by Alwyn Turner
The left was also split, despite the performance of Michael Foot. He came top in the first ballot, getting three times as many votes as Benn, but Benn was able to take comfort from a Sunday Times poll that showed him as the second-placed candidate among Labour voters, clearly ahead of Foot. Amongst Labour activists it was to be assumed that his support was stronger still, such was the growing gap between the old left in Parliament and the younger, more radical factions in the party outside, who looked to Benn as their tribune. Foot had only joined the front bench in 1974, after many years on the backbenches, and though he brought with him a history as the conscience of the left and as the passionate defender of the memory of the sainted Nye Bevan, whose constituency he had inherited, he was starting to seem like something of a relic, a platform orator in a world shaped by the mass media. Moreover he was a man whose fierce loyalty to the party ensured that he would always side with the leadership in moments of crisis, a fact that was anathema to the idealist Jerusalem-builders two generations below him. For it wasn’t just the attitudes that were looking elderly; now approaching his sixty-third birthday, Foot was older than Wilson himself. Even so, he was still younger than the man who beat him in the third and final ballot. (Healey had been knocked out in the interim round, gaining just one vote more than Benn had on the first ballot, which again gave the latter ‘great pleasure’.)
James Callaghan, the ultimate victor in the contest, was in many ways – like Claudius himself, the self-proclaimed Old King Log – an outsider in the race, overcoming the handicaps of birth and circumstance. ‘Prime minister, and I never even went to university,’ he marvelled in his moment of triumph, revelling in his defeat of five Oxford graduates. He had succeeded largely by remaining outside the fray; aligned with the factions of neither left nor right, but instead establishing himself as the master of the party machine, he carried no ideological baggage, just a reputation as a safe, if unadventurous, pair of hands. By these means he had already occupied the other three great offices of state – chancellor, home secretary and foreign secretary – before ascending to the highest position of all. As Claudius put it, when he finally became emperor and was accused of being half-witted: ‘I have survived to middle age with half my wits, while thousands have died with all theirs intact. Evidently quality of wits is more important than quantity.’
Son of a Catholic named James Garoghan, who had changed his surname to adjust to British society, Callaghan left school at sixteen to become a clerk and then a union official, later serving in the Royal Navy during the war. He was elected as a Cardiff MP in 1945, and became a junior member of the Attlee government, with an appointment as parliamentary secretary to the ministry of transport; it was in this capacity that he made what have turned out to be his most durable contributions to the everyday life of Britain: the introduction of cats-eyes and of zebra crossings to the country’s roads. He was far from a conspicuous success in any of his subsequent political posts, but he proved himself an articulate spokesman for an innately conservative section of the working class, an attribute that became of ever greater significance as the 1960s cabinet lost one by one its trade union representatives (Frank Cousins, Douglas Houghton, George Brown, Ray Gunter). A lone working-class voice in a room full of intellectuals, he was unrepentantly isolated on most of the fashionable issues of the day; as far back as 1961 he had shuddered at television’s depiction of ‘the morals of the farmyard and the violence of the jungle’, pre-dating even Mary Whitehouse’s outrage. Also in doubt was his attitude towards questions of race and immigration. ‘If you ever want to engage Jim’s interest,’ commented one of his friends, ‘talk about the problems of the poor – he’s far more interested in them than he is, say, in black people.’ When confronted by Benn over the position of the Kenyan Asians in 1970, he had summed up his position as being simply: ‘We don’t want any more blacks in Britain.’ And when, as prime minister, he removed Jim Lyons from the Home Office, Lyons, who had campaigned for anti-racist causes, claimed that ‘I have paid the price of trying to get justice for the blacks in this country. Jim has never had much time for those who espoused that cause.’
By the time of his election as leader, however, Callaghan had, by virtue of his longevity, experience and shrewd positioning, assumed a role as, in Bernard Donoughue’s words, ‘very much the conservative elder statesman’. Or, as Benn saw him, he was ‘the party fixer with the block vote and the praetorian guard of the trade unions behind him’.
He was an unexpectedly tall man, whose slight stoop and kindly face gave him an avuncular appeal; he looked as though he were likely at any moment to press 50p in your hand and tell you to buy some sweets, but not to tell your mum. (Ted Heath, of course, had been another kind of uncle altogether, the one who meant well but got it slightly wrong, putting a 50p postal order in your birthday card.) Revelling in the popular nicknames of ‘Sunny Jim’ and ‘Farmer Jim’, he made conscious play of his age, continually referring to his colleagues as young men with great futures in front of them, to their great irritation: ‘The truth is that, at fifty-two, I was not so young!’ fumed Eric Heffer of one such patronizing reference, while Benn, on another occasion, tried to point out the same truth to him: ‘I’m not a young man. I’m fifty-one. I’ve been here twenty-six years.’ However annoying such a habit was to its victims, it reflected an impression of solid seniority that played well with the public; after what was seen as the evasive, manipulative style of Wilson, the genial and seemingly unflappable Callaghan seemed a more straightforward, depend able man of the people. ‘A socialist government must lead,’ he wrote reassuringly in his memoirs, ‘but if those marching in the vanguard are so far ahead of their followers that they are out of sight, then the general body of the army will lose touch and stray off in different directions.’
The strength of the field of candidates to succeed Wilson suggested that a level of continuity and experience could be expected from Callaghan’s administration. Events, however, conspired against such an outcome. His first actions were to remove Barbara Castle from the cabinet, and to appoint Crosland to take over from himself as foreign secretary. This latter decision was to the great frustration of Jenkins, who had also wanted the job; he responded by shaking the dust of British politics from his handcrafted sandals and exiling himself in the promised land, as president of the European Commission, where his nouveau patrician manner earned him the nickname ‘Le Roi Jean Quinze’. Within months there was a further, more terrible loss when Crosland died suddenly, the victim of a cerebral haemorrhage. The two great heroes of the right were now gone from government for ever, and the future of the Labour Party shifted accordingly. ‘One day it may be resurrected,’ wrote Roy Hattersley of the untimely death of Crosland, ‘but British egalitarian socialism died with him.’ (Jenkins, incidentally, was later to write the entry for Crosland in the Oxford Dictionary of National Biography, where he noted – wrongly – that he ‘ran fifth of five candidates’ in the election to become leader. Who, some wondered, was the sixth candidate that Jenkins was writing out of history? Was it his own dismal result that he sought to erase?)
Despite the changes in personnel, one thing that remained constant was the appeal to the nation to tighten its collective belt. In August 1975 Wilson had made a television broadcast urging the public to ‘give a year for Britain’ in the battle against inflation and unemployment; ‘harder work’ and ‘national self-discipline’ were apparently required if that battle was to be won. In Callaghan’s first New Year message to the country, he made much the same call in the passage quoted at the head of this chapter, though the inclusion of the fine old naval word ‘scrimshanking’ at least indicated a change of style. Meanwhile, Jack Jones was also getting in on the act, suggesting that 1977 should be ‘the year of the beaver’, a phrase which disappointingly turned out to refer yet again to the need for hard work. All these appeals were reminiscent of the 1960s ‘I’m Backing Britain’ campaign, now recast in a grimmer, less celebratory shape, and without the benefit o
f a cash-in single by Bruce Forsyth. And like that movement, they failed to achieve their objective, and were regarded with outright hostility by those who resented what were seen as spurious appeals to patriotism; the London dockers’ leader Jack Dash contemptuously dismissed such campaigns as being fit ‘only for the proles, well-meaning office-girls and misguided factory workers’.
Perhaps more authoritative than these pleas from politicians and union leaders was the call to the nation issued in 1975 by Donald Coggan, the newly enthroned Archbishop of Canterbury. Speaking of a ‘drift towards chaos’, he insisted that ‘each man and woman counts’, and revived the recruiting slogan of the Great War: ‘Your country needs you’. He denounced materialism and the worship of money, and rather than seeing denial and discipline as temporary evils, he celebrated them as part of a well-ordered society. ‘A bit of hardship hurts none of us,’ he declared from the comfort of Lambeth Palace. ‘We’re growing soft.’ For a brief moment Coggan managed to spark a debate on the spiritual health of the country, with the most spectacular contribution coming from Mervyn Stockwood, the Bishop of Southwark, a man whose love of publicity and espousal of faux radicalism made him an enduring, if not always endearing, part of British life for two decades. Writing in the Morning Star, the newspaper of the Communist Party of Great Britain, Stockwood paraded himself as a revolutionary: ‘I have no intention of shoring up a society which, because of its basic injustice, is at last crumbling in ruins.’ And he drew hope from the rigours of the Soviet Union: ‘If a communist government were to be established in Britain,’ he wrote, ‘the ugly features of our permissive society would be changed in a matter of days.’
If the appeals to the populace to get a moral grip on itself were not noticeably successful, the Callaghan government could at least claim to be making progress in its dealings with the unions. Wilson had returned to office trumpeting the ‘social contract’, a somewhat nebulous pact struck with union leaders which would ensure a fair deal for workers (primarily the repeal of Heath’s Industrial Relations Act) in exchange for what turned out to be a negotiated pay policy, intended to combat inflation. In 1975 this resulted in a flat increase in wages of £6 per week, and the following year Healey’s first budget under Callaghan’s premiership produced a new proposal, a package that, if accepted (as it subsequently was), would see pay rises restricted in return for tax breaks that would improve on those increases. Healey later wrote of the TUC that ‘they were stunned by being made formally responsible for the level of income tax in this way’, but they were not alone; the idea that the chancellor of the exchequer would make his budgetary decisions for the nation dependent on the wishes of union leaders reinforced the views of those who believed that power no longer resided in an elected parliament, and that the system of government was itself under threat. And the critics were not all on the right: ‘I think that parliamentary democracy is in danger,’ said John Cousins, son of the former TGWU general secretary Frank Cousins. ‘Quietly and methodically we are burying our democracy, and trade union members – ordinary working men and women – have more reason than anyone else to fear this loss.’ Elsewhere, the left (like the Tory right) was beginning to move against the very idea of a pay policy. ‘We were not elected to nurse an unjust and inefficient system through yet another crisis,’ argued Benn. ‘We are not just here to manage capitalism but to change society and define its finer values.’ Neil Kinnock put his objection in more personal terms in response to the 1976 package: ‘This budget codifies the beliefs of the most selfish and short-sighted saloon-bar loudmouth that income tax is the source of all evil and stagnation.’
The crisis of which Benn spoke was not long in coming. In mid-1976, with sterling falling rapidly on the international markets, Healey arranged a five-billion-dollar credit agreement with the USA and other central banks, and imposed a series of cuts in public expenditure, but neither was sufficient to stabilize confidence in the British economy, and more serious measures appeared to be called for. At that year’s party conference, in September, Callaghan made perhaps his most famous speech, reading the funeral rites for the Keynesian era. ‘We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists,’ he warned the delegates. ‘For too long, perhaps ever since the war, we postponed facing up to fundamental choices and fundamental changes in our society and in our economy. This is what I mean when I say we have been living on borrowed time.’ And he pointed out what most of the country had already noticed: ‘The cosy world we were told would go on for ever, where full employment would be guaranteed by a stroke of the chancellor’s pen, cutting taxes, deficit spending – that cosy world is gone . . .’
Even as he spoke, Healey was opening the negotiations that would lead to the granting of what was then the largest loan ever approved by the International Monetary Fund, a loan that would bail Britain out of its immediate difficulties in return for a further set of cuts in spending. The deal was of a kind more normally associated with Third World countries, allowing domestic policy to be determined by international bankers, and it provoked anguish and anger amongst many in the Labour Party. Callaghan allowed his colleagues prolonged discussion in a series of cabinet meetings and then, having given everyone the chance to air their opinions, threw his weight behind the IMF agreement. Ironically, he had rebelled against his own government in 1945 over the very establishment of the IMF (as had Foot, his deputy prime minister), but the precarious position of sterling also carried more powerful, personal echoes: as chancellor in the ’60s, he had been forced by the markets to devalue the currency, and he had no desire to repeat that humiliating experience.
The objections that were raised during those cabinet meetings came from two quarters. Benn and the left prepared what became known as the alternative economic strategy, which amounted to a siege economy buttressed by import controls, an attitude that had been mocked as ‘socialism in one country’ by Jenkins a few years earlier: ‘That is not a policy, it’s just a slogan.’ Meanwhile Crosland, in his last great fight, advocated a more daring approach; arguing that the situation was nowhere near as catastrophic as was being painted, he suggested simply facing down the IMF. Divided amongst themselves, the dissidents proved no match for Callaghan and Healey, and by the end of the year, in the words of the former, ‘The cabinet had reached a decision and, unlike 1931, would stay together.’ The ghostly memory of Ramsay MacDonald had been exorcised again.
Crosland’s analysis was, by any objective measure, perfectly sound, as was demonstrated posthumously when it became clear that the government was not going to have to draw on the totality of the IMF funds that had been made available. The economic crisis was indeed not as acute as was believed in those traumatic months at the end of 1976. But inter national finance, like politics, is not merely a matter of economics, nor is it objective. ‘The markets wanted blood,’ commented Gavyn Davies, later chairman of the BBC but then an economic adviser to Callaghan. ‘We didn’t understand that in No. 10 at the time, we didn’t know that what they wanted was humiliation. Trying to avoid the humiliation was a waste of time.’
Humiliation was certainly how it was perceived in the country at large. The expression ‘going cap-in-hand to the IMF’ became part of the lexicon of the right, to indicate just how shamefully far Britain had fallen. ‘In your farewell to 1976, did you see Britain old and worn, on the brink of ruin, bankrupt in all but heritage and hope, and even those were in pawn?’ challenged Hughie Green on Opportunity Knocks, on the eve of the new year, almost as though he were the British incarnation of Howard Beale in Network, mad as hell and not prepared to take it any more. And he appropriated Callaghan’s conference phrase ‘borrowed time’ to twist the knife. ‘Where do we go from here if time – bought with borrowed money – is lost through lack of conscience?’
The sense of lost prestige and self-respect was palpable in the early months of 1977, and the ti
ghtening of the economy added to the atmosphere not necessarily of crisis as such, but certainly of exhaustion. ‘Every time the housewife went to shop, she found the prices were still rising fast, mainly because the measures the government had taken had not had time to slow down the inflation rate,’ admitted Callaghan in his memoirs. ‘Another source of discontent was that the flat-rate pay increases of earlier years were compressing the skilled workers’ differentials.’ But ultimately ‘the most important cause of discontent was a fall in real take-home pay of as much as five per cent during the preceding twelve months’. And the underlying problems remained, despite the social contract and despite the IMF deal: in 1977 some 10 million days were lost in industrial disputes, nowhere near as bad as in the last days of Heath, but still four times higher than in France and not even remotely comparable to the situation in West Germany, where just 86,000 days were lost. The national mood – in danger of becoming chronic – was one of depression and resignation. ‘I believe in the final good sense of the British people,’ wrote Peter Hall in his diary, ‘but by Christ they have to be in trouble before they wake up. I feel the country isn’t yet in trouble enough.’
Things weren’t getting any better but, for a moment at least, they weren’t quite in a state of acute crisis. The resulting fatalism was exemplified at its most extreme by the Christmas episode of The Goodies in 1977. Eschewing the slapstick and the special effects for which the series was best known, ‘Earthanasia’ instead observed the classical unities of drama, set in a single room in real time, starting with a radio announcement at 11.30 p.m. on Christmas Eve: ‘World leaders have been meeting in Washington over the past week to consider the ever worsening problems of inflation, overpopulation, racism, pollution – you name it, they’ve considered it. They have come to the conclusion there is no point in going on. It is their unanimous decision that at 12 o’clock tonight, in a final act of unprecedented international military cooperation, the world will be blown up.’ The episode ended with a blinding white flash and the sound of an explosion, abruptly cutting to the then current BBC1 logo – a revolving globe in blue and yellow – before that too exploded. It was one of the team’s best shows, but it didn’t exactly ring out with seasonal good cheer.
