1973: The most significant year of the 20th century

Forty years on, it is still remembered for power cuts, the three-day working week, the oil crisis, a miners' strike – and we are still dealing with the consequences

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No self-respecting Oxbridge general paper in the early 1980s could decently omit the question: "Which, in your opinion, is the most significant year in 20th-century British history?" Conventionally-minded candidates tended to go for 1914 (start of the First World War) or 1945 (arrival of the reforming Attlee government.) The politically astute sometimes chose 1956 (Suez Crisis) and the sophisticated 1963, the year when, according to Philip Larkin, sexual intercourse began. It was far too early in the Thatcherite dawn to plump for 1979, but even then, barely a decade on, a great deal of the smart money was placed on the winter of 1973-4 – the era of the State of Emergency, the Three-Day Week and the power-cut, a time when the faces of the country's leading trades unionists appeared on The Six O'Clock News as regularly as politicians, and an executive meeting of the National Union of Railwaymen could rate as many column inches as a Cabinet reshuffle.

The sheer turmoil of life in Edward Heath's Britain 40 years ago this week, was brought vividly back to mind by last night's splendid Radio 4 documentary, helmed by Michael White. Not the least of its attractions was the number of elderly politicians who came affably forward to reminisce.

Lord Carrington, Heath's Energy Secretary, now a hale 94, recalled his negotiations with the miners' leaders. The misfortunes of his deputy Patrick Jenkin, who advised responsible citizens to beat the power switch-off by cleaning their teeth in the dark, only to have his house photographed by the press with every light ablaze, were duly reprised. Lord Heseltine talked about the threat to the West posed by Communist hegemony, and Heath's aide de camp, Sir Robert Armstrong, remembered the difficulty, here on a planet without mobile phones, of communicating with his prime minister when the latter was out sailing his yacht. It was another world, and yet, as a few minutes spent untangling the various causes and effects on display soon revealed, one with an altogether ominous significance for our own.

At its core lay one of those unfortunate collisions that occur whenever the express train of a government's domestic policy smashes into the level crossing of an unexpected international crisis. By the latter part of 1973 Britain was recovering from the after-effects of what, taking its name from Heath's Chancellor Anthony Barber, came to be known as the "Barber Boom", an imprudently stoked-up cauldron of cheap credit and consumer confidence followed, almost inevitably, by a banking crisis, raging inflation, and stratospheric wage deals. In the week that Heath unveiled Stage Three of his wage-rise-limiting pay policy, the Opec nations, sensibilities inflamed by the latest Arab-Israeli war, embarked on a series of manoeuvrings that eventually quadrupled the price of oil. Back on the home front, the miners' union lodged a 40 per cent pay claim. There followed a State of Emergency, a government/union stand-off which Heath could have avoided had he been less intransigent, a hasty general election campaign fought on the issue of "Who governs Britain?" and, rather against the odds, the advent of a minority Labour government.

Several factors combine to give the era of the Three-Day Week its eerie prefigurative sheen. The first is its global dimension. If Suez, 17 years before, had demonstrated that Britain's capacity for unilateral action in the political sphere was severely limited by international opinion, then the Opec price-hike showed quite how vulnerable a post-Imperial nation could be to economic upset, particularly in the presence of an energy cartel at whose hands most European economies (Britain had joined the European Economic Community on 1 January 1973) also suffered.

At the same time, the principle thereby established was taken note of back home: as one of the miners' executive remarked, if the government could afford to pay a cabal of Gulf State sheiks four times the standard price for oil, then why couldn't they afford to pay a fair price for the coal stocks that lay in their own back yard?

Worse, it was capable of being extended to other parts of the economic landscape, where old post-Empire agreements had kept prices down. One of the great retail sensations of 1974, for example, was a rapid increase in the price of sugar – a consequences of the old Commonwealth contracts coming up for renegotiation which meant that, in the interregnum before new deals were signed, supplies had to be bought on the world market.

The second factor was an industrial dispute that matched a Conservative government against the National Union of Mineworkers in a stand-off which, however much some of those involved affected to deny it, could scarcely fail to acquire a political underpinning. Joe Gormley, the miners' moderate and realistic leader, always maintained that the dispute was solely about wages, and at one point went so far as to offer Heath a way out of the impasse which a more resourceful politician might have grasped. On the other hand, Gormley's team also harboured the Scottish miners' leader Mick McGahey, who, asked by a somewhat puzzled Heath exactly what he wanted from the negotiations, is supposed to have replied that his real aim was to effect a change of government. Up-and-coming Conservative ministers never forgot this exchange and the deliberation with which Mrs Thatcher went about her plans for seeing off Arthur Scargill 10 years later was a tribute to the lessons learnt.

But lurking beneath these global contingencies and political imperatives was something that proved to be quite as important in creating the new world of the post-1979 general election. This was the rise of middle-class dissatisfaction, almost amounting to paranoia.

The galloping inflation of the early 1970s had had a profound effect on middle-class living standards; the gap between white-collar and blue-collar salaries eroded as the decade went on. The class distinctions of the 1970s – as glaring then as they have ever been – were increasingly behavioural rather than economic, and beneath them lay a suspicion of revolutionary intent. My father, for example, used quite seriously to believe that he would wake up one morning to find Soviet tanks parading through the streets of Norwich – a fear that found a resonant echo in Robert Moss's scare-mongering The Collapse of Democracy, published in 1975, and clearly inspired by the events of 1973-4, which begins with a fictitious letter from the London of 1985, now in a state of "proto-Communism".

But, of course, democracy, or what passes for democracy in this country, did not collapse. King Log was succeeded by King Stork, in the person of Harold Wilson, and the danse macabre of untrammelled wage and price inflation went on for another five years: a process of call and response that had less to do with revolutionary fervour than with organised labour's determination to preserve wage differentials.

If the 18 years of Conservative government that followed had an animating force, then it was the resolve of the affronted British bourgeoisie to get a little of its own back, and the explanation lies here in the world of Slade singing "Merry Christmas Everybody", Edward Heath's barking voice resounding over the radio, the television set suddenly failing, and the curious sensation invoked in the breast of every civilised person by the sight of a street-full of houses at dusk where, mysteriously, no light shines.

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