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Problems the Labour Party faced - Coggle Diagram
Problems the Labour Party faced
Inherited
Inflation was at 15% in 1974
Taxes were increased and Public Spending was cut
A 'Social Contract' was developed with the TUC in a bid to meet demands
Discovery of oil in the North Sea helped to bring down Inflation to 10%
Low Productivity/Balance of Payment deficit of £3 Billion
Taxes were increased and Public Spending was cut
The National Enterprise Board (NEB) was established to manage wages and Government spending, although it was largely ineffective and was disbanded in 1975
Poor Industrial relations
Miners were offered a 35% wage increase to end the Miner's strikes and abolish the 3-day week
Labour was a divided party
The Government consisted of a balance between left wingers (Benn and Foot) and centrists (Healy)
Hung Parliament
After the February 1974 election, Labour held office as a Minority Government
An election was called October 1974, gave Labour a 3 seat Majority
Created
Small Party Majority, which had dissappeared by 1977
The Lib-Lab pact, formed in 1977, helped Labour pass legislation, in return for some Liberal policies/legislation being introduced
Social Contract failed to constrain wage demands