Profile Paragraph: I am a full-time research student at the University of Liverpool. Having graduated with a degree in politics, I decided to undertake a PhD looking at the ideological shift in Sinn Fein and the notion of 'post-Republicanism'. I have completed a substantial body of the research for this project and shall be presenting some of my findings later this year at a Research Student Conference. I am also a tutor at the University of Liverpool; currently I teach two classes of third-year politics students undertaking a module entitled 'Comparative Peace Processes'.

To what extent should the Labour Government of 1974-79 be viewed as a failure?

In order to accurately measure the success of the Labour governments of Wilson and Callaghan between 1974 and 1979, one must take into account their accomplishments and mistakes. Furthermore, it is imperative that constraints on them at home and abroad be acknowledged. Once Labour's actions in the 1970s have been examined in the context of the particular circumstances of the time, it will then be possible to conclude the extent to which the government should be viewed as a failure.

Labour returned to power in March 1974. The Conservatives, led by Edward Heath, had been in office since 1970. Heath's government had faced many difficulties, including large-scale strikes, and at the time of the election being called, Britain was on a three day working week in order to save electricity. Heath dubbed the 1974 general election, "Who governs Britain?". He claimed it was time for the electorate to decide who runs the country, the democratically elected government or the trade unions? Unfortunately for Heath, Labour won the most seats with 301. This was not enough to give them an overall majority and so for the first time since 1929 there was a hung parliament.

Due to the inconclusive result, the smaller parties held the balance of power (Thorpe, 2001:171). Following the outcome, Heath tried to convince the Liberal leader, Jeremy Thorpe, to take the Liberals into coalition with the Conservatives. Thorpe rejected the idea and so it was up to Labour to form a government. Wilson knew that another general election would have to be called in the near future. Ruling for the long-term as a minority government was not an option.

The new government immediately repealed the Industrial Relations Act and ended the dispute with the miners. The State of Emergency was ended and the three day week abandoned (Holmes, 1985:4). They also initiated the 'Social Contract'. This was an agreement between the government and union leaders whereby the government would implement as many radical socialist policies as possible with unions trying to keep down wage settlements (Thorpe, 2001:167). This was a measure to avoid further increases in inflation since when returned to office it was very high.

In the summer of 1974 opinion polls indicated that Labour was ahead and a general election was called for 10th October. Labour gained an overall majority of just three. Wilson had hoped to gain a larger majority, but felt able to govern due to having 42 more seats than the Conservatives. The likelihood of the smaller parties uniting with the Conservatives to defeat the government was judged to be small. The result provides an example of constraints upon the 1970s Labour Government at this time. Those on the left of the Labour Party tend to judge its time in office by its ability to implement socialist policies. However, with such a small majority the government was always going to struggle to act as radically as some would like. They were skilful in maintaining the ability to govern.

By March 1977, with the government having suffered by-election defeats in addition to some defections, they were in need of support from other parties. This led to the Lib-Lab pact where Liberals were consulted over issues such as the economy and devolution (Thorpe, 2001:181). By August the pact ended with Steel pulling out due to Liberal criticisms. However, the pact had kept Labour in power despite a lack of an overall majority and illustrated the way Labour handled this well in the 1970s. Labour were also able to count on the abstention of 10 Ulster Unionists after offering to review the number of Northern Irish representatives at Westminster.

However, the result in October 1974 also brought about one of Labour's failures of the 1970s. It confirmed fears that nationalism, particularly in Scotland, was gaining in strength. The Scottish National Party took 30.4 per cent of the vote in Scotland. The success of the nationalists convinced some in the Labour party that devolution might be necessary for electoral reasons. By granting Scotland and Wales limited autonomy, with the former to have more powers than the latter, some in the Party felt that nationalists would be satisfied, the UK strengthened and Labour would be able to gain seats from the SNP and Plaid Cymru.

Things, however, were not so simple. Little progress was made under Wilson in terms of devolution. Following his unexpected resignation in 1976, Callaghan took over as Prime Minister and was forced to act on the issue. Labour's slim majority had vanished as a result of four Labour MPs defecting. Two of these, Jim Sillar and John Robertson, had left to form the Scottish Labour Party in protest at the way Wilson was dragging his feet over devolution (McSmith, 1993:58).Callaghan appointed John Smith as the Devolution Minister and it was decided that referenda would be held in Scotland and Wales on devolved assemblies.

The decision to go ahead with referenda on devolution caused something of a split in the Labour Party. The likes of Robin Cook and Tam Dalyell were fiercely opposed to devolution in Scotland, with Neil Kinnock being the main dissenting voice in the case of a Welsh Assembly. Cook argued that were a Scottish Assembly to be implemented, the Conservatives could use it as an excuse to cut the number of Scottish MPs at Westminster when they were next in government. Dalyell's main objection was over what he called the 'West Lothian Question'. Devolution to Scotland could mean that he, as a Scottish MP at Westminster, would be unable to vote on education matters in Scotland, since that power would be a devolved issue. However, he could vote on education matters in England, which would not affect his constituency. He felt this was absurd. Kinnock argued that not only was nationalism in Wales was not strong enough to justify a devolved assembly, but in practice it would be of no benefit to the Welsh working class anyway. Furthermore, it would have so few powers it would be a waste of taxpayers money (McSmith, 1993:64).

In 1978 the government introduced legislation facilitating referenda on devolution. However, the legislation had been amended by Labour backbenchers against decentralisation. The Cunningham Amendment, as it became known, stipulated that 40 per cent of the entire electorate must support devolution for it to come into effect. The referenda were held in 1979. In Wales a majority actually voted against devolution. In Scotland, 51.6 per cent of those who voted were in favour. However, this was only around 33 per cent of the entire electorate and so it never came to pass. Labour had wasted much time on something that came to nothing. Furthermore, its attempts to quell nationalism had failed. This represented a major shortcoming of Labour from 1974 to 1979.

The other famous referendum facilitated by the Labour government of the time was that on membership of the EEC. It was not the disaster that those on devolution had turned out to be. There was some division in the Labour Party on the issue of Europe. A number of Labour MPs, especially on the left of the party, were in favour of pulling out of the European Economic Community. This group included Tony Benn and Michael Foot.

The United Kingdom had finally gained entry into the EEC under Heath in 1973. In the run-up to the 1974 general election Labour had promised to renegotiate the terms of the Treaty of Rome and then hold a referendum on whether the UK was to stay in the EEC under the new terms. The Labour Government did indeed do this, although many argued that the renegotiated terms did not differ greatly from those initially agreed. The result of the referendum was almost two thirds voting in favour of remaining in the EEC. Whilst this disappointed some in the party, Wilson had at least put their case to the electorate and the result served to unite the Government. If not an outstanding success, this renegotiation and subsequent referendum result at least prevented a split Labour could not afford.

The Labour Government could also be argued to have failed in Northern Ireland. It is important to recognise that the situation they inherited was difficult and that the Conservatives later found Ulster a difficult place to manage. Nevertheless, Wilson's strategy in particular proved to be somewhat flawed.

The Sunningdale Agreement had been reached in Northern Ireland in 1973. This involved power-sharing between Unionist and Nationalist parties. Up until 1969 Northern Ireland had had its own parliament at Stormont, but it was unrepresentative with too large a Unionist majority. After the situation had become violent in 1969, Wilson sent in British troops and imposed direct rule on the province. At first this calmed the situation but under the Conservatives in the early 1970s violence resumed, with the rise of the paramilitary groups occurring.

Part of the Sunningdale Agreement was the creation of the Council of Ireland. This gave the Republic of Ireland some say on matters north of the border, something that infuriated many Unionists. Unionist dissatisfaction eventually manifested itself in the form of strikes called by the Ulster Workers Council. In an extraordinary television outburst, Wilson claimed the strikers were, "sponging on Westminster and British democracy". This alienated Unionists further. In reality, the Labour government had underestimated the power of the strike and had they taken measures earlier, the industrial action may have been avoided (Wolff, 2001:12).

There was no success vis-à-vis reinstating a devolved parliament to Northern Ireland under Wilson or Callaghan. Throughout the 1970s there was also politically motivated violence by such groups as the Republican IRA and Loyalist UVF. The Labour government was never able to keep the situation under complete control and hence can be judged to have failed in this area.

Despite its small parliamentary majority, the government did manage to pass some social reforms. Equal opportunities legislation was passed and State Earnings-Related Pension Schemes, or SERPS, were also set-up. The equal opportunities act was an attempt to remove discrimination from the workplace. The SERPS were especially important as they served to show that Labour was still able to implement socialist policies. All people making national insurance contributions were to get pensions of 25 per cent of their earnings in addition to the traditional state pension.

At this point, Labour's record in the 1970s seems mixed. They failed to implement devolution and wasted plenty of time trying, and the violence in Northern Ireland became more widespread. Having said this, they handled the small parliamentary majority well and the situation in Northern Ireland has proved difficult to manage for every government since the 1960s. Furthermore, European policy was sound. The referendum on membership of the EEC succeeded in keeping the party fairly united at a time when a split would have been suicidal. Some socialist reforms were also put into operation.

However, the two key events that the Labour Party of the 1970s are generally remembered for are the 'IMF Crisis' of 1976, and the 'Winter of Discontent' of 1978-9 (Morgan, 1997:557). Both were seen as disastrous for the United Kingdom and along with only a mixed record in other areas would suggest that Labour had indeed been a failure. But how catastrophic were they and how much blame can actually be attached to the government for each one?

One has to be fair to the Government. When they regained office in 1974 they inherited a dire economic situation. Oil prices had gone through the roof, inflation and unemployment were both very high, public expenditure was out of control, and the balance of payments in huge deficit. None of these things were the Labour government's fault (Holmes, 1985:3).

On the other hand, the IMF crisis may have been averted had Labour taken certain other measures. In 1974 the government raised income tax by three pence in the pound, as well as greater increases for the top earners. This gave them a greater tax yield and put them in a position where they might have been able to get the country out of the economic problems it had encountered (Holmes, 1985:9).

However, as well as receiving the extra revenue from these tax increases the government were implementing some expensive measures as promised in the Social Contract. These included raising food subsidies to £500 million and raising housing subsidies by £50 million. This meant that whilst the government were able to reduce the Public Sector Borrowing Requirement, it was still too high in a climate of high inflation and the balance of payments problems (Holmes, 1985:9).

In April 1975, with inflation still far too high and the Social Contract not keeping wage settlements as low as the Government had hoped, Healey decided to put the conquest of inflation before the maintenance of employment levels (Thorpe, 2001:177). In July 1975 it was agreed that there would be a limit of £6 per week on wage increases for those earning up to £8500. The TUC general council grudgingly accepted, even prominent Union leaders such as Jack Jones and Hugh Scanlon were themselves becoming worried about the inflation levels. The policy expired in August 1976 and was replaced by a maximum rise of £4 per week, approximately 5 per cent.

The measures were partially successful. Average wage settlements and inflation both fell, although not to the levels the government desired. Furthermore, there was still pressure on sterling. Loans even had to be secured from other central banks to prop it up. Chancellor Denis Healey, initially determined to avoid an appeal to the IMF, realised it might by Britain's only option.

After deliberation Callaghan agreed to the IMF loan. Some in the cabinet were critical but they were unable to produce a convincing alternative. As a condition of the loan Britain had to cut public expenditure by £1000 million in each of the next two years, seen almost as a cardinal sin for a Labour government. All the same, the IMF loan was enough to see Britain through the crisis, inflation fell to manageable levels, unemployment fell from its peak of 1,500,000 and by the time Labour left office the IMF loan had been paid back in full.

On the one hand the need for an IMF loan might have been avoided and its acceptance did lead to some cuts in public expenditure. On the other hand, Labour arrived in office to find economic difficulties and with the help of the loan got inflation down and prevented the complete collapse of sterling. The cabinet also stayed united, something of an achievement in purely parliamentary terms. Therefore, one could argue that whilst the IMF crisis did represent a failure of government, it was not entirely Labour's fault. Nor was it the total catastrophe that it is often described to be.

Just before the end of the Lib-Lab pact in 1979, Labour had introduced the 5 per cent pay limit. This was part of the ongoing drive to keep inflation down by stipulating that government contractors should not give pay rises of more than 5 per cent. At this time the Ford company was performing well. It offered its workers a rise within the government's guidelines. The workers were unhappy with this and 15,000, mainly of the Transport and General Workers Union, decided to strike.

Ford settled the dispute by granting them a 17 per cent rise. The settlement gave an incentive for other unions to go for big increases. Many more strikes occurred including lorry drivers. They eventually got a 30 per cent pay increase (Thorpe, 2001:184). Callaghan had been attending a conference at Guadeloupe at this time. When he returned a reporter asked him about the mounting chaos. Callaghan replied, "Perhaps you are taking a rather parochial view at the moment, I don't think that other people in the world would share the view that there is mounting chaos" (http://www.ft.com/cms/s/0/9c1375b6-f711-11dd-8a1f-0000779fd2ac.html).This was a serious error. Callaghan gave the impression that the strikes and wage increases were not important and that the chaos was a media fabrication.

Many people working in the public sector were by now incensed. As they saw it they were being denied significant wage increases to keep inflation down, and yet when someone in the private sector complains they get a sizeable increase. It led to public sector strikes with such consequences as the dead remaining unburied in parts of Manchester and Liverpool and all over the country rubbish remaining uncollected. These workers were ultimately granted pay increases well above the 5 per cent level decided upon in the summer.

Whilst one can attach some blame to the Ford company or to the Unions for the Winter of Discontent, Callaghan's Government is undoubtedly also at fault. Having recovered from the IMF crisis and actually been ahead in the polls, Callaghan should probably have called a general election in Autumn 1979. However he chose to wait until after the Winter. This almost certainly lost him the election. Furthermore, one could argue that the 5 per cent level was unrealistic. The government should have had more foresight. The view that Labour was able to handle the Unions was discredited.

To sum up the Labour Government's time in office, one would have to conclude that there were more failures than successes. The debacle of devolution, the mishandling of Northern Ireland, the economic problems and subsequent IMF crisis, and finally the Winter of Discontent and the election defeat all stick out as failures of the Government.

Equally though, it is imperative to note that the previous Government's incompetence and the international situation, especially the high oil prices, left Labour in a difficult position. Furthermore, the way the party was kept together with such divisive issues as Europe and the economy on the agenda was a major achievement. The Winter of Discontent must see blame lain at the doors of the Unions and contractors involved as well as the Government.

As an overall assessment, although the failures outweigh the successes, there were a large number of external factors contributing to them. For these reasons, it is clear that there were shortcomings of the Government but to view it as a complete failure would be too severe.