The Heath government 19701974

1
The Heath government 1970-1974

• Heath

2
The issues

• Economic
• EEC
• Unions

3
Overall

• Ambitious agenda, largely unfulfilled
• Failed in 3 main aims reduce price rises,
  increase productivity and reduce unemployment
• Unions and strikes saw to this

4
Heath and the Unions

• Dominated by union strife
• Hoped for negotiation
• Offered them role in economic planning in return
  for wages policy
• 1970 Industrial Relations Act restricted right o
  strike
• NUM strike in 1972
• Led to a 3 day working week
• Eventually got a 21 rise in wages
• Led to another strike in 1974
• Heath then called an election Who governs
  Britain?

5
1973 Oil Price Rise

• Until early 1970s oil companies controlled oil
  prices
• OPEC members, mainly Arab states decided to use
  oil as a weapon in their war with Israel
• OPEC reduced supplies and raised prices
• Severe inflation created

6
1973 Oil Price Rise

• Balance of Payments deficit rose to 1 billion
• Inflation rose to 16
• Sterling dropped
• Interest rates rose to 15
• Record budget deficit
• Unemployment double4d to 1.44 million

7
TASK

• Summarise in 5-10 points the main problems faced
  by the Heath government
• Who was to blame? The government or the unions?