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 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, civil liberties, housing, health, education, and worker's rights.
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. 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. Following a costly battle, market pressures forced the government to devalue the pound by 14% from $2.80 to $2.40 in November 1967. 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.
Social reforms Wilson's government is perhaps best remembered for its progressive 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' tenure as Home Secretary (1965–1967), with whom the liberal reform agenda is particularly associated. Wilson personally, coming culturally from a provincial non-conformist background, showed no particular enthusiasm for much of this agenda.
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. 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's government created the
Open University, to give adults who had missed out on tertiary education a second chance through
part-time study and
distance learning. 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%. 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.
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, 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, 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). This scheme had the effect of reducing housing costs for buyers on low incomes and enabling more people to become owner-occupiers. In addition, house owners were exempted from capital gains tax. Together with the Option Mortgage Scheme, this measure stimulated the private housing market. 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." 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.
Social Services and welfare 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. 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).
Northern Ireland Wilson's first premiership was marked by the emerging conflict in
Northern Ireland: like all British governments since the
partition of Ireland in 1921, Harold Wilson's Labour government preferred not to intervene in the affairs of Northern Ireland. However in August 1969,
escalating sectarian violence between the Northern Ireland's
unionist (largely
Protestant) and
nationalist (largely
Catholic) communities, and involving members of the
police force of Northern Ireland, gave the
Government of Northern Ireland, led by
Prime Minister of Northern Ireland Terence O'Neill, little choice but to ask the British government to intervene directly and send troops. It was Wilson's Home Secretary,
James Callaghan, who took the decision to
deploy British Army troops to Northern Ireland. In return Wilson and Callaghan demanded that various reforms be implemented in Northern Ireland, such as the phasing out of the Protestant paramilitary, the
B-Specials. Their replacement by the
Ulster Defence Regiment was controversial and by 1971 they had lost support from the nationalist population for their covert arrest and internment without trial of Catholic men and their
shoot to kill policies and involvement in collusion, murder and loyalist crime. Wilson passed reforms to reduce discrimination against Catholics in secular life, including expanding the voting franchise to all citizens in Northern Ireland rather than those (largely unionist) who owned property, and reformed local government boundaries to reduce
gerrymandering.
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.
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. 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. 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. while in the government's last budget (introduced in 1970), two million small taxpayers were exempted from paying any income tax altogether.
Industrial relations Wilson made periodic attempts to mitigate inflation, largely through
wage-
price controls—better known in Britain as "prices and
incomes policy". 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. 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. The only point of total agreement was that both Johnson and Wilson emphatically supported Israel in the 1967
Six-Day War.
Europe in 1965 Among the more challenging political dilemmas Wilson faced was the issue of
British membership of the European Economic 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 Economic Community. After initial hesitation, Wilson's Government in May 1967 lodged the UK's second application to join the European Economic Community. It was vetoed by de Gaulle in November 1967. After De Gaulle lost power, Conservative prime minister
Edward Heath negotiated
Britain's admission to the EEC 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 EEC 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 EEC. As a small agricultural producer heavily dependent on imports, Britain suffered doubly from the dominance of: :(i) agricultural spending in the EEC
budget, :(ii) agricultural
import taxes as a source of EEC
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. 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.
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. 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. 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. Wilson was known for his strongly pro-Israel views. 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.
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, in 1966 and 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. 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. 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.
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. 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. 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". 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". Ultimately, however, the election saw Labour's vote share fall to its lowest since
1935. Several prominent Labour figures lost their seats, notably
George Brown who was still Deputy Leader of the Labour Party. ==Return to opposition (1970–1974)==