General view of a meeting of the Organization of Petroleum Exporting Countries (OPEC), at the group's Vienna headquarters in Austria in April 1973. © /AP/Press Association Images
In the late summer of 1973, Britain’s Prime Minister left London on a brief national tour. In the last three tiring, difficult and contentious years, Edward Heath had seemed the helpless victim of events. But as he conducted a calypso at a Walsall primary school and signed autographs for a friendly crowd in Reading, his recent battles with the Irish Republican Army, the miners and his own backbenchers seemed to have faded into history. The latest polls showed the government only a couple of percentage points behind Labour, and in any case he had until June 1975 to call the next election. By that time, his aides hoped, Britain would be booming, inflation would have been beaten and Heath could start planning for his second full term.What happened next is often remembered as one of the great turning points in Britain’s political history. On 6th October, Egyptian and Syrian troops invaded Israel. When the United States began airlifting supplies to their Israeli allies, the Arab-dominated Organisation of the Petroleum Exporting Countries oil cartel (Opec) responded with a 70 per cent increase in the posted price of oil. By the end of 1973, the price of a barrel of oil had surged from $2.59 to a staggering $11.65.
Almost overnight, the western economy tipped into a nightmarish combination of recession and inflation, nicknamed stagflation. And when Britain’s miners, defying the government’s pay limit, walked out for the second time in two years, all Heath’s plans were undone. By January 1974, he had put Britain on a three-day working week, and on 28th February he called a shock general election on a single issue: Who governs?
Most commentators expected him to win but the result was a hung parliament. With the Liberals declining to prop Heath up, his old rival Harold Wilson moved back into Number 10. A year later, Margaret Thatcher deposed him as Tory leader, and so began the longest sulk in history.
Since Heath spent the next 30 years brooding over his party’s ingratitude and his successor’s disloyalty, it must have crossed his mind that had it not been for the oil shock, things might have been very different. Without the unexpected price hike of autumn 1973, there would surely have been no great inflation of 1974-5, when the rate of annual price increases peaked at a postwar record of 26 per cent. In the absence of the oil shock, he would probably have been able to weather another challenge from the miners, who might have been less confident about their ability to threaten the government. There would have been no election in February 1974. Instead, Heath would have gone to the country at a time of his choosing, perhaps in the summer of 1974 or the spring of 1975.
Read more from our "what if" series:
What if... Thatcher had lost the Falklands war?
What if... Americans spoke German?
What if... Henry VIII had been granted a divorce?
In that case, Heath would have been confident of victory. The two elections of 1974, after all, were extremely close: with no oil shock, Heath could hardly have done worse and would probably have won a comfortable majority. A second Heath government, lasting to the end of the decade, might have put Britain firmly at the centre of Europe, embracing the new European Monetary System and the principle of monetary union. He would probably have continued to work for trade union reform, and would almost certainly have contemplated more sweeping administrative changes, perhaps including devolution. Possibly, reshaping his government after his re-election, he might have moved his Education Secretary to her dream job at the Treasury. More plausibly, he would have kept her in the middle order and then booted her out a couple of years later. After all, he was never a Margaret Thatcher fan.
As for the Labour Party, a second successive failure would have meant curtains for Harold Wilson, who actually expected to lose in February 1974. That would have meant a bloody leadership battle between Jim Callaghan, Michael Foot, Roy Jenkins, Denis Healey, Anthony Crosland and Tony Benn, which was the line-up in reality in 1976, with a similar result. Perhaps the party might have split, with Callaghan and Jenkins leading rival wings into battle in 1979 or 1980.
Could they have stopped Heath winning a third term? Well, perhaps he might not have got that far anyway. Given how badly he treated his own backbenchers after one victory, how insufferable might Heath have been after two?
But of course all this is academic. The real surprise about the oil shock is not that it happened, but that it happened so late. As early as 1971, Heath himself had told West Germany’s Chancellor Willy Brandt that another Middle Eastern crisis would probably interrupt oil supplies to the west, and in 1972 officials at the Department of Trade and Industry predicted that a steep increase in the price of oil was bound to happen soon.
There is no doubt that the 1973 oil shock, compounded by the miners’ strike, was a daunting challenge. But Heath had only himself to blame for making such a mess of it.
