Why was political consensus beginning to collapse before 1979?

Learning objective – to be able to explain how post war political consensus was beginning to fail before 1979. I can describe the key features of post war British political consensus and how it was failing before 1979. Grade D I can explain why post war British political consensus was failing before 1979. Grade B I can explain and assess the reasons why post war British political consensus was failing before 1979. Grade A

Starter – What five questions could you ask this photograph?

What was the traditional view of the end of political consensus? The traditional and once accepted view was that the election of Margaret Thatcher in 1979 saw the beginning of the end of political consensus. Evidence of this view was drawn upon – Unemployment rising to 3 million in 1981. Sweeping privatisation of key industries. Monetarism replacing Keynesian economics. Curbing of Trade Union power. But is this view correct?

Why was growing discord between the government and the trade unions? The 1960s saw a period of growing inflation which both Labour and Conservative governments tried to control with wage and price controls. This led to tensions between governments and trade unions, who led sporadic strikes throughout the 1960s. Harold Wilson’s Labour government felt its hands were tied as the party was reliant on trade union funding and unable to resist trade union demands. Although, Wilson tried to regulate strikes and limit union power with proposals in the White Paper – In Place of Strife – but this divided the government and fearing trade union backlash the proposals were never made into law.

How did industrial relations help bring down the Heath government? The Heath government passed the Industrial Relations Act in 1971 to regulate strikes and industrial relations. The Miners, constantly underpaid in the post war period, confronted the government and demanded 33% pay increase. Initially, the Heath government resisted these demands. However, in 1972 the miners went on strike leading power shortages. The government backed down and gave the miners a 27% pay rise. A second miners strike followed the oil crisis of 1973. This forced the government to call a ‘three day week’ and a state of emergency. Heath called an election with the slogan ‘Who governs Britain?’ He lost.

What was the impact of the fall of the Heath government in 1974? Labour led a government between 1974 and 1979. They repealed the Industrial Relations Act and replaced it with the ‘Social Contract’ – a voluntary prices and wages control agreement. This failed as trade union members wanted pay increases. Industrial unrest culminated in the ‘Winter of Discontent’ in 1978-79. Public support for trade unions collapsed. Conservatives wanted to confront trade union power and Thatcher’s election campaign in 1979 promised to do this.

How did the Heath government begin to challenge the mixed management of the economy? Keynesian economics was the bedrock of political consensus. However, it was seen to be failing in the 1960s with growing inflation and a stagnating economy – stagflation. The first challenge to Keynesian consensus came with the Heath government of 1970-74. The Heath government aimed to ‘ reduce the rise in prices, increase productivity and reduce unemployment’ by promoting a largely hands-off approach in matters of government direction and to encourage people to use the new freedom to promote their own interests. This was the first move towards free market principles of the Thatcher government from 1979.

Why did Heath’s challenge to the Keynesian approach fail? The budget of 1971 saw cuts in income tax and government spending. However, economic policy was in tatters by the end of 1971 as inflation soared and production fell due to, in part, lack of government intervention. Heath, losing his nerve, conducted a u-turn in government policy and returned to increasing government controls in prices and incomes and interference in industrial relations. It was also at this point that unemployment reached one million for the first time .... and the abandonment of the commitment to full employment – part of consensus politics.

Why did Callaghan ditch Keynesian economics? The consequences of the 1973 oil crisis led to rapid inflation and the pound falling in value to the extent by 1976, Britain was almost bankrupt. Callaghan’s response in a key speech was – ‘We used to think you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending .... That option no longer exists’ Such was Britain’s position in 1976, the government negotiated a £3 billion loan from the International Monetary Fund. Britain could have the loan only if they made major cuts in public spending. The impact of this was the abandonment of Keynesian economics, formal withdrawal from the commitment to full employment and paved the way for Thatcher’s more radical approach from 1979.

Task Stick a copy of this comic strip on a piece of card and annotate it by adding relevant details beside each panel. Use the PowerPoint presentation to help you.

Task To include colour, key words and images. Design a mind map outlining the end of the post war political consensus. Remember – To include colour, key words and images. To include the key features of political consensus. To include the reasons why it existed and continued beyond 1951. Extension task Prepare an essay plan for the following question – ‘Consensus politics was over by 1979.’ How far do you agree with this statement?

Plenary – My Brain Subheading – My Brain Draw an outline of your brain. Fill your drawn brain with all the things you have learnt in this lesson. This can be in the form of key words, drawings, bullet points, lists – anything you like so long as it summarises your learning and that others can understand it.