by Andy Beckett
In 1977, Callaghan also enthusiastically took part in the celebration of the Queen’s Silver Jubilee:
The Queen kindly invited Audrey and me to join [the royal yacht] Britannia when she reached my home city of Portsmouth on 27 June for the Naval Review at Spithead. I was determined not to miss this … The Queen held an evening reception aboard Britannia and the Royal Marines beat the Retreat, marching and playing as only they can … I felt my spine tingle as dusk fell and the ceremony drew to an end with the tune ‘Sunset’ blowing softly on the bugles … On the next morning Britannia threaded her way through the long lines of ships drawn up for review …
At the end of the year, Tony Benn wrote in his diary: ‘Callaghan is riding high. The press loves him because he’s openly right-wing.’
In March 1977, Callaghan increased his independence from the Labour left by forming an alliance with the Liberals. The Lib–Lab pact, like many of his manoeuvres as prime minister, deftly turned a position of weakness into one of at least temporary strength. From the start, Callaghan’s government had been hampered by its lack of a Commons majority. By early 1977, he had accepted that getting legislation through the Commons, let alone staying in office until the economy and Labour’s poll ratings properly healed, would require a deal with one of the minor parties. The Liberals proved amenable. Since the onset of the mid-seventies crisis, there had been persistent talk among some centre-right and centre-left politicians of the need for a ‘national government’ – a cross-party governing coalition as there had been in the thirties – to cope with the recession and the threat to British democracy from the extreme left and right. A decade earlier, prominent Liberals had considered such an alliance with Wilson’s first, relatively fragile sixties government. But the Liberal Party as a whole had not backed the proposal and, wrote David Steel, then a rising young Liberal MP and a supporter of the deal, had then seen ‘influence slip from our grasp’ as Wilson increased his majority at the next general election. Yet now, in 1977, the time was riper still: Labour needed a Commons ally, and Steel was party leader, his predecessor Jeremy Thorpe having resigned amid allegations about his sexuality, his involvement in financial irregularities, and his part in a plot to have his lover Norman Scott murdered.
On 23 March, Callaghan and Steel ambushed the Conservatives by announcing the Lib–Lab pact, immediately after Margaret Thatcher had put to the Commons what she hoped might be a deadly motion of no confidence in the government. All thirteen Liberal MPs voted against the motion, and the government survived comfortably. For the next year and a quarter, until the Liberals terminated the alliance in July 1978, Labour were protected by their new parliamentary allies, without conceding much to them beyond the establishment of ‘a joint consultative committee’ involving the two parties to ‘examine Government policy’. A frustrated and irritated Thatcher was ‘astonished’, she wrote, that the Liberals ‘had signed up to such a bad deal’. Benn was enraged by the pact for the opposite reason, feeling that Labour had conceded too much, but when he threatened to denounce the alliance publicly, Callaghan threatened in turn to sack him from the Cabinet, and Benn was silenced. For now, ‘Uncle Jim’ had outfoxed all of them.
Moreover, for all his right-wing gestures, he could not simply be dismissed as a sort of counterfeit Tory. The Lib–Lab pact suggested a way forward for centre-left politics that would directly and indirectly lead, for good or ill, to the creation of the SDP in the next decade and of New Labour the decade after that. Callaghan also continued to give the unions unprecedented influence over government policy. After all, in his mixture of social conservatism, patriotism and reverence for trade unionism he shared the world view of many of their members. With his heavy head and thick-rimmed glasses, his careful manner of speech, his affability in public and occasional menace in private, he could easily have been mistaken for a senior union official.
Finally, and most significantly, he presided over a Britain that was probably more equal than it had ever been before – and certainly more equal than it has ever been since. Authorities on poverty rates and income distributions differ as to precisely when the optimum moment came, but some of their statistics for the period leap out. The Gini coefficient, a common measure of income inequality, reached its lowest level for British households in 1977. The proportion of individual Britons below the poverty line did the same in 1978. Social mobility, measured as the likelihood of someone becoming part of a different class from their parents, also peaked in the Callaghan era. The causes were various and hard to disentangle: the social contract, the tax system, the post-war expansion of higher education and white-collar employment, even the seventies economic crisis, which had depressed the incomes of many of the wealthy for an extended period. But the egalitarian Britain of the Callaghan years was an achievement, not much trumpeted at the time, which would seem larger and larger after he left office, as its social trends were relentlessly reversed.
In 1978, that did not seem imminent. In July, the TUC–Labour Party Liaison Committee published ‘Into the Eighties’, a pamphlet confidently laying out a path for continued Labour government. The pamphlet envisaged a ‘high productivity, high investment, high wage economy’ with good industrial relations, progressive tax rates and, repeated in almost every rose-tinted paragraph, growing prosperity from North Sea oil. In a lull over the summer, the prime minister went for a walk along the South Downs near his farm with his sonin-law and confidant Peter Jay, whom he had recently approved, with a hint of nepotism and hubris, as Britain’s new ambassador to Washington. Callaghan told Jay that he sometimes thought of himself as a Moses figure: a leader who set vital changes in motion and hoped to guide his followers to the promised land.
In the summer of 1978, his chances of doing so certainly seemed better than Margaret Thatcher’s. By then, she had been leader of the Opposition for three and a half years, a long time in the accelerated politics of the seventies. And her years in charge had not been easy. In her memoirs, the chapter covering 1975 to 1977 is titled ‘A Bumpy Ride’.
Some of her difficulties derived from how she had been elected: surprisingly, less than overwhelmingly and, for some Tory MPs, accidentally, as their intended protest against Heath misfired. ‘“My God! The bitch has won!” exclaimed a Vice Chairman of the Party when the news came through,’ recorded the Tory historian John Ranelagh, then a member of the Conservative Research Department, which remained doggedly Heathite for the rest of the seventies regardless. Once Thatcher’s victory had sunk in, he continues, ‘There was a great shrugging of shoulders and an assumption that Thatcher would lose the next election because her policies were “silly” and out of tune with political realities, notably that getting along with the trade unions was a sine qua non of political life. Within the Party bureaucracy it was felt essential to … indicate privately to journalists that the new leader was an aberration … that she would soon be out and Willie Whitelaw would replace her.’
Thatcher, it was often said within the party during 1975, would be ‘gone by Christmas’. The Conservatives had been quick to change failing leaders in the past. Some senior Conservatives, including members of her shadow cabinet, doubted whether a woman had the mental and physical stamina to lead the party. Others felt that, like Heath, she would eventually be forced into policy U-turns. Still others simply thought her policies were crude and appalling. Former party leader Harold Macmillan was one of them. In the autumn of 1975, Peter Walker, undeterred by Heath’s fall, was at work on an update of Macmillan’s thirties argument for liberal Toryism, The Middle Way. ‘I used to go down to Harold’s house in Sussex with the latest chapter,’ Walker told me.
One day after Margaret’s first party conference I was down there, and he said, ‘Peter, were you at the party conference?’ I said, ‘Yes I was.’ And he said, ‘I watched on television. An extraordinary affair. I’ve always been to these conferences. You sat on the platform, and you would listen to incredible remarks being made from the floor. You know, they wanted to birch them
before hanging them, things like that. Then you’d get up and make your speech. You wouldn’t mention anything that had been said from the floor. And they were terribly nice, they’d give you wild applause … Watching her last week, I think she actually agrees with them.’
Yet while Thatcher’s robustness on law and order and rhetoric about ‘middle-class values’ delighted many party members, that did not necessarily mean they preferred her to Heath. At the same party conference, Ranelagh notes, ‘Heath was given a rapturous reception … and was widely reported, both in private and in the press, to have described Thatcher and Joseph as traitors and as crazy, with right-wing views that would, if implemented, destroy the Party and the country … Pointedly, Heath left the Conference before she gave her speech.’ Heath’s distaste for Thatcher and her type of Toryism, often openly expressed, would hang over her leadership like a dark plume of pollution from some obsolete but stubbornly surviving old factory, never quite dispersing even on the brightest days. His hold over the party membership and bureaucracy, over Tory MPs and the shadow cabinet, over Conservative and Conservative-leaning voters would not prove quite as enduring, but it remained strong right through the seventies. In late 1978, almost four years after he had been deposed, a Gallup poll gave the Conservatives a narrow 3 per cent advantage over Labour. But the lead grew to 14 per cent if Heath replaced Thatcher.
For her, iconoclastic advisers like Alfred Sherman and upstart think tanks like the Centre for Policy Studies were an alternative to the traditional Tory power centres and networks, at least until she could gain control of them, as well as sources of ideas. Another favoured method of outflanking the Heathites was the direct, sometimes emotional appeal to the public on issues such as the mass picketing at Grunwick, which could be used to suggest changes in Conservative policy which had not been cleared with colleagues. She was not a natural on television; she was working too much to watch it very often. There remained a stiffness in her posture and a monotony in her voice. But she worked hard on her screen presence during her first years as leader. She hired Gordon Reece, a former television producer, and followed his advice to slow down and deepen her voice, to shed what she had learned from a set of elocution lessons in her youth, which had left her sounding like a Tory lady from the shires. With Reece’s coaching, she now sounded more like a kind of supremely authoritative suburban housewife. She even learned to show glimpses of a rather dominating humour. On the Yorkshire Television programme Calendar in February 1978, an interviewer asked her a question that ended with the words ‘if you get to Downing Street’. Thatcher snapped back: ‘What do you mean, “if”?’ There was a pause. The leader of the Opposition looked at the camera, her hair enormous and sculpted, her expression utterly deadpan. Then she broke into a huge sharkish smile. A few moments later, the interviewer asked her: ‘Are you difficult to work with?’ Out came the shark smile once more: ‘Are you having difficulty with this interview?’
The Conservative leader was now compelling television. The problem was, as the seventies crisis eased during 1977 and 1978, a compelling leader was not necessarily what voters wanted. Thatcher’s personal ratings were consistently much lower than Callaghan’s. On ominous foreign-policy issues, such as how to deal with the Russians, her certainty and fierceness sometimes went down well with the public. In early 1976, in a speech written for her by Robert Moss, a leading member of NAFF, she accused the Soviet Union of being ‘bent on world dominance’ – virtually a heresy for a senior Western politician in the era of detente. The Russian army newspaper Red Star condemned her as ‘the Iron Lady’. The following month, her approval rating jumped seven points. Yet this kind of bluntness and fresh thinking seemed less well suited to British issues. On key questions such as what to do about the unions, the Conservatives were divided. ‘I often felt that the shadow cabinet and Conservative Central Office were like the Tower of Babel,’ wrote Sherman. ‘We spoke different and mutually incomprehensible languages. Leading members of the shadow cabinet were … less concerned with opposing the Labour government than in internal manoeuvres, and clipping Mrs Thatcher’s wings.’ Meanwhile, in other important policy areas, such as the economy, the Callaghan government and the IMF already seemed to have set the country on a new course.
Unlike Sherman or Keith Joseph, Thatcher was a sensitive enough political operator to realize that there was a limited public appetite in the Britain of 1977 and 1978 for further transformation of the post-war order. During this period – indeed during the whole period between her election as leader and her first general-election campaign – she permitted the publication of only a single guide to her party’s policies, ‘The Right Approach’, a 1976 document so carefully designed to strike a balance between Thatcherite and Heathite Toryism that it was actually written by her enemies in the Conservative Research Department. ‘It was a fudge,’ wrote Thatcher later of the document’s ambiguous, detail-free proposals for controlling wages and prices, ‘but temporarily palatable.’
Between 1975 and 1978, her own speeches, while full of bold generalizations about the failings of the Left and the virtues of the free market, were quite often vague – if not downright misleading – about what a Thatcher government would actually do. ‘Let me make it absolutely clear that the next Conservative government will look forward to discussion and consultation with the trade union movement about the policies that are needed to save our country,’ she told the Conservative Party conference in 1976. Such are the necessary evasions of most governments-in-waiting with big ambitions; her biographer John Campbell calls this period ‘Thatcherism under Wraps’. During these years, her appetite for radical right-wing ideas and advisers never really diminished, but some of the free marketeers did begin to worry about her: ‘Cautious Margaret’ was the phrase they used. Previous Tory politicians with an interest in the new right’s ideas, such as Joseph, and Heath in the sixties, had let the movement down once they took office.
And when would Thatcher take office? Since 1974, Labour had survived despite the economic crisis, despite Wilson’s resignation, despite the IMF crisis, despite deep troughs of unpopularity, defeats in by-elections and local elections, the loss of its Commons majority, profound Cabinet splits, and despite an almost constant feeling that the government could fall at any moment. ‘Margaret’s stint as Opposition Leader, the hardest job in British politics, was to last longer than any of us had expected,’ Geoffrey Howe confessed in his memoirs. ‘We were obliged to maintain the weary routines of opposition well into a fifth year.’ And by that fifth year, with many things going better for the government and North Sea oil finally about to start delivering its benefits, the mood among many Conservatives was shifting from frustration and anxiety to something worse. ‘There was certainly an air of defeatism,’ wrote Norman Tebbit of the feeling among his fellow Tory MPs in June 1978. Even Thatcher herself was prone to occasional dark thoughts. After Kingsley Amis had dinner with her at Flood Street, he wrote,
The bit [she said] that stayed with me most ran roughly, ‘People have always said that the next election is going to be crucial. But this one really will be, and if it doesn’t go the way Denis and I want then we’ll stay [in Britain], because we’ll always stay, but we’ll work very hard with the children to set them up with careers in Canada.’
Yet, outside the Thatcher family, leaving the country was slipping out of fashion by the late seventies. Between 1974, a peak year for emigration as for other bleak socio-economic indices, and 1978, Britain’s annual population loss slowed by almost a third, according to the Office for National Statistics. ‘The future looked tastier,’ wrote Peter York in December 1977, summing up the national mood at the end of the year for Harpers & Queen. ‘There was a feeling that things were starting to go up again, and indeed the indicators suggested at the very least a consumer boomlet for 1978.’ The Conservative Research Department agreed with him. In a confidential advisory note on the party’s strategy for that year, written in February and marked ‘MT to see ASAP’, the departm
ent conceded that in early 1978, ‘There was a surprising amount of euphoria about the country’s economic prospects and Labour and Mr Callaghan seemed in calm control of events.’
Perhaps the most complete expression of this renewed optimism about Britain was a book published that year by the Washington Post’s London correspondent, Bernard D. Nossiter. Nossiter was an experienced reporter, suspicious of orthodoxies, and the author of two previous books: one on the subservience of President Kennedy and American unions to corporations, and one on the inadequacies of India under the often admired rule of Mrs Gandhi.
Britain: A Future that Works began with refreshing irreverence, by mocking all ‘the scribes and prophets of disaster’ who had predicted a British collapse over the previous half-dozen years. Nossiter made some persuasive, or almost persuasive, points: that all wealthy countries had found the seventies hard going; that the declinists tended to omit the decade’s better years from their plunging graphs about Britain; that the country’s levels of state spending and taxation were average rather than crushing by European standards; and that the British economy had grown faster between 1945 and 1975, despite its much-trumpeted post-war troubles, than it had between 1855 and 1945. ‘Is it possible’, asked Nossiter of Britain’s seventies crisis, ‘that the whole episode is a case of hypochondria?’
