Edward Heath - Prime Minister

Prime Minister

With another general election approaching in 1970 a Conservative policy document emerged from the Selsdon Park Hotel that, according to some historians, offered monetarist and free-market oriented policies as solutions to the country's unemployment and inflation problems. Heath stated that the Selsdon weekend only reaffirmed policies that had actually been evolving since he became leader of the Conservative Party. The prime minister, Harold Wilson, thought the document a vote-loser and dubbed it the product of Selsdon Man - after the supposedly prehistoric Piltdown Man - in order to portray it as reactionary. But Heath's Conservative Party won the general election of 1970 - 330 seats to Labour's 288. It was the only occasion since 1945 in which one party with a working majority had been replaced in a single election by another party with a working majority.

The new cabinet included Margaret Thatcher (Education and Science), William Whitelaw (Leader of the House of Commons) and the former prime minister Sir Alec Douglas-Home (Foreign and Commonwealth Affairs).

During Heath’s first year in office, higher charges were introduced for school meals, spectacles, dentistry, and prescriptions. Entitlement to state sickness benefit was also changed so that it would only be paid after the first three days of sickness. As a result of the squeeze in the education budget, Margaret Thatcher acted on the late Iain Macleod's wishes by ending the provision of free school milk for 8- to 11-year-olds (the preceding Labour Government having removed it from secondary schools three years before), for which the tabloid press christened her "Thatcher the Milk Snatcher". Despite these measures, however, the Heath Government encouraged a significant increase in welfare spending, and Thatcher blocked Macleod's other posthumous Education policy: the abolition of the Open University, which had recently been founded by the preceding Labour Government.

A Family Fund was set up to provide assistance to families with children who had congenital conditions, while new benefits were introduced benefiting hundreds of thousands of disabled persons whose disabilities had been caused neither by war nor by industrial injury. An attendance allowance was introduced for those needing care at home, together with an invalidity benefit for the long-term sick, while a higher child allowance was made available where invalidity allowance was paid. Widow’s benefits were introduced for those aged between forty and fifty years of age, improved subsidies for slum clearance were made available, while rent allowances were introduced for private tenants. In addition, the school leaving age raised to 16, while a family income supplement was introduced to boost the incomes of low-income earners. Families who received this benefit were exempted from health service charges while the children in such families were eligible for free school meals. Noncontributory pensions were also introduced for all persons aged eighty and above, while in 1973, a new Social Security Act was passed which introduced benefit indexation in the United Kingdom for the first time by index-linking benefits to prices to maintain their real value.

In Great Britain, Scottish and Welsh nationalism also grew as political forces, while the decimalisation of British coinage, begun under the previous Labour Government, was completed eight months after Heath came to power. The Central Policy Review Staff was established by Heath in February 1971, while the 1972 Local Government Act changed the boundaries of Britain's counties and created "Metropolitan Counties" around the major cities (e.g. Merseyside around Liverpool): this caused significant public anger. Heath did not divide Britain into regions, choosing instead to await the report of the Crowther Commission on the constitution; the ten Government Office Regions were eventually set up by the Major government in 1994.

Heath's time in office was as difficult as that of all British prime ministers in the 1970s. The government suffered an early blow with the death of Chancellor of the Exchequer Iain Macleod on 20 July 1970; his replacement was Anthony Barber. Heath's planned economic policy changes (including a significant shift from direct to indirect taxation) remained largely unimplemented: the Selsdon policy document was more or less abandoned as unemployment increased considerably by 1972. By January that year, the unemployment rate reached a million, the highest level for more than two decades. Opposed to unemployment on moral grounds, Heath encouraged a famous "U-Turn" in economic policy that precipitated what became known as the “Barber boom.” This was a two-range process involving the budgets of 1972 and 1973, the former of which pumped £2.5 billion into the economy in increased pensions and benefits and tax reductions. By early 1974, as a result of this Keynesian economic strategy, unemployment had fallen to under 550,000. The economic boom did not last, however, and the Heath Government implemented various cuts that led to the abandonment of policy goals such as a planned expansion of nursery education.

Heath attempted to rein in the increasingly militant trade union movement, which had so far managed to stop attempts to curb their power by legal means. His Industrial Relations Act set up a special court under the judge Lord Donaldson, whose imprisonment of striking dockworkers was a public relations disaster that the Thatcher Government of the 1980s would take pains to avoid repeating (relying instead on confiscating the assets of unions found to have broken new anti-strike laws). Heath's attempt to confront trade union power resulted in a political battle, hobbled as the government was by inflation and high unemployment. Especially damaging to the government's credibility were the two miners' strikes of 1972 and 1974, the latter of which resulted in much of the country's industry working a Three-Day Week in an attempt to conserve energy. The National Union of Mineworkers won its case but the energy shortages and the resulting breakdown of domestic consensus contributed to the eventual downfall of his government.

As mentioned above, Heath's government oversaw two years of a steep rise in unemployment, which they later successfully reversed. His Labour predecessor as prime minister, Harold Wilson, had inherited an unemployment count of around 400,000 at the time of his general election win of October 1964 but seen unemployment peak at 631,000 during the spring of 1967, though it had fallen to 582,000 by the time Heath seized power in June 1970. Like Wilson and Labour, Heath and the Tories were pledged to "full employment" but within a year it became clear that they were losing that battle, as the official unemployment count crept towards 1,000,000 and some newspapers suggested that it was even higher. In January 1972, it was officially confirmed that unemployment had risen above 1,000,000 - a level not seen for more than 30 years. Various other reports around this time suggested that unemployment was higher still, with The Times newspaper claiming that "nearly 3,000,000" people were jobless by March of that year.