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Labour - lessons from the 1970s

26th March 2015

Labour - lessons from the 1970s

By Barbara Humphries

In February 1974 the Labour Party won an election against the predictions of the opinion polls, having a slender majority of four over the Tories. However there was no overall majority. The Liberals held 14 seats, and other political parties including the Scottish and Welsh nationalists 23 seats between them. Labour was to govern as minority government, going to the polls later in the year, when it gained an overall majority of three.

The 1974 elections illustrate that unpredictable and inconclusive election results are not a new event in British politics. Indeed there were minority Labour governments in the 1920s. They reflected economic and political instability of the times. The February 1974 election took place against a background of economic crisis. The Tories had been in power since 1970. During that time unemployment had risen to half a million, the highest since the 1930s. World oil prices had risen leading to inflation, and pressure on wages.

The Prime Minister Edward Heath had declared his intention of taking on the trades unions, introducing an Industrial Relations Act, to curb strike action. However when five dockers had been imprisoned under the terms of the Act, a near general strike situation arose, as workers took solidarity action. The government had tried to impose compulsory pay restraint which had led to further conflict with the trades unions, and in the winter of 1973 the National Union of Mineworkers called a strike for a pay increase which would have breached the government’s pay policy.

In response Heath announced that there would be a ‘three day week’ throughout industry. In February 1974 he called a snap general election on ‘who governs – the government or the trades unions?’  Clearly this was a high stakes gamble but it was not to pay off. The election campaign lasted just a few weeks. At the beginning the opinion polls pointed to a Tory lead. Very few people expected Labour to win.

The Labour Party’s manifesto Let us work together: Labour’s way out of the crisis, promised ‘a fundamental and irreversible shift in the balance of power and wealth in favour of working people and their families.’ The lessons of the defeat of the Wilson government in 1970, and the radicalisation of the trades union movement under the Tories had shifted the Party to the left. The manifesto promised price controls, a social contract with the TUC, which included voluntary wage restraint in return for preserving the ‘social wage’, accountability of industry, more public ownership, including government control of North Sea oil, renegotiation of Britain’s membership of the European Economic Community (European Union), and repeal of the hated Industrial Relations Act.

Prime Minister Ted Heath was reluctant to accept defeat on the day after the election (February 28th). For days he attempted to form a coalition with the Liberals, but when that failed, Labour was called upon the form a government. A favourable pay settlement was reached with the miners and a full working week was restored across industry. For many workers the main issue was inflation. Between February and October 1974 the Labour government reduced VAT and introduced a rent freeze.

After October 1974 Labour governed with a very small majority. As it lost bye-elections it increasingly had to do deals with minority parties including the Scottish and Welsh nationalists. On occasions there were reports of MPs who were sick having to be carried into the voting lobby in Parliament to support the government. But the deal with the trades unions lasted and there was a lull in the industrial militancy which had taken place under the Heath Government.

However this social contract was stretched to breaking point after the government starting making cuts in social expenditure, partly at the behest of the International Monetary Fund in 1976. This nearly caused a split in the government, comparable to the Labour Government of 1929/1931. The scene was set for strikes over pay, leading to the ‘Winter of Discontent’ in 1979 when low paid public sector works took strike action.  However it was failure to do a deal with the Scottish and Welsh nationalists in 1979 that led to the fall of the government, and the election which was to lead to Thatcher’s election victory.