After a swing to the Conservatives in the 1970 General Election Heath came to power with a majority of 30. The country had faced economic problems in the previous decade and Heath thought that he knew a solution to the Boom and Bust cycle. His remedy was to reduce governmental controls while bringing the country into the European Economic Community (EEC) which would make it easier for British manufacturers to sell goods in Europe. For this task Heath had an experienced politician, Iain Macleod, as the Chancellor of the Exchequer. His sudden death shortly after the election was a major blow for Heath, and his replacement, Anthony Barber, couldn’t command the same authority as Macleod. It was an inauspicious start to Heath’s premiership.
Barber introduced deregulation such as reducing restrictions on hire purchase and other forms of credit, while also reducing taxes. The aim of joining the EEC succeeded in 1972 and is widely regarded as Heath’s greatest achievement in office. Despite his aims being achieved the results didn’t go to plan. Industry failed to receive investment while inflation shot up. Heath did an about face and introduced regulation in an attempt to end this, perhaps most controversially wage restrictions. This didn’t seem to help and had the effect of reducing real wages. By 1973 the balance of payments deficit was back and reached a level of £900 million. Worse still unemployment had grown further, with 850,000 out of work and those still in work facing their living standards being reduced by inflation.
The Family Income Supplement was introduced to help low income families, as were rate and fuel rebates. Many Conservatives were not pleased with Heath introducing reforms which would normally have been associated with Labour ideology. Local government was also reformed under Heath, with a lowering of the number of counties coming into effect in 1974. This wasn’t very popular as many people felt the boundary and name changes ignored the historical nature of the counties.
Heath’s government is remembered today for its confrontations with Unions which arguably it ultimately lost along with the election that brought Labour back to power in 1974. In 1971 Heath introduced the Industrial Relations Act which was a government attempt to reduce strikes. Among its changes were mandatory ‘cooling off’ periods before strikes, a National Industrial Relations Court, and made ballots a requirement. For many Conservatives it didn’t go far enough, but it was bitterly opposed by the Trade Union movement, angry that their right to fight for their members was being reduced while inflation was affecting their living standards, which fought back with strikes leading up to the 1974 Miners’ Strike which would lead to a three-day week to conserve fuel and ultimately bring down Heath.
Heath inherited a tense situation in Northern Ireland following clashes between Unionists and Republicans. Catholics had launched a civil rights movement a year earlier against discrimination in jobs and housing and had faced attacks from extremist unionists while demonstrating leading to Catholic Republicans and Protestant Unionists clashing. The IRA, which had split into an Official faction which was Marxist and a Provisional wing which became more militarist and adopted guerrilla military attacks as its method, had launched a campaign of attacks. Heath’s strategy for dealing with the problem was to suspend the Northern Irish parliament which, being dominated by protestants, was seen by Catholics as disrespecting their civil rights. This strategy somewhat backfired as it suited no one: direct rule from Westminster meant for Republicans that Britain still had a colonial relationship with Ireland and for Unionists it suggested that Britain was moving against their interests. The solution of a new parliament in 1974 which guaranteed Catholic interests failed to bring an end to the crisis when Unionists, unhappy that they had to share power with the Catholic minority, launched a strike wave. Heath’s government had to quickly suspend this new parliament and was lost to find a solution to the problems.
1973 Oil Crisis
Following the 1973 Arab-Israeli war in October 1973 the Arab nations decided to punish states they saw as too close to their enemy Israel by reducing their export to these countries. Britain’s oil supply fell by 15% due to this, and also faced price increases from these Arabic oil producing states meaning the cost of oil trebled. Motorists were unhappy at the price increases, and it also worsened the balance of payments issue as Britain was forced to pay far more for its oil imports. Petrol stations dried up and businesses that relied on transport costs staying low to make a profit faced severe problems. The government could at least blame this crisis on factors largely outside their control (although Japan had found a route out of the crisis by promising friendship with the Arab world), it would not be so lucky the following month and added together the Heath government was clearly in terminal decline.
The Three Day Week
Heath’s policy of wage restraint had not been popular when inflation was still high. The Miners’ decided to protest this measure by introduction an overtime ban. This ‘work to rule’ measure meant that not enough coal was produced to power the country. As electricity workers and railway depot workers joined this action the shortages became worse. Heath decided not to admit his wages policy had failed and instead introduced what was known as emergency measures in order to limit power consumption. By the beginning of 1974 a three day week had been introduced. Along with this a 50mph speed limit was introduced and television stopped broadcasting at 10:30pm. Clearly the economy would be greatly damaged by such measures and Heath was hoping the Miners would realise this and give in. Instead they voted for an all-out strike which began on 9th February 1974 arguing that if Heath only allowed wages to keep up with inflation then a normal working week would be restored. The country was in crisis and Heath’s government were no longer the only ones with a clearly ability to steer events. In an attempt to regain control Heath called a general election feeling if he won it would delegitimise the miners.
Heath was determined that his policy of wage restraint was correct and therefore sought a vote to give him a mandate on the issue and, he hoped, force the miners to return to work. The wage restraint policy however was having an serious affect on many peoples living standards, and two days before the election statistics were released showing food costs had risen 20% in 1973. Many people felt that wages should at least keep up with prices so living standards would not fall, a policy which is technically known as a ‘sliding scale of wages’ and this figure of price rises showed what many felt: that the wage freeze was making them worse off. The same day a figure was released showing the gap between imports and exports was higher than it had ever been before.
Even the Conservatives were split. Enoch Powell, a Conservative who is best known for his racist ‘Rivers of Blood’ speech, decided to call for a vote against Heath and for Labour. In the end the country was unimpressed by either party and the vote fell massively, but the vote for the Conservatives fell more than for Labour, losing a million and half a million votes respectively. It was enough to cause the Conservatives to lose their majority, leaving Labour as the largest party with 301 seats to the Conservatives 297. The Liberals increased their seats only slightly to 14, but massively increased their vote. 23 seats were shared by the various nationalist parties and others. Heath had gone to the country asking them ‘who rules’ and had lost.
Books about Edward Heath
Can't find what you were looking for? Try searching our site: