Harold Wilson - Electoral Defeat and Opposition

Electoral Defeat and Opposition

By 1969, the Labour Party was suffering serious electoral reverses, and by the turn of 1970 had lost a total of 16 seats in by-elections since the previous general election.

Although the First Wilson Government had enacted a wide range of social reforms and arguably did much to reduce social inequalities during its time in office, the economic difficulties that it faced led to austerity measures being imposed on numerous occasions, forcing the government to abandon some of its key policy goals. Amongst the controversial austerity measures introduced included higher dental charges, the abolition of free school milk in all secondary schools in 1968, increased weekly national insurance contributions, the postponement of the planned rise in the school leaving age to 16, and cuts in road and housing programmes, which meant that the government's house-building target of 500,000 per year was never met. The government also failed to meet its 1964 manifesto commitment to tie increases in national insurance benefits to increases in average earnings, although this reform would later be implemented during Wilson’s second premiership in 1975. There was also much controversy over the government's decision to reintroduce prescription charges in 1968 (after having abolished them in 1964), although the blow of this measure was arguably by softened by the fact that many people were exempted from charges. In 1968, arguably in response to sensationalist stories about supposed “scroungers” and “welfare cheats,” the government made the decision to introduce a controversial new rule terminating benefits for single men under the age of 45 was introduced. Under this rule, young, single, unskilled men who lived in areas of low unemployment would their supplementary benefits stopped after four weeks.

A plan to boost economic growth to 4% a year was never met, while development aid was cut severely as a result of austerity measures. A proposed “minimum income guarantee” for widows and pensioners was never implemented, together with Richard Crossman’s compulsory national superannuation scheme. This scheme, a system of universal secondary pensions, was aimed at providing British pensioners with an income closer to what they enjoyed during the best years of their working life, when their earnings were at their highest. According to Brian Lapping, this would have been Wilson’s largest reform of social security, had it been carried out. In addition, the government's austerity measures led to an unpopular squeeze on consumption in 1968 and 1969.

By 1970, the economy was showing signs of improvement, and by May that year, Labour had overtaken the Conservatives in the opinion polls. Wilson responded to this apparent recovery in his government's popularity by calling a general election, but, to the surprise of most observers, was defeated at the polls by the Conservatives under Heath.

Wilson survived as leader of the Labour party in opposition. Economic conditions during the 1970s were becoming more difficult for the UK and many other western economies as a result of the ending of the Bretton Woods Agreement and the 1973 oil shock, and the Heath government in its turn was buffeted by economic adversity and industrial unrest (notably including confrontation with the coalminers which led to the Three-day week) towards the end of 1973, and on 7 February 1974 (with the crisis still ongoing) Heath called a snap election for 28 February.