In 1973 there was the first major re-statement of party policy for many years - 'Labour's Programme 1973.' This was to be the basis of the 1974 election manifestos, pledging to bring about a 'fundamental and irreversible shift in the balance of power and wealth in favour of working people and their families.' A reference in this programme was made to a 'far reaching Social Contract between workers and the Government.'
The 1973 Programme, in which Tony Benn had played an integral part, was to form the kernel of the Left's demands for a long time to come. It recommended wholesale nationalisation of top industries; not just struggling businesses, but successful ones. Harold Wilson had drily commented in the late '60s that running Marks & Spencer as efficiently as the Co-op was slightly misguided; certainly this reflected doubts within the Shadow Cabinet about the Programme.
New ideas were percolating into the Party, however, particularly concerning constitutional reform and industrial democracy. A new generation, which had emerged from the ferment of 1960s activism, was starting to influence the Party.
The TUC-Labour Party Joint Liason Committee elucidated some of these ideas in the document 'Economic Policy and the Cost of Living.' It contained original thought related to wages control - in the context of a much reduced income gap throughout Britain.
Whilst many in the Party looked forward, the opposition of Harold Wilson worked fairly effectively in exposing what was regarded at the time as a truly dreadful Conservative government with no positive aspects to it whatever. Food prices, housing costs and unemployment rocketed. When the Oil Crisis of 1973 hit, Britain's debts spiralled, with a #2,000 million trade deficit. From a favourable inheritance, an intractable mess was being created.
Margaret Thatcher had began to make her mark as 'the milk snatcher,' whilst a regressive and unworkable Industrial Relations Act had even offended the CBI. In fact, the early years of the Heath government can be seen as 'protoype Thatcherism' with a disastrously tight incomes policy. When Heath relaxed policy, the result was to be ballooning inflation, fuelled by both the oil crisis and a short-lived property boom.
Where the Heath government was to fatally blunder was in industrial relations. The miners banned overtime in December 1973 after seeing a popularly-supported wage claim of 31% rejected. The Conservatives saw their incomes policy going down the pan, so forced a confrontation. Despite large reserves of coal and the fact that the miners were still working a normal week, a State of Emergency was declared, with a three-day week and the plastering of buildings with expensive 'Switch off Something' stickers.
The miners decided to strike in February 1974, and Heath called an election on the issue 'who governs Britain?' Labour's response was to promise the repeal of iniquitous Tory legislation and propose measures to control inflation whilst protecting the poor. An increase in public ownership and industrial democracy was proposed. Most importantly, Labour promised to get Britain 'Back to Work with Labour.'
The result was a Labour Minority Government after the Liberals rejected Heath's offer of a coalition. The miners strike was quickly settled with a 29% pay increase. Two new departments were quickly introduced by the new government - the department of Energy, headed by Eric Varley, and Prices and Consumer Protection, of which Shirley Williams took charge. To prevent a rerun of the fractitious relationship between Party and government, special advisers were drafted in from Transport House.
With a strong Cabinet in terms of both experience and ability, Labour seemed well placed to deal with the emergency economic situation: GDP had been hit by the Three Day Week. Pensions and other benefits were increased as rents and mortgage rates were frozen. Shirley Williams introduced tough price controls on bread, flour and butter.
New laws to outlaw discrimination against women, take development land into public ownership and re-distribute wealth with a Capital Transfer Tax were quickly implemented. The National Enterprise Board was designated the task of re-vitalising British industry.
The Cabinet called another election for October 1974, focussing upon the quality of its leaders throughout the campaign. Despite the overall majority of just three which resulted, opposition in Parliament was very splintered, with a high Liberal vote and respectable showings for nationalist parties in Wales and Scotland.
Labour had a few years to attempt to defuse the economic mess, but had to tread particularly carefully. A statutory pay policy was introduced in a piecemeal and sensitive manner, whilst a plan to nationalise the top twenty companies was totally discarded. The Labour Party's manifesto in the second election had been a tame affair in many regards. In fields such as education, egalitarian instincts were to be immediately repressed, as private and grammar schools were left to their own devices; even allowed to maintain their charitable tax-breaks. The consolodation of a comprehensive system was to take place against a selective backdrop; arguably undermining the new system from the very beginning.
The issue that tended to overshadow discussion was that of whether to remain within the Common Market. Wilson had first approached the Community during the 1966-1970 government, and had been rebuffed by De Gaulle. A year after taking office, Ted Heath then rushed Britain in at the first available opportunity. The terms were crippling to British industry and agriculture.
Harold Wilson renegotiated the terms of entry, but still found one-third of the Cabinet and more than half of the Parliamentary Party opposed to continued membership. To his credit, he did not attempt to enforce his pro-European views on either the country or the Party. He was actually unable to force Cabinet ministers on the NEC to use their influence to soften its opposition to the Common Market. In these circumstances, a referendum considered to be the best way forward.
The opposition to continued membership had less resources, tending to draw upon the political skills of mavericks and, specifically, advocates of the Commonwealth, such as Benn, Michael Foot, Barbara Castle and Peter Shore. With the mainstream of both parties in favour of remaining in the EC, the 1975 referendum result of two- to-one in favour of membership was emphatic. This did not, however, remove Europe as a contentious issue for the Party.
As early as 1972, Harold Wilson had informed a number of people that he had no plans to be Prime Minister for more than three years the next time Labour were elected. As it turned out, this became two years, as the most electorally successful leader of the Party ever announced his retirement in 1976 to the shock of the Party and the country as a whole.
Wilson had come under some fire for what now looks like naive over-generosity in the New Years Honours List, and his health may well have been failing at this point. There was, perhaps, an overdependence upon the Prime Ministerial tipple, scotch whisky. However, his style had been relaxed and statesmanlike in his last government, mainly reserving his ire and distrust for Tony Benn.
Bearing in mind Wilson's success as a party manager and his very real lasting achievements as Prime Minister, the speed with which he was denigrated from a position of the greatest respect to that of total pariah seems extremely harsh. Upon retirement, his reputation fell faster than an Austin Maxi off a cliff; he was ostracised by both left and right of the Parliamentary Party, and was largely ignored and even despised for some years afterwards. In retrospect, we can see this as showing that the Party itself began to polarise after his retirement; and centrists in this situation can find themselves knocked down from both sides.
The leadership election that followed offered clear-cut choices between the left and right of the party. James Callaghan, on the Right of the party, was the winner, beating Michael Foot, Roy Jenkins, Tony Benn, Tony Crosland and Denis Healey. Now the Cabinet was re-organised, to the detriment of left-wingers and Wilson people. Barbara Castle, Bob Mellish and Willie Ross were sacked.
Jim Callaghan gave a comforting reassurance at a time when sterling and prices were causing a crisis. Callaghan's leadership was to be, in these circumstances, stable and conservative. The 1973 Programme and new Social Contract receded into the distance. What remained was an incomes policy.
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