This chapter looks at the origins of the inflation which struck the developed world in the early 1970s, and the huge balance of payments imbalances which followed the explosion of oil prices in 1973. It describes what the internationally prescribed responses were and recounts how the policy followed by the Heath Government came to be defeated by the reactions of organised labour. It goes on to describe what the policies of the incoming Labour Government were in March 1974 and how they contributed to a compounding of the economic problems. It scrutinizes what the Treasury advice to ministers was to restore balance to the economy — controlling public expenditure, financing the balance of payments, and achieving equilibrium in the trade balance. It argues that although some progress was made in all these areas the problem of inflation was not addressed and the Government continued to pin its faith on the Social Contract it had concluded with the TUC.
Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.
If you think you should have access to this title, please contact your librarian.