1997 Historical Context

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1991-2 Recession

Supply-side miracle=economic conception that states, within the lowering of corporate taxes, the government can stimulate the economy and raise production to lower prices and stabilise inflation, due to the UKs increased growth in the economy.

ERM=Exchange Rate Mechanism

Conservatives cut income taxes and house prices increased to create consumer wealth and increased consumer spending

Increase in consumer confidence

Believed to be a Supply side miracle due to Thatcher's government

The economic growth was mostly due to consumer borrowing and spending

High rates of borrowing and spending caused current account deficit and an increasing inflation rate

Government joined Exchange Rate Mechanism in 1990 to try and stabilise inflation, which was in double digits

Joining of ERM caused economy to slow down and value of £ was dropping below the Deutsche Mark (DM)

Government had to use foreign currency reserves to buy more sterling pounds and had to increase interest rates: 10% in 1992 before increasing to 12% and then 15%, temporarily, to protect value of sterling

Speculators were stronger and UK to leave ERM and devalue

Increasing interest rates caused: increased price on borrowing, mortgage costs, fall in house prices so many couldn't afford mortgages, reduced household wealth, falling demand on AD (aggregate demand) and confidence fell

Led to Monetary Policy Committee to have control over independent interest rates

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GENERAL DATES

22nd Feb: Dolly the Sheep successfully cloned in Roslin, Scotland-the first mammal to be cloned from an adult somatic cell

1st May: Labour end 18 year Tory rule by winning 1997 election in landslide

11th June: House of Commons votes for total ban on handguns

1st July: UK hands sovereignty of Hong Kong to China

31st August: Princess Diana is in car crash in the Pont de L'Alma tunnel in Paris and is announced dead at 4 a.m.

5th September: Mother Teresa dies of heart failure in Kolkata, India

11th September: Scotland votes to create own parliament after 290 years of union with England

18th September: Wales votes in favour of devolution and formation of National Assembly

11th November: Mary McAleese is elected 8th President of Ireland

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North: Labour increased by 10.4%, Tory decreased 9.4% and Lib Dems by 1.8%

Midlands: Labour increased by 9.3%, Tories decreased by 10.9% and Lib Dems by 1.5%

South: Labour increased by 29.8%, Tories decreased by 12.7% and Lib Dems by 0.9%

England: Labour 16.5%+, Tories 11.0- and Lib Dems 1.4%-

Scotland: Labour gained 45.6%, Tories 17.5% and Lib Dems 13.0% of the votes + Labour increased by 6.6%

Wales: Labour gained

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Age and voting

18-24 year olds: 27% voted Tory, 49% Labour + 16% Liberal Democrat

25-34: 28% voted Tory, 49% Labour + 16% Lib Dems

35-44: 28% voted Tory, 48% Labour + 17% Lib Dems

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Campaign techniques

Labour:

Re-create Party by introducing 'New Labour' (originating in 'New Labour, New life for Britain'