How successful was Edward Heath as prime minister? Flashcards
What did Heath promise to do?
Strengthen the economy and curb inflation
Legislate to transform industrial relations
Create ‘one nation’, promising regional development, faster economic growth, better social services, and the maintenance of full employment
Apply to join the EEC
What did Heath tell his party conference?
‘we were returned to office to change the course of history of this nation - nothing less’
What did the policy proposals suggest?
That they would allow market forces to determine prices and wages, and would be less involved in managing the economy
What did Heath deem unacceptable and what did he believe?
High levels of unemployment
That the government, by channeling investment appropriately, still had a significant role to play in regenerating run-down parts of the country
What was the inflation rate in 1970 and 1974?
1970: 5%
1974: 10%
What was GDP in 1970, 1973, and 1974?
1970: 2.7%
1973: 6.5%
1974: -2.5%
What was spending in 1970, 1972, and 1974?
1970: 38.52%
1972: 37.37%
1974: 42.35%
What happened on 1 January 1973?
Britain became a full member of the EEC
How many Conservative MPs voted against EEC entry and how many Labour MPs voted for it?
39
69
What did Heath believe?
That membership of the EEC would give British industry better access to Europe’s market and that European competition would stimulate modernisation and development
Why did Britain’s application have a much better chance of success?
CDG had left office and Pompidou was not opposed to British entry
What was Pompidou determined about and what was the consequence?
That Britain should enter on French, not British, terms
It angered some Conservatives who were mistrustful of Europe, believing that it threatened Britain’s independence
What did Britain have to do?
Sacrifice any remaining preferential trade deals with the Commonwealth
Accept the EEC’s policy of heavily subsidising French farmers
What was the impact of membership?
Had little immediate impact on Britain’s economic performance
What did Heath believe the 1970 election victory had given him?
A popular mandate to legislate on industrial relations as there was considerable popular support for government action to curb strikes
What Act was passed in August 1971 and what did it aim to do?
The Industrial Relations Act
Balance the rights of individual workers with those of the unions, while reducing the likelihood of strikes
What were the main provisions of the Industrial Relations Act?
Challenged the legality of the closed shop
The NIRC and the IRC were established
Trade unions were required to register with the NIRC and IRC
Members would enjoy better protection against unfair dismissal
Unions which failed to register would be liable for claims for damages
The Act gave the government power to order a pre-strike ballot and impose a cooling-off period of up to 60 days
Why did the Act fail?
The regulations were similar to ‘In Place of Strife’
The TUC told its members to de-register and defy the NIRC
It increased the bitterness of confrontations between unions and employers
It complicated Heath’s efforts to negotiate with the TUC
What were many union leaders and what did they hope to do?
Militant
Destroy the Industrial Relations Act and bring down the Heath government
What undermined the Act?
A legal judgement in 1972 ordering the release of some dock workers who had refused to appear before the NIRC
What increased the frequency of strikes?
Union hostility to the Industrial Relations Act
Rising inflation; workers sought to increase their wages to prevent their living standards falling
How many working days were lost to strikes in 1970, 1972, 1973, and 1974?
1970: 10.9 million
1972: 23.9 million
1973: 7.2 million
1974: 14.7 million
Why was inflation severe in the 1970s?
In 1971 Nixon ended the system of fixed exchange rates which devalued the dollar and made British exports more expensive
In 1972 the pound was allowed to ‘float’ freely and imports became more expensive
There was a worldwide increase in prices of raw materials, food, and fuel
Heath cut taxes and increased public spending in the 1972 budget which stimulated a demand for goods and services but also pushed up prices
What was the 1972 budget and how much would be required to pay for it?
£1 billion cut in income taxes
£3.4 billion
What was the BOP as a % of GDP in 1970, 1971, and 1974?
1970: 0.6%
1971: 1.1%
1974: -4.4%
What triggered the miners’ strike?
The miners’ demand for a 43% pay increase and the 8% offered by the National Coal Board
What did Heath believe wage increases should be?
4%
What happened in January 1972 and what was the government forced to do?
280,000 coal miners came out on strike
Declare a state of emergency as there were regular power cuts throughout the country
What did the government concede?
A 30% wage increase
Why was the miners’ strike successful?
Skilfully organised, especially by Scargill, who coordinates flying pickets
There were violent incidents (at the Saltley coke depot 15,000 massed pickets prevented large supplies of fuel from leaving the depot) which didn’t damage public sympathy for the workers
The government was poorly organised to cope with the strike and hadn’t stockpiled coal
Why was the success of the strike damaging for the government?
It encouraged other workers to strike for pay increases
Successful strikes added to inflationary pressures
The government looked weak in the face of union hostility
It emphasised the failure of the Industrial Relations Act
What did Heath’s government begin with the intention of doing?
Reducing state intervention in industry
Refusing to rescue failing enterprises (lame ducks)
What happened in January 1971?
The aircraft division of Rolls-Royce, facing bankruptcy, was nationalised because it was regarded as vital to Britain’s defence industry
What was Heath not prepared to do?
Allow unemployment to increase as the price of reducing government expenditure
What happened in February 1972?
The government granted £35 million to Upper Clyde Shipbuilders to safeguard its 3000 jobs
What was set up in April 1972?
A new Ministry for Industrial Development to provide aid to industry in deprived regions of the country as part of the government’s plan to stimulate growth
What was announced on 6 November 1972 and what did it follow?
Statutory controls on pay and prices (a freeze for 90 days)
What happened in October 1973?
Egypt and Syria went to war against Israel to try to recover the land lost in the war of 1967. Oil-producing countries, angry at Western support for Israel, cut back supplies and quadrupled their prices
How did this affect Britain?
A barrel of crude increased from £1.5 and £1.67 to between £3.85 and £5 since Britain depended on oil for 50% of its energy needs
What happened in November 1973?
The miners began an overtime ban and demanded a 35% pay increase
What did Heath try do do in 1973?
Negotiate directly with the leaders
What was the aim of the miners’ strike?
Halve production of coal
What did the national conference do?
Pass resolutions for the election of a Labour government committed to true socialist policy
What happened on 13 December?
Heath declared a State of Emergency and announced the introduction of a three-day working week:
Electricity would be provided to industry and businesses only on three specified days per week
A 50mph speed limit was introduced
Television was required to close down at 10.30 pm
What happened in February 1974?
The miners voted 81% in favour of strike action
How did Heath respond to the strike and what did he hope to get?
Called an election for 28 February on the issue of ‘Who Governs Britain’
Decisive support for his policies
What was the result of the election?
The Conservatives won 37.8% of the vote and 297 seats
Labour won 37.1% of the vote and 301 seats
What happened on 4 March 1974 and why?
Wilson became PM again
Heath’s efforts to form an anti-Labour coalition failed
What was the unemployment rate in 1971 and 1974?
1971: 4.1%
1974: 3.7%
