hi everybody welcome to the latest video in our series on the making of modern britain unit 2s our previous videos have looked at the period of conservative government between 1951 and 1964. this video takes up the story in 1964 through to 1970 and these are years of labor government under prime minister harold wilson this video is going to look a little bit at who wilson was why he won two elections and a little bit about his character his style of government and his political views we're also going to have a look at some of the economic challenges facing wilson and his government and assess whether or not he was successful in tackling those challenges first of all then wilson's victory in elections in both 1964 and also 1966. in a previous video we talked about alec douglas who prime minister from 1963 to 1964 and about the fact that by the early 60s it seemed astonishing that the conservatives had chosen an aristocrat a member of the upper classes to be their leader and to be prime minister britain was changing to some extent there were being questions being asked about the establishment and hume seemed a very peculiar choice wilson very effectively plays on that during the 1964 election wilson is very skilled at presenting himself as an ordinary man a grammar school boy and somebody who was far more modern and in touch with 1960s britain than hume was and part of the reason why wilson and labour win in 1964 is because they convinced the people of britain that wilson is indeed a modernizer that hub is old-fashioned he's out of touch that britain had been stagnating under the conservatives it's also about the sort of things that wilson is saying to in particular about science and technology we know that the 50s was a time of economic and social change we know that new technology was being developed and wilson taps into this wilson is is skilled at making speeches which which refer in particular to this phrase the white heat of technological change wilson says the conservatives have held britain back other parts of the world japan the us west germany have invested in research are leading in terms of technological development and britain needs to catch up and wilson's argument is that labour is the party of progress of modernity as labour which will do it and that is an appealing message having said all of that it's interesting that labor only scrape into power with a majority of four in 1964. that sort of majority is simply not sustainable for five years so two years on in 1966 while much of england is busy watching england win the world cup wilson is going to the polls and in the 1966 election as you can see the labor majority increases pretty dramatically to 98. so we know why wilson won in 64 but why does he win so handsomely in 66 and it's a an interesting question because the conservatives have actually chosen a new leader who is very much not from the upper classes edward heath is a grammar school person like wilson himself he can very much present himself as a pretty ordinary man too the problem is that he particularly on tv which is such an important form of media by the 60s heath comes across as it's pretty boring he's a little bit stiff and awkward wilson is relaxed friendly confident far more skilled at using tv and that contributes to this increased labor majority he doesn't compare to wilson particularly in terms of media perceptions let's have a little think about wilson as a politician and some of the things he may have believed in people have often said that wilson was a left winger that he came from the left of the labour party itself certainly true that in the 40s and the 50s wilson was a close ally of an iron bever and was very firmly on the left the bev and i left of the labour party um in the the battle really for the soul of the party against hugh gates and the centrists so when bevin resigns from atlee's government when prescription charges are introduced to the nhs for things like false teeth and glasses uh wilson resigns alongside him wilson is a loyal ally of bevan so much so that by 1961 when gay school has been leader of the party for several years gay school is increasingly unpopular is wilson who takes him on unsuccessfully but takes him on as the left-wing candidate having said that we can also see elements of wilson which are far more moderate far more centrist rather than very left-wing wilson may have opposed gate school but he nevertheless served in gate school shadow cabinet he's prepared to work with him wilson also supports british nuclear weapons as well uh generally something which the the left of the party with its links to cmd didn't do during wilson's time as prime minister he attempts he fails but he certainly tries to reform the trade unions wilson believes that the trade unions have exceeded their power so those policies suggest that actually maybe wilson is a a bit more of a centrist after all other people claim that perhaps actually wilson really didn't believe in much at all there are bits of left bits of center actually maybe wilson just believed in whatever was going to make him popular whatever was going to make him powerful and some people say he's simply an opportunist he does what he feels will make him lay the leader making popular with labour members and mp and ultimately he says and he does whatever he needs to do to win the general elections to gain power so is wilson simply an opportunist now there's possibly something in all three of those interpretations um but what's undoubtedly true is that final one wilson perhaps more than anything is a modernizer we've talked already about science and technology we've talked about wilson projecting an image of himself as an ordinary man almost classless uh beyond classes quite an astonishing fact there and until wilson every other prime minister had been to private school wilson is the first prime minister from a state school who went to huddersfield grammar uh wilson has at least a bit of the yorkshire accent and as we've said before he's good on tv so it's about wilson himself but also about wilson's policies and his rhetoric around technology i'd argue that there is something in each one of those interpretations something you need to be aware of in terms of wilson's style and the way he governed is a slightly peculiar phrase called the kitchen cabinet we'll talk more about some of this in our next video but one of the features of wilson's government is that there were a number of really powerful heavyweight politicians within it people like jim callahan uh george brown roy jenkins and that made wilson massively insecure um you know people like callahan and jenkins were popular politicians they had loads of experience wilson was convinced that they were plotting against him and one of them one day would try and take his place and it made wilson anxious and worried and that's why wilson rather than spending a lot of time with his fellow cabinet members or top civil servants wilson actually has a team of trusted advisors they're not politicians they're not in the civil service but these are the people who get to spend the most time with wilson the most famous name of those is marcia williams now marston martial williams is wilson's secretary his his political secretary and there's also some economic advisers there are a few mps generally not in the cabinet but those are the only people who wilson truly trusts and will really talk to in great depth and the phrase that we use for these people is that wilson has a kitchen cabinet it's about just how close these people are to wilson you know they will go to downing street and they will sit there and no doubt they'll have a better drink and a snack can possibly even stay in the kitchen um but ultimately you know these are the people who wilson wants round this house even if his house is 10 downing street these are the people who wilson trusts the problem with something like this is if you end up with a kitchen cabinet because you're worried about your rivals you're going to surround yourself with people who will probably just stoke those fears even more by only talking to these people wilson becomes even more suspicious of those people people like callahan and jenkins it also doesn't make for particularly effective government if government ministers and cabinet members don't have all that much access to wilson and we can argue that some of wilson's insecurities perhaps even paranoia make it far harder for him to govern effectively for the remainder of this video we're going to focus on what was probably the biggest issue for wilson however and that's the economy it's certainly the case that the wilson government inherits a tricky situation from the conservatives it's also the case that labour's commitment to the white heat of technological revolution was perhaps not always as sound as wilson had suggested so first of all it's the fact that much as wilson talks about technological development not everybody in his his government is either massively committed to it or at all experienced there's a couple of uh almost comical examples here uh we've got jenkins uh he's gonna become home secretary and chancellor later on but he begins as aviation minister in other words um responsible for aircraft development for example for aircraft technology now jenkins is is quite honest he says look i'm a non-scientist he's very clever very cultured man roy jenkins he loves theater he loves music he loves red wine and he doesn't love science and and when briefing papers are passed to him jenkins will often look at them and go go get it so not the best person maybe to having a a very technology-focused job perhaps even worse you've got frank cousins who is a union leader who's brought into the cabinet as technology minister spearheading the revolution frank cousins not really all that interested in technology so it's it's not the best start it's also a fact that if you are going to press forward with this sort of change you've got to invest huge amounts of money in research and development britain really can't afford it it can afford it to an extent so britain is very involved in the development of concord along with france the the supersonic plane but britain has to be picky about which projects it does get involved with and there's no way at all that britain can compete with the the economic and technological might of the usa but as we say this is not just about wilson maybe making a few poor choices or about wilson's rhetoric and then speeches being a bit overblown this is just the the grim reality that wilson has inherited a a tricky economic situation from the previous government a quick reminder of what that situation was we've we've talked about this in previous videos we know that for a lot of the british people their financial situation was probably better than it had been forever in the 50s but in terms of britain as a country in comparison to its competitors especially japan and the us and west germany britain was was lagging behind it was coasting while those economies flourished we know as well that the french that de gaulle says no he vetoes the british application to join the ec in 1961 and so britain has denied the benefits that come from membership of the ec as well and as a result of all of that british economic growth rates are pretty limited productivity is limited as well and something we've talked about a lot in previous videos britain seems to be stuck in these stop go cycles where we have short bursts of inflation and then the government will stop the economy by raising interest rates we then have these deflationary areas there's the danger of unemployment going up and the government has to make the economy go again all of this is short-termism there's a very reactive uh flavor to the policy-making and there's a real absence of any long-term economic planning we know as well the these stop go policies uh end up in balance of payments crises where the amount of money that britain's spending on imports far exceeds the revenue coming in from exports we've talked already about periods of high inflation rising prices if wages aren't keeping pace with that then clearly a lot of ordinary people are going to suffer one of the biggest problems of all the wilson inherits is a government deficit of 800 million pounds that's a really significant number it's not unusual for a government to have a deficit but 800 million is a particularly difficult figure and wilson it is clear that he's going to have to tackle this issue alongside some of those others and there are various possible methods that wilson can use to to sort out and to improve the standing of the british economy he could for example look at deflationary policies we've talked about these before and obviously this would have the advantage of controlling inflation it would mean uh the labor won't go down the devaluation route which as we'll see in a minute is a route with disadvantages too but ultimately if you're going to do deflationary policies things like raising taxes raising interest rates so people have less disposable income that's just stop go again it's just like the stop phase of the old stop go policies so wilson says no we're trying to break away from this and a deflationary economy is one in which labour couldn't spend huge amounts on welfare or on technology and and wilson didn't want to be in that position so devaluation is another option this is one of those examples where you don't need to get too deeply into the maths of it into the economics of it as long as you understand the basic point about devaluation first of all what is devaluation well devaluation is where the british pound is linked to other currencies and then it's linked in a fixed rate so um just before wilson eventually does devalue the pound but then that's going to come later uh one pound is worth 2.8 uh us dollars devaluation will mean that the pound is then worth only 2.4 us dollars now if you do the maths or maybe do the math which since we're talking about america um you'll find that devaluation does a couple of things first of all it makes exports cheaper so if you're a british business and you do a lot of exporting your exports competitive they're they're cheaper people will buy more they'll be tempted to buy them is it's good news for british export business the other thing that devaluation does is it makes imports more expensive so if you're a british person and you're considering importing you might well think twice perhaps it's going to encourage people to buy british it's going to protect british business and in that sense as well the devaluation could be good for the british economy both of those things should help the balance of payments so that's another option that wilson can take and as we'll see he eventually does take that but not at the beginning because wilson is is cautious devaluation has economic benefits but on the political level it's embarrassing you're basically saying by devaluing the pound britain is is not a strong economy britain doesn't compare and doesn't compete properly with the us it's a political humiliation even though it has economic benefits atlea had had to devalue the pound in 1949 wilson is really worried that labour will get a reputation as the party of devaluation he doesn't want that so that's another option that in the first instance doesn't happen so what does wilson actually do well what he does is he says do you know what we've got to break out of stop go we're going to plan the economy properly in the long term and he does that by setting up something called the dea this is a new department of government called the department of economic affairs and wilson puts george brown in charge of it brown is another really senior really experienced labor politician and the dea is all about planning it's about setting targets for economic growth and across the country there are going to be economic planning councils under the oversight of the dea and george brown cracks on with us quickly he says we need to work together with trade unionists with business with civil servants we need to sit down we need to get these voluntary agreements about prices about wages about keeping a lid on both of them so that we're properly planning the economy and we're keeping inflation down so in theory is this the moment where the british economy can finally break out of this cycle of stop go well the answer is no part of the reason why is because of the treasury now the treasury is the the government department which traditionally has this deal with the money the chancellor of the exchequer is in charge of the treasury the treasury doesn't like this upstart new government department pretty much telling it what to do and the treasury say we control economic policy this dea shouldn't be doing it and on a more personal level jim callahan hugely powerful figures chancellor doesn't like the fact that george brown appears to be a rival when it comes to making economic policy brown himself is something of a problem as well um he's a controversial character he can be brilliant but he can also be terrible he's impulsive he's reckless there are all sorts of rumors about his heavy drinking is he an alcoholic and brown is is not the most reliable person to put in charge of such an important job but equally he's popular in the party he's experienced wilson knew he had to give him a leading role but was this perhaps not the right role um it's also true that the civil service seems to be working against brown the rumors that his phone's been tapped rumors that civil servants are not giving key government papers to george brown so for all those reasons ultimately the dea a great idea in theory ends up failing partly for political reasons partly for personal reasons and the sign of that is that in 1966 only two years into the government george brown is moved to be foreign secretary and a year later wilson abolishes the dea it's a very short-lived experiment in trying but ultimately failing to break out of stop go so the question is well what does labour do next what it does next is what we call prices and incomes policies and this is quite simple this is the government saying to union leaders to employers we've got to restrain wages we can't have wages rising and rising all the time we've also got to stop prices increasing all the time and on a really simple level this is about trying to force unions and employers into a situation where inflation comes down and this involves setting up a board an organization a group called the prices and incomes board which is going to oversee these policies to try and keep wages and prices at a sensible level this leads to a couple of consequences that wilson really hadn't wanted first of all when when wilson says to the unions you've got to keep a lid on wages we've got to be restrained some of the unions are unsurprisingly not very happy about this and in particular the the sea men's union goes on strike for quite a period in 1966 frank cousins if you remember cabinet member who began as a trade unionist he resigns from the cabinet he feels that unfair pressure is being put on the unions and the left of the labour party agree with frank cousins as well wilson increasingly as we move through the 60s is becoming an unpopular prime minister with the left of his own party they feel he should be backing the unions that he should be far more positive as a labour prime minister about strike action but when all this is said and done where are we we've seen wilson reject certain uh economic policies like deflation and devaluation we've seen wilson attempt to do some long-term economic planning with the dea but clearly that's failed we've seen wilson calling for price and wage restraint but that in many ways has only created further tension particularly with the unions so where do we turn next we turn next to devaluation and this was something as we know wilson hadn't wanted to do but as so often in politics events get in the way and in 1967 there's a really significant war in the middle east between israel and some of its arab neighbors and as often happens when there's war in the middle east um oil supplies to the west are affected there very much reduced or even cut off and this has an impact on the british economy what we also get in august 1967 is a dock strike and clearly the docks are really important for the export trade exports suddenly are not being exported to a to any great degree and once again we have a balance of payments crisis and wilson realizes he's gonna have to move towards devaluation for the economic reasons that we set out before it's the fact that ultimately this is going to make exports cheaper more competitive imports will become more expensive potentially protecting british business and the details of the devaluation um the pound is now 14 lower against the dollar the us dollar and it's gone from one pound being two point eight dollars to being two point four dollars like we've said before despite the economic benefits devaluation is politically humiliating and alongside this labor does something else that they haven't wanted to do originally which is deflation and increasing interest rates putting restrictions on credit and on higher purchase so all of this is going to be unpopular uh deflationary policies limiting the amount of disposable income and credit that people have generally don't go down well and it's the fact that labour said we're not gonna do deflation we're gonna break out to stop go we're going to never ever do devaluation again and now labour's doing all of these things and labor doesn't seem particularly credible anymore people stop believing wilson on the economy it goes from bad to worse in 1967 wilson applies to join the eec and for the second time that is rejected for the second time britain can't enjoy the benefits of the ec membership it's not all bad news uh roy jenkins we've mentioned him earlier becomes chancellor later on in the wilson government and he continues to pursue deflation and that does lead to a balance of payments surplus the revenue from exports increases spending on imports and having said that inflation right at the end of the wilson period in 69 70 is at 12 that really is pretty high so the overall story of wilson and the economy is one of struggle one of the great ambitions around faking how to stop go about the white heat of technological change the reality is that the economy lurches from one crisis to another under wilson and that aim of long-term planning really never comes to fruition huge thank you again to tom for that a really brilliant video on a bit more modern british history again this is part of our series on modern britain going through the 2s syllabus on aqa taking us through from 1951 through to 2007 we will continue to add more and more videos to this so if you haven't done so already please subscribe turn on notifications so as more videos get added and there should be some more coming very very soon then you can keep up to date with all of those and it should help you develop your knowledge and get ready for those lovely exams we will also be adding videos of all other types of topics so there are other history topics there's also lots of stuff on a level politics as well so well worth subscribing for more of me and of course some more of tom as well thank you again to tom thank you again to all of you for watching