this analysis, and he greatly underestimated the stimulating effects of removing credit controls. He felt that emergency fiscal measures were necessary to boost demand and reduce unemployment. And this conviction influenced his decisions across the board. Ironically, because it led to higher inflation whose main effects were suffered under the following Labour Government, and because inflation destroys jobs rather than preserves them, it ultimately led to higher unemployment as well.
In particular, the approach of the Government to Upper Clyde Shipbuilders flowed from fear of the consequences of higher unemployment. But it was also seen as caving in to the threats of left-wing militants. When we first discussed the company’s problems in December 1970 the Cabinet agreed that existing government support for the UCS Group would not be continued, though there was a lifeline: we would continue with credit guarantees so long as the management agreed to close the Clydebank yard and separate Yarrow Shipbuilders from the rest of the group. Yarrow – an important Royal Navy supplier – seemed salvageable. But by June 1971 the UCS Group was insolvent and its liquidation was announced. There followed a protest strike on Clydeside. In July trade unionists occupied the four UCS shipyards.
There was further discussion in Cabinet in the autumn of 1971, and the Government allowed itself to be sucked into talks with the trade unions, who it was believed might be able to influence the militant shop stewards behind the occupation. The Economic Committee of the Cabinet had agreed that money should be provided to keep open the yards while the liquidator sought a solution, but only on condition that the unions gave credible undertakings of serious negotiations on new working practices. There was strong criticism of this from some of my colleagues, rightly alert to the danger of seeming to give in on the basis of worthless undertakings. But the money was provided and negotiations went ahead.
It was the unemployment prospect rather than the prospects for shipbuilding which by now were undisguisedly foremost. In November Ted Heath affirmed in a Party Political Broadcast that the ‘Government is committed completely and absolutely to expanding the economy and bringing unemployment down’. The fateful one-million mark was passed on 20 January 1972. On 24 February at Cabinet we heard that the Economic Committee had agreed to provide £35 million to keep three of the four yards open. John Davies openly admitted that the new group had little chance of making its way commercially and that if the general level of unemployment had been lower and the economy reviving faster, he would not have recommended this course. There was tangible unease, but Cabinet endorsed it and at the end of February John announced the decision. It was a small but memorably inglorious episode. I discussed it privately with Jock Bruce-Gardyne, who was scathing about the decision. He regarded it as a critical, unforgivable U-turn. I was deeply troubled.
But by now we all had other things to worry about. In framing the Industrial Relations Act we had given too much emphasis to achieving the best possible legal framework and not enough to how the attacks on our proposals were to be repelled. The same mentality prevailed as regards the threat which the National Union of Mineworkers (NUM) posed to the Government and the country. We knew, of course, that the miners and the power workers held an almost unbeatable card in pay negotiations, because they could turn off the electricity supply to industry and people. Industrial action by the power workers in December 1970 had been settled after the setting up of a Court of Inquiry under Lord Wilberforce which recommended a large increase in February the following year. Within the NUM, however, there was a large militant faction at least as interested in bringing down the Conservative Government as in flexing industrial muscle to increase miners’ earnings. The NUM held a strike ballot in October 1970 and narrowly turned down an offer from the National Coal Board (NCB). Fearing unofficial action, Cabinet authorized the NCB to offer a productivity bonus to be paid in mid-1971. The NUM again turned the offer down, following which Derek Ezra, the NCB Chairman, without consulting ministers, offered to pay the bonus at once and without strings attached to productivity. Cabinet accepted this fait accompli. Perhaps John Davies and other ministers continued to monitor events. If they did I heard nothing about it.
Only in early December 1971 did the issue of miners’ pay surface at Cabinet, and then in what seemed a fairly casual way. The NUM’s annual conference that year had significantly revised the rules which provided for an official strike, so that now only a 55 per cent, as opposed to a two-thirds, majority was required. The NUM ballot, which was still going on, had, it was thought, resulted in a 59 per cent majority vote for strike action. Yet nobody seemed too worried. We were all reassured that coal stocks were high.
Such complacency proved unwarranted. At the last Cabinet before Christmas Robert Carr confirmed to us that the NUM was indeed calling a national strike to begin on 9 January 1972. There was more trouble over pay in the gas and electricity industries. And we only needed to glance outside to know that winter was closing in, with all that meant for power consumption. But there was no real discussion and we all left for the Christmas break.
There was still some suggestion over Christmas that the strike might not be solid, but two days after it began it was all too clear that the action was total. There was then discussion in Cabinet about whether we should use the ‘cooling off’ provisions of the Industrial Relations Act. But it was said to be difficult to satisfy the legal tests involved – ‘cooling off’ orders would only be granted by the courts if there was a serious prospect that they would facilitate a settlement, which in this case was doubtful. The possibility of using the ballot provisions of the Act remained. But there was no particular reason to think that a ballot forced on the NUM would lead to anything other than a continuation of the strike. It was an acutely uncomfortable demonstration of the fragility of the principal weapons with which the Act had equipped us. Moreover, important parts of the Act had yet to come into force, and we were also aware that there was a good deal of public sympathy with the miners.
The pressure on the Government to intervene directly now increased. Looking back, and comparing 1972 with the threatened miners’ strike of 1981 and the year-long strike of 1984–85, it is extraordinary how little attention we gave to ‘endurance’ – the period of time we could keep the power stations and the economy running with limited or no coal supplies – and how easily Cabinet was fobbed off by assurances that coal stocks were high, without considering whether those stocks were in the right locations to be usable, i.e. actually at the power stations. The possibility of effective mass picketing, which would prevent coal getting to power stations, was simply not on the agenda. Instead, our response was to discuss the prospects for conciliation by Robert Carr and the use of ‘emergency powers’ which would allow us to conserve power station stocks a few weeks longer by imposing power cuts. There was a great deal of useless talk about ‘keeping public opinion on our side’. But what could public opinion do to end the strike? This was one more thing I learned from the Heath years – and anyway, on the whole public opinion wasn’t on our side. A further lesson from this period – when no fewer than five States of Emergency were called – was that for all the sense of urgency and decision that the phrase ‘emergency powers’ conveys they could not be relied upon to change the basic realities of an industrial dispute.
The crunch came on the morning of Thursday 10 February when we were all in Cabinet. A State of Emergency had been declared the previous day. It was John Davies who dropped the bombshell. He told us that picketing had now immobilized a large part of the remaining coal stocks, and that the supplies still available might not even suffice beyond the end of the following week. Electricity output would fall to as little as 25 per cent of normal supply, drastic power cuts were inevitable, and large parts of industry would be laid off. The Attorney-General reported that the provisions of the Industrial Relations Act against secondary boycotts, blacking of supplies and the inducement of other workers to take action resulting in the frustration of a commercial contract, would not come into force until 28 February. He thought that most of the picketing which had taken place was lawful. As regards the criminal law, some arrests had been made but, as he put it, ‘the activities of pickets confronted the police with very difficult and sensitive decisions’.
This was something of an understatement. The left-wing leader of the Yorkshire miners, Arthur Scargill, who was to organize the politically motivated miners’ strike I faced in 1984–85, was already busy winning his militant’s spurs. In the course of Cabinet a message came through to the Home Secretary, Reggie Maudling. The Chief Constable of Birmingham had asked that