State of Emergency: the Way We Were

by Dominic Sandbrook

  Having won such a personal victory in June 1970, Heath had good reason to feel pleased with himself as he looked forward to remaking his country. He had arrived in Downing Street as the ‘master of Britain’s fate for the immediate future’, said The Times, ‘full of authority and command as the leader who was doubted and who conquered against the most daunting psychological odds’. But this carried a profound danger. Always a solitary, proud man, Heath felt no humility in victory, only the confirmation of his enormous self-belief, which his biographer summarizes as an attitude of ‘Bugger them all – I won’. Although he had won on the back of a slick, professional advertising campaign, he increasingly disdained the media and refused to listen to his public-relations men, preferring instead to communicate by giving long, austere television lectures, like some Soviet commissar reading out tractor statistics. And as time went on, so he withdrew deeper into the Downing Street bunker, a lonely man with no family to relieve the pressure, no wife to act as a confidante, just his beloved music to keep him company in the long evenings, as one by one his dreams of modernizing Britain turned inexorably to dust.17

  As Heath’s administration got under way in the summer of 1970, there was a palpable sense of anticipation at the radical departure to come. With four early announcements – the application to join the EEC, a plan to reform local government, an initiative to allow tenants to buy their council houses, and the withdrawal of Labour’s attempt to compel education authorities to scrap their grammar schools – the Conservative grass roots were immediately delighted. On the first day of the new parliamentary session, Heath told the Commons that he meant to rebuild Britain as ‘one nation’, with national unity as the theme in everything from education to the economy. But when he rose to speak in Blackpool a few months later at a celebratory Conservative Party conference, his message was rather more pointed. To the delight of his audience, Heath promised ‘to reorganise the functions of Government, to leave more to individual or to corporate effort, to make savings in Government expenditure, to provide room for greater incentives to men and women and to firms and businesses’, encouraging them ‘to take their own decisions, to stand on their own two feet, to accept responsibility for themselves and their families’. This was Heath the radical modernizer, not Heath the consensual compromiser. He wanted ‘to permanently change the outlook of the British people’, he said grandly, for ‘to cling desperately to the present will be to find ourselves embracing only the past’. And finally there came the phrase for which he hoped his premiership would be remembered. ‘If we are to achieve this task,’ he concluded, ‘we will have to embark on a change so radical, a revolution so quiet and yet so total, that it will go far beyond the programme for a Parliament to which we are committed and on which we have already embarked: far beyond this decade and way into the 1980s. We are laying the foundations, but they are the foundations for a generation.’18

  At the time, the phrase ‘the quiet revolution’ seemed likely to capture the mood of the historical moment, just like Wilson’s talk of white heat or Macmillan’s boast about people never having had it so good. In the Evening Standard, one reporter wrote that Heath was ‘pulling down the [Rab] Butler boarding house’ and replacing it with ‘a skyscraper with self-operating lifts,’ while in the New Statesman, Paul Johnson wrote that exchanging Wilson for Heath was like swapping ‘an India-rubber-ball for a spanner’. And at least as far as the machinery of government was concerned, Heath seemed to be delivering on his boasts of a ‘radical reforming government’. In the middle of October, he reorganized Whitehall by creating two new ‘super-ministries’: a gigantic new Department of Trade and Industry, and an even bigger Department of the Environment, run by his protégé Peter Walker, which swallowed up Transport, Housing, Local Government, and Public Building and Works. Meanwhile, he had also set up a new Central Policy Review Staff under the biologist, MI5 agent and mandarin Victor Rothschild, which for the first time would supply disinterested advice to the Cabinet. Known as the Think Tank, it was much mocked by Heath’s critics but had considerable influence, not only in urging his U-turns over incomes policy in 1972, but also in predicting the OPEC oil shock. It also had the unusual distinction of being the only Whitehall unit parodied in Doctor Who: in Tom Baker’s debut story, ‘Robot’, in 1974, the Doctor has to foil an evil plot to hold the world to ransom, hatched in the National Institute for Advanced Scientific Research, or ‘Think Tank’. Fortunately, none of Rothschild’s schemes were so nefarious, or involved giant robots.19

  The modernization drive did not end there. By early 1971, the government had edged towards a policy of privatization, selling off some of its more eccentric holdings, from the Thomas Cook and Lunn Poly travel agents, which had been nationalized by the Attlee government for no very good reason, to the state-owned pubs in Carlisle, which had been taken over as an experiment in limiting drinking during the First World War. Even this minor divestment provoked fury on the Labour benches. Harold Wilson even warned that the once ‘respected’ firm of Thomas Cook would be turned into one of the ‘crook organizations in the travel industry who are not too squeamish about their safety level’, adding that his own sister had recently had the misfortune to be ‘fleeced’ by a package company. And there were also, in due course, tentative moves towards reforming council housing, thanks to Walker’s Housing Finance Act, which redirected subsidies from all tenants to those in most need. Since this meant that more affluent tenants’ rents promptly went up, it caused an enormous outcry: in Clay Cross, Derbyshire, the Labour authority refused point-blank to implement it, and eleven councillors were personally surcharged. Meanwhile, Walker tried to persuade local authorities to sell council houses to their tenants, but this did not catch on at all. By 1974 just 7 per cent of eligible houses had changed hands, and the next government immediately changed course.20

  There were two obvious problems with Heath’s ‘quiet revolution’. The first was that it was not terribly popular. Although most people had read in their newspapers about Britain’s competitive decline, and were certainly aware that the country had lost power and prestige since the Second World War, their own lives, by and large, had been marked by greater affluence and opportunity. They had not yet realized the penalties – in higher prices, falling living standards, pay freezes and strikes – they would have to pay for Britain’s economic problems, and there was little sense that they wanted radical change. What was more, Heath’s bloodless brand of time-and-motion modernization was not always very attractive, a classic example being Walker’s reform of local government. The historian John Campbell argues that since the existing system was such a messy, disorganized patchwork of counties, county boroughs, non-county boroughs, district councils and parish councils, ‘reform was long overdue’. The Redcliffe-Maud Report, commissioned under Labour and published in 1969, had advocated taking a chainsaw to the old counties and creating eight large provinces, which was too radical even for Walker. But his solution, enshrined in the Local Government Act of 1972, horrified most ordinary taxpayers, who felt a vague but powerful sense of attachment to the historic county system. Rutland, which had been fighting a desperate battle for survival for years, was abolished, as were the much-loved Yorkshire ridings. Herefordshire and Worcestershire were combined; Shropshire was unaccountably renamed Salop; and entirely invented bodies such as ‘Avon’, ‘Cleveland’ and ‘Humberside’ were foisted upon their residents, almost all of whom loathed them. In Wales, the situation was even worse: the old counties disappeared entirely, replaced by made-up entities like Clwyd and Dyfed. It was Heathite modernization at its worst: unresponsive, high-handed and entirely insensitive to history. In some areas, such as doomed Rutland, or Berkshire, which lost its beloved White Horse of Uffington, there were even protests and marches against the scheme, and most people saw it as a symbol of everything least attractive about Heath’s government, a ‘monstrous bureaucratic abortion derived from a misplaced belief in institutional change for its own sake’. And the one thing it was n
ot, of course, was conservative.21

  The other problem with the ‘quiet revolution’ was that behind the sweeping rhetoric and the superficial changes to county councils and Whitehall departments, it was much less radical than it seemed. Heath and Barber talked a lot, for example, about slashing government spending, much to the horror of the Labour Party and the unions. And yet despite the accusations that Heath was a callous, flint-eyed reactionary, filled with loathing for the poor, this was a myth. As Jim Prior later recalled, they were committed to the ‘social consensus’, and planned ‘an improved Welfare State … in which the social services should be expanded and more should be done about housing’. In fact, social spending, both in real terms and as a proportion of GDP, increased more under Heath than under any other post-war government since Attlee. There was a strange irony in the fact that, even as Wilson was denouncing his successor for cold-hearted cruelty, Heath was approving spending increases that went well beyond anything in the 1960s, including small acts of generosity such as giving pensions to people who had retired before 1948 and thus had not qualified for a state pension, or giving Christmas bonuses to the elderly, or giving pensions to widows over 40, or allowances to the disabled. A senior civil servant who worked for Keith Joseph, the new Secretary of State for Social Services, recalled that at the beginning ‘there was a little Selsdon Man phase’. But that lasted no more than three months, and then Joseph settled down to behaving just like his predecessor, Labour’s Richard Crossman. ‘For all practical purposes,’ the official reflected, ‘the Heath government was exactly like working for the Wilson government.’22

  Despite his subsequent reputation as the founding father of Thatcherism, Joseph was one of the Heath government’s two biggest spenders. Born into the wealthy Jewish family that was behind the Bovis housing giant, he was an introverted, tortured personality, afflicted both by terrible medical problems (plagued by ulcers, he had had half his stomach removed in 1968), and by a burning though unfocused social conscience. In the late 1960s he had been a keen supporter of the Child Poverty Action Group, and even his Labour opponents conceded that he was ‘a compassionate man who cares about the problems of the underprivileged’. He even had the courage to tell his party conference that there were far fewer ‘shirkers and scroungers’ than they thought, and that he would never inflict poverty and starvation on the children of those ‘who cannot manage their lives effectively’. As head of the DHSS, he presided over a steady expansion of the welfare state, from higher disability benefits to higher child allowances; and while his attempt to reorganize the NHS ended up as yet another bureaucratic nightmare, he spent more money at a faster rate on the health service than had ever happened under Labour.23

  As a spender, Joseph had only one Cabinet rival: the Education Secretary, Margaret Thatcher. Derided as the ‘Milk Snatcher’ in 1971 because she had to carry out Macleod’s plan to scrap free school milk for children aged between 8 and 11, Mrs Thatcher was actually a big-spending education chief who secured the funds to raise the leaving age to 16 and to invest £48 million in new buildings. In December 1972, she even published a White Paper envisaging a massive £1 billion a year for education by 1981, with teaching staff almost doubling and vast amounts of extra cash for polytechnics and nursery schools. She wanted ‘expansion, and not contraction’, she said. It never happened; if it had, her reputation in the education sector might be very different. ‘In several respects,’ said the Guardian at the time, she had been a ‘more egalitarian Minister than her Labour predecessor. Her support for primary schools, polytechnics, the raising of the school-leaving age, and the new nursery programme will all provide more help to working-class children than the Labour programme actually did.’24

  The truth was that, far from breaking with the post-war consensus, Heath’s ministers still believed that the proper role of government was to administer a gently expanding welfare state, with more money being spent every year on health, education and social benefits. Behind this was the fatal assumption that, once the right dose of efficiency had been applied, Britain’s economy would set off on a new burst of steady growth, the pie expanding every year so that everyone could have a bigger slice. But this was wildly optimistic, to say the least, for the economic inheritance was not as rosy as it looked. Although the outgoing Chancellor, Roy Jenkins, had left his successor a rare balance of payments surplus, his austerity had fuelled intense resentment among workers who had seen their earnings stagnate. By the autumn of 1969, there were already reports of ‘anarchy’ in industry, with car workers, coal miners, nurses, firemen, dustmen and local government workers all walking out in pursuit of better wages. Conscious of the looming electoral showdown, Jenkins had quietly turned a blind eye to their escalating pay claims, with some settlements soaring as high as 12 or 13 per cent. But while this was clever politics, it was extraordinarily reckless economic management. Even at the time, many observers thought that it was madness to allow workers’ pay to increase so quickly at such a sensitive moment. Growth was sluggish, profits were weak and output was growing at barely 1.5 per cent a year. What was more, the cancer of inflation had already taken hold in the world economy, thanks to the Americans’ disastrous overspending on the Vietnam War. As early as April 1970 the economist Michael Shanks predicted that defeat ‘on the wage front’ would be an object lesson in ‘how dangerous it can be for governments to slacken the reins’. And whoever found himself in Downing Street after the election, predicted Lord Shawcross in The Times, would have to take ‘the most disagreeable measures’ if Britain was to escape ‘runaway inflation’.25

  In the summer of 1970, Heath’s economic priorities, as he reminded his colleagues, were ‘to reduce the burden of taxation and to restore the competitive vitality of British industry’. And in his first budget, unveiled at the end of October 1970, Anthony Barber did as his master demanded, slashing income tax by 6d. in the pound and corporation tax by 2.5 per cent, while cutting about £300 million in government spending, thanks to higher charges for prescriptions, false teeth, glasses and school meals, the withdrawal of free school milk for older children, the end of universal council-house rent subsidies and the imposition of admissions charges for museums and galleries. The general aim, said Barber, was to ‘lessen Government interference’ and to give the individual ‘greater freedom in how he spends or saves his income’, sentiments that delighted right-wing newspapers and outraged the Labour benches. And yet, behind the rhetoric, Barber was already seriously worried. As early as July, when he had succeeded the unfortunate Macleod, the Treasury had reported that wages and salaries were growing by 11 per cent a year. Heath urged his ministers to stand firm ‘in the face of clearly excessive wage demands’. Even though it would mean strikes in the short term, he said, ‘there will be long-term gains’. But a few months later, Barber reported that wage settlements in July had reached 14 per cent, even though the economy was growing at barely 2 per cent. The economy was facing ‘the most severe bout of cost inflation since at least 1951’, he gloomily told his colleagues; they simply must persuade the workers’ representatives in the TUC to moderate their demands.26

  Unfortunately for the government, however, the unions were in no mood to roll over. As the union leaders saw it, this was a reactionary Conservative government that had come to power promising to slash public spending and push back the frontiers of the state. Even worse, the Employment Secretary, Robert Carr, was preparing a radical Industrial Relations Bill that would drastically curtail the historic rights and freedoms of the union movement, and had already made it clear that he would not be deflected by TUC protests. And now, they thought, the government proposed to make low-paid public employees foot the bill for its battle against inflation. They watched in fury on 24 September, as Heath told ITV’s Alastair Burnet that he was determined to resist ‘wildly inflationary’ wage demands, even if it meant a rash of strikes over the winter. And as prices inexorably rose, putting living standards in further jeopardy, so the pressure from their members mo
unted.27

  Of course, Heath could have resorted to a statutory incomes policy to keep wages down; but having ruled this out only months beforehand, he was not ready for a U-turn just yet. Instead, he told Carr that the government must hold the line against big public pay increases, setting an example for the private sector. Carr duly carried this message to the TUC, imploring them to show restraint. But it was too late. Already the strike figures for 1970 were far worse than in previous years, he told the Cabinet on 3 September, ‘and there was no prospect of an early improvement’. Worryingly, strikes seemed to be getting longer, while ‘militancy was also continuing to be rewarded’, for example at the big GKN engineering plant in Wellington, Shropshire, where workers had just won a whopping 25 per cent increase. Both government and employers, Carr said, must ‘offer strong resistance repeatedly – a single successful test case would not be enough’. But he had bad news for his colleagues: the next important public pay claim, from the local authority manual workers, was upon them, and he did not expect an easy ride.28

  More than any other event, it was the council workers’ strike of October and November 1970 that demonstrated the weakness of Heath’s modernizing ambitions and set the tone for his unhappy premiership. By the middle of October, more than 60,000 workers had walked out, with another 75,000 taking part in overtime bans, one-day strikes and unofficial stoppages. It was not a strike that did great damage to Britain’s economy, but it caused enormous and very visible inconvenience to millions of people, as parks and schools were closed for a lack of caretakers, as rubbish piled up in the streets, as raw sewage poured into the nation’s rivers. Along the Thames and Avon, observers spotted thousands of dead fish, poisoned by the stream of pollution; in Enfield, flies swarmed out of the Deepham sewage works into the streets of London; in Tower Hamlets, troops were called out to clear the streets of decaying offal; in Leicester Square, in an uncanny preview of events at the end of the decade, uncollected bags of rubbish were piled into a foul-smelling mountain. As in the General Strike, volunteers offered to help stave off mass flooding: in Cardiff’s Penarth Road pumping station, residents worked eighteen-hour days to prevent the system breaking down and sewage flooding into the streets. In London, meanwhile, a group of ‘six patriots’, including the Duke of St Albans’s daughter Lady Caroline ffrench Blake, swept the streets around Whitehall in preparation for Remembrance Day. It was ‘a demonstration against industrial anarchy’, said their leader, a City economist called Patrick Evershed. ‘We all believe that it was a disgrace that Mr Heath’s visitors who come from all corners of the world should have to wade through debris on their way into No. 10 … We are all quite sure that the majority of the British public will support us in the action we have taken today.’29