To put that another way; does anyone remember the IRA? The bombing outside Harrods? The hotel in Brighton? The mortar attack on Ten Downing Street? Now THAT was a terrorist organisation! those were a terrorists terrorists! Yet compare our response to IRA terrorism to Islamic terrorism. Did we get our panties in knots and suspend ancient freedoms over the IRA? Did we run around denying jobs to anyone with an Irish name who was a Catholic?
Actually, yes -- on both counts. The humorously-named Prevention of Terrorism (Temporary Provisions) Act 1974, rushed through Parliament in all its stages in just two days, conferred upon the Home Secretary the power to declare certain organisations illegal by
fiat, those who remained members of them being punishable by prison sentences of up to ten years. The Act also set up a system of internal exile of a kind unique to Europe west of the Iron Curtain, enabling the Home Secretary to issue indefinite "exclusion orders" to persons he didn't like the look of, either confining them to Northern Ireland, or preventing them from going there. The affected person had no right to be informed of the reasons, if any, for the making of these orders, or to challenge them in the courts. Violators got five years' stir. The Act allowed suspects to be detained without charge or trial for up to seven days, without the right to see a solicitor or any obligation on the part of the state even to confirm that the arrest had taken place; some 150,000 people, nearly all Irish, were so detained during its lifetime. A similar piece of legislation adopted at the same time abolished trial by jury for terrorist offences; the two "Real IRA" suspects convicted a few weeks ago were tried in such a non-jury court, with a single judge in the agreeable position not only of determining the guilt or innocence of the accused but also adjudicating on the fairness of his own conduct of the trial. ,All of these powers were not only preserved, but extended, when the PTA was supplanted by the Terrorism Act, 2000, and its many pieces of supplementary legislation. Needless to say, the expedients pioneered in Northern Ireland, and introduced under the rubric of combatting terrorism, have now been extended to Great Britain, where today they are mainstays of regular criminal procedure: the abolition of the right to silence (Criminal Justice and Public Order Act, 1994); detention without trial (Police and Criminal Evidence Act, 1984); restrictions on movement (Public Order Act, 1986); wiretapping and surveillance for such "offences" as sending one's children to a school outside one's own district (Regulation of Investigatory Powers Act, 2000); the end of "double jeopardy," allowing the state to use its limitless resources to try suspects for the same crime over and over until it gets the verdict it wants (Criminal Justice Act, 2003); and much else. This is one of the drawbacks of not having a written constitution: civil liberties exist only as long as Parliament is pleased to permit them to exist. The late Lord Hailsham in 1976 famously described the British political system as an "elective dictatorship." He didn't know the half of it.
As for discrimination in employment against people with Irish names or accents: the practice may not have been codified in law, but it was nonetheless widespread in the 1970s and 1980s. Nor was it illegal at the time. It would be if revived today.