On 20 January 1972, the number of people out of work and claiming benefits in the United Kingdom rose above one million for the first time since the 1930s. The announcement of the unadjusted figure – 1,023,583 – represented a significant psychological and political blow to Edward Heath’s Conservative government.

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The Conservative 1970 general election manifesto said the party would not “tolerate the human waste and suffering that accompany persistent unemployment, dereliction and decline.”

During the election campaign, Heath pledged that his party’s proposals “would, at a stroke, reduce the rise in prices, increase production and reduce unemployment.”

The increase in unemployment in the early years of Heath’s tenure as prime minister has been associated with the deflationary measures pursued by Roy Jenkins after the devaluation of sterling in 1967.

In January 1972, the announcement that unemployment had reached the one million threshold was politically explosive. The employment secretary, Robert Carr, reportedly responded that he was “not alarmed, but I am very worried”.

Carr added: “I had hoped I would never see unemployment reach this level and our measures are going to take longer to have an effect than I hoped.”

Heath, who attended the commons on 20 January for prime minister’s questions, was repeatedly shouted at by opposition MPs in a staged protest. The disturbances started as Heath rose to answer a question on the forthcoming accession ceremony that would mark Britain’s entry into the European Economic Community (EEC).

When the prime minister took to his feet, opposition MPs shouted: “Out, out!”

The commons speaker, Selwyn Lloyd, attempted to call the House to order, reminding MPs: “This is question time and the prime minister should be allowed to answer the question.”

But the cries of “Heath out! Heath out!” continued.

Lloyd warned: “I hope the House realises the position in which this puts me. I shall have to suspend the sitting… Order. The sole effect of a suspension would be that the prime minister would not be able to be questioned today.”

With the protests showing no sign of abating, the speaker announced: “I shall suspend the sitting until half-past three.”

The commons returned at 3:30 pm for the weekly business statement. The Labour leader of the opposition, Harold Wilson, asked the government for the forthcoming commons business on “the assumption that the government have not done the decent thing and resigned by then”.

It was announced that a debate would be held on Monday 24 January on a motion of censure against the government.

In response, Conservative MP Peter Tapsell denounced Wilson for “having wholly failed to show any leadership during the disgraceful exhibition [at PMQs].”

Conservative MP Cranley Onslow argued that the “thoroughly disgraceful, carefully rehearsed and comprehensively orchestrated” scenes should be referred to the procedure select committee.

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On 24 January 1972, the commons debated Wilson’s motion of censure against the government. The motion recalled Heath’s pledge to “reduce unemployment at a stroke” and condemned the government’s “doctrinaire and irresponsible policies”.

Wilson, who led the country as prime minister from 1964 to 1970, welcomed Heath “back to reality” after his appearance at the EEC accession ceremony.

He said that the prime minister, his successor, felt “no sense of shame.”

The Labour leader berated Heath for having given “not a word of admission that this is the result of his government’s policies, and no less of his own characteristic personal style of dehumanised government.”

He added: “There sits the man who, almost on the very eve of polling, pledged himself to reduce – his word – unemployment at a stroke. Does he deny that pledge? If he had told the country the truth about employment, he would have been abjectly consigned in the election to oblivion.”

Harold Wilson: “Last Friday he left these shores, the first dole queue millionaire to cross the Channel since Neville Chamberlain…

“There sits the man who, almost on the very eve of polling, pledged himself to reduce – his word – unemployment at a stroke. Does he deny that pledge? He may say that it was not the pledge that won the election.

“He may say that he won the election by his appeal to housewives, based on his clear pledge directly to reduce prices.”

Heath dismissed the Labour leader’s “personal sneers and jibes”, characterising unemployment as “a waste, a human waste as well as an economic waste, a waste of a man’s skills and abilities, and hardship for his family.”

The “cyclical aspect” of the situation, Heath said, could be explained by the “deflationary measures” introduced by the Wilson government. He attributed the structural unemployment to a “massive shake-out of labour” and “runaway wage inflation”.

Heath accused Wilson of conducting a “continuous retreat… from responsibility; a retreat from responsibility in industrial relations, and over Europe; a retreat from responsibility on inflation, and now a retreat from responsibility over employment.”

He added: “If ever the proof of that were needed, it was the pantomime organised by himself and his chief whip at question time last Thursday.”

The House divided at 9:59 pm. Wilson’s motion was defeated by 302 votes to 275 – a majority of 27.

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Rising unemployment took a significant political toll on Heath’s government. The prime minister, haunted by memories of the Great Depression and opposed to unemployment on moral grounds, undertook a famous U-turn.

Heath responded with an audacious plan to reflate the economy. The 1972 “Barber boom” budget, set out by chancellor Anthony Barber on 21 March, pumped £2.5 billion into the economy through tax cuts and increased benefits.

Barber argued that economic growth was needed to “bring down the deplorably high level of unemployment and to increase the real wealth of our country.”

He stated: “We are right also to regard with profound concern the immediate problem of a level of unemployment which has persisted despite the unprecedented action to counter it which has been taken over the past year…

“There is universal agreement that the present high level of unemployment is on every ground – economic and social – one which no government could tolerate.”

Barber said his measures were “intended to ensure a growth of output at an annual rate of 5% between the second half of last year and the first half of next.”

He dismissed concerns about his forecast £3.4 billion public sector borrowing requirement.

The chancellor stated: “I do not believe that a stimulus to demand of the order I propose will be inimical to the fight against inflation.

“On the contrary, the business community has repeatedly said that the increase in productivity and profitability resulting from a faster growth of output is one of the most effective means of restraining price increases.”

The package marked a major reversal of the non-interventionist tenor of the Conservative Party’s 1970 manifesto.

Wilson said the budget was the “result of panic necessity to spend our way out of unemployment.”

Clip.

GDP growth in 1973 hit a post-war high of 9.6%. But the “Barber boom” did not last.

Within months, Barber was forced to bring in a deflationary budget, announce a pay freeze that led to a major confrontation with the miners and float the pound. This latter measure, announced on 23 June, led to a sharp decrease in its value and further inflationary pressure on the economy.

Heath called a snap general election for 28 February 1974. “Who governs Britain?”, he asked. A minority Labour government, the electorate responded.

The fallout of the 1972 budget helped undermine the post-war Keynesian consensus, paving the way for the rise of Margaret Thatcher and her abandonment of “full employment” as an economic objective.

Jim Prior, an ally of Heath and agriculture minister in January 1972, later described the effect unemployment had on Heath, both politically and psychologically.

In his memoirs, published 1986, Prior wrote: “In January 1972, although the jobless total adjusted for seasonal factors remained below one million, the unadjusted overall total exceeded that. The commons had to be suspended during the prime minister’s questions following Labour’s furious protests.

“This in itself did not shake Ted, but he utterly despised and detested the pre-war Conservative governments, who had tolerated between two and three million unemployed.”

He added: “It was therefore no surprise in which direction Ted decided our economic policy should go when he now had to choose between tolerating a continued high level of unemployment, in the hope that this would keep some control over wage claims and inflation – or trying to run the economy with a higher level of output and growth, and seeking some other means of control over wage and price increases.

“The high unemployment route was counter to everything Ted believed in and had hoped to achieve for Britain.”