Edward Heath 1970-1974

Edward Heath 1970-1974

1. 'The New Right'

   • Reduce rise in prices, increase productivity, reduce unemployment
     • State intervention to be abandoned, 'break away' from consensus

2. Trade Unions

   • Industrial Relations Act 1971
     • Restricted right of workers to strike
     • National Industrial Relations Court (NIRC) judged validity of strike
     • Unions required to register themselves to Govt to maintain legal rights
   • Hostility
     • TUC refused to join 1971 Act, as did all unions. Impossible to enforce Act
       • Heath Govt. appeared weak
     • NUM. 1972, for wage increase and highlight threat on livelihood, strikes

3. A Bad Start

   • John Davies, Department Of Trade and Industry
     • Advised Govt comapanies not doing well, should not be funded
   • Anthony Barber as Chancellor Of Exchequer
     • Income tax cuts, reductions in Govt spending, scrapped Prices and Incomes Board
       • Brought tax concession to rich, rise in council house rent
   • Withdrawal of free milk. Margaret 'the milk snatcher'
   • Inflation at 15% in 1971, Industrial output declining
     • 1972, returned to price and income control
       • 1971, DTI nationalise Rolls Royce. U-Turn
         • Upper Clyde Shipbuilders granted £34m to continue

4. Failures

   • 1973, three-day week. NUM gained 21% wage increase
     • Almost 3x what they originally offered
       • 1974 further strike, 'Who governs Britain?'
     • Major Heath defeat
   • Rapid inflation made maintaining prices impossible
     • Productivity declined due to miners strikes and demands
       • Unemployment had only risen under Heath
         • Resorting back to austerity measures with 3 day week
   • Labour won 1974 election by four seats

5. Other Aspects

   • Local Government Act 1972-73
     • Peter Walker, Environmental Minister
       • Reshape local government structure
         • Destroyed landmarks, Rutland
   • EEC 1973
     • De Gaulle retires 1969
       • Reapply 1972, signed Jan 1 1973
         • Heath said to have told colleagues to accept EEC's request at any cost
     • 'The Six' unwilling to listen to newcomer
     • European tariffs non-profitable for imports or exports
     • British workers could work in any EEC country
   • Oil Price Crisis 1973
     • OPEC, Arabs use oil as weapon in conflict with Israel
       • Arab-Israeli War, Oct 1973. West supported Israel
         • Arabs then reduced oil supplies to West
           • Severe Inflation. Severe Recession 1973-83
   • Balance of Payments deficit reaches £1b
     • Unemployment had receded to 628,000 by 1974
       • Sterling value dropped from $2 to $1.57