United Kingdom

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b

Egypt

The next crisis for the empire occurred in Egypt, where British domination of the Suez Canal sustained Britain’s role as a world trader. Even before the war, British troops had withdrawn to a zone around the canal, and Britain had ceased its once active role in Egyptian government. Relations were complicated by the creation in 1948 of a Jewish state, Israel, in British-controlled Palestine. Both Arabs and Israelis accused the British of taking the other’s side, and both wanted Britain out of the Middle East.

In 1956 Egyptian leader Gamel Abdel Nasser seized the canal. Britain, with military assistance from France and Israel, attempted to retake the canal and almost succeeded in doing so. However, the United States and the USSR, who were caught unaware by the Suez crisis, insisted that British, French, and Israeli forces withdraw from the canal area. The Suez crisis saw Britain lose all of its influence in the region and raised at home the idea that Britain was no longer a great power.

During the 1960s colonies throughout the world rapidly acquired their independence. In 1961 South Africa withdrew from the Commonwealth after controversy developed within the Commonwealth concerning apartheid, South Africa’s policy of racial segregation. Other African territories became self-governing states and joined the Commonwealth of Nations. Ghana, Nigeria, Uganda, and Kenya—all large African states under British control—developed into republics and adopted British forms of parliamentary government, law, and finances.

The Commonwealth provided an international sphere of influence for Britain during world crises and remained an important economic union. Although Britain was no longer a superpower, the country’s traditional role in Africa and the Middle East made it an obvious mediator of conflict. London remained the financial center of choice for petroleum-rich states as well as the educational center for the sons of the ruling elite in the former colonies. The Commonwealth tied together the member nations by automatically granting British citizenship to citizens of Commonwealth countries, a policy that ended in 1983. British emigration to the former colonies of Canada, Australia, and New Zealand remained a significant dimension of its population history as did the even higher immigration into Britain from its former Asian and African possessions. This immigration created racial tensions in Britain’s largest cities. While the Race Relations Act of 1968 prohibited discrimination, racial violence increased, especially among youths.

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The Search for Economic Well-Being

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1

Conservative Rule

In 1951 the Labour Party lost its majority in Parliament, and the Conservative Party regained control. The Conservatives led the nation toward renewed prosperity. They returned the iron and steel industries to private ownership, but left intact the major components of the welfare state. Tight government control on imports and on government spending, high rates of income tax for the wealthy, and investment in new industries such as automobiles and chemicals finally created a surplus in British trading accounts.

Private enterprise led the growth of what was being called “the affluent society.” The value of the goods that workers could buy with their wages rose by 40 percent during the 1950s. Two symbols of affluence—cars and televisions—soon became so common that the government undertook a program of motorway expansion. In addition, private investors created the first independent television network to compete with the government-owned British Broadcasting Corporation (BBC).

The accession of young Queen Elizabeth II in 1952 provided a ray of light toward a brighter future, as did the extraordinary accomplishments of British sportsmen around the world. In 1953 a British expedition scaled the world’s highest mountain, Mount Everest; another British expedition crossed Antarctica; and in 1954 British athlete Roger Bannister became the first person to run a mile in less than four minutes. In the early 1960s, British popular culture swept the world. For a time the United Kingdom replaced the United States as the leader in fashion, style, and especially music, with popular music groups such as the Beatles and the Rolling Stones emerging as the dominant rock groups of the day.

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2

Industrial Decline

Almost imperceptibly, Britons came to realize that their nation was in decline during the 1960s and 1970s. Early recovery from the war led to an optimism that could not be sustained as other European countries staged their own revivals. Despite being severed in two, Germany emerged once again as an industrial and trading power. Under the energetic leadership of Charles de Gaulle, France charted a course of independence from the United States by refusing to join the North Atlantic Treaty Organization (NATO), a defensive organization formed by the United States and a number of European countries to counter the military strength of the USSR.

For a time, de Gaulle managed to keep Britain out of the European Economic Community (now the European Union), an organization designed to promote economic integration among European nations. De Gaulle vetoed Britain’s membership applications in 1961 and 1967, largely because of Britain’s close ties with the United States. Britons themselves remained split over closer ties with the continental powers. It was not until 1973 that Britain finally became a member of the European Community.

By the mid-1960s Britain was mired in an economic slowdown. Massive dock strikes in both 1966 and 1967 severely affected British exports. In an effort to prevent the flow of money out of the country, the government devalued the currency. Devaluation lowered the value of British currency in relation to foreign currency, making it less expensive for Britain to pay its foreign debts. It gave a boost to British exports by making British goods less expensive on the foreign market. However, it also made imported products more expensive for British citizens and lowered international confidence in Britain’s currency.

Industries in which Britain had been dominant for centuries were decaying rapidly. Shipbuilding, textiles, coal, and steel, all of which had been bywords of Britain’s Industrial Revolution, were no longer competitive. Each was beset with low productivity, high labor costs, and outdated plants and machinery. Industrial relations between workers and employers were at an all-time low, as workers staged hundreds of strikes, work stoppages, and deliberate slowdowns.

Crisis came in 1973 when oil-exporting nations in the Middle East dramatically cut shipments to pro-Israeli nations following the Arab-Israeli War. Oil prices quadrupled, forcing British industries to use more coal. This was the opportunity for which miners had waited. Miners were dissatisfied because they opposed the government’s wage controls as well as the policy of closing down unprofitable mines at the cost of miners’ jobs. Now the miners introduced a ban on working overtime and finally began an all-out strike to pressure the government to abandon its policy of legislating limits on wage increases. In response, Prime Minister Edward Heath introduced emergency legislation that limited the working week to three days and instituted national electrical power cuts to minimize the amount of coal used in power plants.

The election of 1974 was fought on whether government would restrain the unions. The Labour Party won a narrow majority by promising not to interfere with the unions. With legal limits removed, the unions won wage increases. Workers now had more money to spend, while the amount of available goods on the market remained the same. As a result, prices for products began to rise, and double-digit inflation ensued. Food prices rose 20 percent in 1973 alone.

Wages and prices spiraled out of control. Only a supply of oil drilled from the North Sea off the coast of Scotland saved Britain from a crisis over the payment of its foreign debts. Even with the new supply of oil, the government raised taxes on income and on consumer goods to finance raises in wages that had been negotiated with union members in nationalized industries. The taxes left less and less for reinvestment. In 1979 an arrangement between the Labour Party and the unions to keep wage demands moderate broke down, and another round of strikes took place.

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3

The Thatcher Revolution

The Conservatives capitalized on the situation to win the election in 1979 under their newly chosen leader, Margaret Thatcher, Britain’s first female prime minister. Thatcher was a strident Conservative, and she was determined not to give in to the unions or change from the course she had charted to revive the British economy. Thatcher based her policy on the theory of monetarism. This theory involved strictly controlling the money supply to reduce inflation, lowering tax rates to encourage investment, and minimizing government intervention in industry to remove restrictions on the expansion of businesses.

The Thatcher government began privatizing industry, relaxing government regulation, and removing government subsidies. This was strong medicine and initially led to an even more rapid decline. By 1981 both interest rates and unemployment reached postwar highs, and a growing number of British firms faced bankruptcy. Pressure mounted to reverse government policy, and even members of Thatcher’s own party threatened to revolt. Thatcher refused to abandon her policies.

A political crisis was averted only after war broke out when Argentina invaded the Falkland Islands, a British dependency in the South Atlantic that is also claimed by Argentina. The Falkland War released a mood of defiance in Britain in the wake of decades of international setbacks. Following Britain’s victory in the war, the Conservatives won a resounding electoral victory in 1983. However, their 150-seat majority came almost entirely from the southeast, where the benefits of monetarism were felt most.

The election victory allowed for the continuation of Conservative economic policies, as well as an attack on the social programs that had been the backbone of Labour policy for half a century. When the government announced that it would close inefficient coal pits in 1983, the miners again went on strike, but this time there was no compromise offered. Despite its heavy cost to the economy, Thatcher allowed the strike to last an entire year. Violent confrontations and hardships for thousands of mining families resulted. In the end, the strike collapsed.

By the mid-1980s monetarist policy had brought down interest rates and mortgages for an increasing number of homeowners. It had dramatically curbed inflation, and the remaining British industries slowly became internationally competitive. At the same time, social programs came under attack with deep cuts in the National Health Service and in the budgets of local government. Conservative support was now evenly balanced between traditional upper-class Conservative voters and the lower middle classes, including skilled workers who saw their standard of living rise and their values of work, family, and personal responsibility vindicated.

The successes of Thatcherism were tempered by the new social divisions it created. Scotland, Wales, and northern England all became economic backwaters; their industrial bases were in ruins, and an entire generation of workers was unemployed. Moreover, the new wealth that monetarism created—in the financial industry, real estate, and technology—led to many displays of luxury among the newly rich. The new wealth contrasted sharply with the loss of income experienced by many inner-city residents and unemployed middle-aged males. Conservative support slipped in the polls, and members of the party revolted against Thatcher, who resigned in 1990.

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4

Attempts at Peace in Ireland

In Ireland, the uneasy settlement that had kept Northern Ireland part of Britain exploded in the late 1960s. In 1968 Northern Ireland’s Catholic minority launched a series of protests against discrimination in employment and housing. The protests led to increasing violence between Catholic and Protestant groups. British troops were sent to keep the peace in cities such as Belfast, which had large concentrations of Catholics among the majority Protestant population. These troops became the target of violence, and guerrilla warfare followed. Beginning in 1973 the Irish Republican Army (IRA) targeted prominent sites in England, bombing subway stations, department stores, and tourist locations.

For the next 25 years Catholic and Protestant paramilitary groups waged a deadly battle. Catholics fought to create a single Ireland; Protestants fought to maintain union with Britain. Almost every effort toward peace was sabotaged by acts of violence by one side or the other. By the early 1980s, hunger strikes conducted by IRA prisoners in Northern Ireland heightened political tensions and fueled fears that the province’s moderate Catholics would become radicalized. These concerns led the British government to pursue a policy of close cooperation with the Irish government to achieve peace in Northern Ireland. In 1985 Thatcher and Irish prime minister Garret FitzGerald signed the Anglo-Irish Agreement, which gave Ireland a consultative role in the administration of Northern Ireland.

Anglo-Irish cooperation provided fresh momentum to the peace process, and in 1993 the British and Irish governments issued a joint peace proposal called the Downing Street Declaration—a document intended to form the basis for peace negotiations. In an important breakthrough, the IRA announced in 1994 that it would suspend its paramilitary operations in favor of peace talks. However, British demands that all-party peace talks could not proceed until the IRA began disarming were rejected by the IRA, and in 1996 the IRA broke its cease-fire with a renewed campaign of violence.

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