A foreign war that triggered a ruinous rise in energy prices...
A Tory PM fighting to stave off recession...
CAN it really be half a century since the events of 1973 — a year that immediately conjures up memories of Slade, Spangles and Space Hoppers, The Sting, The Exorcist and Live And Let Die? Alas, there’s no denying it. Though it’s hard for some of us to admit it, the passage of time never slackens and it’s now 50 years since the first series of Are You Being Served? and Last Of The Summer Wine appeared on Britain’s TV screens.
Fifty years since the heyday of Wizzard, the Osmonds and David Cassidy; 50 years since Sunderland stunned Leeds in the FA Cup Final, and a Polish goalkeeper sent England crashing out of the World Cup at Wembley.
For some people, 1973 will always be the year Britain joined the Common Market, a landmark greeted with an exhibition of European sweet-wrappers at the trendy Whitechapel Art Gallery. (Yes, seriously.) That, as we now know, was the high point in the relationship.
But of all the memories of 1973, the one that resonates today is the economic and energy crisis that dominated the final months of the year. For although history never repeats itself exactly, it’s hard to miss the parallels between past and present.
Then, as now, inflation had been creeping upwards for months before the storm broke. Much of the blame 50 years ago lay with the Prime Minister, Edward Heath, and his browbeaten Chancellor, Anthony Barber, who had gambled on a massive injection of money into the economy in an ill-fated dash for growth.
Although unemployment began to fall, inflation started to surge. For two years in a row, the money supply expanded by more than 25 per cent, and by the summer of 1973 prices had gone up by almost 10 per cent in a year. Heath’s answer, which most sane politicians would consider unthinkable today, was to control wages and prices by diktat.
In early October 1973, he unveiled a fearsomely complicated new package of state controls, with a Price Commission to regulate businesses and a strict 7 per cent pay limit for workers up and down the country.
But just a week later, fate — or rather, world events — took a decisive hand.
The trigger was a war, not in Eastern Europe, but in the Middle East, where Egyptian and Syrian troops launched a stunning surprise attack on Israel on the Jewish holiday of Yom Kippur.
Outraged by Western military aid for Israel, the Arab oil producers came to a fateful decision. On October 16 they announced a 70 per cent increase in the posted price of oil, which soon reached a record $11.65 a barrel, up from just $2.40 a few months earlier.
Worse was to follow. As the Arab nations announced massive production cutbacks, punishing
Britain and other Western countries for their foreign policy, prices at the pumps surged out of control.
For Britain’s struggling economy, the oil shock was a hammer blow. As one commentator remarked, it was as if somebody had turned a dial and, with a flourish, turned inflation up by another 15 per cent.
But the impact wasn’t just economic: it was political. For back in the autumn of 1973, just as today, some people saw the energy crisis as a chance to humiliate the Conservative government — chief among them the Left-wing leaders of Britain’s trade unions.
Half a century ago, the government’s most implacable foe was the powerful National Union of Mineworkers, led by the rumpled Joe Gormley. And when the miners called for a whopping 35 per cent pay increase, Heath knew he was in for a fight.
On November 12, defying his desperate entreaties, the miners announced an overtime ban, the first step towards an all-out strike. By an extraordinarily unlucky coincidence, not only were the power workers on strike, too, but the weather forecasters were predicting a sudden cold snap.
That very evening, the Electricity Board warned people to prepare for snap two-hour power cuts. The following day, the government announced its fifth state of emergency in less than four years. Electric advertising was banned. Public buildings were ordered to cut power consumption.
And ration cards were even sent to Post Offices, ready for national distribution.
On top of all that, the economy was heading for a catastrophic recession. That same day, the Bank of England put lending rates up to 13 per cent, while interest rates on overdrafts soared to a spine-chilling 18 per cent — a level that would probably send millions into penury if it were repeated today.
By the end of November, the headlines had become unremittingly depressing. In London, schools sent children home because they couldn’t afford to heat their classrooms.
In Sussex, some 10,000 street lights were turned off to save power.
‘Fuel and Power Emergency: Leave Your Car at Home This Weekend’ read stark advertisements in the newspapers, begging drivers to cut out ‘weekend motoring’ and keep below 50mph at all times.
‘The choice is stark,’ explained the deputy chairman of the Electricity Council. ‘Either the public co-operates or complete cities could lose their supply of electricity at a stroke.’
Today all this apocalyptic rhetoric sounds almost quaint, because we know that Britain pulled through eventually. But nobody knew that at the time.
Indeed, the Cabinet Office was even working on a worst-case scenario for a complete power blackout and economic collapse, with plans for the Army to defend hospitals and prevent riots if the lights went out for good.
At last Heath roused himself from his torpor to make a dramatic new intervention. On the night of December 12, the words ‘The Rt. Hon. Edward Heath, MP. The Prime Minister’ appeared on millions of television screens across the country, below the puffy features of the man himself, his heavy features ashen with tiredness, his eyes narrowed.
‘As Prime Minister,’ he began simply, ‘I want to talk to you about the grave emergency facing our country.’
He explained the background: the oil crisis, the strikes, the terrible crisis at the power stations. ‘We shall have a harder Christmas than we have known since the war,’ he said gloomily.
Then he revealed his hand. The only solution was to move to a three-day week, cutting demand for electricity by 20 per cent.
Businesses must keep their thermostats below 17c. Half of Britain’s street lights would be switched off. Floodlit sport was banned, and the BBC and ITV were ordered to shut down their TV stations at 10:30 on weeknights.
While Slade’s Merry Xmas Everybody, the ultimate escapist hit, soared to the top of the charts, many insiders couldn’t hide their despair.
The head of British Rail told colleagues that the West faced its greatest challenge since the 1930s,
Motorists told not to use their cars at weekends