- Labour wins in the 1970 general election with a small majority, Harold Wilson continues as Prime Minister.
- By 1972, the government is in crisis. Trade union militancy has exploded and the international hike in oil prices has crippled British industry. Foreign Secretary, Roy Jenkins, lauches a coup against a deeply unpopular Wilson and becomes the new Prime Minister. A small core of Labour's hard Left led by Eric Heffer, however, refuses to support a Jenkins government, denying him a majority.
- Jenkins calls an election to recieve a mandate for his leadership, but the election results in a hung parliament, with Labour as the largest party. Labour cannot form a majority with the Liberals, and Jenkins is worried about left-wing opposition to his leadership.
- With the economy pushed into further crisis as the world stock market crashes, Jenkins decides to form a temporary "Government of All the Talents", involving members of the Labour, Conservative and Liberal parties. William Whitelaw, the Conservative leader after Iain Macleod's death in 1971, agrees to join Jenkins in government, as the Conservative Left become increasingly worried about the growing radicalisation of the Labour party.
The Government of All the Talents (October 1972-):
Prime Minister: Roy Jenkins
Deputy Prime Minister and Home Secretary: William Whitelaw
Chancellor of the Exchequer: Denis Healey
Foreign Secretary: Jim Callaghan
Defence Secretary: Edward Heath
Education and Science Secretary: Jeremy Thorpe
Employment Secretary: Barbara Castle
Industry Secretary: Anthony Crosland
Environment Secretary: Jim Prior
Trade Secretary: Reginald Maudling
Transport Secretary: Bill Rodgers
Prices and Consumer Protection Secretary: Lord Carrington
Minister for Overseas Development: Tony Benn
Scotland Secretary: William Ross
Wales Secretary: John Morris
Northern Ireland Secretary: Sir Alec Douglas-Home
Chief Secretary to the Treasury: Robert Carr
- Briefly, the majority of both parties support the government. Yet as time goes on, opposition to the arrangement grows. In January 1973, Barbara Castle and Tony Benn resign from the government, frustrated over its lack of radicalism in responding to the economic crisis. They are replaced in Cabinet by Shirley Williams and Merlyn Rees. In the Conservative Party, more and more MPs are gravitating towards Enoch Powell, who has led a fierce opposition to the coalition.
- In June 1973, the Government of All the Talents fails a vote of confidence in the House of Commons and a general election is called. Whitelaw narrowly survives a leadership election against Powell, but Jenkins is not so lucky, facing a leadership challenge from Tony Benn which leads to the victory of Jim Callaghan who enters the race as a "compromise candidate".
- In the general election of July 1973, William Whitelaw's Conservative Party wins with a majority of 32. Britain's economic problems continue...