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@gbj_tester
I'm inclined not to help, just because you made me feel old. I had that bike new in 1984.
The wheels are 27", and already have quite long reach brakes, so fitting new 700c wheels is going to be troublesome. If it were mine, I think I'd just make a ghetto fixed conversion without changing anything other than taking the freewheel off and screwing on a wide based 16t Trialtech sprocket. The suicide hub approach won't be a problem as you'll be leaving both brakes on. Chainline will probably be good using the existing 42t inner ring, so you won't even have to respace/redish the rear wheel. Total conversion cost about £20.
Tarting it up with new brake cables, handlebar tape, chain and tyres will add almost £100 to the bill. If you start going much beyond that, you might as well get a whole new bike, bearing in mind that £300 gets you an brand spanking new Vitus Vee 1 29er which is at least as good for short commutes and shopping and adds a bit of light XC capability too.