Page "Edward Heath" Paragraph 27

Heath's time in office was as difficult as that of all British prime ministers in the 1970s.

The government suffered an early blow with the death of Chancellor of the Exchequer Iain Macleod on 20 July 1970 ; his replacement was Anthony Barber.

Heath's planned economic policy changes ( including a significant shift from direct to indirect taxation ) remained largely unimplemented: the Selsdon policy document was more or less abandoned as unemployment increased considerably by 1972.

By January that year, the unemployment rate reached a million, the highest level for more than two decades.

Opposed to unemployment on moral grounds, Heath encouraged a famous " U-Turn " in economic policy that precipitated what became known as the “ Barber boom .” This was a two-range process involving the budgets of 1972 and 1973, the former of which pumped £ 2. 5 billion into the economy in increased pensions and benefits and tax reductions.

By early 1974, as a result of this Keynesian economic strategy, unemployment had fallen to under 550, 000.

The economic boom did not last, however, and the Heath Government implemented various cuts that led to the abandonment of policy goals such as a planned expansion of nursery education.