Struggles, Hopes and Failures

Changes of government fail to solve Britain's growing economic problems and the outbreak of sectarian 'troubles' in Northern Ireland add to the problems. However, Britain becomes the world centre of a 'youth culture' revolution and people approve the decision to join the European Economic Community (Common Market) in a referendum. 

Labour was back in power, claiming in Harold Wilson’s words it would replace “13 wasted years" under the Tories with the "white heat of revolution" which would sweep away "restrictive practices ... on both sides of industry". However, it was clear Labour could not put its policies into effect with such a small majority. Two seats were lost in bi-elections and Wilson took a gamble when he went to the country again in March 1966. The gamble paid off and Labour was returned with an overall majority of 97 against a Conservative party now led by Edward Heath.

Wilson’s plans to reform the country with a National Plan drawn up by a new Department of Economic Affairs were thrown into disarray by a balance of payments crisis triggered by the Maudling boom. Deflationary measures and a 15% import surcharge were put in place. The economy continued to be a problem and market forces, described by Wilson as ‘the Gnomes of Zurich’, eventually forced another devaluation on a Labour government in November 1967.

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Sterling was reduced by 14% from $2.80 to $2.40. Interest rates were raised to 8%. Wilson’s claim that the pound in people’s pocket would not be worth less was derided. The Chancellor James Callaghan moved to the Home Office a few weeks later and the government’s attempt to seek economic shelter in the EEC was rejected for a second time by De Gaulle. The country’s poor productivity and an oil embargo resulting from the Six Day Arab-Israeli war led up to another sterling crisis in 1968, when a second devaluation was avoided by an international loan and further deflationary measures.

The period was marked by an escalation in major strikes and niggling industrial disputes which helped fuel the decline in the country’s economic performance. Selective Employment tax was introduced in 1966 to encourage exports by subsidising employment in the manufacturing sector with a tax levied on other sectors of the economy. Unions, which had regained legal protections and rights when the Trade Union Act was passed in 1946, competed to improve their members’ pay and conditions, despite the difficult economic circumstances. In 1969 Barbara Castle, a leading member of the Bevanite side of the Labour Party, introduced a White Paper named In Place of Strife, which was intended to impose some legal regulation on industrial relations. Her proposals were attacked within the cabinet by Callaghan and in the Labour movement by her left wing comrades and the proposals were dropped. However, she secured the passing of the Equal Pay Act in 1970, following her involvement in the Ford sewing machinists’ strike.

Britain’s world-wide defence commitments were drastically reduced as part of the government’s spending cuts. In 1968 it was decided that forces would be withdrawn from Singapore and Malaya and other stations East of Suez. Several military and naval projects were cancelled, but the Defence Secretary Denis Healey continued with the British nuclear Polaris project, which went into service later in 1968 despite pressure from CND supporters in the party. Wilson successfully avoided committing British forces to the Vietnam conflict as he navigated the currents of left wing opposition to the war whilst maintaining a friendly relationship with the beleaguered American President Lyndon B. Johnson.

Closer to home, relations with the Irish Republic had remained cool since the war, but the economies of the two countries were closely connected and many Irish people regarded Great Britain as something like a ‘second homeland’. The IRA had kept up a low grade programme of hostility for years, but it was mounting demands for civil rights in Northern Ireland which caused British troops to be sent into the province to maintain law and order and guard some public installations in 1969. The Catholic minority alleged discrimination by the NI government, the Royal Ulster Constabulary and major employers. There were complaints that the police had put down demonstrations with undue violence and loyalists, believing the demonstrations were a republican front, also reacted with violence; led by the Rev. Ian Paisley, they regarded the Unionist government as weak in its response to republicanism and several Catholics were killed by the paramilitary loyalist Ulster Defence Force, which was outlawed. In September the army began to erect ‘peace walls’ to separate the warring sectarian communities. In July 1970 four people died in a gun battle between the army and the IRA in the Lower Falls area of Belfast.

Although, the decolonisation programme continued, there were signs that some of the new nations were not adjusting easily to the norms of democracy and the rule of law  set out in the constitutional arrangements bequeathed by Britain. Some became one party states, justice was not always available to all and corruption was alleged to be widespread. In 1968, it was feared that large numbers of people of Indian ancestry from Kenya and Uganda were likely to come to Britain with British passports as a result of discrimination in those countries. An Immigrants Act was passed which limited eligibility for British citizenship to those with a grandparent or parent who was a citizen of the UK or was born there.

Wilson’s main colonial problem, however, was what was to be done with Southern Rhodesia. Ian Smith declared his country was an independent state and part of the Queen’s realm in November 1965. Wilson then imposed economic sanctions, but they were ineffective due to the continuation of Rhodesian trade with Portugal and South Africa and money earned from the export of food to other African states. Wilson and Smith met twice aboard British warships moored off Gibraltar in December 1966 and October 1968, but they could not agree on progress to independence due to a fundamental lack of trust on both sides. Smith declared Rhodesia a republic on 2 March 1970 with a constitution aiming at eventual parity of power between the races, but this was not acceptable to Wilson.

Race problems were clearly apparent in Britain and were marked by the foundation of the National Front neo-fascist party in 1967. The Race Relations Act was passed in 1968, making it illegal to refuse employment, housing or education on the basis of ethnic background. The bill caused Enoch Powell to make a private speech to Conservative party members in the Midlands warning of racial conflict on the streets. It be-came known as the Rivers of Blood speech and won demonstration of support in several other parts of the country. Ted Heath, the Conservative leader, immediately sacked him from the shadow cabinet and Powell drifted out of mainstream politics, finishing up as the Ulster Unionist MP for South Down. A professor of Ancient Greek at the age of 25 who attained the rank of brigadier during the war, with one speech Powell wrecked his career as one of the most original conservative theorists of his generation.

Wilson called an election in June 1970 and lost power to Edward Heath. This was the first British election at which anyone aged 18 could vote but the overall turnout of 72% was low. In addition to lowering the voting age, Wilson’s first government had passed other progressive legislation including the abolition of capital punishment and acts liberalising laws on censorship, divorce, abortion, and homosexuality. However, it made little progress in solving the country’s economic problems and Wilson’s failure in the election was probably due to a bad set of balance of payments figures published days before the election. Unemployment had also risen and there was growing disenchantment with the power of the trade unions.

The major social change during the period of Harold Wilson’s first government could not be attributed to any political act. In 1964, Britain unexpectedly become a leader of world youth culture when the Beatles became an overnight world sensation. They were quickly joined by the Rolling Stones and a host of other British pop and rock groups, whose music was broadcast to an avid audience of younger people by pirate radio stations such as Radio Caroline. London was the swinging capital of the world, where Mary Quant introduced the mini skirt and people from all over the world flocked to buy the youth fashions of Carnaby Street, Chelsea’s King’s Road and the BIBA outlet in Kensington. A new spirit of youthful rebellion was abroad; drugs were openly used and sexual liberation was encouraged with the availability of the birth control pill. It was colourful, loud and completely out of tune with the drab years and quiet respectability of an earlier conformist Britain. For many people, the excitement of the age was made complete by England’s world cup soccer win in 1966.

Edward Heath, known as Ted, the son of a carpenter and a maid, was, except for Disraeli, the first Conservative party leader not born to a high born and/or wealthy family. He won the party leadership contest when Alec Douglas-Home resigned in 1965, and hung on to it after the comprehensive defeat in the following year’s election. The pollsters were astonished when he led his party to a surprise victory in the 1970 election.  He was a committed supporter of closer ties to Europe and led the negotiations to join the European Economic Community which foundered when de Gaulle vetoed the idea in 1963

Therefore, Heath’s overriding economic objective when he achieved power was to secure UK membership of the EEC.  Charles de Gaulle, who had twice vetoed British membership, was no longer president of France and the UK, together with Ireland and Denmark, was accepted as a new member of the European club in January 1973. Norway, had also agreed to join, but withdrew after a referendum refused to endorse the decision. Heath believed the UK would benefit from greater influence and power within the Community in return for giving up a raft of policies to Brussels control, including matters involving taxation. The Labour party was divided on the issue, with Harold Wilson’s tacit agreement to remain in the community being opposed by Callaghan, speaking on behalf of many traditional union members.

1972 brought two festering problems to a head. Army units had more or less taken over from the police in some areas of Northern Ireland and the IRA had split between the official wing and a provisional section which was committed to use violence to achieve a united Ireland. They were opposed by the Ulster Volunteer Force, an armed Unionist underground force and the Royal Ulster Constabulary, a Unionist and Protestant law enforcement fiefdom. British attempts at impartiality were rejected by much of the Catholic community, which put up barricades closing off the Bogside in Derry. The Provisionals began to attack military targets and personnel in 1971 and the British government responded with a measure allowing internment without trial in an attempt to remove men of violence from the streets. In January 1972, a large demonstration against the internment measures congregated in Derry, but the area was cordoned off by a unit of the Ist Parachute Regiment. Violence broke out and only concluded after soldiers had shot dead 13 civilians. From this day the Troubles in Northern Ireland descended into a nasty affair, in which the Provisionals, supported by many but not all Catholics, regarded the British troops as an occupying army; much of the Unionist majority regarded with distaste the anti-Catholic violence of the UVF, but were determined to hold their country against Catholic republicans; and the army struggled to impose the political will of Westminster governments, which were often at a loss about how to deal with such a complex mess.

The other problem which confronted Heath’s government in 1972 was the influx of 27,200 Asian refugees expelled from Uganda by the dictator Idi Amin, who demanded Britain take responsibility for the ethnic Indians who were not registered Ugandan citizens; he accused them of "sabotaging Uganda's economy and encouraging corruption”. By November 1972, only a few hundred Asians remained in Uganda following the exodus. India, Canada and other countries took a share of the Ugandan refugees, but Britain assumed responsibility for the lion’s share. The loss of Indian business and management acumen was a disaster for Uganda, but many of the refugees thrived in the UK and have become assimilated into British culture.

Heath came to power committed to moving towards a free market economy, but his Chancellor of the Exchequer Iain Macleod died one month after taking office, to be replaced by Anthony Barber. In the first year, Barber attempted to hold down government expenditure. He brought in higher charges for benefits such as school meals, spectacles, dentistry, and prescriptions. The education budget was also squeezed, causing the Education minister, Margaret Thatcher, to end the provision of free school milk for 8 to 11 year-olds, but the Open University was allowed to start and plans to raise the school leaving age to 16 were put into effect. Unemployment continued to rise and by January 1972 it had risen above 1,000,000, a level not seen for more than 30 years. Barber then set in motion a boom with his 1972 budget which gave rise to higher inflation, causing a flood of wage demands from the trades unions. By early 1974, unemployment had fallen to under 550,000, but the boom could not be sustained in the face of a new world crisis.

In the 1960s, American oil production decreased and consumption increased, which resulted in increased imports and inflation. The Bretton Woods Agreement had pegged the dollar to gold at a fixed price, but inflation had weakened it against the open market value of gold metal. Holders of dollars began to sell them to America in return for gold at the Bretton fixed rate, which was then sold for a higher price on the open metal market, putting pressure on American gold reserves. In August 1971, the United States unilaterally abandoned Bretton Woods and let the price of the dollar float against gold. Britain, and most other nations whose currencies had been tied to the dollar, followed suit and allowed their currencies to float.

As oil was priced in dollars, oil producers' real income decreased and. in September 1971, OPEC, the oil producing cartel, stated it would price oil at a fixed amount of gold. A world oil crisis began in October 1973 when the members of the Arab oil exporting countries reduced production and proclaimed an oil embargo on nations believed to support Israel during the Yom Kippur war. The price of oil rose from $3 to $12 a barrel. Therefore, Barber’s boom coincided with a major crisis in the world’s financial affairs, which resulted in the stock market collapse of 1973-4 and rising inflation.

Labour relations steadily worsened as the government struggled to deal with a mixture of inflation, balance of payments deficits and unemployment. The Labour Relations Act 1971 which attempted to curb some union activities was vigorously opposed by the unions and the Mineworkers union was especially confrontational. Their use of flying pickets and mass picketing to close the Saltley coke works in their 1972 strike proved devastatingly effective. The government reluctantly offer an inflation-busting pay rise in order to secure the country’s power supplies. In November 1972, as the oil crisis and financial crash developed, it introduced a policy to control prices and incomes. In November 1973, the miners’ wage had again fallen behind some other workers; they rejected another strike call, but proceeded with an overtime ban which cut production by half and reduced coal stocks at the power stations. In an attempt to prevent power blackouts, Heath announced that from 1st January 1974 commercial consumption of electricity would be limited to three consecutive days each week. On 24 January, the miners voted to go on strike.

Heath maintained the three day week, whilst calling an election in February and posed the question ‘who governs Britain?’ Labour produced a plan for a Social Contract with the unions whereby, in exchange for union cooperation on wage controls, labour promised a ‘social wage’, improved social welfare and price controls. During the campaign Enoch Powell shocked many Conservatives by indicating it would better to vote Labour, rather than support the party which took Britain into the EEC. The result was a hung parliament. Conservatives won the most votes, but lost their majority in the Commons, partly due to increased support for the Liberal party and Scots Nationalists who won seven seats in Scotland. Heath failed to secure parliamentary support from the Liberals and other minor parties, including Irish Unionists, and he resigned to make way for Harold Wilson’s return to power with a minority government.

Harold Wilson formed a government with the country in a desperate economic condition due to high inflation and serious balance of payments deficits. Employment Secretary Michael Foot restored the lights and ended the miner’ strike with a generous wages settlement and new compensation schemes for industrial diseases and superannuation, but Wilson and the government spent the following months preparing the ground for another election in October which they hoped would win them a working majority.

The result of that election was disappointing for both Labour and the Conservatives. Wilson resumed his post at number 10 with a tiny majority of three in the House of Commons. Planned social improvements were to be paid for by raising taxes; an investment income surcharge of 15% was introduced which, added to the highest rate of income tax, brought the total top rate charge to 98%. Tony Benn, the Industry Secretary set up the National Enterprise Board with the purpose of re-generating industry. Its remit was to invest public money in return for an equity stake in private companies. Many of the board’s investments, such as that in British Leyland, turned out to be duds which never produced a return for the public investor. The Social Contract failed to provide conditions for the successful management of the economy and inflation continued to rise until it reached 26% in 1975; unemployment topped 1 million again in the same year.

After leading his party to two defeats, Heath’s leadership of the Conservative party was under question and a leadership election under new rules was held in January 1975. He was opposed by Margaret Thatcher and another; most expected Heath to win, but he came second to Thatcher and resigned. Several shadow cabinet members opposed her in the second ballot, but they were too late: Margaret Thatcher sensationally became the first woman leader of a major UK party. Heath remained an MP for many years and eventually became ‘father’ of the House. Apart from attaining his goal of joining the European Community, his period as prime minister was difficult and can only be regarded as a failure in most respects. He was never reconciled to his successor and his remaining time on the back benches has been described as the ’longest sulk in history’.

Labour had been ambivalent about joining the EEC, foreseeing the loss of economic sovereignty and higher food prices, due to the Common Agricultural Policy. As promised in the party manifesto, a referendum was held in June 1975 with a recommendation to approve. Some cabinet ministers continued to oppose membership during the campaign, but the decision to remain in the Community was confirmed by a very large majority.

On 5th March 1976 the country was stunned when Wilson resigned. There is no doubt that he had lost his appetite for the political fight and his wife was never a happy occupant of Downing Street, but it is likely that discovery of the onset of Alzheimer’s disease also played a part in his decision. He came to office full of plans to reform the UK with a technological revolution, but the cold winds of world economics and union resistance at home ruined many of his hopes. A progressive programme of social reforms, including a country-wide reduction in selective education, helped ease the country into a new age of liberalised social and moral attitudes, His resignation honours, disparagingly known as the ‘Lavender List’ played a part in undermining his legacy. Harold Wilson is often remembered as a better leader of his party than of his country.

His successor was a man from the centre ground of Labour party politics. Jim Callaghan was highly experienced, having held all three major offices of state before coming to 10 Downing Street. He had supported the unions against Barbara Castle’s reforming programme In Place of Strife. As Foreign Secretary and a long time eurosceptic, he had tried to win better terms for remaining in the EEC. His main opponent for the leadership was Michael Foot, leader of the left wing Tribunite wing of the party, who in a short time became deputy leader.

With a small and diminishing majority and a powerful left-wing element at his back, Callaghan’s Chancellor Denis Healey faced a hard task trying to come to terms with the UK’s economic problems of high inflation and rising unemployment. By June 1976 sterling fell to a record low against the dollar and the Bank of England was forced to withdraw from the world foreign exchange market. The cabinet resisted his attempts to cut government spending. Healey was forced to turn back from Heathrow in the autumn for crisis meetings with the IMF, which insisted on deep cuts in public expenditure and increased interest rates in return for a record loan of $3.9 billion. By adopting the IMF policies, despite resistance led by Tony Benn, Healey managed to reduce inflation to single digits by 1978, unemployment also began to fall and sterling’s value was stabilised.

In November 1976 Labour lost 2 bi-elections and Callaghan lost his majority. He prepared a failed bill which offered devolution to Scotland and Wales and helped win some appreciation or ‘benevolent neutrality’ from the 14 MPs representing Plaid Cymru and the Scottish Nationalists (SNP). He next turned to the Liberals, now led by David Steel, and a Lib-Lab Pact was agreed in March 1977, whereby the Liberals would support Callaghan in any no confidence motion. The pact ended in September 1978, at which time it was expected Callaghan would call an election. However, although opinion seemed to be turning in his favour, he hoped further economic improvement would enhance his chances the following year. His hopes were wrecked by industrial action in support of pay claims which outstripped the government norms. Gravediggers went on strike, rubbish piled up in the streets and many hospitals were forced to limit admissions to emergency cases in what became known as the ‘Winter of Discontent’.

A referendum on devolution was held in Scotland at the beginning of March 1979 at which a slight majority voted in favour, but as the majority amounted to less than 40% of the total electorate it was deemed to have failed. The SNP and Liberals then withdrew support from the government; the Conservative leader Mrs Thatcher seized her chance and tabled a no confidence motion, which Callaghan lost by one vote. The ensuing general election was won by the Conservatives with an overall majority of 43. They had campaigned on the economic issues, pledging to control inflation and to reduce the power of the trade unions. Their poster claiming ‘Labour isn’t working’ created by Saatchi and Saatchi advertising agency was a memorable part of the campaign. Labour’s campaign was more traditional, promising an increase in pensions and tax cuts.

The general election of 1979 proved to be a political watershed. Throughout the entire decade of the 1970s, people in the UK were trying to come to terms with a changing world. Younger people continued to create an hedonistic culture, but comedy clubs specialising in anti-establishment, anarchic humour and the growth of a punk rock music scene were signs of their growing discontent with the status quo. Some turned to anti-authoritarian, even revolutionary, politics such as the Trotskyist Socialist Workers party, which publicised and encouraged splits in the social fabric of the country.

Racial tensions in Britain had also increased and neo fascist groups sprang up, provoking ill feeling towards people of colour and different ethnicities, especially among some of the indigenous poorer working class. Government organisations and others promoted the concept of the UK as a multi-cultural society, but many people with ex colonial roots still tended to live and commune together. Second generation black youths complained of police harassment and colour prejudice against their communities. Racial confrontations occasionally turned into violent clashes as at the Notting Hill Carnival in 1976.

The Empire was nearly completely dissolved by this time, but the old problem of Southern Rhodesia remained, with the white settler minority continuing to declare Rhodesian independence whilst struggling with two separate tribal guerrilla forces - The Matabele ZIPRA and the Shona ZANLA. Successive British governments tried to devise a constitution with majority rule which would be acceptable to all the parties involved. Other African ex-colonies were beset with tribal and racial problems and some suffered civil wars or widespread lawlessness and corruption. Academics, professionals, political dissidents and economic migrants from many parts of the old empire continued to seek a new home in London and other cosmopolitan centres in Britain.

The movement for women’s liberation became much more vocal in the 1970s. Many women were well-educated and, aided by the availability of female pharmaceutical contraceptive, were conversant with Germaine Greer’s argument that the historic view of women’s submissive place in society was a male fantasy and women were equipped and entitled to play a full role in the world. The bonds of marriage were also slackened and many young couples were setting up home together without going through the traditional conjugal ceremonies. Homosexuality between consenting adults was no longer a crime and, as well-known gays began to ‘out’ themselves, the gay scene was beginning to be part of a changing social world.

Housing needs remained an important political subject. Many working class people were housed by their local councils, who followed the advice of social planners about peoples’ needs. The old lateral slum terraces and tenements were cleared and the tenants were rehoused in vertical high rise flats. Others were removed from their inner city environment and started a new life in new towns, where they stubbornly held on to their old city culture and still supported their home football teams. Those who could not obtain a council home relied on a private rented accommodation sector, which was regulated by the Rent Acts, although certain unscrupulous landlords became a bi-word for illegal activities, especially concerning non-white tenants. A growing number of people were eager to buy their own homes, which were proving to be a sound investment and a safeguard against high inflation.

The world of work and employment was also rapidly changing. Technology could wipe out a century of traditional practices in a few years. For instance, since the Suez crisis, shipping companies had invested in giant oil tankers and bulk carriers. Goods going to and from Britain’s new trading partners in Europe began to be moved from producer to customer on trucks, using the new motorway network and the convenience of roll on roll off services at new port facilities. Freight from further afield was rapidly transferring to large new ships, built to carry containers for efficient delivery of goods without depending on the old dock and stevedore and rail services. Nearly all the tankers, ships, containers and trucks for these new services were built in countries better able to satisfy the demands of the customer. Britain’s shipyards and factories, and the steelworks and multiplicity of suppliers who serviced them were losing out in the scramble for all that new business. Heath and Wilson had placed their faith in a revival following on from membership of the EEC, but employment laws, archaic practices and poor management undermined the ability of many British companies to compete with overseas rivals.

Finally, Northern Ireland was a continual source of concern after Bloody Sunday 1972. The two separate armed nationalist groups, the Provisional IRA and the Irish National Liberation Army, conducted paramilitary campaigns in N. Ireland and on the British mainland, which tied up a large number of British armed forces. The Unionist UVF continued to wage a violent campaign against the Catholic community. The Stormont government was suspended and the British government imposed direct rule on the province. Attempts to control the situation, such as imprisonment without trial, earned condemnation and support for the nationalist cause in some areas abroad, including the Irish community in the United States.

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