What happened in the 1974 election?

Oil, Scottish Nationalists, and a split house - it all sounds a bit familiar.

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For Labour, defeat is like shortbread: it rarely stops with one. Loss of power in 1951 was followed by crushing reverses in 1955 and 1959. The party stumbled out of office in 1979 – and went on to lose in 1983, 1987 and 1992. Since 1945, Labour has bucked the trend on just one occasion: 1974.

In June 1970, to the surprise of just about everyone but himself, Ted Heath, who had been widely written off by his own party due to both dire approval ratings and his strange lifestyle, became prime minister with a majority of 30. Harold Wilson, Labour’s popular if, by that point, somewhat tarnished leader, had planned to retire in 1972. But he
was desperate not to go down as a loser and was able to persuade his colleagues that only he could keep together a party that was badly split between modernisers still pining over a departed leader (Hugh Gaitskell) and an increasingly vocal left.

That unity came at the price of clarity, and both factions angrily stockpiled weapons for the coming civil war, with the right consolidating its control over the conservative parliamentary party and the left making inroads into the constituencies.

That war might have broken out into the open if the Conservative government had not made such a mess of things. Heath’s government became locked in a fruitless battle with the miners, while Anthony Barber, the chancellor of the Exchequer, managed to turn a large Budget surplus into a deficit of 6 per cent of GDP.

In February 1974, faced with the unappetising choice of a failed Tory administration and an incoherent Labour opposition, the country shrugged. The third party, the Liberals, enjoyed their biggest share of the vote since 1923 and the Scottish Nationalists returned their highest number of MPs yet (seven). Wilson, meanwhile, finished just behind Heath in the popular vote but ahead on seats, with 301 to the Conservatives’ 297. In addition, Labour’s position in the Commons was stronger than it looked, because even though it was 30 seats short of a working majority, none of the smaller parties – from the Liberals to the Scottish Nationalists and the various flavours of Irish unionists – wanted to help Heath stay in office.

Wilson opted to eschew a formal coalition with a smaller party and to carry on in the hope of securing a more comfortable parliamentary position at a later date, just as he had turned a Labour majority of four seats in 1964 into one of 96 in 1966. But Labour’s position after the October 1974 election was little better than it had been in February, with a majority of just three, and the Scottish Nationalists, on their best ever showing in parliament, with 11 seats.

The economy was still being buffeted by adverse global winds and capital flight, the trade unions were restive, and there was the question of Barber’s deficit to be addressed. The small majority would have been hard to manage in the best of times – but unlike in 1964, when Labour was largely united, the party’s divisions, partly suppressed during the years of opposition, sprang back into the open in office.

Passing legislation turned into a war of attrition that wore hard on Labour parliamentarians – for the most part, elderly men with hard careers in manual labour behind them. It proved next to impossible for the government to get bills through the House without them acquiring wrecking amendments and vexatious extra spending commitments, many of these from MPs who were notionally on the government’s side.

The years of hard slog had their effect. Thirteen Labour MPs died between October 1974 and May 1979. That, coupled with the enervating affect of Britain’s economic woes on the party’s popularity, meant that by the time that Jim Callaghan succeeded Wilson in 1976, the government had a majority in name only. A year later, in 1977, a double defeat in Birmingham Stechford and Ashfield left the party without any sort of majority at all.

Labour was now forced to live on what it could wheedle out of the smaller parties. But unlike the large majority secured by David Cameron in concert with the Lib Dems, these were impromptu coalitions, and they were able to edge the government over the line on individual votes, each often splitting the Labour Party down the middle.

What kept ministers and MPs going? The dream of North Sea oil, great deposits of which prospectors had discovered by 1974, but was not due to start paying dividends until the end of the decade. Labour’s dream was that if it held on long enough, it would be able to reap the electoral benefits of Britain striking oil. But it wasn’t to be: a deal with the SNP – for a devolved assembly for Scotland – was rebuffed by the Scottish electorate and led to a vote of no confidence in the Labour government.

The Scottish Nationalists voted with the Liberals and the Tories to bring down the government: and in the early hours of the morning on 4 May 1979, Margaret Thatcher stood outside Downing Street as prime minister for the first time. Labour did not come close to office again until 1997.

Stephen Bush is special correspondent at the New Statesman and the PSA's Journalist of the Year. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

This article first appeared in the 17 April 2015 issue of the New Statesman, The Election Special