ESSAY - “Politically and economically the Wilson and Heath governments between 1964 and 1974 were a disaster.”

Note: these are essays written by me and have not been marked, so may contain mistakes. Please use for revision purposes only :) 

“Politically and economically the Wilson and Heath governments between 1964 and 1974 were a disaster.” To what extent do you agree with this? (45 marks)

The Wilson and Heath governments were one of rivalry, tension and drama. Their political and economic agendas were far from what they actually achieved while in power. While Wilson’s social reforms were certainly an asset to his government, his economic policies were less so. Heath faced similar problems; his success over getting Britain into the EEC was quickly undermined due to the continuing economic difficulties. Since neither man accomplished to take hold of the economic decline, prevent social discontent with unpopular policies or halt the rapid rise in inflation, it is therefore difficult to conclude that their governments were not a total disaster.      

Harold Wilson stepped into Downing Street in 1964 full of hope, modernity and regeneration. His campaigning phrase of “the white heat of technological revolution” hit a positive response among the public, however he was not expecting the £800 million trade deficit he had inherited from the previous government. As a solution, Wilson created the disastrous Department of Economic Affairs (DEA). From the beginning, it was clear that the DEA would cause problems as it essentially did the same job as the Treasury. Led by the perpetually drunk minister George Brown, the production of the National Plan was in theory meant to stimulate industrial production and encourage cooperation between government, employers and trade unions. That goal was never reached. The National Plan and the DEA was humiliatingly disbanded in 1967 with economic problems still unresolved.

It was 1965 which saw the election of Edward Heath as the new leader of the Conservative party and a great threat to Wilson’s position. Although Wilson played the political game more carefully and won the 1966 general election with a majority vote, the return to power was marred by the growing awareness of the pressure on the sterling. Wilson had always been a man obsessed with his political image – one would even say he was almost paranoid - , so was desperate to prove that Labour was not the “party of devaluation.” His continuing to seek large loans from the IMF only made it more degrading when the pound was unsurprisingly devalued anyway in 1967. What made matters worse was his truly awful speech where he claimed that nothing had really changed. This hit home just how inefficient the Labour government was with regards to economic policies and highlighted the significance of Britain’s economic decline. 

Furthermore, wage and inflation increase continued to haunt Wilson’s time in government.  The Prices and Incomes policy was imposed as an answer to this issue, which would set limits to price rises and call for wage restraints. However, this policy cannot be described as a success since it only managed to infuriate the already seething trade unions. The cosy relationship the unions once shared with the government had indisputably fallen apart. With the growing number of wildcat strikes and the abundant loss of working days, Britain’s social stability as well as economic stability was being questioned intensively.

The disastrous “In Place of Strife” was the direct consequence of this. A panicked Wilson allowed Barbara Castle to go ahead with the policy but ended up facing his worst fear as the row almost split the party apart. Heated debate ensued with proposals including ballots on strikes and a thirty day “cooling off” period in disputes. Although the proposals seemed in favour with the public, Wilson eventually backed down making “In Place of Strife” seem like a national joke and presented Labour as an incompetent government which Britain most definitely did not need at a time of economic turmoil.

With the 1970 general election looming, Wilson was confident that he would be re-elected. Through Roy Jenkins, Labour finally achieved some economic success as he managed to accomplish a balance in payment surplus. There were also a number of large and successful companies that were established at this time such as International Computer Limited. This, coupled with Wilson’s social reforms (such as the Sexual Offences Act, the Abortion Act and the first Open University) made him popular politically. However, Heath’s victory came as a stunning surprise showing Jenkins’s deflationary methods proved to be unpopular with the public. Nevertheless, Heath’s economic and political earthquake began only a few weeks after he was elected.

Edward Heath’s “fresh image” of the Conservative party was uplifting. He declared he was adopting a “new style of government” and intended to do what the Labour party could not. Heath’s problems began however by the loss of his most able minister, Ian Macleod. He was replaced by the less experienced Anthony Barber who in turn introduced gargantuan tax cuts, abolished free school milk, increased the price of school meals and increased prescription charges. These measures were clearly going to be detested and undoubtedly criticised.  The policies neither solved the balance in payment difficulties nor the sterling crisis. For this reason the policies were an evident economic failure. It was far from the auspicious start Heath had wanted in his government since these measures only achieved to break the many promises made in the election campaign.

Additionally, Britain’s unemployment had exceeded the one million threshold under the Heath government by January 1972. It was a monumental figure since it had never decreased, even to this day. Yet at the same time, wages were increasing and the rate in inflation was still high under the “Barber boom” - the so-called “stagflation” had taken place. The fact that the appearance of inflation and stagnation was supposedly impossible just goes to show how far the British economy had fallen. It was a political and economic catastrophe for Heath and one which was to be the bane of Heath’s administration.

In June 1970, Heath stated “…our purpose is not to divide but to unite.” Ironically, it is further divisions that he accomplished with his ill-advised Industrial Relations Act. The Act was largely an extension of “In Place of Strife” but with tensions with the unions already hanging on a fine line, this act only exacerbated the situation. It is therefore understandable that the unions became hostile and outright rejected the act, publicising the lack of competence the Conservatives seemed to have acquired from their predecessors. Had Heath learnt from the failures of the previous government, this crisis could have been arguably avoided.

The very damaging miners’ strike was furthermore stimulated by the obvious loss of deference by the unions. 280,000 miners took the streets on strike, demanding wage increases. The confrontation lasted six weeks before the unions won their first battle as the Heath gave in to their demands. This obvious lack of authority stimulated more strikes sending Britain into chaos as more working days were lost. It also led Heath into the ultimate low of his career – the three-day week. The British economy had become so bad by the social grievances and together with the unlucky timing of the OPEC oil crisis, Heath prohibited the use of electricity for only three consecutive days a week. It was a devastating blow for Heath politically and economically and one which defined his time in government.   

Finally, Heath’s attempt at the “new style of government” embarrassingly collapsed after just eighteen months. His great plan of government non-interference in industries backfired when Rolls Royce, Britain’s industrial pride and joy, and Upper Clyde Shipbuilders hit hard times financially. Heath was adamant when he came to power that he would not help out “lame ducks.”  It is almost laughable then that Heath ended up doing a complete U turn on his own polices. He nationalised the Rolls Royce and invested millions on Upper Clyde Shipbuilders. He also returned the infamous Prices and Incomes policy. This greatly exposed Heath’s weaknesses in economic issues and is a distinct example of his economic failures.

Nevertheless, some historians would argue Heath’s greatest triumph was finally getting Britain accepted into the EEC. It was a good moment for the government, especially because the achievement was denied by two previous Prime Ministers. It was a major change in British history, but one unfortunately that would be swept aside by the industrial strife. The added burden of the oil crisis, the fifteen per cent inflation increase and being forever known as the government of the U-turn rendered Heath’s promising beginnings to end in humiliation and eventual defeat in 1974.

Therefore to conclude, both the Wilson and Heath governments had a number of economic failures. Granted, some economic issues were out of their control such as Wilson’s inherited balance in payments deficit and Heath’s oil crisis. Regardless, Wilson’s silver tongue that impressed the nation in his 1966 election campaign did not help him talk his way out of the tensions between the government and the trade unions. His analytical mind did not foresee the rapid rise in inflation, or the dramatic turn out of devaluation.  Even Heath’s extraordinary planning of the “new style of government” was an abject failure, his complete turn-around in policy proving this point. Thus from this, it is fair to say that the Wilson and Heath governments were economically and politically a disaster.