- Created by: eva
- Created on: 15-01-18 14:51
The previous government had been in power since October 1974, when Harold Wilson’s Labour party were re-elected with an overall majority of 3 seats. The economic situation in the UK during the period 1974-79 was one of declining living standards and high inflation. Between 1971 and 1974 inflation had been running at a rate of 9.3 percent, but reached a high of 27 percent in 1975. Between 1974 and 1978 inflation was at an average of 17.3 percent and finally dropped to 9.3 percent in 1979. The high levels of inflation were partly the result of the 1974 oil crisis, when O.P.E.C. quadrupled oil prices, affecting most prices within the economy. Inflation levels affect the standard of living within the country and devalue savings, affecting the value of fixed returns on savings and devaluing loans. In an inflationary environment, there is a natural desire for workers within the economy to demand higher wages to allow them to keep up with rising prices.
Against this backdrop, the main factor that contributed to the 1979 Conservative victory was the “Winter of Discontent” which gave credence to the theory that Britain was virtually “un-governable”. The “winter of discontent” was a period when all of the symptoms of the “British disease” came to a head at once. The trade union’s influence at this time, perhaps summed up by the phrase “beer and sandwiches at Number 10”, had reached extraordinary levels, resulting in large pay increases and increased levels of strike activity.
The unions campaigned for high pay increases, such as 22 percent for fireman and 14 percent for bakers, against a government policy of 5 percent, as a result strikes started to break out. Strikes by lorry drivers and threats from oil tanker drivers threatened Britain with a winter of fuel and food shortages. The refuse collection services in Liverpool went on strike, causing rubbish to pile up in the streets, and most depressing of all, the grave-diggers went on strike, coming to symbolise a nation in which nothing could be relied on. Negotiations with the unions were largely unsuccessful, the Valentine’s Day “concordat” being the only agreement reached of any note.
The ensuing General election, caused by the breakup of the Liberal/Labour coalition, was fought with the spectre of the “winter of discontent” prominent in the electorate’s mind. Labour fought a campaign maintaining its commitment to the health service, education and high levels of employment. The Labour manifesto offered no major new ideas after Callaghan had successfully removed a number of policy objectives that arose from within the party that he viewed as too radical, such as the abolition of the House of Lords and nationalisation of the four biggest high street banks. The whole Labour campaign was weighted towards looking back at past glories, although the Valentine’s Day agreement was played up appropriately.
The Conservative manifesto was strikingly different with the adoption of monetarist policies marking a clear break from general consensus on Keynesian demand management, which all governments since 1945 had…