State of Emergency: the Way We Were

by Dominic Sandbrook

  Throughout the late summer of 1973, Edward Heath’s poll ratings remained becalmed. Recent by-election results had been dreadful, with the government losing Rochdale in October 1972, Sutton and Cheam in December 1972, and both Ripon and the Isle of Ely in July 1973, all to Thorpe’s resurgent Liberals, who had come from nowhere to become the political sensation of the moment. For Heath, it was not much consolation that the victorious Liberal candidates – among them the vastly and splendidly overweight Cyril Smith and the lugubrious Clement Freud – added greatly to the colour and gaiety of Westminster life. Indeed, the Prime Minister’s personal standing remained very poor: according to Gallup in July, only one in five people thought he would be re-elected in late 1974 or 1975, and with the Liberals approaching 30 per cent there were even murmurs that the Tories would be relegated to a poor third.

  Heath himself, however, remained surprisingly upbeat. When Douglas Hurd accompanied him on a tour of the constituencies that September, the mood was relaxed and optimistic, the sun shining as Heath conducted a calypso at a Walsall primary school, shook hands with ‘waving women in sunny streets’, drank gin with local newspaper editors and signed autographs for a big and friendly crowd in Reading. Even when Hurd was given the latest poll figures, showing Labour on 34 per cent, the Liberals on 32 and the Conservatives on 31, the Downing Street staff remained calm and cheerful. After all, they had until June 1975 to call an election, and by that time, they hoped, the country would be basking in the sunshine not just of a decent British summer but of the economic miracle wrought by Barber’s dash for growth. And the next step towards recovery, they hoped, would be the latest instalment of Heath’s plan for wages and prices: Stage Three.40

  Since Stage Three was a monument to bureaucratic grandiosity, it made perfect sense for Heath to unveil it in the gilded baroque surroundings of Lancaster House, lecturing the television cameras like some latter-day General de Gaulle. Under the new regime, pay rises were to become more flexible. Although the ceiling was set at 7 per cent or £2.25 a week, with a maximum per individual of £350, there were now exceptions for unsocial hours, efficiency schemes and ‘equal pay’ measures. Prices, however, were even more tightly controlled than before, with an extra 1,000 companies coming under the supervision of the Price Commission. All in all, it was an even more complicated package than Stage Two: the consultative Green Paper published to accompany the announcement was fifty-five pages long, including a mind-numbing thirty-seven pages of amendments and clarifications. The TUC’s reaction was predictably negative, and general secretaries queued up to offer gloomy criticisms. But Heath had thrown them more than a few bones, including a Christmas bonus for pensioners, a strict limit on dividend payments, and ‘threshold payments’ to protect living standards if import prices increased too much. As he explained that evening on Panorama, the threshold payments guaranteed that workers would not suffer from inflation: since they would kick in automatically, there was no need for the unions to seek inflationary pay rises themselves. And since unemployment had fallen so fast it was almost at a record low, he was confident that the unions would make little trouble. Even The Economist agreed that world commodity prices might soon fall, which would inevitably mean a recovery in the balance of payments. ‘As a nation, as a country,’ Heath intoned at the end of his presentation, ‘we have a great opportunity, and it is up to all of us as a nation to seize it.’41

  Yet even before Heath published the new plan, there were signs of trouble. An ITN poll released on 6 October hinted at what critics called a ‘serious failure of communication’, with 53 per cent describing Heath’s incomes policies as unfair and only 38 per cent calling them fair. Only 28 per cent said that they were better off than in October 1972, while 30 per cent said they were about the same and 41 per cent thought they were worse off. Perhaps most worryingly for the Prime Minister, only 14 per cent expected things to get better over the next twelve months, while 49 per cent thought they would get worse – hardly a vote of confidence in his economic policies. And plenty of experts had their doubts that Stage Three was the answer to the nation’s problems. As Alan Watkins wrote in the New Statesman, the much advertised threshold payments ‘could turn out to be catastrophically expensive’ if prices defied Heath’s predictions. Under Stage Three, workers were entitled to an extra 40p a week as soon as the retail price index went above 7 per cent, and then another 40p for every percentage point thereafter. If prices remained stable, or increased by only a small margin, then it would be no more than a clever gimmick to win union support. But if they went up, then the threshold payments might be an inflation accelerator, piling wage rises on price rises, a certain recipe for hyperinflation.42

  It was at this moment that fate took a decisive hand. Whatever Heath’s weaknesses – his atrocious communication skills, his impatient dismissal of tradition, his inability to understand the passions of others, his curious lack of political sensitivity, his towering personal rudeness – they were dwarfed by one flaw he could do absolutely nothing about: he was extraordinarily, incredibly unlucky. Just three days before the unveiling of Stage Three, Egyptian and Syrian troops crossed the ceasefire lines in the Sinai desert and the Golan Heights, launching a coordinated offensive that took Israel almost completely by surprise. Six days later, American planes began airlifting supplies to Israel – a decision that President Nixon and his Secretary of State, Henry Kissinger, had already been warned might provoke severe economic repercussions from the Arab nations who dominated OPEC, the oil-producers’ cartel. And vengeance came swiftly. On 16 October, the delegates of OPEC’s six Gulf states released their first bombshell: a 70 per cent increase in the posted price of oil, which now reached a record $5.11 a barrel. It was the first time they had set the price without bothering to consult the world’s major oil companies, among them the part-British firms BP and Shell. ‘The moment has come,’ remarked the Saudi oil minister. ‘We are masters of our own commodity.’43

  It is a complete myth that the oil shock of late 1973 was a surprise, breaking like thunder in an untroubled blue sky. In fact, the papers had been predicting it for months, even years, and the OPEC nations had actually secured their first price increase two years before, reflecting not only the new self-assertion of the post-colonial Arab world, but the fact that greedy Western consumers were guzzling more oil than ever before – 44 million barrels a day by 1970 – while trying to sell the Arabs manufactured goods at rapidly rising prices. What is more, the notion that the Arabs kept their monopoly of oil hidden up their capacious sleeves as a kind of secret weapon is utter nonsense. As early as 1971, Heath himself had told the West German Chancellor Willy Brandt that if there was another war between Israel and the Arabs, then OPEC might cut oil supplies to the West. A year later, officials at the Department of Trade and Industry predicted that a steep increase in the price of oil was bound to happen soon, and in June 1973 Reginald Maudling warned the readers of the Sunday Express that conflict in the Middle East was bound to trigger a sharp increase in the near future. Indeed, the Arabs hardly made a secret of their intentions. In May 1973, Saudi Arabia’s King Faisal publicly declared that the West must ‘do something to change the direction that events were taking in the Middle East’, or they would have to pay the price. And as late as September, he told American television that ‘America’s continued support of Zionism against the Arabs makes it extremely difficult for us to continue to supply the United States with oil’. The West could hardly say it had not been warned.44

  What few had anticipated, however, was how savage the blow would be. Since Heath’s government was regarded as friendly by the Arab world, Britain was spared a full embargo. Even so, the impact of the price hike as well as severe production cutbacks meant that the price of a barrel of oil surged from$2.40 in early 1973 to a staggering $11.65 by the end of the year – and this compared with just $1.80 at the turn of the decade. But Heath believed, with characteristic stubbornness, that Britain could escape the storm because of its connections to Shell and
BP, of which it owned 40 per cent and 51 per cent respectively. A few weeks after the crisis began, he summoned Sir Frank McFadzean, the chairman of Shell, and Sir Eric Drake, his counterpart at BP, to a secret meeting at Chequers, and told them that they must not cut their supply to Britain, as they were doing elsewhere in the world. McFadzean pointed out that since Shell was 60 per cent owned by the Dutch, he could hardly give Britain preferential treatment. So Heath focused on Sir Eric Drake, not asking him but ordering him, as his majority shareholder, to do as he was told. Not for the first time, though, Heath had chosen his adversaries badly. A tough and blunt man, Drake had once been threatened with death in Iran, and had no intention of letting Heath ‘destroy my company’. As he aggressively pointed out, if Britain insisted on preferential treatment, not only would BP’s smaller shareholders sue the government, but its subsidiaries in France, West Germany and elsewhere would almost certainly be nationalized in retaliation. If Heath insisted, Drake said, ‘then I must tell you that I must have it in writing. Then we can plead force majeure to the other governments because I’m under government instructions.’ Heath hesitated: such a document, he knew, would destroy his relationship with his new European partners. ‘You know perfectly well I can’t put it in writing,’ he snapped. ‘Then I won’t do it,’ Drake said calmly.45

  Heath’s fury was understandable, because the oil crisis had the potential to destroy his economic ambitions; but it was impotent fury all the same. In the long run, the crisis was a watershed not just in British but in world history, the moment when globalization made itself felt, when the Western industrial powers realized that they could not have everything their own way, and when millions of ordinary families felt the shuddering impact of distant events hundreds and thousands of miles away. As a result of the price rise, the industrialized world faced a bill for more than $70 billion a year on top of what they were paying already. And with oil at almost $12 a barrel, the Western economy plunged almost overnight into a nightmarish combination of recession and inflation, ‘stagflation’, amounting to the worst global downturn since the Second World War. For Heath, it was the worst possible news, and there was no silver lining. The Economist estimated that the cost in imports would add an extra £1.8 billion to the balance of payments deficit in the next twelve months, while the inflationary effect would be as if the entire country had awarded itself a pay rise of 15 to 20 per cent. And with prices increasing, Heath’s own policies guaranteed that wages would rise too, thanks to Stage Three’s threshold payments, which were triggered eleven times in the next few months. ‘I realised very quickly’, said Anthony Barber, ‘that all we’d been trying to achieve was really coming to an end.’46

  But it is also a myth that the oil shock was always bound to bring doom and disaster in its wake. In the United States – which was punished even more severely than Britain, because of its support for Israel – the Nixon and Ford administrations managed to weather the economic blizzard without plunging the economy into a devastating bout of inflation, and although there was a prolonged and painful recession, the American economy was in recovery by early 1976. But coming after three draining years of industrial conflict, pay restraint and rhetorical class warfare, the oil shock brought out the very worst in British politics. What was more, it exposed all the weaknesses of Heath’s economic policies: the wishful thinking, the reckless spending, the naive faith in rational bureaucratic solutions. And it handed power to the one group of workers that Heath most dreaded seeing again in the headlines: the miners. Only months earlier, Joe Gormley had promised the NUM conference that ‘never again will we say we shall be more loyal to the country than to our members’. With the country desperate for energy, the miners found themselves in a position of unprecedented power – and they intended to use it.47

  14

  We Hate Humans

  If they kick me or one of the others, well I just nut them. I call it me ‘flick’. It’s a joke among us at Arsenal … it means being brought up in Holloway where it’s tough and you learn from the pram to nut people who pick on you.

  – Charlie George, Daily Express, March 1972

  President Ford … is nothing to do with motor cars but apparently has a good record in baseball. Seems rather like asking Don Revie to become Prime Minister. Might not be such a bad idea at that! He’d certainly make a better impression than Wilson or Heath.

  – Kenneth Williams’s diary, 10 August 1974

  Wednesday, 17 October 1973: a cool, damp evening in north-west London as the players of England and Poland lined up in the tunnel for their decisive World Cup qualifier. In an era when few football matches were shown on television, it was a testament to the importance of the game that not only were the BBC broadcasting it live to millions of nail-chewing English fans, but a global audience potentially reaching 200 million people was expected to tune in. Wembley had been sold out for weeks, and as the players’ studs clattered in the stadium tunnel they could already hear the mighty roar of the crowd, the needy, surging chants of ‘England, England’. The camera panned across the gum-chewing faces as the line of blue tracksuits began the long march out into the arena, their features taut with tension: Martin Peters, the captain and hero of 1966; Peter Shilton, the impossibly athletic young goalkeeper; Roy McFarland, the cultured centre back who had replaced Bobby Moore as leader of the back line; the dynamic combination of Allan Clarke, Mick Channon and Martin Chivers in attack, a riot of sideburns and goals. In the corner of the screen, a grey-haired man in a fawn raincoat slipped past almost unnoticed, impassive and self-contained. Some said Sir Alf Ramsey, the mastermind behind England’s World Cup victory seven years before, was behind the times. But Ramsey needed only this victory to take his country to the World Cup finals in West Germany.

  As England dominated the early minutes, urged on by the roar of 100,000 fans, Ramsey sat motionless on the team bench, his face barely betraying a flicker of emotion as Mick Channon smacked the ball against the Polish post, or as Tony Currie thundered in a shot that seemed destined for the net until the Polish goalkeeper, Jan Tomaszewski, pawed it aside. On television beforehand, the outspoken Brian Clough – who had sensationally resigned only days before from Derby County – had told viewers that Tomaszewski was a ‘clown’. But Ramsey, who had managed England for eleven years and knew better than to underestimate unknown foreign opponents, was not laughing. Nor were Ramsey’s players as the Polish goalkeeper pulled off save after save, shrugging aside the congratulations of his defenders as though it were merely another day at the office. The pressure continued – by the end, England would have 26 corners to Poland’s 2 – and still no goal came. Channon had a shot cleared off the line, a header clawed away; Clarke headed over; Colin Bell cracked in a shot that somehow, diving from nowhere, Tomaszewski touched wide. ‘The night wore its jagged path away,’ wrote the veteran football correspondent Geoffrey Green, one of a dying breed of highly literate sportswriters, ‘amidst a wall of sound rising in layers from the 100,000 crowd while nervous cigarettes darted like fireflies in the night.’

  There was just half an hour left when, at last, a goal came. Poland were packed into their own half, England pressing yet again, when Currie lost the ball on the right and it was swept on towards Gadocha on the Poles’ left wing. ‘Hunter’s got to make that,’ the BBC’s commentator Barry Davies said, a hint of urgency in his voice as the Leeds defender moved to intercept – and then, suddenly: ‘He’s lost it! Gadocha is inside McFarland, Hughes trying to get back goal-side’ – and as red Polish shirts flooded towards England’s goal – ‘Domarski coming up square, number ten’ – and at that moment the Polish forward hit a low, scuffed shot that slipped through Shilton’s despairing fingers, and in the blink of an eye England were behind. ‘And it’s there!’ yelled Davies, his voice shrill with horror. ‘Hunter had to make that challenge, and he didn’t succeed!’ On the pitch, the white-shirted players stared at the ground in disbelief. On the bench, Ramsey sat impassive, his face carved from stone. He made no move
to change tactics, to bring on fresh legs, to gee up his players. He just sat there, calmly and quietly, as he always had.

  England drew level six minutes later, Clarke coolly converting a penalty after Martin Peters had been pushed in the penalty area. But although shots continued to rain down on Tomaszewski’s goal, the clock was ticking remorselessly down. Hunter had a fabulous chance when the ball broke to him on the edge of the Polish area, but again Tomaszewski was there to palm the ball away. With just two minutes left, Ramsey made his move, bringing on Derby’s Kevin Hector for the misfiring Chivers. But it was surely too late. ‘We move into injury and stoppage time,’ exclaimed Davies above the din of the crowd. England threw in one last corner; Tomaszewski flailed desperately; the ball ricocheted towards the net, came back off a Polish defender, and at the back post Hector stretched – and poked it wide. And then, seconds later, the referee blew his whistle, and it was all over. As red shirts streamed towards the Polish bench in celebration, a photographer captured Norman Hunter, his face crumpled with disappointment, his eyes turned to the ground, his shoulders slumped in despair. ‘We all sat in the dressing room afterwards and not a word was said,’ Tony Currie recalled afterwards. ‘Everyone was in shock.’1

  Even in an autumn of inflation, bombings and strikes, there were few more compelling symbols of national decline than England’s failure against Poland. Just seven years after the golden victory that had supposedly capped the youthful optimism of Harold Wilson’s swinging Britain, England had failed even to reach the final stage of sport’s most lucrative tournament. When Alf Garnett contemplated the disaster a few weeks later on Till Death Us Do Part, he was still trembling with anger at the base ingratitude of Britain’s wartime allies. The World Cup, he spat bitterly, would be ‘a laughing stock without England’. The press, meanwhile, was unforgiving. ‘WE’VE HAD IT!’ screamed the back page of the Sun, pointing the finger squarely at the manager. On television, Brian Clough held up a nail and quipped that he would like to hammer it into Ramsey’s coffin. ‘For Sir Alf I can find no excuse,’ wrote Geoffrey Green in The Times; for ‘as the minutes unwound, seemingly faster and faster, there he sat with his substitutes on the sidelines … immobile while his men on the field drained themselves of their last ounce of energy’, like some sporting equivalent of the politicians who had fiddled as Britain’s economic reputation went up in smoke. And like so many commentators in the decades to come, Green diagnosed a chronic failure of the English game, crippled by ‘fear of defeat’, a ‘stagnant defence’ and a fatal addiction to ‘head-ball’, and typified by ‘the hoisting of high lobs into a penalty area’ that resembled ‘Piccadilly during the evening rush hour’. As the Daily Telegraph grimly put it, England had been ‘relegated to a place among soccer’s second-class powers’.2