👋 Welcome to Britain, 1964–90! Your Comprehensive Study Guide

Hi there! This chapter, Britain, 1964–90, is crucial because it covers the dramatic shift from the post-war consensus (where Labour and Conservative parties generally agreed on the welfare state and Keynesian economics) to the radical free-market policies of Margaret Thatcher. This is a story of economic crisis, massive industrial strikes, and profound social change. Understanding this period is key to understanding modern British politics!

Don't worry if this seems tricky at first! We will break down complex concepts like Monetarism and the Balance of Payments crisis into simple, clear steps. Let’s get started!

Quick Review: The Context (1945-1964)

Before 1964, Britain operated under the Post-War Consensus, which involved:

  • The Welfare State (NHS, universal education).
  • A commitment to full employment.
  • Keynesian Economics (government spending to manage the economy).

By 1964, this system was struggling due to repeated economic crises. Harold Wilson promised to modernize Britain—to embrace the "white heat of technology."

Section 1: The Wilson and Callaghan Years (Labour, 1964–70 & 1974–79)

Economic Challenges and the 'Stop-Go' Cycle

The biggest headache for every government in the 1960s and 70s was the economy, particularly the Balance of Payments deficit. This means Britain was buying (importing) more than it was selling (exporting).

Key Economic Term: Balance of Payments

Analogy: Think of Britain like a student. If you spend £100 on new books and clothes (imports) but only earn £50 from your part-time job (exports), you have a £50 deficit. Britain repeatedly had this problem, which meant the value of the Pound Sterling was under constant pressure.

Wilson’s initial policy was to avoid devaluation (reducing the official value of the currency), which he saw as a national humiliation. He tried to manage the economy using 'Stop-Go':

  1. Go: When the economy was slow, the government encouraged spending.
  2. Stop: When the Balance of Payments deficit worsened, the government 'stopped' growth by increasing taxes and cutting spending.

This cycle was inefficient and led to weak economic growth. Wilson was finally forced to devalue the pound in 1967.

Did you know? When the pound was devalued in 1967, Wilson famously told the public, "The pound in your pocket is not worth less." This was technically true for domestic spending, but internationally, it was a major setback.

Social Reform and the Permissive Society

While the economy struggled, the 1960s saw significant social liberalization, often referred to as the Permissive Society. Many of these changes happened through backbench MPs, not direct government policy, but they were supported by the Labour government.

  • 1967 Abortion Act: Legalized abortion under certain medical grounds.
  • 1967 Sexual Offences Act: Decriminalized homosexual acts between two consenting adults in private (if both were over 21).
  • 1969 Divorce Reform Act: Allowed divorce without proving fault, introducing 'irretrievable breakdown.'
  • 1965 & 1968 Race Relations Acts: Made discrimination in public places and housing illegal, though enforcement was often weak.

Memory Aid (for Wilson’s Social Reforms): Think D-A-H: Divorce, Abortion, Homosexuality.

The Winter of Discontent (1978–79)

The Labour government under James Callaghan (Wilson resigned in 1976) faced a crucial crisis. Trying to control inflation, Callaghan imposed limits on wage increases (a 5% pay cap). Unions, tired of wage restraint, fought back.

  • Massive strikes occurred, especially by public sector workers (dustmen, grave-diggers, hospital staff).
  • Images of uncollected rubbish piling up in the streets and widespread public service disruption led to a major loss of public confidence in the Labour government and the power of the trade unions.

Key Takeaway for Section 1: The Labour years were marked by continuous economic struggles, attempts at modernization, and key social reforms. The Winter of Discontent fatally undermined the public’s belief in the Labour Party's ability to govern and directly led to Margaret Thatcher's victory in 1979.

Section 2: The Heath Government (Conservative, 1970–74)

The U-Turn and Industrial Conflict

Edward Heath came to power promising to tackle inflation and limit union power. He initially adopted a Laissez-faire approach (less government intervention), but economic reality forced him to make a dramatic "U-turn" back to interventionist policies.

The most defining feature of Heath's time was the clash with the coal miners, who had immense power due to Britain's reliance on coal for electricity.

  1. 1972 Miners' Strike: Successful strike that resulted in massive pay increases.
  2. 1973 Oil Crisis: International oil prices soared, increasing inflation dramatically.
  3. 1974 Miners' Strike: Miners demanded more pay. Heath refused and introduced the Three-Day Week (factories could only operate three days a week to conserve power).

Heath called a general election with the slogan "Who Governs Britain?" He hoped the public would choose the government over the unions, but the election resulted in a hung parliament (a minority government, quickly replaced by Labour).

The European Question: EEC Entry

Heath achieved a long-held ambition: successfully taking Britain into the European Economic Community (EEC) in 1973. This was controversial, as many feared losing sovereignty. Labour later promised a referendum on membership.

Quick Review: Heath’s Key Points
  • Entered the EEC in 1973.
  • Failed to defeat the powerful unions, leading to the Three-Day Week and his downfall.

Section 3: The Thatcher Revolution (Conservative, 1979–90)

The Shift to Monetarism

Margaret Thatcher came to power intending to break the post-war consensus. She believed the root cause of Britain's problems was inflation, caused by too much money in the economy and powerful unions demanding excessive wages.

Her key economic policy was Monetarism, influenced by economist Milton Friedman. This is a complex idea, but here is the simple version:

  1. The Belief: Inflation is caused by the money supply growing faster than the production of goods.
  2. The Action: The government must control (reduce) the money supply, usually by raising interest rates and cutting public spending.
  3. The Result (Expected): High interest rates would make borrowing expensive, slowing down the economy and forcing companies to keep prices and wages low to survive. Inflation would drop.

Initial Impact: The early 1980s saw a severe recession. Unemployment soared past 3 million. Manufacturing industries suffered hugely. This was very painful, but eventually, inflation was brought under control.

Privatization and Deregulation

Thatcher sought to reduce the state's role in the economy through two methods:

  • Privatization: Selling off state-owned industries to private investors (e.g., British Telecom, British Gas). The goals were to raise money, reduce debt, and encourage competition.
  • Deregulation: Reducing government control, especially in the financial sector (e.g., the 'Big Bang' in 1986, which revolutionized the London stock market).

The Miners' Strike (1984–85): The Great Confrontation

Thatcher viewed the defeat of trade union power as essential for economic progress. The showdown came with the National Union of Mineworkers (NUM) led by Arthur Scargill.

  • The Cause: The government planned to close many 'uneconomic' coal pits.
  • The Conflict: The strike lasted a year. The government had prepared (stockpiling coal, using police tactics).
  • The Outcome: The NUM was defeated. This was a pivotal turning point. It significantly reduced union power across all industries and marked a permanent shift in industrial relations away from organized labour.

The Falklands Factor (1982)

When Argentina invaded the British-held Falkland Islands, Thatcher immediately sent a task force to retake them. The successful, if costly, war boosted national morale and secured Thatcher's reputation as a strong, decisive leader. It was crucial to her second election victory in 1983.

Common Mistake to Avoid: Don't confuse the Heath Miners' Strike (1974) with the Thatcher Miners' Strike (1984-85). The 1974 strike defeated Heath; the 1984-85 strike defeated the NUM and cemented Thatcher's power.

Key Takeaway for Section 3: Thatcher systematically dismantled the Post-War Consensus using Monetarism, privatization, and a deliberate confrontation with the trade unions. The Falklands War provided a huge boost to her authority.

Section 4: Social, Cultural, and International Issues (1964–90)

The Troubles in Northern Ireland

The period 1964–90 saw the height of sectarian violence in Northern Ireland, known as The Troubles. This was a conflict between the predominantly Catholic nationalists (who sought a united Ireland) and the predominantly Protestant unionists (who wanted to remain part of the UK).

  • 1969: British troops deployed to maintain order.
  • Bloody Sunday (1972): British soldiers shot 26 unarmed civil rights protestors in Derry, escalating violence.
  • Hunger Strikes (1981): Imprisoned IRA members staged hunger strikes, demanding political prisoner status. Ten men, including Bobby Sands, starved themselves to death. This generated huge sympathy for the Republican cause internationally and worsened Anglo-Irish relations.

Race and Immigration

Large-scale immigration from the New Commonwealth (Caribbean, India, Pakistan) continued in the 1960s, leading to increasing social tension and, often, racism. Governments responded with both restrictions and legislation:

  • Immigration Restrictions: Commonwealth Immigrants Act (1968) severely restricted entry.
  • Race Relations Acts: Further legislation (1976) strengthened laws against racial discrimination and created the Commission for Racial Equality (CRE).

Did you know? Enoch Powell's controversial "Rivers of Blood" speech in 1968 argued against mass immigration and led to his sacking from the Shadow Cabinet, but it also polarized public opinion.

Women and Feminism

The rise of the Second-Wave Feminism movement brought issues like equal pay and reproductive rights to the forefront. Key legislation included:

  • 1970 Equal Pay Act: Made it illegal to pay men and women different rates for the same job. (Note: Proving equal worth was often difficult).
  • 1975 Sex Discrimination Act: Made discrimination on the basis of sex or marital status illegal in employment and education.

The End of an Era (1990)

Despite her dominance, Thatcher’s authority eventually crumbled, mainly due to internal Conservative Party opposition over the deeply unpopular Poll Tax (or Community Charge) and differences over European integration. She was forced to resign in November 1990.

Key Takeaway for Section 4: The 1964–90 period saw massive social upheaval, particularly concerning civil rights, the role of women, and the tragic escalation of The Troubles in Northern Ireland.

📚 Comprehensive Final Review

To help you prepare for exam questions, here is a quick summary of the main areas of change and continuity:

Area 1964–1979 (Consensus Breaking) 1979–1990 (Thatcherism)
Economy Dominated by Balance of Payments crisis, Inflation, and ‘Stop-Go.’ Dependence on IMF loans (1976). Shift to Monetarism. Focus on low inflation, high interest rates, and deficit reduction.
Industrial Relations Unions were extremely powerful (e.g., successful 1972/74 Miners' Strikes). Culminated in Winter of Discontent. Union power systematically crushed (e.g., defeat of the 1984-85 Miners' Strike). New anti-union laws introduced.
State Ownership Commitment to keeping key industries nationalized. Massive programme of Privatization (selling state assets).
Social Policy Major liberal reforms passed (Divorce, Abortion, Homosexuality). Growth of the Welfare State continued. Less focus on further liberalization. Cuts to public spending and challenges to the universality of the Welfare State.