A History of Modern Britain

by Andrew Marr

  69

  Floating

  If Heath is associated with a single action, it is British entry into ‘Europe’ but throughout his time in office the economy, not Europe, was the biggest issue facing him. British productivity was still pitifully low compared to the United States or Europe, never mind Japan. The country was spending too much on new consumer goods and not nearly enough on modernized and more efficient factories and businesses. Prices were rising by 7 per cent and wage earnings by double that. This was still the old post-1945 world of fixed exchange rates which meant that the Heath government, just like those of Attlee and Wilson, faced a sterling crisis and perhaps another devaluation. It is hard to describe quite how heavily, how painfully, relative economic decline weighed on the necks of politicians of thirty and forty years ago. The unions, identified by Heath as his first challenge, had just seen off Wilson and Barbara Castle. Heath had decided he would need to face down at least one major public sector strike, as well as removing some of the benefits that he thought encouraged strikes. Britain not only had heavy levels of unionization through all the key industries but also, by modern standards, an incredible number of different unions – more than 600 altogether. Leaders of large unions had only a wobbly hold on what actually happened on the factory floor. It was a time of political militancy well caught by the 1973 hit from the folk-rock band the Strawbs, who reached number two with their anthem, ‘Part of the Union’. Its chorus ran, ‘Oh you don’t get me, I’m part of the union’ and different verses spelt out why: ‘With a hell of a shout, It’s out brothers, out…And I always get my way, If I strike for higher pay…So though I’m a working man, I can ruin the government’s plan.’ And so they could.

  Almost immediately Heath faced a dock strike, followed by a big pay settlement for local authority dustmen, then a power workers’ go-slow which led to power cuts. Then the postal workers struck. The mood of the government was less focused and less steely than it would be nine years later when Margaret Thatcher came to power. Douglas Hurd, later seen as a ‘wet’ in her cabinet, was Heath’s political secretary at the time, and recorded in his diary his increasing frustration. ‘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.’ Later, Hurd confronted Heath in his dressing-gown, warning him that the government machine was ‘moving too slowly, far behind events’. Things were so bad in the car industry that Henry Ford III, with his right-hand man Lee Iacocca, came to warn Heath that they were thinking of pulling out of Britain entirely. Yet Heath’s Industrial Relations Bill of 1971 was meant to be balanced, giving new rights to trade unionists while at the same time trying to make deals with employers legally enforceable through a new system of industrial courts. It was the Tories’ first stab at the kind of package which had been offered to the unions by Wilson. There were also tax reforms, meant to increase investment, a deal with business on keeping price increases to 5 per cent, and even some limited privatization – the travel agents Thomas Cook and Lunn Poly were then state owned, and sold off, along with some breweries.

  But the Tory messages were still, to put it gently, mixed. Cuts in some personal taxes encouraged spending and inflation. With European membership looming, Barber, Heath’s Chancellor, was dashing for growth, which meant further tax cuts and higher government spending. Perhaps the most significant move in the long term was the removal of lending limits for the high street banks, producing a vast surge in borrowing. Lending had been growing at around 12 per cent a year already but in 1972 rose by 37 per cent and the following year by 43 per cent. This, obviously, further fuelled inflation but it also gave a fillip to the ancient British fetish for house price ownership and borrowing. The huge expansion of credit and the unbalanced amount of capital sunk in bricks and lawns in modern-day Britain can be traced back partly to this decision, then the new credit boom of the Thatcher years. It is not even mentioned in Heath’s memoirs.

  At the same time one of the historic constraints on British governments had gone. In the summer of 1971 President Nixon unilaterally tore up a key part of the post-war financial system by suspending the convertibility of the dollar for gold and allowing exchange rates to float. His problem was the awesome cost of the war in Vietnam (though it would cost only 60 per cent in real terms of the later post-September 11 conflicts in Afghanistan and Iraq), combined with rising commodity prices. The effect on Britain was that the government and Bank of England no longer had to be quite so obsessed by sterling reserves, though this remained a problem until 1977. But it opened up new questions, about how far down sterling could go and how industrialists could be expected to plan ahead. Heath’s instincts on state control were quickly tested when the most valuable parts of Rolls-Royce faced bankruptcy over the cost of developing new aircraft engines. Heath briskly nationalized the company, saving 80,000 jobs and allowed it to regroup and survive, to the relief of the defence industry. Rolls-Royce duly did revive and returned to the private sector, making this a clear case of one nationalization that with hindsight clearly ‘worked’.

  70

  Into Europe, with the Peasants

  We have seen how deeply the cause of Europe had marked Heath, and how hard he had struggled as a negotiator in the early sixties in the face of President de Gaulle’s ‘Non’. He had done the time, served in the tobacco-smoked rooms, haggled over the detail. As a keen European he knew his French partners better than any other senior British politician. Long before winning power as Prime Minister, he had identified Georges Pompidou who replaced de Gaulle as President as his likely interlocutor. At a meeting at Chequers, Heath later revealed, Pompidou had told him, in French, ‘If you ever want to know what my policy is, don’t bother to call me on the telephone. I do not speak English, and your French is awful. Just remember that I am a peasant, and my policy will always be to support the peasants.’

  This was fair warning about the vast expense of the Common Agricultural Policy but it was not a true reflection of Pompidou’s wider vision. In fact, he wanted a Europe of large manufacturing companies able to take on the United States and the Far East. By 1970, after a decade during which Britain had grown much more slowly than the Six members of the Common Market, Heath was in some ways in a weaker position than Macmillan had been. On the other hand, Heath had some advantages. He was trusted as a serious negotiator. Britain’s very weakness persuaded Paris that this time, ‘les rosbifs’ were genuinely determined to join. Pompidou also thought the time was right. A ‘Oui’ would get him out of the great dead general’s shadow. France like the rest of the Community had for years been struggling to understand what Britain really wanted. This had been particularly difficult in the Wilson years, when the British left had been riven by the issue.

  Heath had only promised to negotiate, not to join. His enthusiasm, however, was in total contrast to Wilson’s wiggling. The best historian of Britain’s relations with the rest of the EU described the difference between the two: ‘It probably mattered quite a lot to the direction of later events that in early September 1939, as Ted Heath was making it back to Britain from Poland by the skin of his teeth before war was declared, Harold Wilson was motoring to Dundee to deliver an academic paper on exports and the trade cycle, and that later, while Heath was training to run an anti-aircraft battery, Wilson became a potato controller at the Ministry of Food.’ Yet opinion polls suggested that Heath’s grand vision was alien to most British people and that the former potato controller’s warnings about prices had much more effect.

  With Heath in power, over eighteen months of haggling in London, Paris and Brussels, a deal was thrashed out. It infuriated Britain’s fishermen, who would lose most of their traditional grounds to open European competition, particularly from French and Spanish trawlers. It was a second-best deal on the budget which would later be reopened by Margaret Thatcher. Above all it left intact the previous Common Market designed for the convenience of French
farmers and Brussels-based bureaucrats, not for Britain. Vast slews of European law had to be swallowed whole, much of it objectionable to the British negotiators. Only at the very margins, dealing with New Zealand butter, for instance, did the Six make concessions – and the Commonwealth farmers’ deal was won at the expense of a worse agreement on the budget. The truth was that the British negotiators had decided it was essential to the country’s future to get in at any price. At a press conference at the Élysée Palace in Paris in 1971, Heath and Pompidou, after a long private afternoon of talks between just the two of them, language notwithstanding, revealed to general surprise that so far as France was concerned, Britain could now join the Community. Heath was particularly delighted to have triumphed over the media, who had expected another ‘Non’.

  Now there would have to be a national debate about the terms of entry and a vote in Parliament. But in Opposition, Wilson was playing true to form. When Heath began negotiations, as we have seen, Wilson was a publicly declared supporter of British membership. But the tactical Wilson soon displaced the statesman. As British accession loomed, he cavilled and sniped. As ever, he was looking over his shoulder. Jim Callaghan, a potential successor, was campaigning openly against Europe, partly on the grounds that a French-speaking institution threatened the language of Chaucer, Shakespeare and Dickens. The left was in full cry. A special Labour conference in July 1971 confirmed how anti-EEC the party had become, voting by a majority of five to one against. Labour MPs were also hostile by a majority of two to one. Wilson now announced that he would oppose British membership on the Heath terms. He was not against in principle, he insisted, just here-and-now. After the long and tortuous journey this disgusted the Labour pro-Europeans. It did not much enthuse the Labour anti-Marketeers, who simply did not believe Wilson’s apparent change of heart and assumed he would sign up if he returned to Number Ten. So even Wilson’s great cause, Labour unity, was lost.

  When the Heath proposals for membership were put to the Commons sixty-nine Labour pro-Europeans defied the party and voted with the Conservatives. They were led by Roy Jenkins, though to his later embarrassment he did not continue voting against his party on every detail. The left, led by Barbara Castle, Michael Foot and Benn, were livid with the rebels. A divide which would eventually lead to the breakaway SDP was just beginning to be visible. For the Labour conference majority, staying out was a matter of principle. For the sixty-nine, going in was a matter of principle. Forms of words, pious evasions and bluster might patch over the cracks in opposition but this quite clearly had the potential to destroy Labour should it return to power. Caught between the moral self-belief of the Castles and Benns, and the steely self-certainty of Jenkins, Wilson protested to the shadow cabinet that ‘I’ve been wading in shit for three months so others can indulge their conscience’ and threatened to quit as party leader: ‘They can stuff it as far as I’m concerned.’ It was only a tantrum but as he struggled to hold things together, the left-wing New Statesman delivered a withering verdict on ‘the principal apostle of cynicism, the unwitting evangelist of disillusion…Mr Wilson has now sunk to a position where his very presence in Labour’s leadership pollutes the atmosphere of politics.’

  After winning his Commons vote on British membership of the Community, Heath went quietly to Downing Street to play Bach on the piano in a mood of triumph. For the Labour party it had been a dreadful night, with screaming matches in the voting lobbies and ghastly personal confrontations between the sixty-nine rebels and the rest.

  The hero of the hour turned out to be Tony Benn, then haring leftwards at a keen lollop. ‘Tony immatures with age,’ said Wilson but on this issue he proved a lot shrewder than the Labour leader. Benn began to argue that on a decision of such importance the people should vote, in a referendum. His constituency was in Bristol, whence the great eighteenth-century MP and writer, Edmund Burke, had sent a letter to his electors explaining that he owed them his judgement, not his slavish obedience to their opinions. In a reversal of the argument, the other Bristol MP argued instead that a democracy which denied its people the right to choose a matter of such importance directly would lose all respect. To begin with Benn had almost no support for this radical thought. Labour traditionalists despised referendums as fascist devices, continental jiggery-pokery not to be thought of in a parliamentary democracy. Though at this stage Benn was ambivalent about the Common Market, pro-Europeans also feared this was the first move towards committing Labour to pulling out.

  Harold Wilson had committed himself publicly and repeatedly against a referendum. Slowly and painfully, however, he came to realize that opposing Heath’s deal but promising to renegotiate, while offering a referendum could be the way out. This could be sold to the anti-Marketeers as a swerve against Europe but the pro-Marketeers would realize he was not actually committed to withdraw. And the referendum promise would gain some political high-ground. He would ‘trust the people’ even if the people were, according to the polls, already fairly bored and hostile. When Pompidou suddenly announced that France would have a referendum, Wilson snatched at the Benn plan. It was an important moment. The referendum would make the attitude of the whole country clear, at least for the seventies. It was to be a device used again by politicians faced with particularly important or tricky constitutional choices.

  71

  A Dream Disintegrates

  On the afternoon of May Day 1971 John Evans, the manager of the hugely popular Kensington boutique Biba, walked nervously downstairs into the basement. There had been a series of outlandish phone warnings about some kind of bomb, which to start with had simply been ignored by the girl on the till. Outside on the street were some 500 women and children who had by now been hurriedly evacuated. When Evans pushed open the door of the stock-room, there was an almighty bang, a flash of flame and a billow of smoke. The Angry Brigade, middle Britain’s very own terror group, had struck again. In their communiqué explaining the attack, they misquoted Bob Dylan – ‘if you’re not busy being born, you’re busy buying’ – and went on: ‘All the sales girls in all the flash boutiques are made to dress the same and have the same make-up…Life is so boring there’s nothing to do except spend all our wages on the latest skirt, or shirt. Brothers and Sisters, what are your real desires? Sit in the drugstore, look distant, empty, bored, drinking some tasteless coffee?…The only thing you can do with modern slavehouses – called boutiques – is WRECK THEM.’ What they did not seem to realize was that its customers found Biba not oppressive but liberating.

  There are hundreds of dates and events you could pick to date the end of the sixties dream, but the Biba bombing has a piquancy all of its own. Two of the main forces behind the flowering of youth culture were at war. On the one side is the fantasy of revolution, anarchist or Leninist according to taste, the world of Che Guevara on the wall and obscure leftist handbooks by the bed promising a world in which Starbucks would never have got started. On the other side is the fantasy of benign, hippy business as part of the consumer culture, the world of eyeliner, cool clothes and gentle people making money. The two organizations, Biba and the Angries, sum up much of the underlying argument of sixties youth culture.

  The small group of university dropouts who made up the grandly titled Angry Brigade would go to prison for ten years after 123 attacks and are little remembered now. But they were the nearest Britain came to an anarchist threat. They took their philosophy from two counter-culture theorists, the Frenchman Guy Debord and the Belgian poet and teacher, Raoul Vaneigem, who argued that capitalism and Soviet Communism were equally repressive. All organizations were eventually taken over by capitalism which turned everything into a commodity for sale. Even attacks on capitalism could be marketed and sold – witness all those commercially produced Che Guevara badges and posters of Mao. Debord in particular extended his attack from old-style Communists, Western politics, the media and other familiar targets, to the drug-taking hippy culture, modern architecture, even tourism. Once people had so many thin
gs they were bored of simply possessing, then capitalism would sell them experiences too, such as foreign travel and nostalgia.

  So the ‘Situationists’, as they called themselves, resolved to attack targets such as shopping centres, museums, and the media, where ‘scandalous activity’ might provoke repression, and therefore help the scales to drop from people’s eyes. They staged a little revolution at Strasbourg University, where they took control of the student union and mocked their contemporaries for merely pretending to be radical, while actually being seduced by ‘clothes, discs, scooters, transistors, purple hearts’, proving them to be merely conventional consumers. It was a shrewd assessment of what would happen to most radical students.

  Debord himself was almost a caricature French intellectual. He was disdainful of Anglo-Saxon culture, committed to fine food, drink, free love and philosophical conversation. His work had been badly translated and spread among students in Britain. At Croydon Art School it had influenced a group calling itself King Mob (after graffiti used by the mob in a London riot in 1790). A belief in anarchy and disorder was spread by this and other groups in magazines and handbills whose scrawled writing and cut-out letters look remarkably like the punk fanzines of the seventies. This is not coincidental. Among the British admirers of the ‘Situationists’ was the young art student Malcolm McLaren, later the creator of the Sex Pistols. Notes for a film he wrote in 1971, insisting ‘the middle classes invented the commodity. It defines our ambitious, our aspirations, our quality of life. Its effects are repression – loneliness – boredom’ could have come from an Angry Brigade communiqué of the same time. When McLaren and Vivienne Westwood opened their clothes-to-shock shop in Kings Road, they were producing just the rebel imagery dreamed of by political rebels a few years earlier. Punk in England in the seventies had roots in what happened in Paris in 1968.