The Story of Britain: From the Romans to the Present (107 page)

Not content with changing the currency and the country’s trading orientation, the Heath government massively remodelled local government to reflect population trends. In six conurbations outside London new metropolitan counties came into being–Merseyside, South Yorkshire, Tyne and Wear, the West Midlands, West Yorkshire and Greater Manchester.

The Heath government also saw the intensification of a civil war in Northern Ireland which had erupted in the last year of the Wilson administration. Stormont, the local Parliament for home affairs established in 1920 on the edge of Belfast, had ruled Northern Ireland in the interests of the two-thirds Protestant majority. Protestants controlled everything, including housing and employment, leaving Catholics with very few civil rights. The Royal Ulster Constabulary, the province’s police force, was Protestant to a man and discriminated against Catholics.

For forty years the Catholics of Northern Ireland had endured being treated as a lesser race. However, at the end of the 1960s the example of black people successfully asserting their civil rights in America inspired them to revolt. Civil rights organizations began to flourish in Northern Ireland, helped by a liberal reforming prime minister, Captain Terence O’Neill. The Royal Ulster Constabulary outraged world opinion by using violence against demonstrators, but no policeman was punished for this brutality and no attempts were made at government level to get Stormont to be more responsive to the needs of the Catholic community. So serious did the situation become, with clashes between Protestant and Catholic rioters and the burning of hundreds of mainly Catholic homes in Belfast, that in 1969 Wilson sent British troops to the province.

At the same time a deadly new splinter group called the Provisional IRA, or the Provos, started murdering Protestants in Northern Ireland. They believed that the only way things would ever improve for the Catholics was to obtain the unification of Ireland. The bombing campaign waged pitilessly by the Provos was answered just as bloodily by Protestant terrorist groups. When the British government insisted on introducing internment without trial, the prejudice against Catholics seemed to be confirmed even in the treatment of suspected terrorists, as no Protestant terrorists were being interned.

The watershed came one day in January 1972 that became infamous as Bloody Sunday, when thirteen members of a peaceful group of Catholic demonstrators were shot dead in Derry. With the province in uproar the Conservative government concluded that the fifty-year-old Stormont Parliament should be closed down. Direct rule would be imposed for twelve months while plans were drawn up for a fairer assembly and a power-sharing executive created from that assembly with equal rights for Catholics and Protestants.

The Heath government understood that one of the most important factors in obtaining peace in Northern Ireland was to involve Southern Ireland or Eire. At Sunningdale in 1973 the Council of Ireland was created, a body with members from both north and south. In return for gaining some say in the north’s affairs, Dublin agreed to give up its fifty-year-old claim to Northern Ireland. Dublin also accepted that the province would never change its status and be reabsorbed into the south unless the majority of its citizens wished it.

Despite the importance of these exchanges, the sectarian hatreds of Northern Ireland prevented the assembly’s rule of the province from getting under way as planned in January 1974. All the successful candidates in the elections to the new assembly, except one, were opposed to sharing power with the Catholics. Strikes took place all over Ulster in bitter protest against the Sunningdale agreement. The British government was forced to suspend Stormont and retreat to direct rule once more, with 20,000 soldiers now stationed in Ulster.

As Heath’s initiatives in Northern Ireland ground to a halt, by the beginning of 1973 his industrial strategy was also being violently rejected. A series of massive strikes had been directed against his pay and price initiatives. Even normally restrained civil servants went on strike as the price of food soared and unemployment rocketed. The American dollar was devalued with knock-on effects on the pound. So ruinous and uncontrollable was the rate of inflation that Heath’s chancellor Anthony Barber was forced to make emergency payments to those on social security and to subsidize the price of butter. He also handed over no less than £15 million to the mortgage companies to make sure they kept their interest rates down because the cost of living was rising too fast.

Unlike Labour, the Conservatives had not been divided among themselves over legislation to restrict the powers of the trade unions. They pushed through industrial relations laws and set up the National Industrial Relations Court. But this policy of confrontation did not stop the strikes. In 1972 the Conservatives had been humiliated when an inquiry awarded striking miners a pay rise three times the amount the government was offering.

In October 1973 the already spiralling inflation spun out of control, as it did all over western Europe, as a result of the Arab–Israeli Yom Kippur War. Enraged by western support for a victorious Israel, which had once again defeated the Arab nations, Arab revenge had been hardhitting. Countries which had supplied arms to Israel were boycotted, and oil prices were quadrupled. This pitched the economies of western Europe into recession. At this time of crisis it was more necessary than ever to keep a ceiling on wages and prices. But the miners rebelling against Heath’s price controls realized that the moment gave them unique leverage. With fuel at a premium, they refused to work overtime unless they were given a pay increase above the government’s norm. They were joined in fraternal solidarity by the electricity power engineers and by ASLEF, the Amalgamated Society of Locomotive Engineers and Firemen; this disrupted not only the running of power stations but the movement of coal.

As the icy winter of 1973 drew on the country began grinding to a halt. Heath felt he had to stand by his inflation strategy, but the result was deadlock. Once again the government was forced to employ emergency measures. British industry was rationed to working a three-day week to save electricity. A sense of despair pervaded the country. A government-imposed speed limit took the place of petrol rationing, but the effect on morale was the same. Television stations were forced to close down by government order at 10.30 each night. When the TUC stepped in to offer to negotiate a one-off settlement with the miners outside Heath’s pay norm, the newspapers asked ‘Who governs Britain?’ But the miners refused to enter into further negotiations. They wanted a dramatic increase in wages, even though Britain could not afford it. When that was refused the miners declared that on 9 February 1974 they would strike. In response Heath called a general election for 28 February.

Heath had only been pursuing policies which Labour had pursued more cautiously. But, just as he had been defeated by the miners, he was defeated at the election–though so narrowly that he could approach the Liberals and ask them to form a pact with him. There was not enough common ground between the two parties, and so Harold Wilson formed a minority government, returning to power for the third time. In October that year he went to the country again, in search of an overall majority; he succeeded, but his majority was only three. Heath was challenged for the leadership of the Conservative party in February 1975 by Margaret Thatcher, his former education minister. With right-wing support she succeeded in replacing him.

In theory, an agreement known as the social contract between Labour and the TUC that had been reached before the February election should have made industrial relations less fraught. In return for the Labour government repealing Heath’s anti-union legislation, the TUC promised once more to lean on the unions and dissuade them from demanding from the country more than it could afford. The miners’ strike was indeed soon settled. Nevertheless, the rate of inflation ensured that the unions were not inclined to restrain themselves. By 1975 annual wage increases were averaging a grotesque 25 per cent a year, in line with inflation. Over the previous five years, the PSBR (the Public Sector Borrowing Requirement–the total borrowing of the government and of nationalized industries) had gone up by £8 billion. Once again in July 1975 the Labour government fell back on a statutory price freeze and a statutory prices and incomes policy, so that those earning over £8,500 a year were not allowed more money.

Labour fought a losing battle to keep down the cost of government. Mammoth amounts of money were still borrowed by the government and poured into British industries such as British Leyland Cars, Rolls-Royce and Ferranti. By 1976, once again, to the outside world Britain under Labour seemed to be sinking. In March Wilson retired without warning as prime minister. He was succeeded by James Callaghan, who had held the offices of home secretary and chancellor of the Exchequer in previous Wilson administrations and had been foreign secretary since 1974. He and his chancellor of the Exchequer Denis Healey’s immediate task was to negotiate another vast loan of £3,900 million from the International Monetary Fund in Washington to prop up sterling. Once again, the conditions dictated to the British government by the IMF were to reduce public spending.

Denis Healey would implement deep cuts in health and education. But the Labour government was already committed to higher taxation as part of their policy of wealth redistribution. Healey’s frappant remarks about soaking the rich could not be forgotten when supertaxes came in, with the highest rate pitched at a colossal 83 per cent. Many high earners chose to leave Britain now that they were only receiving seventeen pennies for every pound they earned. The new administration could not counter the widespread feeling that the unions ruled Britain. The weakness of the government was shown at every level.

A series of dismal by-elections had cut Labour’s overall majority down to one. Only an agreement with the Liberals, the Lib–Lab pact, allowed them to continue in office, as Callaghan did not want to call an election. The Liberals under the youthful David Steel, ‘the Boy David’, made it a condition of their support that they should be able to veto every new Labour law. As ever the Liberals were hoping for electoral reform and proportional representation: in February 1974 they had polled six million votes out of a total of twenty-seven million, almost a quarter of the voting population, and yet had won only fourteen seats out of 635 in the House of Commons. But owing to an upsurge of Celtic nationalism, the Liberal vote started falling. When the Liberals decided to withdraw their support Callaghan was forced to turn to the newly powerful Scottish Nationalists, who had eleven seats by October 1974. The Scottish Nationalists demanded devolution and a Scottish Assembly in exchange for their support. The discovery of oil in the North Sea off the coast of Scotland in the late 1960s had given the Scots confidence that ‘their’ oil could finance an independent government. Their demands for Scottish independence obliged Labour to speed up an inquiry into the possibilities of devolution and regional assemblies for Scotland and Wales.

Sunny Jim, as the burly, commonsensical Callaghan was known, had begun his reign full of optimism and with the support of the unions. He was determined to unite left and right within the Labour party. But by the beginning of 1979 the unions were no more inclined to obey him or the TUC than they ever had been. They simply refused to be tied to the wage increases the government had asked for to keep down inflation. Almost all asked for double–and got it.

And the way they got it was by strikes. There was endless industrial action by transport workers and a reckless strike mentality spread into every industry in Britain. When in late January 1979 over a million workers in the public services, dustmen, ambulance drivers and water engineers, went on strike for a day it seemed that Britain was collapsing into its own filth. The dead could not even be buried. It was Britain’s ‘Winter of Discontent’.

In marked contrast to Callaghan’s constant and ultimately feeble remonstrations with the unions was the voice of Margaret Hilda Thatcher, the new leader of the Conservative party. She did not mince her words as she watched the government’s guidelines on incomes and industrial policies being destroyed by the unions. Increasingly most of the country agreed with her as the rubbish mounted outside their windows during a three-and-a-half-month dustmen’s strike. At the end of March 1979 the Labour government had run out of deals. On a no-confidence motion in the House of Commons, it was brought down by one vote and an election was called for 3 May.

The Thatcher Legacy (1979–2002)

In a dramatic reversal of fortune the 1979 election gave the Conservatives 339 seats, against Labour’s 268. With an overall majority of forty-three the Conservative leader Margaret Thatcher took office. With her elegant blonde coiffeur, her high court shoes, flowing skirts and handbag she looked no more threatening than the wife of the company director she was. But Mrs Thatcher’s sedate appearance disguised the fact that she was a revolutionary, a revolutionary of the right.

By 1979 British industrial productivity had reached dramatic new lows. Britain was known as the Sick Man of Europe and was being held to ransom by the unions, whose legendary union-sponsored tea breaks made the country a laughing stock all over the world. The Labour government’s stormy attempts to curb the unruly unions weakened Britain’s international standing and undermined sterling. Restrictive union practices–for example, that such and such a worker could only do the job his union permitted–were holding back Britain from the sort of technological innovation without which industries die. The print unions were preventing the British newspaper business from using the computer technology that would have made their papers far cheaper to produce, because it would put the compositors out of a job–the people who each day pasted up the type for the hot-metal printing process invented in the fifteenth century. Japan and Germany were forging ahead because they had rebuilt their industries from scratch after the destruction of the Second World War, unimpeded by obstructive unions.