1970's beginning

• 1970 general election

  • Conservative = 330 (46.4%)
  • Labour = 287 (43.0%)
• Reasons for Labour's election defeat -> 1. Powell effect

  • The case of immigration being a threat to the character of the UK as it could lead to riots like in USA
  • Popular among the working class + gained conservatives
  • 2.5 million votes
  • Condemned by all political sides and Heath dismissed him.
  • -> Enoch Powell's speech 'Rivers of Blood' presented
• Reason for defeat -> 2. Undistinguished economic policies

  • The economy started to strengthen before the election but people couldn't see its benefits due to previous economic failures such as the national plan failing.
  • People were disillusioned and still in belief that the economy was going badly.
  • Poor figures which weakened labour's position, making it more credible when conservatives said you cannot trust them.
• Reason for defeat -> 3. Failure to control the unions

  • Strikes from 6 million to 10 million days lost (1969-70) that demanded higher wages which labour was against.
  • A 'place of strife' was going to be put in place to control trade unions causing further anger + disappointment in labour.
• Devaluation

  • Heath dragged the sterling during the elections -> showed that labour wasn't able to keep balance of payments and instead dwelt to devaluation which may have caused economic problems.
  • Damaged Wilson's prestige as he couldn't follow through on promises of economic growth.
• Heath's aim as prime minister

  • Intended to adopt a new style of gov. that would 'reduce the rise in prices, increase productivity and reduce unemployment'
  • SELSDON attitude: state intervention isn't a good idea - wanted hands-off approach election of 1970 brings a new direction. -> system of a society for the ruthless, uncaring, decision for sustained economy to be achieved best by restoring the dynamism of the private sector and its discipline of the market economy. -> opposition said it would be ruthless.
  • new conservative approach/new right
• 'Lameduck' and its relation to the government


  JOHN DAVIS advised the government not to help out companies and businesses that expected public money to be spent on them to bail out even when they performed badly.
• What was Heath's government criticized for by the opposition?

  • Abandoning the mixed economy
  • Weakening the welfare state
  • undermining the principle of full employment
  • putting economic calculation before social improvement.
• Problems with the unions

  • As soon as IRA was introduced, TUC resisted by formally voting not to cooperate with the government's measures and called on individual unions to refuse to register -> This made Heath's government look incompetent and unrealistic = STRIKE INCREASE DURING HEATH 2.2K TO 2.9K
  • To gain wage increase and highlight the number of pit closures that affected their lives, a strike that used flying pickets to prevent the movement of coal -> organised by Arthur SCARGILL (NUM) which disrupted fuel, electricity + reduced industrial production.
• What were flying pickets?

  Teams of unions ready to rush to areas where strikes had been called to intimidate workers from going to work.
• Miner strike 1972

  • In 1971, it was decided by NUM to ask for a 43% pay rise when gov. was offering 7-8%
  • rejected all pay offers and went on strike all over Britain
  • Miners targeted major coal users and NUM tried to stop the movement of the fuel suppliers.
  • 3-day week introduced
  • Gov. offered a 25% wage increase = accepted
• 3-day week 1973

  • The 3-day week was aimed at conserving electricity and coal stocks, this was implemented by the Conservative Prime Minister, Edward Heath, who announced several measures under the Fuel and Electricity.
  • Stocks were already low after a strike by the National Union of Mineworkers in 1972, and when the miners implemented an overtime ban in late 1973, production was further hit.
• Miner's Strike 1974

  • Gov. was attempting to introduce pay freezes and restraints to help the poor economy = relations were hostile with the miners so they decided to strike if pay demands weren't met.
  • Miners refused to accept the 7% pay rise which led to another 3-day week and election in hopes that Heath would gain sympathy but lost in the election.
  • Labour and Miners struck a deal afterwards.
• 1974 General Election

  • Labour = 301 seats
  • Conservative = 297 seats
• Reform of Local Government

  • The most significant reform measures under Heath was the local gov. act
  • reshaped the structure of local gov. but destroyed many historical administrative landmarks.
  • many familiar place names disappeared and areas subsumed into newly created regions
  • Led to many protests, particularly from conservatives on the right
• Oil price rise crisis 1973'

  OPEC= Organisation of Petroleum Exporting countries

  • The West supports israel angering the Arab nations, so the arab nations deny oil access to the West.
  • OPEC raised its prices of oil exports going from $2 to $35 per barrel in 1973-1980 -> in the decade after 1973, Britain suffered a severe recession -> inflation throughout the industrial world.
  • By 1976 inflation reaches 25%
  • Oil production leading nations: Bahrain, KSA, Iraq, Kuwait & Libya.
  • Britain had to contribute more into the EEC than they were receiving in pro's.
• Economic effects of the oil crisis in Britain

  • Payments deficit rose to 1 billion pounds
  • Annual inflation rate rose to 16%
  • Sterling value dropped to $1.57
  • unemployment figure doubled to 1.44 million during 74-76
• What did Labour suffer from during the years of 1974-9?

  • Narrowness of Labour's overall majority in the commons
  • struggle with trade unions
  • grim effects of rapid inflation that followed the oil price rise 73' -> Britain began to suffer the worst effects of rapid inflation.
  • decline in value of money and growing debit in its trade balance threatened to make Britain bankrupt.
  • The pound dropped below $2 in exchange value for the first time in history
• Labour and the Unions

  • Cuts in public expenditure from IMF loans and the large rise in unemployment weakened the unions' loyalty to the labour party -> created resentment in the unions.
  • The credit the gov. got the repealing the Industrial Relations Act was lost by its inability to persuade the workers to cooperate consistently with it = repeat of troubles that Heath faced.
  • It seemed though that Wilson was on good cooperative terms with union creating social contracts, etc, which produced little direct results through.
• Referendum on Europe 1975

  • Was to improve relations with unionists that Wilson pledged that a future labour gov. would renegotiate the terms of Britain's membership into the EEC.
  • He called a national referendum and all gov politicians and people were to vote on it ->Majority voted to stay in EEC.
  • An issue not considered was the effect the membership would have on British sovereignty.
• Membership effects : 


  Greatly increased financial costs with no real trade benefits.
• Oct. 74' election = 2nd election in 1974, gave labour 42 more seats than torries but it's overall majority was never over 3 seats
• Lib-Lab pact


  The pact which committed liberals to vote with gov. in the commons in return for the government's agreement to consult the liberals on key issues
• Inflation during Labour's Gov. 1974-79

  • Britain began to suffer the worst effects of rapid inflation that followed the oil price rise.
  • The decline in the value of money and growing debt in its trade balance threatened to make Britain bankrupt.
  • The pound dropped below $2 in exchange value for the first time in History.