Editing Harold Wilson (section)

===Domestic economic affairs===
The Second Wilson Government made a major commitment to the expansion of the [[British welfare state]], with increased spending on education, health, and housing rents.<ref name="labour1"/> To pay for it, it imposed controls and raised taxes on the rich. It partially reversed the 1971 reduction in the top rate of tax from 90% to 75%, increasing it to 83% in the first budget from new chancellor [[Denis Healey]], which came into law in April 1974. Also implemented was an investment income surcharge which raised the top rate on investment income to 98%, the highest level since the Second World War.

Despite its achievements in social policy, Wilson's government came under scrutiny in 1975 for the rise in the unemployment rate, with the total number of Britons out of work passing one million by that April.<ref>{{cite web |url=https://www.expressandstar.com/days/1950-75/1975.html |title=Those were the days |publisher=Expressandstar.com |access-date=27 December 2011 |archive-date=13 January 2012 |archive-url=https://web.archive.org/web/20120113140027/http://www.expressandstar.com/days/1950-75/1975.html |url-status=live }}</ref>

Wilson's second government came into office at a troubled time for the British economy, due to [[1973–1975 recession|a global recession]] and [[stagflation]], in large part this was due to the [[1973 oil crisis]], and also the preceding government's [[1972 United Kingdom budget|inflationary attempt to boost growth]].<ref name="Britrec">{{cite web |title=British recessions: a short history |url=https://www.theguardian.com/business/2012/dec/07/britain-recessions-history |work=The Guardian |date=7 December 2012 |access-date=17 December 2019 |archive-date=17 December 2019 |archive-url=https://web.archive.org/web/20191217062731/https://www.theguardian.com/business/2012/dec/07/britain-recessions-history |url-status=live }}</ref> In order to deal with inflation (which peaked at 26% in 1975) the government negotiated a '[[Social Contract (Britain)|social contract]]' with the [[Trades Union Congress]] to implement a voluntary [[incomes policy]], in which pay rises were held down to limits set by the government. This policy operated with reasonable success for the next few years, and inflation fell to single figures by 1978.<ref name="Davies"/> By 1976 the recession had ended and economic recovery began,<ref name="Britrec"/> by 1978/79 living standards recovered to the level they had been in 1973/74.<ref>Labour and Inequality: A Fabian Study of Labour in Power, 1974–79 edited by Nick Bosanquet and Peter Townsend</ref> The Labour governments of the 1970s did, however, manage to protect the living standards of many people from the worst effects of the recession and high inflation, with pensions increasing by 20% in real terms between 1974 and 1979, while measures such as rent and [[Price Commission|price controls]] and food and transport subsidies mitigated the adverse impact on the living standards of many more people.<ref>The Labour Party: An introduction to its history, structure and politics edited by Chris Cook and Ian Taylor</ref>

The government's [[industrial policy]] was greatly influenced by the economist [[Stuart Holland]] and the [[Secretary of State for Industry]] [[Tony Benn]]. The centrepiece of the policy was the [[National Enterprise Board]] (NEB) which was established in 1975 and was intended to channel public investment into industry, in return for taking a holding of equity in private companies. The NEB was intended to extend [[public ownership]] of the economy as well as investing in the regeneration of industry, although it had some successes in that aim, in practice one of its main activities became that of propping up failing companies such as [[British Leyland]]. The government also continued its policy of encouraging regional development by increasing Regional Employment Premiums, which had first been established in 1967.<ref name="Davies"/><ref>{{cite web |title=National Enterprise Board (NEB) |url=https://www.nationalarchives.gov.uk/cabinetpapers/themes/national-enterprise-board-neb.htm |publisher=National Archives |access-date=17 December 2019 |archive-date=17 December 2019 |archive-url=https://web.archive.org/web/20191217051202/https://www.nationalarchives.gov.uk/cabinetpapers/themes/national-enterprise-board-neb.htm |url-status=live }}</ref>