Harold Wilson had two terms as Prime Minister of the United Kingdom. His first premiership began in 1964 when Labour won the 1964 general election, and was consolidated two years later in the 1966 general election, when Labour won a much larger majority.
His first term as prime minister was noted for its liberal social reforms, and the expansion of education and social services, however it was also hindered by persistent problems with Britain's external balance of trade.
Labour lost power at the 1970 general election, but Wilson returned for a second term as Prime Minister of a minority government with the February 1974 election, which was consolidated later that year at the October 1974 election, in which Labour won a slim majority. In his second term, Wilson oversaw the 1975 referendum on Britain's membership of the European Community. His premiership ended when he resigned unexpectedly in 1976.
First premiership (1964–1970)
Appointment Labour won the 1964 general election with a narrow majority of four seats, and Wilson became prime minister, at 48 the youngest person to hold that office since Lord Rosebery 70 years earlier. During 1965, by-election losses reduced the government's majority to a single seat; but in March 1966 Wilson took the gamble of calling another general election. The gamble paid off, because this time Labour achieved a 96-seat majority over the Conservatives, who the previous year had made Edward Heath their leader.
Domestic affairs The 1964–1970 Labour government carried out a broad range of reforms during its time in office, in such areas as social security, civil liberties, housing, health, education, and worker's rights. Economic policies Wilson's government put faith in economic planning as a way to solve Britain's economic problems. The government's strategy involved setting up a Department of Economic Affairs (DEA) which would draw up a National Plan which was intended to promote growth and investment. Wilson believed that scientific progress was the key to economic and social advancement, as such he famously referred to the "white heat of technology", in reference to the modernisation of British industry. This was to be achieved through a new Ministry of Technology (shortened to "Mintech") which would coordinate research and development and support the swift adoption of new technology by industry, aided by government-funded infrastructure improvements.
In practice, however, events derailed much of the initial optimism. Upon coming to power, the government was informed that they had inherited an exceptionally large deficit of £800 million on Britain's balance of trade. This partly reflected the preceding government's expansive fiscal policy in the run-up to the 1964 election. Immediately the pound came under enormous pressure, and many economists advocated devaluation of the pound in response, but Wilson resisted, reportedly in part out of concern that Labour, which had previously devalued sterling in 1949, would become tagged as "the party of devaluation". Wilson also believed that a devaluation would disproportionately harm low-income Britons with savings and poorer Commonwealth of Nations countries in the sterling area. The government instead opted to deal with the problem by imposing a temporary surcharge on imports, and a series of deflationary measures designed to reduce demand and therefore the inflow of imports. In the latter half of 1967, an attempt was made to prevent the recession in activity from going too far in the form of a stimulus to consumer durable spending through an easing of credit, which in turn prevented a rise in unemployment.
After a costly battle, market pressures forced the government to devalue the pound by 14% from $2.80 to $2.40 in November 1967. Wilson was much criticised for a broadcast soon after in which he assured listeners that the "pound in your pocket" had not lost its value. Economic performance did show some improvement after the devaluation, as economists had predicted. The devaluation, with accompanying austerity measures which ensured resources went into exports rather than domestic consumption, successfully restored the trade balance to surplus by 1970. In retrospect Wilson has been widely criticised for not devaluing earlier, however, he believed there were strong arguments against it, including the fear that it would set off a round of competitive devaluations, and concern about the impact price rises following a devaluation would have on people on low incomes.
The government's decision over its first three years to defend sterling's parity with traditional deflationary measures ran counter to hopes for an expansionist push for growth. The National Plan produced by the DEA in 1965 targeted an annual growth rate of 3.8%, however, under the restrained circumstances the actual average rate of growth between 1964 and 1970 was a far more modest 2.2%. The DEA itself was wound up in 1969. The government's other main initiative Mintech did have some success at switching research and development spending from military to civilian purposes, and of achieving increases in industrial productivity, although persuading industry to adopt new technology proved more difficult than had been hoped. Faith in indicative planning as a pathway to growth,An influential study at the time, Andrew Shonfield's Modern Capitalism (OUP, 1965), provided intellectual backing for the belief that indicative planning largely underlay the superior growth performance of France and Germany compared to the UK. embodied in the DEA and Mintech, was at the time by no means confined to the Labour Party. Wilson built on foundations that had been laid by his Conservative predecessors, in the shape, for example, of the National Economic Development Council (known as "Neddy") and its regional counterparts (the "little Neddies"). Government intervention in industry was greatly enhanced, with the National Economic Development Office greatly strengthened and the number of "little Neddies" was increased, from eight in 1964 to twenty-one in 1970. The government's policy of selective economic intervention was later characterised by the establishment of a new super-ministry of technology, a connexion not always publicly grasped, under Tony Benn.The Labour Government 1964–70 by Brian Lapping.
The continued relevance of industrial nationalisation (a centrepiece of the post-War Labour government's programme) had been a key point of contention in Labour's internal struggles of the 1950s and early 1960s. Wilson's predecessor as leader, Hugh Gaitskell, had tried in 1960 to tackle the controversy head-on, with a proposal to expunge Clause Four (the public ownership clause) from the party's constitution, but had been forced to climb down. Wilson took a characteristically more subtle approach: No significant expansion of public ownership took place under Wilson's government, however, he placated the party's left-wing by renationalising the steel industry under the Iron and Steel Act 1967 (which had been denationalised by the Conservatives in the 1950s) creating the British Steel Corporation.
One innovation of the Wilson government was the creation in 1968 of the Girobank, a publicly owned bank which operated via the General Post Office network: As most working-class people in the 1960s did not have bank accounts, this was designed to serve their needs, as such it was billed as the "people's bank". Girobank was a long-term success, surviving until 2003.
Wilson's government presided over a rate of unemployment which was low by historic (and later) standards but did rise during his period in office. Between 1964 and 1966 the average rate of unemployment was 1.6%, while between 1966 and 1970 the average stood at 2.5%. He had entered power at a time when unemployment stood at around 400,000. It still stood at 371,000 by early 1966 after a steady fall during 1965, but by March 1967 it stood at 631,000. It fell again towards the end of the decade, standing at 582,000 by the time of the general election in June 1970.
Despite the economic difficulties faced by Wilson's government, it was able to achieve important advances in several domestic policy areas. As reflected by Wilson in 1971:
Social reforms
Wilson's government is perhaps best remembered for its liberal social reforms, notable amongst these was the Race Relations Act 1965 which was the first piece of legislation to address race relations and racial discrimination, the Murder (Abolition of Death Penalty) Act 1965 which abolished capital punishment (except for a small number of offences — notably high treason) the Sexual Offences Act 1967, which partially decriminalised male homosexuality and the Abortion Act 1967, which legalised abortion, the abolition of theatre censorship by the Theatres Act 1968, and the liberalisation of divorce law by the Divorce Reform Act 1969. While many of these measures were introduced as private member's bills, and given a free vote, the government effectively supported them by giving them parliamentary time, this was especially true during Roy Jenkins's tenure as Home Secretary (1965–1967), with whom the liberal reform agenda is particularly associated. Wilson personally, coming culturally from a provincial non-conformist background, showed no particular enthusiasm for much of this agenda.The Battle of Britain: The Home Front, by George Goldsmith Carter.
Education
Higher education held special significance for a Labourite of Wilson's generation, given its role in both opening up opportunities for ambitious youth from working-class backgrounds and enabling Britain to seize the potential benefits of scientific advances. Under the first Wilson government, for the first time in British history, more money was allocated to education than to defence.The Decade of Disillusion: British Politics in the Sixties, edited by David Mckie and Chris Cook. Wilson continued the rapid creation of new universities, in line with the recommendations of the Robbins Report, a bipartisan policy already in train when Labour took power.
Wilson promoted the concept of an Open University, to give adults who had missed out on tertiary education a second chance through part-time study and distance learning. His political commitment included assigning implementation responsibility to Baroness Lee, the widow of Aneurin Bevan.Breach of Promise – Labour in Power, 1964–70 by Clive Ponting. By 1981, 45,000 students had received degrees through the Open University. Money was also channelled into local-authority run colleges of education.
Wilson's record on secondary education was motivated by growing pressure for the abolition of the selective principle underlying the "eleven-plus", and replacement with Comprehensive schools which would serve the full range of children (see the article 'grammar schools debate'). Comprehensive education became Labour Party policy. From 1966 to 1970, the proportion of children in comprehensive schools increased from about 10% to over 30%.Changing party policy in Britain: an introduction by Richard Kelly.
Labour pressed local authorities to convert grammar schools into comprehensives. Conversion continued on a large scale during the subsequent Conservative Heath administration, although the Secretary of State, Margaret Thatcher, ended the compulsion of local governments to convert.
In 1968, Wilson's first government reluctantly decided it could not fulfil its long-held promise to raise the school leaving age to 16, because budget cuts left it unable to fulfil the investment required in infrastructure, such as tens of thousands of new classrooms and teachers.