When someone remarked [that] the new Prime Minister’s Steinway had already been installed in the drawing room, Heath sat down at the keyboard and began to play. After he had completed an entire Beethoven sonata, he stood up. ‘I’m sorry,’ he said, ‘but, gentlemen, when I start something, I always finish it.’
– Time, 9 November 1970
The stark truth now appears. Grocer the waxwork, like Frankenstein’s monster before him, has run amok.
– Auberon Waugh, in Private Eye, 30 July 1971*
On Edward Heath’s first full day as Prime Minister, a woman threw red paint at him. He could hardly have known it at the time, but the incident was an uncanny preview of what was coming in the next few years. But he did not allow it to distract him from his immediate priority: banishing all memories of the hated Harold Wilson. He wasted no time in cancelling Wilson’s Downing Street television rental, and arranged for a removal firm to bring over the furniture from his flat in the Albany, the trappings of his rich bachelor lifestyle: the black leather chairs, the marble tables, the oriental carpets, the collections of old glass and porcelain, the gleaming stereo equipment, the specially built clavichord and, of course, the piano. Meanwhile, he had already made plans for Number 10 to be completely renovated. Out went the chintzy patterns installed by Dorothy Macmillan; in came supposedly ‘masculine’ gold, brown and beige. In the corridors, the dark red carpets were ripped up and replaced with old gold ones; on the walls, workmen put up sheets of white and silver patterned paper. In the Cabinet Room, the dark green leather blotters, the worn leather of the chairs, the patchy green felt on the Cabinet table, were all torn out and replaced with ‘a symphony of muted browns’: fawn baize on the table, light brown leather for the blotters, new brown leather for the chairs. Even the paintings of great old statesmen were taken down, with French pastoral scenes mounted in their place. Admirers told Heath that it looked modern and masculine. But when the former Labour minister Barbara Castle laid eyes on it four years later, she was horrified. ‘Gone was the familiar functional shabbiness,’ she wrote. ‘Instead someone with appalling taste had tarted it up … It looked like a boudoir.’1
Banishing the memory of Harold Wilson, even down to the Downing Street wallpaper, was something of an obsession for Heath. To the new Prime Minister, his rival was a trickster and a cheat, the incarnation of the cheap, squalid compromises and half-measures that were holding Britain back. Even when they met socially, colleagues remembered, Heath would freeze with ostentatious distaste. But now that Wilson was yesterday’s man, the new Prime Minister could apply himself to the task of which he long dreamed, dragging Britain into the brave new world of the 1970s. His had been a very personal victory; and his, he determined, would be a very personal government, a far cry from the feuding and faction-fighting that had blighted Wilson’s years in office. From the very first meeting of his new Cabinet, at eleven o’clock on Tuesday, 22 June, it was obvious that Heath intended to be the boss, the clipped and businesslike captain running a tight, well-disciplined ship. Far more than any of his predecessors, he saw himself as a dynamic, modernizing chief executive, hired to turn around a vast but struggling corporation.2
At that first meeting, Heath told his assembled ministers that he expected ‘a new style of administration’ and ‘changes in the machinery of government’. That was classic Heath; having briefly been a civil servant after the war, he was an unrepentant machinery man. Colleagues often thought that he would have made an excellent civil service mandarin, such was his obsession with efficiency, rationalization and problem-solving. A taciturn and withdrawn man himself, he had never seemed comfortable with political passion or emotion; what mattered was the application of reason to sort out difficult issues. If the committee structure worked properly, ‘with the help of dispassionate and largely apolitical policy analysis,’ wrote his aide William Waldegrave, ‘previously intractable problems could be rationally solved.’ At Heath’s very first Tuesday evening audience with the Queen, his agenda began with ‘the formation of the government, civil service matters and the place of businessmen in the work of government’. But even his aide Douglas Hurd, one of his most loyal admirers, reflected that they had placed rather too much emphasis on how the government worked, on endless boards and commissions and councils, rather that what it was actually going to do. Heath, he thought, ‘tended to exaggerate what could be achieved by new official machinery’. But if the chief executive of Heathco, as Private Eye dubbed him, thought that Britain’s problems could be solved merely with the creation of another board or two, he was heading for disappointment.3
In that first Cabinet meeting of Heath’s premiership, there were already signs of some of the troubles that would define his era. The third item on the agenda concerned Heath’s plan to apply for British membership of the Common Market, which had long been an obsession for him. Within days, he told his ministers, his representatives would be meeting European officials to launch the application. Meanwhile, the new Home Secretary, Reginald Maudling, reported that the chief military commander in Northern Ireland had asked for five more battalions to help contain the demonstrations expected during the July marching season. This met with general agreement, although Heath added that ‘a fresh political approach to the problem of Northern Ireland was urgently needed’. And there were problems closer to home, too. The new Chancellor, Iain Macleod, reported that while Britain’s balance of payments was in a decent state, inflation was a growing concern, thanks to recent ‘sharp increases in earnings and prices’. And the new Employment Secretary, Robert Carr, warned that trouble loomed in the docks, where the unions had threatened to walk out in pursuit of a higher minimum wage. Carr hoped to persuade the employers to ‘conduct the negotiations as far as possible on their own responsibility, without leaning too heavily on Government assistance’. Unfortunately for Heath, however, the strike quickly got so far out of hand that just two weeks later, he was forced to declare a state of emergency – the first of a record five in less than four years.4
In the hot summer of 1970, many people expected the new government to take a radical right-wing approach to public affairs. After all, when the Tories had picked Heath as their new leader five years before, he had been the candidate of change: ‘thrusting, pugnacious, aggressive’, as Panorama had called him, ‘the man for those Conservatives who think the party needs “a tiger in its tank” ’. Since then, grass-roots activists had been disappointed by his moderation, especially over issues such as immigration, on which he had been outflanked to the right by Enoch Powell, the tribune of white working-class resentment and free-market prophet in the wilderness. But in January 1970, Heath had apparently decided on a genuinely radical approach after a Shadow Cabinet strategy meeting in the magnificent Selsdon Park country hotel, near Croydon. Harold Wilson had even nicknamed him ‘Selsdon Man’ (after ‘Piltdown Man’), warning that the meeting heralded ‘not just a lurch to the right’ but ‘a wanton, calculated and deliberate return to greater inequality’, while The Economist hailed the new ‘Stainless Steel Tories’. In fact, Wilson’s phrase rather backfired, giving the Selsdon meeting a sense of coherence and a public impact it never deserved. Much of the discussion had been vague and inconclusive: far from lurching to the right, Heath’s economic policy remained a bit of a fudge, especially where inflation and incomes policies, the two burning issues of the moment, were concerned. But Heath went along with the Selsdon Man image. Even though it gave a misleading impression, it at least made him look decisive and coherent, a tough leader promising radical free-market solutions. And if nothing else, it bought him some credit with the right wing of his party, who now thought that the Messiah had come at last. The only problem, of course, was that he had aroused expectations on which he could not possibly deliver.5
With Selsdon Man in mind, many commentators interpreted Heath’s victory as the end of the consensus that had governed British politics since the late 1940s. Even though the consensus is often exaggerated – the two parties had very different aims, often talked different political languages, and enjoyed a bitter rivalry – there was still a sense in which political and economic life in the 1950s and 1960s fell between universally accepted limits. Both parties, for instance, were committed to the Cold War and retreat from empire; both agreed that the government had a responsibility to ensure social welfare, based on the structures created in the 1940s; both believed in full employment; both recognized and respected the role of the trade unions; and, crucially, both believed that it was the role of government to ensure steady economic growth through managing demand, taking inspiration from the arguments of the great inter-war economist John Maynard Keynes. Unfortunately, although the economy had boomed during the 1950s and 1960s, allowing Tory and Labour governments alike to push through vast increases in social spending, the consensus felt distinctly tired, even threadbare by the time Heath came to power. Even in the early 1960s, there had been a torrent of criticism that Britain had failed to modernize, and that, beneath the superficial prosperity, the rot was setting in. In 1964, Harold Wilson had come to power promising to build a ‘New Britain’ in the ‘white heat’ of the technological revolution. But he had been sucked into a long, debilitating and ultimately misguided attempt to prop up the pound, which ended in defeat with devaluation in November 1967. Even Wilson’s keenest admirers, of whom there were very few, could not disguise the fact that his administration had been a disappointment. Between 1964 and 1970, inflation had doubled, while unemployment rose from 1.6 to 2.5 per cent (small by future standards, of course, but seen as distressingly high at the time). Above all, despite Wilson’s promise of ‘planned, purposive growth’, the oxygen had gone out of the economic boom. From a healthy 5.4 per cent in 1964, growth was down to just 1.8 per cent in 1970. It was no wonder that there was such a pervasive sense of disillusionment and betrayal: as the Labour MP David Marquand later put it, ‘few governments have disappointed their supporters more thoroughly’.6
Behind this, however, lay a deeper problem. For while Britain was clearly much more affluent than in the days when Heath had been growing up, there was also an increasing sense that the country was falling behind its overseas rivals. Some of this showed symptoms of what the historian Jim Tomlinson calls ‘declinism’, a morbid obsession with economic decline that was often politically motivated and overlooked the fact that for most people, life was getting considerably better, not worse. And yet, even though it was inevitable that Britain would eventually lose the competitive lead it had established after the Second World War, there was an overwhelming sense of alarm at the speed with which it seemed to be slipping. In 1950, Britain had commanded a share of about 25 per cent of the world trade in manufactures. By 1960, this had slipped to less than 17 per cent, and, by 1970, barely 10 per cent, just half that of West Germany. In the league table of GDP growth, meanwhile, Britain fell from ninth in 1961 to thirteenth in 1966 and fifteenth in 1971, on its way to a miserable eighteenth in 1976. What was particularly striking was the gulf between Britain and the countries of Europe’s Common Market, which made rather a mockery of the government’s arrogant decision to stay out in the 1950s. By almost every measure, from investment and productivity to the rate of GDP growth per head and the growth of average real earnings, the Common Market countries were ahead. It was no wonder that in the early 1960s, critics had asked ‘What’s Wrong with Britain?’ ‘For the past 25 years or more the United Kingdom has been in a state of chronic crisis … a British disease,’ wrote Lord Shawcross in July 1970. The public needed to face facts: ‘this country is not, and for a long time has not been, sufficiently competitive in world markets.’7
Entire books have been written about what went wrong with British industry. What is clear, however, is that the rot had set in during the 1950s, although it took the global shocks of the late 1960s and 1970s to expose all the weaknesses to public view. At a time when Britain still enjoyed enormous advantages, with many of its competitors busy rebuilding their war-shattered economies, managers and executives were far too complacent, allowing their access to soft colonial markets to blind them to the need for modernization. If Britain had joined the Common Market, its manufacturers might have been exposed to the bracing winds of proper competition, with beneficial consequences in the long run. But it did not. And on top of that, the attachment to full employment (perfectly understandable given the trauma of the 1930s), as well as the power of the unions, meant that politicians shrank from the job losses that would inevitably come in a radical shakeout. So British industry coasted along through the 1950s, only to find the waters getting progressively choppier as foreign rivals caught up. By the early 1960s, the problems were there for all to see: high prices and uncompetitive goods; conservative management; a financial sector obsessed with short-term profits rather than long-term growth; and, of course, short-sighted, defensive unions that did not cause the problems (contrary to what some on the right claimed) but made it almost impossible to take worthwhile measures to resolve them.
Indeed, when the government did intervene, it generally only made matters worse. In a sense, the very idea that the government had a responsibility to manage the affairs of industry was part of the problem. Since it would inevitably be attacked for every rise in unemployment or inflation, no sensible government was ever likely to take radical measures, even though they might be the right ones. Instead, governments of both parties kept intervening to prop up struggling industries like cotton and shipbuilding, although any clear-sighted analyst could see that they were doomed. The Wilson administration was particularly culpable because it was convinced that the way out of the mess was to select ‘national champions’, often huge, unwieldy conglomerates formed after government pressure. But by and large, the ‘merger mania’ of the late 1960s was a disaster. None of the Wilson government’s beloved industrial leviathans, from the gigantic shipbuilding groups in Scotland and the North-east to the ICL computer giant, really worked, while the words ‘British Leyland’ should surely be etched on the tombstone of the man who oversaw its creation, the supreme champion of merger mania, who then called himself Anthony Wedgwood Benn. The problem was not that government intervention in industry was automatically a bad thing; when the French intervened, it often worked, although it is notable that the West Germans, who intervened least, had the best economic record. The problem was that British governments did it so badly, making the wrong choices time after time. And by the time Heath moved his piano into Downing Street, some industries – cars, textiles and shipbuilding, to name but three – were already in desperate trouble.8
In the early days of the Heath government, some predicted that he would bring the radical approach necessary to turn Britain around. Ten days after the election, The Times told its readers that the Tory victory would ‘produce greater changes in the way Britain is run than in any administration since the Attlee government’, a ‘revolution of the generations’ in which ‘most of the pre-1970 assumptions’ would inevitably be discarded. With its promises to cut taxes and to roll back the power of the state, Heath’s manifesto certainly promised something new, and he talked a great deal about setting industry free to stand on its own two feet. And yet the truth was that Heath remained a creature of the post-war consensus. For all his talk of change, he had been a loyal, dependable insider all his political life, and, as Harold Macmillan’s Chief Whip, he had been at the right hand of perhaps the most moderate, collectivist Conservative leader of the century. He was a technocrat, not a radical, a good staff officer who was never comfortable with ideas. His rival Enoch Powell even remarked that ‘if you showed Ted an idea he immediately became angry and would go red in the face’. What people wanted to know, Heath once said, was ‘how we are going to do things rather than what needs to be done’. And like Macmillan and Wilson before him, he hoped that somehow faster economic growth would be the answer to all Britain’s problems. ‘No one will ever understand the Heath government,’ said his friend Robert Carr, ‘unless they understand the degree of our commitment to economic growth.’9
Despite his antipathy to Wilson, Heath and his rival had much more in common than people realized. Both were former civil servants, doers rather than thinkers, who talked a lot about modernizing Britain without quite explaining how they were going to do it. Crucially, both took power with distinctly vague economic plans. For all the nonsense about Selsdon Man, Heath came into office with a yawning policy vacuum concerning the most urgent economic issue of all: the incessant pressure on prices and incomes, which was driving up inflation. Both Macmillan and Wilson had tried to hold down wage increases with statutory freezes – ‘incomes policies’, according to the jargon of the time – but these invariably only postponed and exacerbated the inflationary pressures. The problem for Heath was that the Tory high command was split over the issue. Most senior figures, led by Reginald Maudling, who had been Chancellor in the early 1960s, believed that although incomes policies were blunt and unpopular, they were among the regrettable necessities of life. On the right, however, there was a growing movement to drop them entirely, spearheaded by free-marketeers like Enoch Powell, who thought the government had no business telling people what they should earn. Faced with a crucial choice, Heath’s answer was a fudge: ‘ringing condemnations of compulsory controls qualified by meaningless reservations’, as his biographer puts it. Almost unbelievably, therefore, his five years as Leader of the Opposition had failed to produce a clear sense of how his government would tackle inflation, which was to prove the defining issue of the 1970s. But the public had no way of knowing this, because Iain Macleod had persuaded him that for the campaign it was better to look decisive than to say nothing. ‘Manifestos had to be black or white,’ one colleague remembered Macleod saying. ‘Either we said we were going to have an incomes policy and it would be superb, or that we were not going to have one at all. We should say that we were not going to have one and if in a few years we changed our minds we would have to explain there were special circumstances.’ It was pure cynicism, but Heath went along with it. ‘We utterly reject the philosophy of compulsory wage control’, declared the manifesto – words that even Heath probably did not believe at the time.10
Of all Heath’s ministers, it was Macleod, the D-Day veteran and former bridge prodigy whose mixture of Yorkshire cynicism and Highland romanticism had made him one of the most colourful figures on the Tory front bench, who was expected to set the tone for the 1970s. A brilliant orator whose liberal views on the death penalty, abortion and homosexuality horrified the Conservative rank and file, Macleod had presided over British withdrawal from Africa between 1959 and 1961, but resigned from the government two years later in protest at Sir Alec Douglas-Home’s elevation to the leadership. Everybody agreed that he was Heath’s most brilliant asset; it was said he was the only opponent in debate whom Harold Wilson really feared. As Shadow Chancellor, he was a bit like Denis Healey, a fellow Yorkshireman with a sharp mind and biting wit, in that he prided himself on not reading about economic theory, but cared only about the practical nuts and bolts. Macleod was certainly no fan of laissez-faire, which he thought was ‘a Whig rather than Tory doctrine’, and remarked that setting the market free was ‘an excellent policy for the strong, but we are concerned also with the weak’. As Chancellor, he planned to be a radical reformer, slashing taxes and spending, but not a reckless or uncaring one; in many ways, he was the soul of One Nation Toryism. The only cloud on the horizon was his health. In 1940 he had sustained a severe thigh wound which still affected him, and he also suffered from kidney failure and chronic spondylitis, a spinal disease, which meant that he walked with a pronounced limp, his body hunched and twisted.11
At the beginning of July, Macleod went into hospital for what seemed like appendicitis, but was in fact a benign abdominal condition. On Sunday, 19 July he was back in 11 Downing Street, watching the Commonwealth Games on television, when the heart attack struck. Within an hour, aged just 56, having been Chancellor for exactly a month, he was dead. For Heath, who immediately came over from Number 10 and sat up for the rest of the night trying to comfort Macleod’s wife Eve, it was a terrible blow. ‘I felt numb and sick,’ he later recalled. ‘I was shattered by the news.’ Quite apart from the human tragedy, it was an enormous loss to the government. None of Heath’s ministers had comparable wit, charisma or rhetorical skill, and certainly none had Macleod’s tactical instinct. ‘He was our trumpeter,’ said Robert Carr, ‘and any party, any government, needs a great trumpeter.’ What was more, he was the one colleague Heath really respected and who could stand up to him, the first mate the captain could not do without. With Macleod gone, the government lost its balance. In his place, Heath appointed his protégé Anthony Barber, who had been an RAF pilot in the war, was imprisoned by the Nazis after his plane crashed, and once escaped as far as Denmark before being recaptured. But as Heath’s new Chancellor, Barber cut a much less colourful figure than one might expect from a man who had broken out of Stalag Luft 3, looking more like a balding provincial accountant than a war hero. He had a high voice and hesitant manner, and John Kent’s Private Eye cartoons always showed him addressing Heath as ‘Sir’. To put it bluntly, he was a lightweight; from now on, it was Heath who ran economic policy.12
During the 1970 election, Harold Wilson’s advertising men had come up with a famously negative poster campaign, showing a set of evil-looking clay figurines of Heath, Macleod, Douglas-Home, Quintin Hogg, Reginald Maudling and Enoch Powell, with the caption ‘YESTERDAY’S MEN (They failed before!)’. In fact, yesterday’s men played much less weighty parts in Heath’s government than anyone had anticipated. Macleod was dead, Powell was in exile after speaking out against immigration, and Hogg had been moved upstairs to become Lord Chancellor as Lord Hailsham. Douglas-Home, a former Prime Minister now running the Foreign Office, had too much on his plate already to worry about domestic issues (which had never interested him greatly anyway). The one man who might have been most help to Heath was Reginald Maudling, the Home Secretary, who had been a contender for the Tory leadership in 1965. Maudling was in many ways an enormously appealing politician: clever, affable and fun-loving, a man with a Rolls-Royce intellect who thought nothing of spending the morning tasting vintage port with his officials, and said that his favourite kind of whiskies were ‘large ones’. He might have been a great liberal Home Secretary, a kind of Tory Roy Jenkins. But he was not on good form in the early 1970s. Losing the leadership had brought out his worst characteristics: laziness, greed and self-indulgence. By 1966 he was beginning every day with brandy at breakfast and gin throughout the morning, and while never completely drunk, he was rarely entirely sober either. His wife Beryl, who always liked a drink or several, loved the good life too, and by 1970 they had been sucked into a nether world of flagrant corruption to pay for their extravagant lifestyles. Maudling was turning into a Westminster joke: as Robin Day told a friend in 1969, he was increasingly ‘bone-lazy and quite useless after lunch’. The large Scotches and day-long lunches were taking their toll, and ‘there was an air of shabbiness and disorder in his appearance’, as his biographer puts it. Maudling’s features had thickened; his suits were crumpled; his shoulders were dusted with dandruff; his hair was lank and oily. But these were merely the superficial manifestations of his deeper moral decline.13
From the start, therefore, Heath relied on an inner circle of advisers and officials, the court of a President rather than a Prime Minister. Unlike Wilson’s faction-ridden ‘Kitchen Cabinet’, this was a tight, professional team, albeit a very introverted and technocratic one, including Heath’s political secretary Douglas Hurd, his press officer Donald Maitland, his Principal Private Secretary Robert Armstrong, who soon established an exceptionally close, even filial relationship with Heath, and above all, his Permanent Secretary, Sir William Armstrong, the head of the Civil Service, who became virtually deputy Prime Minister. Beyond them, Heath relied upon a small group of ministers nicknamed the ‘Heathmen’ by the press, who were supposed to be a new breed of thrusting Tory modernizers, united by their modest origins, managerial style and loyalty to their master. This was a bit of an exaggeration, since most came from distinctly wealthy backgrounds, but the press loved the idea of a new generation of ruthless go-getters. Anthony Sampson, an inveterate trend-spotter, thought that they represented the rise of a ‘New Toryism’: ‘men who actually sounded interested in industry; and who were dedicated to making the capitalist system work, with tougher competition, greater incentives and the injection of eager management methods into government’. Among them he singled out the new Education Secretary, Margaret Thatcher, a grammar-school-educated research chemist with a ‘quick mind’ and ‘a scientist’s interest in teaching machines and aids’, and the new Environment Secretary, Peter Walker, a grocer’s son from Gloucester who had become a self-made City millionaire and the ultimate ‘manager-minister’, running his department ‘as if it were a giant corporation’. Walker was not popular inside his own party: at only 38, he was too young, too arrogant, too ambitious and too liberal for many older backbenchers. It was as though an old family firm had been ‘suddenly invaded by icy time-and-motion experts’, one Conservative MP complained. But Heath liked Walker’s emphasis on efficiency, and nobody could deny that he got results.14
In later years, Heath became famous for his hilarious, world-class grumpiness, whether manifested in glacial silences, withering put-downs or selfishness of the most outrageous kind. Stories of his rudeness are legion: the time his campaign bus crashed and threw a middle-aged lady passenger to the floor, prompting Heath to call immediately for a glass of brandy which he then drank himself; or the occasion in the 1970 campaign when a man in a pub asked him whether he would get a tax cut because he was a family man and a home-loving man, to which Heath snapped: ‘Well, you had better go home now, I think.’ Much of this can be traced back to his Kentish boyhood, when he was a spoiled prodigy, smothered with maternal affection: not only did he have his own armchair, he was spared washing-up duty (unlike his brother) because it would interfere with his music practice. Even then, visitors thought him a self-centred little boy, and there was an extraordinary solipsism in the fact that he called his dog ‘Erg’, after his own initials. He did not change as he got older; if anything, as the historian John Ramsden observes, he had a ‘decreasing fund of small talk and a reluctance to spend those diminishing reserves on political colleagues’. His ministers had to get used to long, frosty silences punctuated by flashes of brutally dry humour: after summoning one official away from his wedding anniversary, he greeted him with the words, ‘You’re well out of that.’ ‘The outrageous statement in a deadpan voice, the sardonic question, the long quizzical silence,’ wrote Douglas Hurd, ‘were hard for a newcomer to handle.’ And perhaps only Heath could have attended a dinner of Tory agents before the party conference, organized to show his human side, and sat in silence for so long that his friend Sara Morrison passed him a napkin on which she had scribbled, ‘For God’s sake, say something.’ Without saying a word, Heath slowly unfolded the napkin, read the message, wrote something, folded it, and passed it back. When Morrison opened it, she saw the words ‘I have.’15
And yet there is no denying that Heath inspired exceptional loyalty among his closest colleagues. He was ‘very shy, very reserved’, one civil servant later said, but ‘every so often the clouds would roll back and you saw that he liked you and depended on you. And those moments were worth much more than more frequent signs of friendship from other people.’ Heath’s friend Jim Prior, who was first Agriculture Minister and then Leader of the Commons, agreed that his rudeness was born of shyness and boredom, and that he had a softer side that the public never saw. Other close colleagues, such as Hurd, Whitelaw and Carr, similarly felt a tremendous sense of affection for their chief. Whitelaw even made the extraordinary statement that if Heath told him to become ambassador to Iceland, he would be on the first flight to Reykjavik. ‘I trust his judgement absolutely,’ he said. ‘It’s not because he has charm, because he hasn’t any charm. It’s not because he’s easy to work for, because he isn’t easy to work for. I don’t know what it is – it’s a mystery to me. I only know I trust him more than I’ve ever trusted anybody.’16
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 not, 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 mounted.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
But he was wrong. Like so many of the crises to come, the strike was a public-relations disaster for Heath. One reason the government shrank from sending troops in to run the pumping stations, for example, was their fear that it would alienate the unions and inflame public opinion (another theme repeated during many strikes in the 1970s). Even the Cabinet noted that ‘there was a good deal of sympathy’ with the striking workers: since park-keepers, dustmen and sewage handlers were not well paid, many people thought it was unfair to make them foot the bill for Heath’s economic rigour. And in yet another preview of what was to come, the strike ended in defeat for the government, when an independent panel under Sir Jack Scamp gave in to almost all of the unions’ demands and awarded the strikers an extra £2 10s. a week (a settlement of some 18 per cent) on the grounds that ‘a non-inflationary settlement was never in prospect’.30
For Heath, it was a humiliation. Appearing on Panorama a few days later, he dismissed Scamp’s decision as ‘completely nonsensical’, but refused to accept that it was time to return to an incomes policy. ‘People must face up to their own responsibilities,’ he said, insisting that it was wrong ‘for the Government to compel the people’. Under fire, he lost his temper. ‘Are you really trying to tell me the British people are not capable of facing up to their responsibilities and solving their problems in a free society?’ he snapped. It was a disastrous performance, bearing out the caricature encapsulated by Private Eye’s fortnightly ‘Heathco’ parody. This cast the Prime Minister as the perennially grumpy, small-minded managing director of a beleaguered little firm, forever hectoring his staff on the correct use of the coffee machine or the right way to dispose of their plastic beakers: ‘a man drowning in management-speak but entirely unable to motivate his workforce’, as one account has it. It might not be as good as ‘Mrs Wilson’s Diary’, but not even Heath’s greatest admirers could deny that it had the ring of truth.31
Since polls showed that most people favoured some kind of pay controls, Heath’s refusal to countenance a statutory incomes policy impressed neither the public nor the press. The Times memorably called the government’s economic policy ‘a mint with a hole’. Heath preferred to talk of an ‘N–1’ policy, in which the government would set the moral tone by encouraging settlements that were each slightly lower than the one before. But in many ways this was merely the worst of all worlds: a step away from the supposed free-market principles on which he had been elected, but without any statutory force to back it up. In any case, further humiliation was at hand. On 7 December, the power workers, who were legally barred from walking out because of the danger to public safety, began a work-to-rule and overtime ban in pursuit of a massive 25 per cent pay increase. The effect was immediate. Just before eight that morning, Labour’s Tony Benn noted in his diary, the electricity suddenly blinked off, plunging his home – and millions of others, in the cold winter morning – into darkness. ‘Cold, and the electricity go-slow hits harder and quicker than expected,’ Douglas Hurd wrote that evening. The next day, he recorded, was ‘a bad day. It is clear that all the weeks of planning in the civil service have totally failed to cope with what is happening in the electricity dispute; and all the pressures are to surrender.’32
More than any other dispute, it was the power strike of December 1970 that established the image of the early 1970s as an age of television blackouts and guttering candles. After just two days, power supplies were down by almost a third, and virtually every household in the country had experienced cuts. Early mornings and evenings, peak times for electricity consumption, were the worst: with cuts beginning at seven in the morning, it was common for people to be brushing their teeth or eating their breakfast when the lights suddenly went out. In London in the evenings, lines of cars snaked out towards the suburbs beneath darkened street lamps. In Liverpool, the city ring road came to a standstill as the traffic lights were extinguished; in Edinburgh, thousands of children were sent home after heating and lighting failed at eighteen schools; in Norwich, a couple returned from work to find their house in ashes because they had not realized that their electric fire, cold during the morning’s power cut, had actually been switched on. In the City of London, telephone switchboards failed while banks and brokers’ offices stood cold and lifeless; in Britain’s car factories, workers stood drinking tea around motionless assembly lines. In Bloxwich, Staffordshire, a mother almost died of a severe haemorrhage when the power went off in the maternity ward; in Christchurch, Hampshire, a surgeon operated on an elderly woman in virtual darkness, the theatre lit only by a nurse with a hand-torch. Pubs that relied on electric beer pumps ran dry; hardware stores ran out of candles, which had rocketed in price from 4d. to 15s.; laundrettes raised their prices more than tenfold. And everywhere people sat in impotent fury as the grills cooking their breakfasts went dead and their evening’s television entertainment disappeared before their eyes. Even the Queen had to take her tea by candlelight.33
By the fourth day of the dispute, the government was under intense pressure to give way. Many hospitals were now relying on army generators, while there were genuine fears for outpatients with heart or kidney disease, who relied on their respirators and dialysis machines merely to survive. Outside the House of Commons, demonstrators shivering in the winter frost waved placards condemning Heath’s proposed Industrial Relations Bill. Inside, Parliament was plunged into darkness, with MPs assembling for Prime Minister’s Questions by the dim light of candles and paraffin lamps. ‘The Commons must have looked something like it was 200 years ago,’ one correspondent wrote. ‘Only the quill pens and the winged collars were absent’, and as the ‘voices below boomed out of the gathering gloom … an occasional shaft of light from the windows high above the Chamber picked out landmarks such as a gleaming bald head or the white, flowing locks of Mr Michael Foot’. To many members, the occasion had an almost apocalyptic feel. ‘Driving home that evening through the darkened streets, which only weeks before had been littered with rubbish,’ wrote Chingford’s young Tory MP Norman Tebbit, who had prudently brought his own candle, ‘I wondered for how long this succession of strikes would continue.’34
Jak takes a dim view of the electrical workers in the Evening Standard, 9 December 1970. The printers were in turn so outraged by the cartoon that many walked out, interrupting production of the paper for twenty-four hours.
A few days later, a group of physically handicapped patients in a Cheshire care home, stranded without heat or light, sent a telegram to 10 Downing Street. ‘Don’t weaken,’ it read, ‘we can take it.’ But Heath’s Cabinet had long since acknowledged that for all their fighting talk, there was simply nothing they could do to break the strike. On 12 December, the government declared a state of emergency, which allowed them to forbid the use of electricity in advertising or displays – including Christmas lights, of course – but they could hardly send in the troops to take over and run the power stations. On the same day, Reginald Maudling asked MI5’s Deputy Director General, Anthony Simkins, if the intelligence service would bug a crucial union leaders’ meeting the following morning. To his credit, Simkins refused point-blank, arguing that ‘an eavesdropping attack against this target would take us right outside the field in which the Security Service had operated throughout my twenty-five years with it’. That the government was even contemplating this kind of scheme was a sign of its desperation, and three days later it approved a compromise, although it took hours of late-night talks between Carr, the unions and the Electricity Council before the deal was done. The unions agreed to call off their go-slow, while the government set up an official Court of Inquiry to investigate their pay claim, headed by Lord Wilberforce, a descendant of the great anti-slavery campaigner and one of the most respected judges in the country, with a reputation for pragmatism and fairness. Since the Court’s terms of reference asked Wilberforce to consider ‘the interests of the public and of the national economy’, Heath was confident of a favourable result, while the electricians’ leader Frank Chapple complained that the Court was clearly ‘prejudiced before it had opened’.35
But when Wilberforce reported in the middle of February 1971, his findings made a mockery of their predictions. Far from keeping the settlement at or below 10 per cent, as Heath had hoped, he handed the power workers a new deal worth between 12 and 15 per cent by most calculations, and by some estimates closer to 20 per cent. The unions were naturally delighted, although they did their best not to show it; by contrast, ministers were furious, although they pretended they were satisfied. At the very least, Wilberforce had proved that strikes worked: it was no wonder that the edition of The Times reporting the decision had the headlines ‘Hopes of Postal Strike Settlement Dashed’ and ‘Nurses May Seek Public Inquiry on Pay’ on the next two pages. As an internal report for the Department of Employment wearily put it, the report was bound to ‘influence the general attitude to wage inflation for some considerable time to come’, not least since the government was already embroiled in a fresh battle, this time with the postal workers, and expected further challenges from the engineers, gas and water employees, local authority craftsmen, police and NHS craftsmen. In the event, the government prevailed against the postmen, although ministers reportedly felt sorry to have made an example of a small and moderate union. But this minor victory did not change the fact that in the strike that mattered, Heath had lost. ‘Even when the government wins the battle, as it won the battle with the electricity go-slow,’ said The Times, ‘it loses the peace.’ Like most newspapers, it believed that Heath was mad to have ruled out an incomes policy, not least since Wilberforce had smashed his much-vaunted pay norm into pieces. ‘N–1 may be a policy,’ the paper dryly concluded, but ‘N+3 is a disaster.’36
The debacle of the Wilberforce report made it perfectly clear, if it was ever in doubt, that Heath was sailing into choppier waters than he had ever imagined on that warm June evening when he had snatched victory from the jaws of defeat. By February 1971, the government had fallen almost 8 per cent behind Labour in the opinion polls – this despite the fact that Wilson’s party had descended into a bout of fratricidal bickering bitter even by its standards – while only 31 per cent said they were satisfied with Heath’s record in office. His personal image, never very good anyway, had taken a battering from which it never recovered. Ensconced in Downing Street, he seemed permanently grumpy, even arrogant: when Anthony Sampson interviewed him a month after Wilberforce, he noted that although Heath seemed ‘more relaxed, rather fatter’, with his hair ‘much longer, coming down thickly at the back’, power had brought out some of his ‘monarchic and eccentric tendencies’. Public relations remained a terrible problem: even in private Heath often seemed rude and dismissive, and in front of the cameras he became more stiff and pompous than ever. In Private Eye a few weeks later, the acerbic Auberon Waugh unmasked him as ‘not human at all’, but a ‘wax-work’. This, Waugh thought, was ‘the secret of the amazingly unattractive blue eyes, the awful, stretched waxy grin, the heaving shoulders and the appalling suntan. Even scientists admit that something has gone wrong with the pigmentation.’37
The early months of 1971 were not good to Heath. Not only was he losing the battle against inflation, but the situation in Northern Ireland was rapidly deteriorating, economic growth remained stagnant, and his energies were absorbed by Britain’s bid to join the Common Market, which was far from universally popular. And on 4 February came news of the most humiliating kind: Rolls-Royce, one of the most famous companies in the world, ‘a worldwide symbol of British technology and engineering skill’, as one paper put it, had collapsed. Although it was most famous for its cars, Rolls-Royce also made diesel and petrol engines, nuclear reactors, industrial and marine gas turbines, helicopter engines and aero engines, and it was the last that had brought its downfall. In the late 1960s, egged on by Tony Benn at the Ministry of Technology, the firm had signed a fixed-price deal with the American Lockheed Corporation to make engines for the new RB-211 Tristar airbus. Unfortunately, the contract almost immediately ran into trouble; the deadline was absurdly unrealistic, the time penalties were far too harsh, and even before Heath took office Rolls-Royce had needed £20 million from Benn’s Industrial Reorganization Commission. By November 1970, with its debts mounting, the firm had returned to the government and begged for a further £42 million to stave off its creditors, with an additional £18 million coming from the banks. But even while the company was waiting for the transfer of funds, the losses piled up. By February Rolls-Royce faced a staggering £110 million in production losses, far more than the cost price in the contract. Early on the morning of the 4th, the company released a simple ten-point statement, announcing that, since its losses were ‘likely to exceed the net tangible assets of the company’, it had no choice but to call in the receivers. As one commentator put it the following morning, a more ‘shattering blow to both international prestige and industrial confidence’ could hardly be imagined.38
The collapse of Rolls-Royce left Heath with an apparently impossible dilemma. Allowing the company to fold was unthinkable for national security reasons alone: as he grimly told the Cabinet, the ‘consequential dependence of United Kingdom air defence on a foreign interest would be unacceptable’. What was more, not only the RAF and Royal Navy but 81 foreign air forces and 200 international airlines depended on ‘continuing supplies and servicing of Rolls-Royce engines’, and if the company simply went under the international ramifications would be enormous. The only solution, then, was for the government to step in; and yet that ran counter to everything Heath had been saying about government non-intervention and the virtues of competition. Had not his manifesto in June 1970, after all, promised ‘a vigorous competition policy’, rejected ‘the detailed intervention of Socialism’, and pledged to ‘progressively reduce the involvement of the state in the nationalized industries’? Had not his industry team cut a swathe through Labour’s bureaucratic state, repealing the Industrial Expansion Act and abolishing the National Prices and Incomes Board, the Consumer Council, the Shipbuilding Industry Board and Benn’s beloved Industrial Reorganization Corporation? And had not his Secretary of State for Trade and Industry, the industrialist and former CBI chief John Davies, told the Commons only in November that he would avoid ‘the soft, sodden morass of subsidised incompetence’, and promised to stop giving money to ‘lame ducks’?39
And yet there was rather less to Heath’s economic radicalism than met the eye. Although he was often perceived – and liked to sell himself – as the champion of ruthless neo-liberalism, slashing and burning his way through piles of red tape as he rolled back the frontiers of the state, he was always much more cautious than many people realized. In opposition, he had commissioned a major report by the future minister Nicholas Ridley on how to handle Britain’s gigantic nationalized industries, but while Ridley recommended taking major steps towards what was then called ‘denationalization’, with the ultimate goal of selling off public corporations such as coal, buses, railways, gas and telecommunications, many senior Conservatives (including, interestingly, Sir Keith Joseph) urged caution. Far from embracing Ridley’s proposals, the Tory manifesto was more ambiguous than is often remembered, talking vaguely of pulling the state back from industry without offering concrete details. Even John Davies at the DTI, supposedly the standard-bearer of the new free-market approach, told the party conference that ‘simply to abandon great sectors of our productive capacity at their moment of maximum weakness would be folly’, and pointedly excepted the aircraft industry from his lectures about the madness of bailing out failing industries. Like Heath, Davies was devoted to economic modernization rather than ideological radicalism: the point was to improve British industry by whatever means necessary. And above all there was a basic inconsistency at the heart of Heath’s policy. As the Permanent Secretary at the DTI, Sir Antony Part, later recalled, his job was both to ‘disengage from industry’ and to ‘act like Great Britain Limited’, which were mutually incompatible. Heath wanted to modernize industry and trim the power of the state, but he never seemed to realize that this might mean allowing major corporations to fall victim to market forces, condemning thousands to unemployment. When it came to the crunch, he would have to choose: stick to his guns and throw thousands out of work, or change his mind and step in?40
To push through the first nationalization of a privately owned industry since 1949, Heath said later, was a ‘bitter shock’. But essentially he had no choice: if Rolls-Royce collapsed, not only would 80,000 people lose their jobs, but the implications for Britain’s reputation would be enormous. The effects on Lockheed, which might then go under too, would ‘badly sour relations with the Americans’, while Willie Whitelaw told the Cabinet that the collapse ‘would have the most serious implications for confidence, both in the City and internationally’. On 2 February, therefore, two days before the news was made public, the Cabinet agreed to nationalize the firm’s aircraft assets and sell the rest, including the famous car division, to the highest bidder. When the news was announced to a stunned House of Commons, Labour members jeered with delight, but most Conservatives accepted that Heath had not really had a choice. Even future Thatcherites such as Ridley and Norman Tebbit agreed that Rolls-Royce was an exceptional case, while in the Cabinet Keith Joseph and Mrs Thatcher unquestioningly went along with the plan for nationalization. Only the remorselessly logical Enoch Powell condemned the government’s retreat from its free-market principles, but since not a single other MP shared his view, there could be no division of the House and so he was denied the pleasure of voting against it.41
The next challenge, however, unfolded rather differently. Once again, its roots were in the late 1960s, when Tony Benn had helped to put together a consortium of three shipyards, known as Upper Clyde Shipbuilders, in the Glasgow docks. Since UCS consistently haemorrhaged money, it was a prime candidate for Heath’s policy of disengagement. In opposition, Ridley had even put together a proposal for the ‘butchery’ of the Clydeside shipyards and sale of the carcass. And by the early summer of 1971, the chance seemed to have come: in desperate financial trouble, UCS needed £6 million merely to stave off insolvency. On 21 June, Davies bluntly told the Commons that he had decided it would be in ‘nobody’s interest’ to give the firm more money. A month later, the former Labour minister and Coal Board chief Lord Robens reported that preserving UCS ‘in its present form would be wholly unjustified and in the end could cause more serious and more widespread damage’. Benn’s original merger plan, Robens wrote, had been ‘totally mistaken’, shoehorning five different companies into one rigid structure. As a result, ‘the total injection of public funds has disappeared. No improvement in facilities, no worthwhile investment has been made.’ The only solution, Robens thought, was to wind up UCS, liquidate two yards and keep the other, at Govan, open for the time being.42
It was only with reluctance that Davies accepted the report, not because he thought it was too harsh to the shipbuilders who worked for UCS, but because keeping even one yard open seemed a little too interventionist for his liking. Even the Govan yard, he observed to his Cabinet colleagues, might not find a buyer in the private sector and would probably need an ‘indefinite commitment of public support’, which could not ‘readily be squared with our industrial policy and would be widely resented in sectors of industry (not only shipbuilding) which are being forced to stand on their own two feet’. On the other hand, given the ‘painful social consequences’ of closing all three yards, Davies saw no option but to go along with the report. But when he rose on 29 July, cold and clipped as ever, to announce that some 6,000 men would lose their jobs, the result was bedlam. ‘Nothing in recent years has brought more deafening scenes,’ wrote one observer, as ‘frontbenchers and backbenchers alike leapt to their feet, waving arms and pointing accusing fingers’. With unfortunate timing, Heath was away, leading the British team in the Admiral’s Cup, and it was with merciless fury that Harold Wilson denounced his ‘callous and unfeeling’ treatment of the people of Glasgow. By the time Labour’s Scottish spokesman Willie Ross had stepped up to the dispatch box, ‘the noise was so deafening that he could only stand, without speaking’. ‘This is butchery,’ he cried at last, ‘a cold, callous manoeuvre.’ That was too much for the Tories. ‘Guilty, guilty!’ they chanted at Tony Benn, the architect of UCS, who sat pale and thin-lipped with anger on Labour’s front bench. Only when the Speaker threatened to suspend the session did the noise die down.43
From the very beginning, the workers at UCS were determined not to go down without a fight. Even before Davies’s announcement, they had chartered a special train to bring 400 Clydeside men and women to London, where they marched towards Downing Street, their banners streaming in the sunshine and their pipes and accordion playing ‘Scotland the Brave’ and ‘I Belong to Glasgow’. Invited inside for a short meeting with the Prime Minister, they emerged in defiant mood. ‘We were offered sympathy and only sympathy,’ said the chairman of the joint shop stewards, trembling with fury. ‘If he wants to get us out he will have to come and try to get us out himself. This government will be moved far more quickly than the men of the Clyde.’ ‘They will need to get the soldiers from the Bogside to get us out of the Clydeside,’ added one of his comrades. And while a more sensitive, skilful Prime Minister might at least have persuaded them of his compassion for their plight, they clearly regarded Heath as a reactionary robot. Unemployment in the area, said the shop steward Jimmy Reid, was already running at 10 per cent: what Heath was doing was likely to double that figure, a ‘prehistoric and predatory’ policy. ‘Mr Heath’, he added, ‘seemed to be a person who didn’t know what a dole queue was. What is more, he didn’t seem to care that much.’ It was, he thought, ‘the 1930s all over again, but there is one difference. We are not going to queue for the dole. We are going back to the yards and we are not leaving.’44
It was Jimmy Reid who became the central figure in the UCS controversy. A member of the Communist Party and Clydebank councillor as well as a UCS engineer, he was a master of publicity, inviting the media to come and watch the men defiantly continuing to work. He was the ‘front man with the silver tongue’, as one newspaper put it, becoming a regular on television and the elected Rector of Glasgow University, a symbol both of working-class resistance to the Heath government and of Scottish defiance in the face of English callousness. Neither political party knew what to make of him: the government were taken aback by the UCS work-in, while Harold Wilson visibly squirmed with discomfort at having to support industrial action led by a Communist shop steward. However, Wilson’s natural instincts never deserted him: at one stage he even devised a truly preposterous scheme to sail a boat up the Clyde, ‘visiting the doomed shipyards while Heath was yachting in the Admiral’s Cup’. Tony Benn recorded that he even wanted to wear ‘his outfit as an Elder Brother of Trinity House [the national lighthouse authority], which is the honorary title all Prime Ministers have’. The spectacle of Wilson sailing up the Clyde in a lighthouse-keeper’s uniform would have been worth seeing. Sadly, Benn managed to squash the idea, noting (as was becoming traditional) that ‘my contempt for Harold, which has been pretty high this last week, reached a peak’.45
Benn played a key role in the UCS work-in, not because he felt guilty over his part in the firm’s demise, but because he was convinced that it would crystallize working-class opposition to the Heath government, revive the fortunes of the Labour Party and solidify his own emerging role as the tribune of the grass-roots left. The ideal solution to the shipyards’ problems, he thought, was ‘public ownership and workers’ control’, with UCS becoming a kind of standard-bearer for the new industrial politics he hoped for in the 1970s. Not only did he help to organize the shop stewards’ visit to Westminster in June, he went up to Glasgow for mass rallies in Dumbarton and St George’s Square, and toured the yards, shaking hands with the workers and encouraging them to stand firm. It did him no good in the Commons or the press: Davies even called him the ‘evil genius of shipbuilding’, a phrase gleefully adopted by most of the Conservative-supporting newspapers, while most senior Labour figures remained suspicious of his populist grandstanding. But Benn’s efforts undoubtedly helped to keep the work-in on the front pages, and where he led, others on the left felt they had to follow. By August, support for the shipbuilders had reached proportions of which the government had never dreamed. John Lennon, never one to miss a bandwagon, sent a cheque of support, while on the 18th trade unions organized the biggest demonstration Scotland had seen since the war, leading some 70,000 people from Glasgow’s St George’s Square to Glasgow Green, with pipes and massed banners proclaiming the support of workers from Derby, Barrow, Blackpool and Wolverhampton. Benn, naturally, marched in the front row; later, he addressed the crowd, telling them that the ‘shop stewards were not trying to create a little pocket of revolution in a capitalist world but were trying to engage in a serious industrial and political campaign’, although the effect was rather spoiled when somebody threw a smoke bomb at him.46
On 11 August 1971, Heath returned to London weather-beaten, weary but jubilant after one of the proudest moments of his life, having captained the British team home in the 605-mile Fastnet race and secured the Admiral’s Cup. For any man to bring home the most prestigious trophy in international sailing was a great achievement; for a sitting Prime Minister to have done it during his holiday was extraordinary. In the final race, Heath’s beloved boat Morning Cloud was badly damaged, yet, he recalled, ‘I cannot adequately describe in words our mounting excitement as we calculated that, despite everything, we had made it.’ It was, he said later, ‘one of the most exciting moments of my life’. Yet, unlucky as always, he had no time to enjoy it. As he flew back that evening, Belfast was in flames after the debacle of internment, with twenty-two people having been killed since the army began rounding up IRA suspects. Even his sporting success had become a stick with which to beat him: sailing was a rich man’s habit, his critics said, and his victory was merely proof that he was more interested in his personal hobbies than in the plight of the poor and the unemployed.47
Little seemed to be going right for Heath in 1971. While the death toll mounted in Northern Ireland, the economy stubbornly resisted his best efforts to turn it around, and while the government struggled to hold the line against big public-sector pay deals, private employers, frightened of provoking strikes, were less obdurate. In April, Ford handed its workers a 33 per cent deal after a two-month strike, a precedent followed by the rest of the car industry. By the summer, wages were still rising at an annual rate of almost 13 per cent, far more than the government had forecast. Heath remained adamant, however, that statutory pay restraint was a recipe for disaster. It was Wilson’s ‘compulsory arrangements’, he said in a radio interview to mark twelve months in office, that had bred ‘deep resentments’ among trade unionists in the first place, provoking them to ‘make up the leeway’ as soon as the restrictions were lifted. Wages would soon be ‘increasing at a slower and slower rate’, he predicted, and ‘then of course the economy can expand and work will be provided by firms for people’.48
By this time, however, the question of providing work for people had temporarily eclipsed the nagging anxiety of inflation. The previous June, Heath had inherited a jobless total of just under 600,000 from Labour. But by January 1971, unemployment jumped to 671,000, and, instead of falling, it continued to rise, breaking through 700,000 in February and 800,000 in April, levels unthinkable just a few years before. It was no use Heath pointing out that this was simply the delayed result of Roy Jenkins’s austerity during the last years of the Labour government; to his critics, it was proof that his hard-hearted policies were destroying people’s lives. Instead of focusing on inflation, the press increasingly came to emphasize unemployment, demanding to know what the government was doing about it. And so the Treasury found itself in the awkward position of trying to hold down inflationary wage settlements on the one hand, while stimulating the economy to faster growth on the other. In his first full Budget at the end of March, Anthony Barber told the Commons that it would be ‘irresponsible’ to encourage rampant consumer demand until he had won ‘a substantial reduction in the level of pay settlements’; even so, he still slashed taxes by some £550 million in an attempt to get unemployment down. As Edmund Dell, a waspish critic of so many Chancellors, remarks, it was a budget that promised to bring down both inflation and unemployment, but failed on both counts. But then the combination of the two, known as ‘stagflation’, was a phenomenon that nobody really understood, ‘a new and … baffling combination of evils’, as Barber himself admitted.49
Nothing the government tried seemed to make any difference. With both exports and investment falling and Heath coming under growing criticism for the level of unemployment, the Treasury steadily edged towards greater reflation. In July, matters reached a turning point, as Barber announced an 18 per cent cut in purchase tax, the end of hire-purchase restrictions and bigger capital allowances to encourage companies to invest in new equipment, while Peter Walker unveiled a package of road, railways and housing spending worth some £100 million. This was classic Keynesian anti-recession stuff, and most commentators were broadly enthusiastic, although as The Times noted, the predicted ‘substantial consumer boom’ was bound to put pressure on the level of inflation. And yet, far from falling, the jobless total continued inexorably to rise, breaking through 900,000 in August. When the new session of Parliament opened three months later, the Queen’s Speech pledged that the government’s ‘first care shall be to increase employment’, while Heath told the nation in a party political broadcast that he was ‘committed completely and absolutely to expanding the economy and bringing unemployment down’. Now very little was heard of the government’s radical non-interventionist instincts: even the Post Office Giro Bank, long slated for abolition, was saved because the government could not afford to lose 2,500 jobs on Merseyside. Enoch Powell caustically remarked that ‘from this egg a whole barnyard of lame ducks will speedily be hatched’. But as Heath moved ever closer towards outright interventionism, there were few other voices of Conservative criticism. Most Tories were appalled by the rise in unemployment and wanted the government to be seen to act. Only in a few enclaves of the new free-market or monetarist thinking, such as the Institute of Economic Affairs, were there mutters of disapproval at Heath’s growing apostasy. As yet, however, these were still voices crying in the wilderness.50
By the last weeks of 1971, it seemed that the entire country was waiting with bated breath for the moment that people had once imagined would never happen again, the moment that unemployment reached the dreaded figure of one million. The government, said one junior minister, seemed ‘mesmerised’ by this one, arbitrary statistic, which seemed to mean so much to politicians and the public alike. On 19 November, the latest figures put the jobless total at 970,000, provoking the Opposition to demand an immediate censure debate. A week later, more than 20,000 people joined a trade union-led march from Tower Hill to the Houses of Parliament, which ended in extraordinary scenes as demonstrators and mounted policemen fought a pitched battle on College Green. At one stage, the Speaker had to suspend the sitting after Labour politicians protested that their constituents were being attacked and arrested inside the precincts of the Palace of Westminster – an early sign of the bitterness and violence that seemed to be seeping into political life. But on all sides there was a consensus that unemployment at the current level was simply unsustainable, that it would erode the decency and civility of British life. ‘It is morally, economically, socially and politically intolerable’, said The Times, ‘that unemployment should remain at its present level.’51
Of course, making a fetish of the figure of one million, as The Economist pointed out, was merely a form of statistical superstition. Unemployment had been steadily rising since the late 1960s, partly because of the severe deflation adopted after the Wilson government’s devaluation fiasco in 1967, and partly because of deeper changes in the labour market, which demanded greater flexibility as old heavy industries declined. It was certainly unfair to hold Heath personally responsible when the roots of the problem lay in the late 1960s, and when he had clearly tried everything, including Keynesian spending measures, to address it. In retrospect, it is obvious that full employment as it was understood in the 1940s and 1950s was destined for the scrapheap. From the Wilson years onwards, successive governments were forced to run the economy at higher levels of unemployment simply to keep inflation in check, and even during the fat years under Tony Blair full employment never returned. Indeed, by the standards of later administrations an unemployment rate of around 4 per cent, for which Heath was mercilessly pilloried, was astonishingly good. Under Margaret Thatcher, after all, it reached three times that, and even during the boom of the Blair years unemployment remained much higher than it had been under Heath.
There is an argument that Heath should simply have bitten the bullet and explained to the nation that the days of full employment were dead. Higher unemployment, he could have told them, was not the end of the world; for most people, it would be only a temporary inconvenience, and they were now protected by far more generous benefits than had ever been available in the 1930s. What was more, it was largely beyond the government’s control, and in the long run it would be a price worth paying for modernizing the economy. At any rate, this is what Margaret Thatcher told them ten years later, and it did not stop her winning three consecutive elections. For Heath’s critic Edmund Dell, this proves that he lacked the necessary steel, even the political backbone, to make the tough decisions that Britain needed. But of course the early 1970s and the early 1980s were very different historical moments. Most Conservative MPs shrank from contemplating higher unemployment, convinced that it meant electoral disaster, while even newspapers like The Times, soon to become the chief vehicle for the new monetarism, stuck loyally to Keynesian thinking and the full-employment consensus. For men and women of Heath’s generation who remembered the Depression, high unemployment remained the supreme political taboo, the great evil that the post-war settlement had been built to banish for ever. Jim Prior wrote that Heath ‘utterly despised and detested the pre-war Conservative governments, who had tolerated between two and three million unemployed’. There was a case, Prior reluctantly accepted, for running the economy at a higher rate of unemployment in order to keep inflation down. But there was no way that the Prime Minister would pursue it, and most of his ministers, like Whitelaw, Carr and Prior himself, shared his views. ‘The high unemployment route’, he wrote, ‘was counter to everything Ted believed in and had hoped to achieve for Britain.’52
But this did not protect him from the wrath of his opponents when the long-dreaded moment came. The New Year had begun terribly for Heath: locked in a prolonged struggle with the union leaders over his new Industrial Relations Act, he was also faced with a debilitating coal miners’ strike and a bloodbath in Northern Ireland that was sliding rapidly towards outright civil war. But on Thursday, 20 January, a bad month got even worse: at that morning’s Cabinet, Robert Carr reported that the latest figures, as expected, showed unemployment breaking through the one million barrier. Prime Minister’s Questions that afternoon was a bear-pit: even as Heath entered the chamber, Dennis Skinner, the socialist firebrand from Bolsover, planted himself in front of him and shook his fist threateningly in his face, while Labour backbenchers chanted ‘Out! Out!’ Moments later, as he rose to answer his first question, another Derbyshire man, Tom Swain, walked across and slammed down the Evening Standard on the dispatch box, the front page carrying a stark and simple headline: ‘1,023,583’. For the first time in a century, Prime Minister’s Questions had to be suspended. ‘You ought to be ashamed of yourself!’ Skinner shouted at the shaken Heath. ‘You’re better fitted to cross the Channel and suck President Pompidou’s backside!’53
As it happened, Heath was indeed due to interact with the Continentals the next day, his schedule taking him to Brussels for the formal signing of the treaty marking Britain’s accession to the Common Market. Like his victory in the Admiral’s Cup, it should have been a moment to savour, but again it was overshadowed, partly by the fact that on his way in a woman threw ink over him (such attacks now traditional elements of Heath’s prime ministerial career), but also by the prospect of defending his record against Harold Wilson in an emergency Commons debate. ‘On behalf of the whole House I should like to welcome the right hon. Gentleman back from his visit to Europe,’ Wilson said with merciless glee, opening the debate two days later:
Last Friday he left these shores, the first dole queue millionaire to cross the Channel since Neville Chamberlain. I was thinking of him as he went, and I was pleased to read that he conducted a madrigal. I wish he could have been with me meeting the shop stewards of Fisher-Bendix, attempting to avert a further 750 redundancies and the total closure of that factory, following hundreds of redundancies last year … I wish the right hon. Gentleman could have heard the madrigal that my constituents were singing about him … If the right hon. Gentleman had served the cause of the right to work of the British people, a right of which he is custodian, with one-tenth of the energy which he has devoted to wooing the French President, we should not be having this debate today.
Heath and his ministers, he said bitterly, had
been proud to tear up even the mild prospectus on full employment of Sir Winston Churchill’s coalition Government, and have destroyed the consensus by which post-war Governments have governed. But, above all, they are a Government who, by a combination of negligence, arrogance and wrongly directed policies, by an obsession with the balance sheet and not human beings, have produced a level of unemployment on which the whole country had thought we had turned our backs for ever.
Heath answered with his typical stiff stoicism, like some great bear fending off an attack from a polecat. He did not propose to follow Wilson, he said with grumpy dignity, ‘in the personal sneers and jibes he found it necessary to make’, and he agreed that unemployment was ‘a human waste as well as an economic waste’. The brutal truth, he insisted, was that the government faced ‘a combination of a high rate of inflation … with a high level of unemployment’, something ‘unique in British experience’. It was a line that met with some approval in the press; after the Commons had yielded the expected majority, the broadsheets’ coverage of his speech was generally respectful. And yet, beneath the gruff imperturbability, there is no doubt that Heath was seriously worried. Lord Rothschild later recalled that the Prime Minister appeared ‘emotionally very upset’ by the unemployment figures; Jim Prior thought that he seemed ‘very shaken’ and that this had ‘a marked effect’ on his economic decision-making. Within the Cabinet, already exhausted after the battle to secure European entry and stunned by the slaughter in Northern Ireland, there seemed a mood almost of panic, even of apocalyptic fear. Already the political turmoil had seen fighting between policemen and demonstrators on College Green. And with one million out of work, with the violence in Belfast on their screens every night, and with the miners having walked out for higher pay, there seemed no knowing where it might lead.54