northern Ireland would be ruled from London rather than having its own parliament. He suspended the Stormont Parliament and brought in direct rule from Westminster.
• Willie Whitelaw was the secretary of state during the Northern Ireland troubles.
• The Sunningdale Agreement in 1972 was negotiated between Heath and Whitelaw. There was a plan for a power sharing government...

  • Between both nationalists and unionists
  • Both sides were guaranteed representation
  • New Northern Ireland Assembly was to be elected.
• Positive welfare state policies that Heath introduced included:

  • National Insurance in 1970
  • Pensions for the elderly: 100,000 were affected by this change.
  • Family funds in 1971: Free school meals
• Welfare state policies that had a negative impact on Heath's government meant that:

  • There was no milk for children aged 8-11. Thatcher was labelled as the 'Milk snatcher'
  • Provisions ended
  • Entitlement to state sickness benefits changed: People were only paid after the first three days of sickness.
• The 1970s was the second wave of feminism.
• During the 1970s, Women's liberation groups...

  • Gave support to women
  • Organised demonstrations in London and Liverpool with demands of equal pay and 24 hour free nurseries.
• In 1971, women could take out a mortgage without a male.
• Immigration policies in the 1970s meant that...

  • There was a flow of immigrants
  • The situation in Uganda created exceptions from the 1971 Immigration Act
  • 28,000 arrived in Britain from Idi Amin's persecution
• The 1971 Immigration Act restricted the right of people from the New Commonwealth from coming to Britain. They needed a job and at least one grandparent born in Britain.
• When Britain joined the EEC in 1973, Heath was passionately pro-Europe. France was convinced that the EEC needed Britain as much as Britain needed Europe.
• Britain joining the EEC caused concerns in Britain...

  • Some in the Conservative Party believed that Britain would be surrendering her Sovereignty (supreme power)
  • Enoch Powell believed that Heath had betrayed the country by signing the Treaty.
• Labour opposed Heath's plan to join the EEC and promised to a national referendum if they came back to power. This made the future uncertain.
• During the 1970s, the special relationship meant that...

  • Heath got on with the US President Richard Nixon on a personal level.
  • Heath did not see the special relationship in a strong political way. He believe it was a natural relationship through shared culture.
• In October 1972, The Yom Kippur War put Anglo American relations under strain.

  • US wanted to use NATO bases to supply Israel but most european states (Britain) feared that this would put the supplies of oil from the Middle East at risk.
• The relationship with China meant that...

  • In 1971, Nixon announced a thawing in relations and became friendlier.
  • He visited China and held meetings with Mao which Britain followed.
  • Britain was awarded the Title of 'People's Friendship Envoy'. This is the highest honour given by the Chinese government.
• Relations with China were weak because...

  • China became communist in 1949
  • China supported the communists in the wars in Korea and Vietnam.
  • This created tensions between China and the West
• The international monetary fund aims to improve financial instability. 190 countries fund it.
• Monetarism is an economic theory that states that the government can foster economic stability by targeting the growth rate of the money supply.
• Since 1964, 42 billion barrels of oil had been produced in the North Sea.