DOMINIC SANDBROOK: Tories need to act on uncanny echoes from 1970s

If the Tories don’t act on these uncanny echoes from the 1970s, they’re doomed – and so is Britain, writes DOMINIC SANDBROOK

There’s less than a month left until we know the name of Britain’s next prime minister.

And now the candidates’ minds must be turning to that long-anticipated moment when the winner will walk through the famous black door and up the staircase, past the framed photographs of their 55 predecessors.

In truth, many of those names — the Duke of Grafton, Viscount Goderich, the Earl of Shelburne — are now entirely forgotten. But when our new prime minister reaches the pictures from the 1970s, he or she should pause for thought.

Here, for example, is Edward Heath, whose premiership was destroyed by an energy crisis, surging prices and industrial unrest. Here is Harold Wilson, apparently powerless to stop inflation. Here is James Callaghan, felled by public anger at falling living standards and crippling strikes.

And here, too, is Margaret Thatcher, who ruthlessly profited from her predecessors’ failures, winning a thumping victory in 1979 with a promise to slash inflation, lighten the tax burden, end the strikes and revive people’s faith in Britain itself.

For both Liz Truss and Rishi Sunak, Mrs Thatcher represents an ideological lodestar. Mr Sunak has explicitly promised to ‘govern as a Thatcherite’, though the polls suggest he may not be given the chance.

Conservative party leadership favourite Liz Truss has consciously modelled herself on the Iron Lady, even copying the outfit from her final campaign broadcast in 1979

Prices had been rising since the start of the decade, with an annual rate of 6 per cent in 1970, 7 per cent in 1972 and 9 per cent in 1973. Then, with the outbreak of war in the Middle East, they really went through the roof

Miss Truss, meanwhile, has consciously modelled herself on the Iron Lady, even copying the outfit from her final campaign broadcast in 1979.

Why Margaret Thatcher? There’s an obvious reason: she won three elections and, even years after her death, remains very popular with the Tory rank and file.

But perhaps there’s a further reason. The problems Mrs Thatcher promised to address in the late 1970s — high inflation, surging oil prices, a stagnant economy and a sclerotic, struggling state — are remarkably similar to those we confront today.

History never repeats itself precisely, of course, even if the current heatwave feels uncannily reminiscent of the record-breaking summer of 1976, complete with drought warnings, water shortages and hosepipe bans.

But when you look at today’s headlines, from the rocketing prices in the supermarkets to this weekend’s railway strike, it’s hard to miss the parallels with the age of Slade, Space Hoppers and the Sex Pistols.

Perhaps the most obvious example is the spectacle of an energy crisis driven by a foreign war, brutally laying bare Britain’s dependence on supplies from abroad.

Today it’s Vladimir Putin’s invasion of Ukraine. Back then it was the Arab nations’ stunning surprise attack on Israel in October 1973, which saw the Opec oil cartel raise prices by 17 per cent to punish the West for backing the Israelis.

But when you look at today’s headlines, from the rocketing prices in the supermarkets to this weekend’s railway strike, it’s hard to miss the parallels with the age of Slade, Space Hoppers and the Sex Pistols

In both cases, experts had warned for years that Britain had become dangerously reliant on overseas suppliers and had neglected to maintain its own energy security. But in both cases, nobody listened until it was too late.

Then, as now, the consequences for ordinary families could scarcely have been more dramatic.

Facing the prospect of massive winter power cuts, Edward Heath instructed people to lower their thermostats to a maximum of 17c, and street lights were dimmed to half-strength.

But when the miners, claiming that their wages had been eroded by surging inflation, went on strike for higher pay, Heath went even further, ordering Britain’s shops, offices and factories to move to a three-day working week.

As older readers will remember, Heath paid a heavy price for his inability to resolve the crisis. When he called an election in February 1974 to decide ‘who governs’ — Downing Street or the unions — the result was a hung parliament, and he was out on his ear.

Although there’s a grim lesson there for the next Tory leader, the story of the early 1970s is also a reminder of what’s changed.

Today’s rail strikes may be intensely infuriating. But the hard Leftists behind them aren’t remotely as powerful as their predecessors were in the Heath years, when the general secretaries were forever trooping into Downing Street for the proverbial beer and sandwiches with the PM.

History never repeats itself precisely, of course, even if the current heatwave feels uncannily reminiscent of the record-breaking summer of 1976, complete with drought warnings, water shortages and hosepipe bans

Of course that may change, especially if soaring household and utility bills provoke further pay demands from other unions. But just as in the mid-1970s, the really corrosive problem is inflation. In this respect, I worry that few Tory politicians — many of whom are far too young to recall life back then — grasp how dangerous the situation is.

When I wrote about the perils of inflation in the Daily Mail last autumn, I noted that it was currently 3 per cent and likely to hit 4 per cent by the end of 2021. But how quickly things change! Today, the latest projections suggest that it will peak at an agonising 13 per cent, and may go even higher, if there are further shocks overseas.

That won’t be surprising to anybody who remembers the 1970s: an object lesson in how, when inflation gets going, it’s appallingly difficult to stop.

Prices had been rising since the start of the decade, with an annual rate of 6 per cent in 1970, 7 per cent in 1972 and 9 per cent in 1973. Then, with the outbreak of war in the Middle East, they really went through the roof.

For ordinary British families, the results were devastating.

In just 12 months, the price of electricity went up by 66 per cent, tinned soup by 54 per cent, orange squash by 51 per cent and coal by 47 per cent. The price of carrots went up by 137 per cent; sugar, incredibly, by 184 per cent.

Why wasn’t there mass unrest? The answer is that from the spring of 1974, Harold Wilson’s Labour government simply handed out gigantic public-sector pay deals, with power workers winning 31 per cent, civil servants 32 per cent and doctors 35 per cent.

As a result, inflation became endemic, hitting a post-war record of 27 per cent in August 1975. The costs fell most heavily on people who could ill afford it: the poorest, the elderly, those living alone — their incomes stagnant as prices rocketed. As Britain’s GDP fell two years in a row, living standards sank with it. By December 1977, the average couple took home less money, in real terms, than they had four years earlier.

A pond has dried up and conkers have started to fall at a park in Wanstead, East London due to the current hot weather. The current drought will equal 1976 today, becoming the joint second longest in East London

What should really alarm our incoming prime minister is that inflation is not merely an economic issue. It’s a moral issue, eroding thrift and breaking the unwritten contract between savers and the state. And as the 1970s proved, it’s politically poisonous, driving a wedge between savers and borrowers, old and young, those represented by trade unions and those dependent on fixed incomes.

As so often with a deep-seated disease, the cure was almost as painful as the symptoms. For although Thatcher wrung it out of the system eventually, she only did it by applying the most stringent medicine, with interest rates peaking at an excruciating 17 per cent at the end of 1979. A repeat performance today wouldn’t just blow the housing market to pieces. It would lead to a tidal wave of repossessions and see thousands of families driven into destitution.

Of course there’s no need to assume the worst. Even after the latest rise, today’s Bank of England interest rate is just 1.75 per cent.

But there’s another parallel which should trouble us — namely, the sense of inaction and exhaustion hanging over Westminster this summer, from Keir Starmer’s waxwork act to the intellectual vacuum at the top of the Tory Party.

Back in 1975, with prices soaring week by week, many observers were shocked at Westminster’s failure to take decisive action. ‘Why Are We Waiting?’ thundered one headline. ‘Isn’t it obvious that the Government MUST act against inflation? That we CAN’T go on like this?’

But as Harold Wilson’s policy chief, Bernard Donoughue, wrote in his diary, they seemed to have ‘no more interest, no more ideas, no appetite for power’. There was, he thought, an inevitable sense of ‘erosion and final decline’.

That feels very familiar today. From inflation to housing, energy to productivity, neither Left nor Right seems to have any sense of vision or drive, let alone the determination to bring lasting change.

In an unsparing essay for this week’s Spectator magazine, the writer John Oxley eviscerates the Conservative Party, his own natural home, for its dearth of new ideas.

‘Rather than principles or goals,’ he writes, ‘the Tory Party today lives for day-to-day reactions to the things that catch its eye.’

All too often it seems ‘listless, incapable and slightly baffled by the power it holds’.

We can all think of examples. The worsening housing crisis, with many young couples unable to afford a home of their own, is particularly glaring.

In this, too, there is a 1970s parallel. By the end of the decade, many had become frustrated at Labour’s refusal to let them buy their rented council houses. And when Mrs Thatcher promised them the right to buy, young voters poured into the Tory ranks.

Indeed, first-time voters were some of her most enthusiastic supporters in 1979 — a stark contrast with the electoral demography today.

The message on her posters read starkly: ‘Labour Isn’t Working.’ And that sense of dysfunction, above all, is the most striking parallel between then and now.

‘Almost nothing seems to be working in Britain,’ read the headline of a recent doom-laden essay in the Economist.

Perhaps that’s a bit overstated. As Stephen Glover wrote this week in the Mail, there are plenty of things that work well, and we tend to forget that other European countries are facing the same challenges (and some have even higher inflation rates, believe it or not).

But there is, I think, a palpable sense that things in Britain have become desperately stretched. Nine out of ten NHS dental practices, for example, are no longer accepting new adult patients.

Even more glaringly, Thursday’s NHS figures showed that almost 1,000 patients are having to wait at least 12 hours in A&E every day — the worst performance on record. And heart attack and stroke victims have to wait, on average, 59 minutes — which could mean the difference between life and death.

Perhaps it’s no wonder, then, that in some quarters there seems to be an existential loss of faith in Britain itself. As in the 1970s, younger voters would be forgiven for wondering if our best days are behind us, and whether they’ll ever have the same opportunities as their parents.

All in all, then, Britain’s 56th prime minister will face an in-tray overflowing with challenges.

So what next?

Well, the 1970s offer two possible scenarios. In the first, a tired, threadbare, divided Tory government will stagger to inevitable defeat in 2024, just as Jim Callaghan’s Labour administration did in 1979.

Soaring food prices and crippling energy bills will take a punishing toll on their electoral support. Few ruling parties prosper in hard times, and as a result, the new PM will go down in history as little more than an afterthought.

But there’s another, more optimistic scenario. The two candidates talk of channelling Margaret Thatcher. The lesson of her time in office is that with dynamism, decisiveness, vision and clarity, a truly reforming Tory government can push through painful changes, and still be rewarded for it.

Can they do it, though? Can they banish the torpor and heal the divisions? Do they have a genuine vision for public sector reform and coherent plans to help people weather the inflationary tempest?

Can they slash waiting times and build new homes? And perhaps above all, can they give ordinary men and women reasons to be proud of Britain and cheerful about the prospects ahead?

We’ll soon find out. But the stakes could hardly be higher — not just for the new PM, or even for the Tory Party, but for Britain itself.

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