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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^[1] 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,^[2] civil liberties,^[3] housing,^[4] health,^[5] education,^[6] and worker's rights.^[7]

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.^[8]

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.^[9] 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.^[10]

After a costly battle, market pressures forced the government to devalue the pound by 14% from $2.80 to $2.40 in November 1967.^[8] 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.^[11] 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.^[8]

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.^[8]

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.^[8]

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%.^[8] 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.^[12]

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.^[8][13] Wilson personally, coming culturally from a provincial non-conformist background, showed no particular enthusiasm for much of this agenda.^[14]

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.^[15] 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.^[16] By 1981, 45,000 students had received degrees through the Open University.^[16] Money was also channelled into local-authority run colleges of education.^[17]

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%.^[18]

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.^[8]

Overall, public expenditure on education rose as a proportion of GNP from 4.8% in 1964 to 5.9% in 1968, and the number of teachers in training increased by more than a third between 1964 and 1967.^[13] The percentage of students staying on at school after the age of sixteen increased similarly, and the student population increased by over 10% each year. Pupil-teacher ratios were also steadily reduced. As a result of the first Wilson government's educational policies, opportunities for the working-class were improved; overall access to education in 1970 was broader than in 1964.^[19] As summarised by Brian Lapping,

The years 1964–70 were largely taken up with creating extra places in universities, polytechnics, technical colleges, colleges of education: preparing for the day when a new Act would make it the right of a student, on leaving school, to have a place in an institution of further education.^[17]

In 1966, Wilson was created the first Chancellor of the newly created University of Bradford, a position he held until 1985.

Housing

Housing was a major policy area under the first Wilson government. During Wilson's time in office from 1964 to 1970, more new houses were built than in the last six years of the previous Conservative government. The proportion of council housing rose from 42% to 50% of the total,^[20] while the number of council homes built increased steadily, from 119,000 in 1964 to 133,000 in 1965 and 142,000 in 1966. Allowing for demolitions, 1.3 million new homes were built between 1965 and 1970,^[16] Although concerns were raised about the quality of much of the new housing, which was often cheaply built high-rise stock (the latter came in for particular criticism following the Ronan Point collapse in 1968).^[8]

To encourage homeownership, the government introduced the Option Mortgage Scheme (1968), which made low-income housebuyers eligible for subsidies (equivalent to tax relief on mortgage interest payments).^[21] This scheme had the effect of reducing housing costs for buyers on low incomes^[22] and enabling more people to become owner-occupiers.^[23] In addition, house owners were exempted from capital gains tax. Together with the Option Mortgage Scheme, this measure stimulated the private housing market.^[24] Wilson in a 1967 speech said: ''..the grime and muddle and decay of our Victorian heritage is being replaced. The new city centres with their university precincts, their light, clean and well-spaced civic buildings, will not merely brighten the physical environment of our people, they will change the very quality of urban life in Britain.''^[25]

Significant emphasis was also placed on town planning, with new conservation areas introduced and a new generation of new towns built, notably Milton Keynes. The New Towns Acts of 1965 and 1968 together gave the government the authority (through its ministries) to designate any area of land as a site for a new town.^[26]

Social Services and welfare

 

Wilson on a visit to a retirement home in Washington, County Durham

Wilson's government carried out a merger between the National Assistance Board and the Ministry of Pensions and National Insurance to create the Ministry of Social Security. Wilson's government carried out increases in a number of benefits; family allowances were more than doubled in money terms, whilst redundancy payments were introduced in 1965.^[13]

Prescription charges for medicines were abolished immediately following Labour's 1964 election victrory, while pensions were raised to a record 21% of average male industrial wages. Before the 1966 election, the widow's pension was tripled. Due to austerity measures following an economic crisis, prescription charges were re-introduced in 1968 as an alternative to cutting the hospital building programme, although those sections of the population who were most in need (including supplementary benefit claimants, the long-term sick, children, and pensioners) were exempted from charges.^[27]

In the five years from 1964 up until the last increases made by the First Wilson Government, pensions went up by 23% in real terms, supplementary benefits by 26% in real terms, and sickness and unemployment benefits by 153% in real terms (largely as a result of the introduction of earnings-related benefits in 1967).^[28]

Transport

The Travel Concessions Act 1964, one of the first Acts passed by the First Wilson Government, provided concessions to all pensioners travelling on buses operated by municipal transport authorities.^[29] The Transport Act 1968 established the principle of government grants for transport authorities if uneconomic passenger services were justified on social grounds. A National Freight Corporation was also established to provide integrated rail freight and road services. Public expenditure on roads steadily increased and stricter safety precautions were introduced, such as the breathalyser test for drunken driving,^[15] under the 1967 Road Traffic Act.^[17] The Transport Act gave a much needed financial boost to British Rail, treating them like they were a company which had become bankrupt but could now, under new management, carry on debt-free. The act also established a national freight corporation and introduced government rail subsidies for passenger transport on the same basis as existing subsidies for roads to enable local authorities to improve public transport in their areas.^[17]

The road-building programme was also expanded, with capital expenditure increased to 8% of GDP, "the highest level achieved by any post-war government".^[30] Central government expenditure on roads went up from £125 million in 1963/64 to £225 million in 1967/68, while a number of road safety regulations were introduced, covering seat belts, lorry drivers' hours, car and lorry standards, and an experimental 70 mile per hour speed limit. In Scotland, spending on trunk roads went up from £6.8 million in 1963/64 to £15.5 million in 1966/67, while in Wales, spending on Welsh roads went up from £21.2 million in 1963/64 to £31.4 million in 1966/67.^[31]

International development

A new Ministry of Overseas Development was established, with its greatest success at the time being the introduction of interest-free loans for the poorest countries.^[16] The Minister of Overseas Development, Barbara Castle, set a standard in interest relief on loans to developing nations which resulted in changes to the loan policies of many donor countries, "a significant shift in the conduct of rich white nations to poor brown ones." Loans were introduced to developing countries on terms that were more favourable to them than those given by governments of all other developed countries at that time. In addition, Castle was instrumental in setting up an Institute of Development Studies at the University of Sussex to devise ways of tackling global socio-economic inequalities. Overseas aid suffered from the austerity measures introduced by the first Wilson government in its last few years in office, with British aid as a percentage of GNP falling from 0.53% in 1964 to 0.39% in 1969.^[17]

Taxation

Wilson's government made a variety of changes to the tax system. Largely under the influence of the Hungarian-born economists Nicholas Kaldor and Thomas Balogh, an idiosyncratic Selective Employment Tax (SET) was introduced that was designed to tax employment in the service sectors while subsidising employment in manufacturing. (The rationale proposed by its economist authors derived largely from claims about potential economies of scale and technological progress, but Wilson in his memoirs stressed the tax's revenue-raising potential.) The SET did not long survive the return of a Conservative government. Of longer-term significance, capital gains tax (CGT) was introduced across the UK on 6 April 1965.^[32] Across his two periods in office, Wilson presided over significant increases in the overall tax burden in the UK. In 1974, three weeks after forming a new government, Wilson's new chancellor Denis Healey partially reversed the 1971 reduction in the top rate of tax from 90% to 75%, increasing it to 83% in his first budget, which came into law in April 1974. This applied to incomes over £20,000 (equivalent to £263,269 in 2023),^[33] and combined with a 15% surcharge on 'unearned' income (investments and dividends) could add up to a 98% marginal rate of personal income tax. In 1974, as many as 750,000 people were liable to pay the top rate of income tax.^[34]

Various changes were also made to the tax system which benefited workers on low and middle incomes. Married couples with low incomes benefited from the increases in the single personal allowance and marriage allowance. In 1965, the regressive allowance for national insurance contributions was abolished and the single personal allowance, marriage allowance and wife's earned income relief were increased. These allowances were further increased in the tax years 1969–70 and 1970–71. Increases in the age exemption and dependant relative's income limits benefited the low-income elderly.^[10] In 1967, new tax concessions were introduced for widows.^[35]

Increases were made in some of the minor allowances in the 1969 Finance Act, notably the additional personal allowance, the age exemption and age relief and the dependent relative limit. Apart from the age relief, further adjustments in these concessions were implemented in 1970.^[10]

1968 saw the introduction of aggregation of the investment income of unmarried minors with the income of their parents. According to Michael Meacher, this change put an end to a previous inequity whereby two families, in otherwise identical circumstances, paid differing amounts of tax "simply because in one case the child possessed property transferred to it by a grandparent, while in the other case the grandparent's identical property was inherited by the parent."^[10]

In the 1969 budget, income tax was abolished for about 1 million of the lowest-paid and reduced for a further 600,000 people,^[36] while in the government's last budget (introduced in 1970), two million small taxpayers were exempted from paying any income tax altogether.^[37]

Industrial relations

Wilson made periodic attempts to mitigate inflation, largely through wage-price controls—better known in Britain as "prices and incomes policy".^[8] (As with indicative planning, such controls—though now generally out of favour—were widely adopted at that time by governments of different ideological complexions, including the Nixon administration in the United States.) Partly as a result of this reliance, the government tended to find itself repeatedly injected into major industrial disputes, with late-night "beer and sandwiches at Number Ten" an almost routine culmination to such episodes. Among the most damaging of the numerous strikes during Wilson's periods in office was a six-week stoppage by the National Union of Seamen, beginning shortly after Wilson's re-election in 1966, and conducted, he claimed, by "politically motivated men".

With public frustration over strikes mounting, Wilson's government in 1969 proposed a series of changes to the legal basis for industrial relations (labour law), which were outlined in a White Paper "In Place of Strife" put forward by the Employment Secretary Barbara Castle. Following a confrontation with the Trades Union Congress, which strongly opposed the proposals, and internal dissent from Home Secretary James Callaghan, the government substantially backed-down from its intentions. The Heath government (1970–1974) introduced the Industrial Relations Act 1971 with many of the same ideas, but this was largely repealed by the post-1974 Labour government. Some elements of these changes were subsequently to be enacted (in modified form) during the premiership of Margaret Thatcher.^[8]

Foreign affairs

United States

 

Wilson with US President Lyndon B. Johnson at the White House in 1966

Wilson believed in a strong "Special Relationship" with the United States and wanted to highlight his dealings with the White House to strengthen his prestige as a statesman. President Lyndon B. Johnson disliked Wilson and ignored any "special" relationship. The Vietnam War was a sore point.^[38] Johnson needed and asked for help to maintain American prestige. Wilson offered lukewarm verbal support and no military aid. Wilson's policy angered the left-wing of his Labour Party, who opposed the Vietnam War.^[39] Wilson and Johnson also differed sharply on British economic weakness and its declining status as a world power. Historian Jonathan Colman concludes it made for the most unsatisfactory "special" relationship in the 20th century.^[40] The only point of total agreement was that both Johnson and Wilson emphatically supported Israel in the 1967 Six-Day War.^[41]

Europe

 

Wilson with West German Chancellor Ludwig Erhard in 1965

Among the more challenging political dilemmas Wilson faced was the issue of British membership of the European Community, the forerunner of the present European Union. An entry attempt was vetoed in 1963 by French President Charles de Gaulle. The Labour Party in Opposition had been divided on the issue, with Hugh Gaitskell having come out in 1962 in opposition to Britain joining the European Community.^[42] After initial hesitation, Wilson's Government in May 1967 lodged the UK's second application to join the European Community. It was vetoed by de Gaulle in November 1967.^[43] After De Gaulle lost power, Conservative prime minister Edward Heath negotiated Britain's admission to the EC in 1973.

Wilson in opposition showed political ingenuity in devising a position that both sides of the party could agree on, opposing the terms negotiated by Heath but not membership in principle. Labour's 1974 manifesto included a pledge to renegotiate terms for Britain's membership and then hold a referendum on whether to stay in the EC on the new terms. This was a constitutional procedure without precedent in British history.

Following Wilson's return to power, the renegotiations with Britain's fellow EC members were carried out by Wilson himself in tandem with Foreign Secretary James Callaghan, and they toured the capital cities of Europe meeting their European counterparts. The discussions focused primarily on Britain's net budgetary contribution to the EC. As a small agricultural producer heavily dependent on imports, Britain suffered doubly from the dominance of:

(i) agricultural spending in the EC budget,

(ii) agricultural import taxes as a source of EC revenues.

During the renegotiations, other EEC members conceded, as a partial offset, the establishment of a significant European Regional Development Fund (ERDF), from which it was agreed that Britain would be a major net beneficiary.^[44]

In the subsequent referendum campaign, rather than the normal British tradition of "collective responsibility", under which the government takes a policy position which all cabinet members are required to support publicly, members of the Government were free to present their views on either side of the question. The electorate voted on 5 June 1975 to continue membership, by a substantial majority.^[45]

Asia

American military involvement in Vietnam escalated continuously from 1964 to 1968 and President Lyndon B. Johnson brought pressure to bear for at least a token involvement of British military units. Wilson consistently avoided any commitment of British forces, giving as reasons British military commitments to the Malayan Emergency and British co-chairmanship of the 1954 Geneva Conference.^[46]

His government offered some rhetorical support for the US position (most prominently in the defence offered by the Foreign Secretary Michael Stewart in a much-publicised "teach-in" or debate on Vietnam). On at least one occasion the British government made an unsuccessful effort to mediate in the conflict, with Wilson discussing peace proposals with Alexei Kosygin, the Chairman of the USSR Council of Ministers. On 28 June 1966 Wilson 'dissociated' his Government from American bombing of the cities of Hanoi and Haiphong. In his memoirs, Wilson writes of "selling LBJ a bum steer", a reference to Johnson's Texas roots, which conjured up images of cattle and cowboys in British minds.^[47]

Part of the price paid by Wilson after talks with President Johnson in June 1967 for US assistance with the UK economy was his agreement to maintain a military presence East of Suez.^[48] In July 1967 Defence Secretary Denis Healey announced that Britain would abandon her mainland bases East of Suez by 1977, although airmobile forces would be retained which could if necessary be deployed in the region. Shortly afterwards, in January 1968, Wilson announced that the proposed timetable for this withdrawal was to be accelerated and that British forces were to be withdrawn from Singapore, Malaysia, and the Persian Gulf by the end of 1971.^[49]

Wilson was known for his strongly pro-Israel views.^[50] He was a particular friend of Israeli Premier Golda Meir, though her tenure largely coincided with Wilson's 1970–1974 hiatus. Another associate was West German Chancellor Willy Brandt; all three were members of the Socialist International.^[51]

Africa

The British "retreat from Empire" had made headway by 1964 and was to continue during Wilson's administration. Southern Rhodesia was not granted independence, principally because Wilson refused to grant independence to the white minority government headed by Rhodesian prime minister Ian Smith which was not willing to extend unqualified voting rights to the native African population. Smith's defiant response was a Unilateral Declaration of Independence, on 11 November 1965. Wilson's immediate recourse was to the United Nations, and in 1965, the Security Council imposed sanctions, which were to last until official independence in 1979. This involved British warships blockading the port of Beira to try to cause economic collapse in Rhodesia. Wilson was applauded by most nations for taking a firm stand on the issue (and none extended diplomatic recognition to the Smith régime). A number of nations did not join in with sanctions, undermining their efficiency. Certain sections of public opinion started to question their efficacy, and to demand the toppling of the régime by force. Wilson declined to intervene in Rhodesia with military force, believing the British population would not support such action against their "kith and kin". The two leaders met for discussions aboard British warships, Tiger in 1966 and Fearless in 1968. Smith subsequently attacked Wilson in his memoirs, accusing him of delaying tactics during negotiations and alleging duplicity; Wilson responded in kind, questioning Smith's good faith and suggesting that Smith had moved the goal-posts whenever a settlement appeared in sight.^[47] The matter was still unresolved at the time of Wilson's resignation in 1976. Wilson had a good relationship with Siaka Stevens of Sierra Leone; the two leaders attempted to work together to find a solution to the question of Biafra in Nigeria.^[52][53] But despite this, the British government was actively sending arms, munitions and other equipment to the Nigerian military junta, and consistently denied any wrongdoing by the government of Nigeria: Nigerian writer Chinua Achebe wrote that this may have cost him his position.^[54][55]

Electoral defeat and resignation

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.^[56]

By 1970, the economy was showing signs of improvement, and by May that year, Labour had overtaken the Conservatives in the opinion polls.^[57] 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. Most opinion polls had predicted a Labour win, with a poll six days before the election showing a 12.4% Labour lead. Writing in the aftermath of the election, The Times journalist George Clark wrote that the 1970 contest would be "remembered as the occasion when the people of the United Kingdom hurled the findings of the opinion polls back into the faces of the pollsters and at the voting booths proved them wrong—most of them badly wrong".^[58] Heath and the Conservatives had attacked Wilson over the economy. Towards the end of the campaign, bad trade figures for May added weight to Heath's campaign and he claimed that a Labour victory would result in a further devaluation. Wilson considered Heath's claims "irresponsible" and "damaging to the nation".^[59] Ultimately, however, the election saw Labour's vote share fall to its lowest since 1935.^[60] Several prominent Labour figures lost their seats, notably George Brown who was still Deputy Leader of the Labour Party.^[61]

Second premiership (1974–1976)

Further information: Labour government, 1974–1979

 

Harold Wilson with US President Richard Nixon and Henry Kissinger in 1974

 

Harold Wilson with US President Gerald Ford in 1975, during his second term as prime minister

Labour won more seats (though fewer votes) than the Conservative Party in the general election in February 1974, which resulted in a hung parliament. As Heath was unable to persuade the Liberals to form a coalition, Wilson returned to 10 Downing Street on 4 March 1974 as prime minister of a minority Labour Government. He gained a three-seat majority in another election later that year, on 10 October 1974.

1975 European referendum

One of the key issues addressed during his second period in office was the referendum on British membership of the European Community (EC) which took place in June 1975: Labour had pledged in its February 1974 manifesto to renegotiate the terms of British accession to the EC, and then to consult the public in a referendum on whether Britain should stay in on the new terms. Although the government recommended a vote in favour of continued membership, the cabinet was split on the issue, and Ministers were allowed to campaign on different sides of the question. The referendum resulted in a near two-to-one majority in favour of Britain remaining in the EC.^[62]

Domestic social and economic affairs

The Second Wilson Government made a major commitment to the expansion of the British welfare state, with increased spending on education, health, and housing rents.^[30] To pay for it, it imposed controls and raised taxes on the rich. It partially reversed the 1971 reduction in the top rate of tax from 90% to 75%, increasing it to 83% in the first budget from new chancellor Denis Healey, which came into law in April 1974. Also implemented was an investment income surcharge which raised the top rate on investment income to 98%, the highest level since the Second World War.

Circular 4/74 (1974) renewed pressure for moves towards comprehensive education (progress of which had stalled under the Heath ministry), while the industrial relations legislation passed under Edward Heath was repealed. The Health and Safety at Work etc. Act 1974 set up a Health and Safety Commission and a Health and Safety Executive; it gave a legal framework for health and safety at work.^[18] while the Child Benefits Act 1975 introduced an extra payment for single parents.^[63] In June 1975, the government issued the first series of National Savings Retirement Certificates.^[64]

The Social Security Act 1975 introduced a maternity allowance fund, while the Sex Discrimination Act 1975 set up an Equal Opportunities Commission and outlawed gender discrimination (both indirect and direct),^[63] with women given the right in principle to equal access to jobs and equal treatment at work with men.^[65]

Despite its achievements in social policy, Wilson's government came under scrutiny in 1975 for the rise in the unemployment rate, with the total number of Britons out of work passing one million by that April.^[66]

Economic affairs

Wilson's second government came into office at a troubled time for the British economy, due to a global recession and stagflation, in large part this was due to the 1973 oil crisis, and also the preceding government's inflationary attempt to boost growth.^[67] In order to deal with inflation (which peaked at 26% in 1975) the government negotiated a 'social contract' with the Trades Union Congress to implement a voluntary incomes policy, in which pay rises were held down to limits set by the government. This policy operated with reasonable success for the next few years, and inflation fell to single figures by 1978.^[62] By 1976 the recession had ended and economic recovery began,^[67] by 1978/79 living standards recovered to the level they had been in 1973/74.^[68] The Labour governments of the 1970s did, however, manage to protect the living standards of many people from the worst effects of the recession and high inflation, with pensions increasing by 20% in real terms between 1974 and 1979, while measures such as rent and price controls and food and transport subsidies mitigated the adverse impact on the living standards of many more people.^[69]

The government's industrial policy was greatly influenced by the economist Stuart Holland and the Secretary of State for Industry Tony Benn. The centrepiece of the policy was the National Enterprise Board (NEB) which was established in 1975 and was intended to channel public investment into industry, in return for taking a holding of equity in private companies. The NEB was intended to extend public ownership of the economy as well as investing in the regeneration of industry, although it had some successes in that aim, in practice one of its main activities became that of propping up failing companies such as British Leyland. The government also continued its policy of encouraging regional development by increasing Regional Employment Premiums, which had first been established in 1967.^[62][70]

Northern Ireland

Wilson's earlier government had witnessed the outbreak of The Troubles in Northern Ireland. In response to a request from the Government of Northern Ireland, Wilson agreed to deploy the British Army in August 1969 to restore the peace.

While out of office in late 1971, Wilson had formulated a 16-point, 15-year programme that was designed to pave the way for the unification of Ireland. The proposal was not adopted by the then Heath government.^[71]

In May 1974, when back in office as leader of a minority government, Wilson condemned the Unionist-controlled Ulster Workers Council strike as a "sectarian strike". He refused to pressure a reluctant British Army to face down the Ulster loyalist paramilitaries who were intimidating utility workers. In a televised speech later, he referred to the loyalist strikers and their supporters as "spongers" who expected Britain to pay for their lifestyles. The strike was eventually successful in breaking the power-sharing Northern Ireland executive.

On 11 September 2008, BBC Radio 4's Document programme claimed to have unearthed a secret plan—codenamed Doomsday—which proposed to cut all of the United Kingdom's constitutional ties with Northern Ireland and transform the province into an independent dominion. Document went on to claim that the Doomsday plan was devised mainly by Wilson and was kept a closely guarded secret. The plan then allegedly lost momentum, due in part, it was claimed, to warnings made by the Foreign Secretary, James Callaghan, and the Irish Minister for Foreign Affairs Garret FitzGerald who admitted the 12,000-strong Irish Army would be unable to deal with a civil war.^[72] Later, Callaghan spoke and wrote despondently about the prospect for a British-derived solution to the Northern Ireland issue, supporting a similar plan to push Northern Ireland towards independent status.^[73]

In 1975, Wilson secretly offered Libya's dictator Muammar Gaddafi £14 million to stop arming the Provisional Irish Republican Army, but Gaddafi demanded a far greater sum of money.^[74] This offer did not become publicly known until 2009.^[75]

Resignation

When Wilson entered office for the second time, he had privately admitted that he had lost his enthusiasm for the role, telling a close adviser in 1974 that "I have been around this racetrack so often that I cannot generate any more enthusiasm for jumping any more hurdles."^[62] On 16 March 1976, Wilson resigned as prime minister, taking effect on 5 April. He claimed that he had always planned on resigning at the age of 60 and that he was physically and mentally exhausted. As early as the late 1960s he had been telling intimates, like his doctor Sir Joseph Stone (later Lord Stone of Hendon), that he did not intend to serve more than eight or nine years as prime minister.

Roy Jenkins has suggested that Wilson may have been motivated partly by the distaste for politics felt by his loyal and long-suffering wife, Mary.^[76] His doctor had detected problems which would later be diagnosed as colon cancer, and Wilson had begun drinking brandy during the day to cope with stress.^[77] By 1976 he might already have been aware of the first stages of early-onset Alzheimer's disease, which was to cause his formerly excellent memory and his powers of concentration to fail dramatically.^[78]

Wilson's Resignation Honours included many businessmen and celebrities, along with his political supporters. His choice of appointments caused lasting damage to his reputation, worsened by the suggestion that the first draft of the list had been written by his political secretary Marcia Williams on lavender notepaper (it became known as the "Lavender List"). Roy Jenkins noted that Wilson's retirement "was disfigured by his, at best, eccentric resignation honours list, which gave peerages or knighthoods to some adventurous business gentlemen, several of whom were close neither to him nor to the Labour Party."^[76] Some of those whom Wilson honoured included Lord Kagan, the inventor of Gannex (Wilson's preferred raincoat), who was eventually imprisoned for fraud, and Sir Eric Miller, who later committed suicide while under police investigation for corruption.

The Labour Party held an election to replace Wilson as leader of the Party, and thus prime minister. Six candidates stood in the first ballot; in order of votes they were: Michael Foot, James Callaghan, Roy Jenkins, Tony Benn, Denis Healey and Anthony Crosland. In the third ballot, on 5 April, Callaghan defeated Foot in a parliamentary vote of 176 to 137, and served as prime minister until May 1979.

As Wilson wished to remain an MP after leaving office, he was not immediately given the peerage customarily offered to retired prime ministers, but instead was created a Knight Companion of the Garter. He fought one last election in 1979 in which he was returned as a backbench MP for Huyton. Following his departure from the House of Commons before the 1983 general election, after 38 years of service, he was granted a life peerage as Baron Wilson of Rievaulx, of Kirklees in the County of West Yorkshire, after Rievaulx Abbey, in the north of his native Yorkshire; the Kirklees refers to his home address of Huddersfield, and is not part of his title.^[79][80][81]

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