The transformation of the SLL into the Workers Revolutionary Party in November 1973 was not prepared on the basis of a review of the strategic experiences of the international Trotskyist movement. Rather, it was a tactical response to the working class movement against the government of Tory Prime Minister Edward Heath. The International Committee was excluded by the SLL from participating in the discussions that attended the founding of the Workers Revolutionary Party. After the founding congress, the growth of the WRP during this period of working class militancy, which resulted in the fall of the Heath government and the coming to power of a Labour government in March 1974, concealed briefly the mounting problems within the organization.
The defeat of the Heath government was one episode in an economic and political crisis that convulsed world capitalism in the period between 1973 and 1975. The end of dollar-gold convertibility unleashed an inflationary cycle that was exacerbated by a general loss of confidence in the American currency. In October 1973 war broke out in the Middle East, leading to a quadrupling of oil prices by OPEC, which, in turn, triggered the worst recession since the Great Depression of the 1930s. In April 1974 the fascist dictatorship of Salazar in Portugal, which had been in power for nearly a half-century, collapsed beneath the pressure of anti-colonial insurgencies in Africa (Angola and Mozambique) and mounting domestic crises. The first legal May Day was celebrated in Lisbon with a demonstration of several million people. In July 1974 the military junta in Greece, which had seized power in 1967, fell in the wake of a disastrous intervention in Cyprus. In August 1974, President Richard Nixon was forced to resign after the House Judiciary Committee voted for Articles of Impeachment as a result of revelations relating to the Watergate scandal and to illegal military actions that had been ordered by the Administration in Cambodia. Finally, in April 1975, Vietnamese liberation forces entered Saigon, achieved the unification of their country, and brought the neo-colonialist operations of the United States in Indochina to a humiliating conclusion.