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
State of Emergency: the Way We Were Page 12
