Back to the 60s.
To explain this, one has to go back to 1964, when Harold Wilson won his first Labour general election, with a narrow 4 seat majority over Alex Douglas Home’s Conservatives. Having been left with a £800 million deficit, and the books not in a good state. But you could say we were still trying to recover from the War. Yes a lot of money back then, and one could say even in today’s financial climate and the pounds value.
Wilson’s government started to reduce the deficit with different policies, one being the prices and incomes policy a close relation to the policy that was part of Harold Macmillans policies, but found it hard to get many of the policies through parliament, except the prices and incomes policy which survived until 1970, and because of the many currency crisis that bugged his government from its beginning, Wilson called another general election in 1966 and duly won with a majority of 99 seats. Wilson’s chancellor from 1964 was James Callaghan, who had this headache to deal with it from day one.
History can be a funny thing, you would think having a 99 seat majority, everything would be so much easier. The world is not like that and probably never has been or will ever be. The Middle Eastern hostilities erupted, which ended with the six day war, or what some call the Arab/Israeli War. That is a debate still going on today and why i will keep well clear of that now. But in the process of that war, Egypt decided to close the Suez canal, causing havoc with the distribution of exports, which in turn put pressure on the pound. And if that was not enough General De Gaulle blocked the UK from joining the then EEC (Common Market). The pressure on the pound was becoming critical, so Wilson decided against his chancellors advice, and devalued the pound from £2.80 to £2.40, against the Dollar, approx 14%. Which took pressure off the pound, and things improved, slowly the balance of payments got better and helped reduced the deficit.
After that the then chancellor Callaghan resigned and Roy Jenkins took the job. And once again things went on a downward spiral, and came close to another devaluation, but managed to avoid it. Then along came the 1970 general election, and surprisingly the Conservatives under Edward Heath won with the help of the Ulster Unionists Party with a 31 seat majority. Also a landmark for me personally i was 23 and the first time i could vote in a general election, and the irony of it all, was for someone who always wanted to vote, it was the year they brought the voting age to 18.
General De Gaulle died in 1970, thus opening the chance for the UK to enter negotiations with the EEC, which in 1973 Heath took us in to the Common Market. I remember it like yesterday, being what they call today a brexiteer, and a Bennite, who wanted us to stay out. And yes Jeremy Corbyn wanted to stay out too. We also had the first of two miners strikes, and very high inflation, that was probably the end of Heath, who handled both terribly, turning most of the country against him and his party.
In 1974 came the next general election, which ended up with a hung parliament, and Heath refused to have a coalition with Labour, and resigned, so giving Wilson a minority government for the second time, but unable to form a coalition with another party, so he called for another election in September. which ended up a victory for Labour with just a 3 seat majority, that was slowly lost.
Harold Wilson made Denis Healey Chancellor, who was Secretary of State for Defence in Wilson’s 1964/1970 Labours governments. This was the beginning of actions that started the nightmare that was the Winter of Discontent. And this was not as Black and White as people think today, or thought they knew what had started it, because of what they have been told for years by the right wing media, and how the Conservatives covered up their tracks in the mismanagement of their previous governments. In November 1974, the Chancellor Denis Healey cut taxes on corporations and big business, giving them an extra £800 million a year profit. One could say sweeteners, and one could also say a bribe, which is the view i took back then.
Sweeteners or bribes it didn’t work, like Oliver they wanted more. And it was about then that Edward Heath resigned the leadership of the Conservative Party, and they elected in the first female leader of any party in the UK Margaret Thatcher (The Milk Snatcher), now there is a debating subject for some future time.
So back to Labour’s problems, in the Summer of 1975 and again in 1976, a lot of these same companies, engineered a collapse in the value of the pound, by shifting money abroad. So what did Healey do, he gave them even more, it was never enough for these bosses and they stepped up their blackmail, CBI Director- General, Campbell Adamson later recalled ” We certainly discussed an investment strike, we also discussed various things about not paying various taxes, and a list of things which in themselves would not have been legal”.
The un-elected governor of the Bank of England, told the government on the 30th June 1975, that the pound is plummeting. Labour immediately implemented harsh wage curbs. Pay was held well under the rate of inflation, so living standards fell. At first Labour introduced a £6 limit on wages which was about 10% of the average wage then. Inflation was roaring over 24% in 1975. and in August 1976 the second stage of the incomes policy came into effect, with a limit of 4.5% on wage increases, while when inflation was down to 16.5%. It was at this time i started to worry, that the government wasn’t loosening up the stranglehold on peoples wages fast enough, and as i went across the country working, meeting all different trades and workers, beginning to complain that they were working for nothing, and my own opinion was even a extra 2% would of made workers feel a lot better. But something i never knew was that the government was listening far to much to big business and their bosses. And even today i still don’t know the answer to that.
Still British Companies caused financial panic, until in September Denis Healey went cap in hand to the IMF (International Monetary Fund) for a loan to prop up the pound. The IMF demanded deep cuts in return. But while the bankers and the employers attacked the workers, the Union leaders did their best to stop workers’ struggles breaking out into strikes, remembering the TUC ( Trade Union Congress) had forged an agreement with the Labour government in 1974 called the Social Contract. And the rest is history but i can honestly say that the media even today refuse to tell the whole truth or facts of those times. They protected Big Business and their rulers. Maybe one day someone will prove that wrong.
Colin H Baker 