The Research On The Economic Policy Of Callaghan Labor Government In Britain (1976-1979)

In1974, Harold Wilson party came into power. But at the time the UK had been caught in economic crisis, although the government had adopted a series of measures, but no avail.In March1976, Wilson resigned as prime minister, succeeded by James Callaghan, and inherited the serious economic situation.To solve the economic problems, the Callaghan government formulated a series of economic policy. Based on historical data, The thesis mainly did a research on Callaghan Government’s economic policy, including the economic policies of economic situation, economic policies (macro and micro) formulation and implementation, and the theoretical basis and evaluation.The thesis contains six parts. The introduction is about the significance of this topic:I hope to find some usefulness through the research of the economic policies of Callaghan Government. the literature review at home and abroad:mainly discuss the tools and objectives of economic policies through economic angle. the innovative points of my paper:comprehensively research the establishment of economic policies, the change of the direction of policies, and the achievement and insufficient of economic policies.The first chapter mainly introduces Britain’s economic situation in1970’s, including inflation rate reaches to the peak two times, unemployment breaks through one million, balance of payments deficit and excessive public spending and so on.The second chapter discusses Callaghan Labor government’s macroeconomic policy in detail. First is the fiscal policy, Callaghan comes into power, continuing the previous public spending cuts in order to obtain the IMF aid to deal with the pound crisis.At the end of1977, tighten fiscal policy caused the British manufacturing slump. Fiscal policy expands in1978.Second is monetary policy, currency crisis in early1976the government adjusts the broad money supply and minimum lending rates.The third chapter discusses Callahan Labor government’s microeconomic policies in detail. First is incomes policy, serious inflation in1975makes the government implementing voluntary growth restriction. Voluntary growth restriction breaks down by1978. Second is industrial policy, it mainly contains the government establishes National Enterprise Board, stimulating the manufacturing industry, but the practice is not successful. Third is welfare state system, Government increases education input, intervenes housing market,and establishes pension system associated with earnings.The fourth chapter firstly discusses the theoretical basis of the general direction adjustment of Callaghan government’s economic policy. Firstly, Keynesianism could not deal with the crisis of Britain in1970’s, the Callaghan Government begins to attempt to use Monetarism conducting the economic policies; Secondly, in the Labor Party’s argument of ideology, the Left’s public ownership influences Callaghan Government’s economic policies.The fifth chapter evaluates the implementation of the macro and micro economic policies.Although Callaghan Government’s economic policies have some achievements in short time,through postwar economic development environment of Britain, Callaghan Government’s effort does not make Britain’s troubled economy turning around, and summarizes the election defeat of Callaghan in1979influences the labor part and the next government. Firstly, the Left of labor party advocate their public ownership once again; Secondly, Thatcher Government decides to carry out privatization in order to help Britain break away from economic crisis, and make great success.