CNB George Cobuc.

Grade 12 The Making of Modern Britain, 1970-2018

The Heath Government, 1970-74

It is generally accepted that in the decades immediately after the end of the Second World War
Britains two major political parties the centre-right Conservative Party and the centre-left Labour
Party embraced a broad consensus about the countrys future: a mixed economy of private and
public ownership; government economic management (Keynesianism) to ensure full employment;
a comprehensive social welfare state, including universal health care through the National Health
Service (NHS); withdrawal from Empire (decolonisation); a commitment to the Atlantic Alliance
(Nato the North Atlantic Treaty Organization), including a special relationship with the United
States; and a general aloofness from the idea of European integration the European Coal and Steel
Community (ECSC) was established in 1951, followed by the European Economic Community (EEC) in
1957. This postwar consensus broke down during the 1970s, above all with regard to domestic social
and economic policy; and Britain would subsequently be remade by the Thatcher governments
during the 1980s.

By 1970 the Labour Party had been in government for six years, having won the 1964 and 1966
general elections. The Prime Minister, Harold Wilson (1916-95) was confident that he could win a
third general election and therefore decided to go to the polls in June 1970. Wilsons optimism did
not appear to be misplaced. His government had many positive achievements to its name: the
expansion of higher education; liberalising social reforms (the abolition of capital punishment, the
decriminalisation of homosexuality, the legalisation of abortion); and economic and financial
stability. Moreover, Wilson himself was a good campaigner. His principal opponent, Edward Heath
(1916-2005), the leader of the Conservative Party, was considered dull and boring. But it was Heath
who, somewhat surprisingly won with 330 seats out of 630, the Conservatives had a majority of 30
in the House of Commons.

The following four years, though, would be tumultuous for British politics. Although Heath oversaw a
number of reforms, such as the increase in school leaving age to 16, the decimalisation of the
currency, the reorganisation of local government and the introduction of value-added tax (VAT), his
period in office was characterised by crises and controversy: the decision to take the UK into the
EEC; the Troubles in Northern Ireland; the state of the economy; and widespread industrial unrest.
We will consider Europe and Northern Ireland later in the course; this worksheet will focus on the
British economy and industrial relations.

The Economy
The Conservatives came to power with a commitment to stimulate the economy by lowering taxes,
cutting public expenditure and ending state subsidies for failing industries. However, things did not
go to plan. The government cut direct taxes and liberalised bank lending, but failed to get to grips
with public spending. Instead, Britain was faced by stagflation: lower than expected economic
growth, rising unemployment and increasing inflation. By early 1972 the seasonally-adjusted
unemployment rate was 4.5 per cent and inflation was running at about 8 per cent. The Chancellor,
Anthony Barber (1920-2005), therefore decided upon a dash for growth: he reduced income tax
and gave tax concessions to industry to save jobs. The so-called Barber boom had a short-term
beneficial impact on the economy; for example, by the end of 1973 the unemployment rate had
dropped to 3.4 per cent. However, inflation, which had fallen to 5.8 per cent by the early summer of
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CNB George Cobuc. Grade 12 The Making of Modern Britain, 1970-2018

1972, subsequently increased and was running at over 10 per cent by the autumn of 1973. By now
Barbers policy had shifted to controlling inflation, including limiting wage increases, something that
exacerbated the governments already fraught relationship with the trade union movement. The
outbreak of the Yom Kippur War involving Egypt, Syria and Israel in October 1973 undermined
the governments anti-inflationary strategy as the price of oil quadrupled. This set the scene for a
dramatic confrontation between the trade unions and the government and ultimately to Heaths
loss of power in 1974.

Industrial Relations
Poor industrial relations had plagued the UK for years before the 1970s. Indeed, Wilsons Labour
government had brought forth proposals to reform the industrial relations system which included
taming the power of the unions in 1969. But opposition from within the labour movement
including some members of Wilsons own cabinet led to the proposals being dropped. The number
of working days lost due to industrial action had increased in the late 1960s from 2,787,000 days in
1967 to 4,690,000 days in 1968 to 6,846,000 days in 1969. And Heath was confronted by industrial
militancy from the beginning for example, dockers and postal workers struck in 1970, contributing
to the loss of 10,980,000 working days in that year. The following year, the number of working days
lost increased yet again to 13,551,000. Heath sought to get a grip on the situation through
legislation the Industrial Relations Act, 1971 sought to reduce the number of strikes, while the
Industry Act, 1972, sought to control wages and prices. Both failed the number of working days
lost increased to a staggering 23,909,000 in 1972 as coalminers, ambulance drivers, firefighters, civil
servants, power workers, hospital staff and train drivers all struck.

The most significant of these disputes involved the coalminers. The strike started in the winter, in
January 1972. By February the government was forced to declare a state of emergency schools
were closed, over a million workers were laid off, electricity was rationed and a three-day week was
imposed. In the end, a government-appointed committee supported the miners demands, resulting
in a significant wage increase.

In the wake of the 1973 oil price shock a result of the Yom Kippur War the miners again
demanded a large pay increase. The government, though, was determined not to concede given its
determination to tackle inflation. The miners initially sought to bring pressure to bear by on the
government through an overtime ban, thus reducing the production of coal. At the same time, the
government also had to deal with disputes involving electricity workers, engineers, dockers and
firefighters. Heath responded by declaring a state of emergency, introducing petrol rationing and
reimposing a three-day week in order to conserve energy. This proved prescient, as the breakdown
of negotiations with the miners led to their union the National Union of Miners (NUM)
announcing their intention to call a national strike. Two days before the miners went on strike,
Heath called a snap general election for 28 February 1974. Essentially, Heath asked the electorate to
decide who governs? by which he meant the government or the trade unions.

The election was fought against the backdrop of the miners strike and a state of emergency. But the
result was not what Heath had intended or expected the electorate delivered a hung parliament,
that is, a parliament in which no single party had a majority. And while the Conservatives won the
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CNB George Cobuc. Grade 12 The Making of Modern Britain, 1970-2018

most votes (37.9 per cent to 37.2 per cent), Wilsons Labour Party won the most seats (301 to 297
though 17 seats short of a majority). One of the surprising outcomes of the election was that both
the Conservative and Labour parties lost votes as support for the Liberal Party surged from 7.5 per
cent in 1970 to 19.3 per cent, though the first-past-the-post electoral system ensured that the
Liberals only won eight seats. At the same time, parties in Scotland and Wales made gains, with the
Scottish National Party (SNP) winning seven seats and Plaid Cymru the Welsh nationalists
winning two. In Northern Ireland, all 12 Members of Parliament (MPs) represented local political
parties. The largest of these, the Ulster Unionist Party (UUP), had ended its parliamentary alliance
with the Conservative Party an alliance which stretched back to 1905 in 1972 in protest at
Heaths support for power-sharing in Northern Ireland.

Following the election, Heath sought to cling to office by opening negotiations with the Liberal Party
to form a coalition, while also hoping for parliamentary support from the UUP. However, on 4 March
1974 the Liberals rejected Heaths coalition terms Heath therefore resigned and was replaced as
Prime Minister by Harold Wilson at the head of a minority Labour government.

Questions
1. The economic policies of the Heath government were nothing less than a disaster. Do you agree
or disagree with this view?
2. It was the miners who defeated Heath in 1974. Explain why you agree or disagree with this
statement.
3. Imagine your were a voter in February 1974. Which party would you have voted for and why?