Callaghan faced a severe balance of paymentscrisis which risked devaluation of the pound. They were determined to keep the value at $2.80 to prevent political consequences
The pound was reduced to $2.40 and Wilson made the 'pound in your pocket' speech. This meant that inflation was 10% higher and unions would demand higherwages
In 1969 due to increased worldtrade, there was a balance of payment surplus. Jenkins made cuts to defence spending and Britain withdrew from the East of Suez
Barbara Castle is appointed to tackle this issue while not clamping down too much. She developed 'In place of strife' which included the industrial relations court
Labour's MPs were sponsored by unions and this reliance led them to withdraw the bill. An agreement is made between the government and unions which Wilson sells as a victory
Roy Jenkins is determined for a 'civilised society' so Labour moves towards liberalisation. Private Members Bills are used to pass this legislation, including the Criminal Justice Bill