Bang!: A History of Britain in the 1980s (3 page)

This was far more of a historic occasion than its attendees realized, for at no time over the succeeding quarter-century would a prime minister solicit in this way the opinions of the trade
union high command on such prime ministerial prerogatives as when to call a general election. The eighties changed that relationship abruptly and fundamentally. But Callaghan belonged to a
different world and a contrasting set of values. He was bound to the union bosses by history, by temperament and, most importantly of all, by expedient, for their connivance was essential if the
government’s pay restraint policies were to control inflation. Enjoying vigorous mental and physical health, Callaghan was sixty-six years old, having been born two years before the First
World War began. As he had gone straight from school to the workplace, joining a union had been for him a rite of passage into adulthood and wider responsibility. He had been in Parliament since
1945, having been elected – aged only thirty-three – to a Cardiff constituency in Clement Attlee’s Labour landslide and proceeding to occupy all four of the great offices of
state, serving as Chancellor of the Exchequer from 1964 to 1967, Home Secretary from then until 1970, and Foreign Secretary from 1974 until 1976, when he became prime minister. Although in private
he could display a sharp temper and a tendency to bully colleagues, in public Callaghan seemed at ease with himself. Without a hint of embarrassment or contrived showmanship, he had cheerfully sung
‘I’m the man, the very fat man, who waters the workers’ beer’ at a Durham miners’ gala. At least to those who did not cross him personally, it all seemed part of
‘Sunny Jim’s’ affable nature and rootedness in the culture of working-class struggle.

He was driven precociously into public life and Labour politics by the disadvantages he experienced in childhood. He was the son of an Englishman of Irish descent called James Garoghan, who had
used the assumed name Callaghan when enlisting in the Royal Navy and had seen action at the
battle of Jutland on board the dreadnought HMS
Agincourt
, rising through the
ranks to become a chief petty officer. In 1921, however, he had suddenly died of a heart attack when his son was nine years old, leaving a family without financial security and reduced to living in
a succession of cheap rented rooms. There was no pension upon which to draw until provision was extended by the first Labour government in 1924, along with a grant that ensured the fatherless boy
would manage to stay on at school until the age of seventeen. It was a socialist administration’s helping hand that the young James Callaghan grasped, although the limits of state assistance
in the inter-war period were soon brought home: his grades were good enough, but the lack of further grants made going on to university out of the question. He felt this social handicap for the
rest of his life – perhaps one reason why he sometimes considered himself closer to union leaders than to such Oxford-educated luminaries of the Labour front bench as Hugh Gaitskell, Harold
Wilson, Roy Jenkins, Tony Crosland, Denis Healey and Michael Foot. Tellingly, the first words that came from Callaghan’s lips when told he had made it to 10 Downing Street were, ‘Prime
minister of Great Britain! And never went to university!’
⁸

Unlike typical representatives of the university-educated intelligentsia drawn to the progressive cause of the Labour Party, Callaghan was not a liberal. In many respects, he was a
traditionalist, revering the heritage and structure not only of the trade unions but of the armed forces and the monarchy as well. He never shared the anti-militarist, anti-American sentiments that
engaged radicals of the sixties’ generation. His internationalism found no conflict with a sense of patriotism. In the Second World War, he had served, albeit uneventfully, as a seaman in the
Royal Navy, and his natural admiration for royalty was apparent during the outpouring of popular sentiment accompanying the Queen’s silver jubilee in 1977. One of the vessels framed on his
walls at Upper Clayhill Farm was King Edward VII’s royal yacht,
Victoria and Albert
, upon which his father had served as a rigger. As her prime minister, Callaghan enjoyed a warm
rapport with Queen Elizabeth, with whom he shared an elevated, idealistic, view of the British Commonwealth’s importance. It was, though, in his attitude to the social changes of the sixties
that he demonstrated how fully he did not share what became the prevailing attitudes and assumptions of the left after 1979. Reversing the tone of his predecessor as Home Secretary, Roy Jenkins,
Callaghan assured the House of Commons of his determination ‘to call a halt to the rising tide of permissiveness’, which was ‘one of the most unlikeable words that has been
invented in recent years’.
⁹
Although he had long lost the Baptist faith, or any strong Christian faith, of his upbringing, he believed in
traditional family structures. He was repulsed by pornography, vigorously opposed tolerance of even soft drugs, and struggled to conceal his distaste for
homosexuality.
¹⁰
In these respects, his views were perhaps no different from those of most of his Conservative opponents – or of
a broad, cross-party, swathe of the electorate.

On 5 September 1978, the delegates for the annual TUC conference gathered in a brightly lit hall in Brighton to hear Callaghan’s address to them. They were joined by ranks of journalists
waiting expectantly for the telltale comments that would surely give the game away that he was about to call a general election. His speech opened with an overview of problems surmounted and
achievements to be built upon. Taxes were being cut, benefits and pensions were being increased and, if wage restraint was accepted, inflation, which had previously let rip, would continue on its
downward path. Then he did something so wholly unexpected that it would dominate news coverage that evening. The prime minister broke into a music hall song, which he misattributed to the Edwardian
entertainer, Marie Lloyd:
^EN2

The delegates responded by erupting into laughter and applause, although it was not really clear who he was leaving in the lurch – them, the media or Margaret Thatcher.
Emboldened, Callaghan went on to the offensive. ‘I have promised nobody that I shall be at the altar in October, nobody at all. So all I want to add this afternoon is that I certainly intend
to indicate my intentions very shortly on this matter.’
¹¹
The unions responded by offering £1 million to the election fund, and
The
Times
assured its readers that ‘seasoned political hands’ were united in believing the Cabinet would be meeting on 7 September to agree a dissolution of Parliament for an election
on 5 October.
¹²

On the morning of 7 September, the members of the Cabinet were duly told by Callaghan that their fate was deferred. Rather than call a snap poll, he would settle first the referendums on Welsh
and Scottish devolution and ensure the economic recovery was given a few more months to work its balm upon the nation’s mood. That evening, Callaghan broadcast to the nation announcing there
would be no election. There was much astonishment. A momentum of expectation had developed only to be suddenly and
belatedly quashed. Callaghan, however, did not like others
assuming what he would do and was determined to lay out fresh proposals for the coming decade. ‘We are discontented with the way of the things we observe: the football hooligans, the litter
in the streets,’ he jotted down. ‘There is much to be done – indeed the job is never-ending. We must put forward a realistic socialist policy for [the]
’80s.’
¹³

Most of all, Callaghan simply did not think the opinion poll lead was big enough, or sufficiently sustained, to risk it. He was aware that a new electoral register would come into force in
February 1979 which, it was estimated, would benefit Labour by about six seats. Given the existing arithmetic, that might be the difference between forming a government and going into opposition.
Years later, when holidaying with his wife in Scotland, Callaghan met David Steel, who asked him why he had not called an autumn 1978 election. Callaghan explained that he had been primarily
influenced by the possibility that he might win but without a working majority in the Commons. To a leader of a minority party like the Liberals, a hung parliament would be a godsend, not a
catastrophe, and Steel expressed surprise that such an outcome would have been considered so unpalatable to the Labour Party.
¹⁴
In saying this,
Steel perhaps underestimated the toll that the unrelenting daily political management inflicted upon the prime minister. Callaghan had seemingly reached the point where merely prolonging the agony
of minority government no longer seemed a prize worth fighting for. Instead, he believed the economic prospects were favourable for 1979 and that, far from Britain being in a state of systemic
decline, it had merely suffered a few turbulent years of mismanagement under Edward Heath’s Conservative government, which Labour was demonstrably rectifying. Another six months or so of
sustained improvement would convince the electorate to give Labour a full mandate to govern.

Floating or Sinking?

Certainly, there seemed a marked contrast between Heath’s last period in office and the situation facing Callaghan in the autumn of 1978. Within a couple of years of
winning power in 1970, Heath had been assailed by problems. In the midst of a world boom, financial constraints were relaxed in order to pursue a ‘dash for growth’. Low interest rates
and easy credit powered a spectacular, and highly speculative, property boom. In place since the end of the Second World War, the Bretton Woods system of international fixed currency exchange rates
had broken down in August 1971 and various anti-volatility mechanisms had been put in place in an effort to maintain stability. However, in June 1972, the decision was taken to cut sterling free
from its corset. For the first time since the 1930s, Britain
had a currency whose value ‘floated’ against other currencies. Heath’s Chancellor, Anthony
Barber, announced that it was only ‘a temporary measure’
¹⁵
(apart from the abortive experience of the European Exchange Rate Mechanism
of 1990–2, the currency was still floating well into the second decade of the twenty-first century). At first, Heath saw this freedom from constantly having to intervene to keep sterling at a
fixed rate as a carte blanche to do as he pleased, as if Britain had entered a consequence-free economic world. Although the pound initially ascended above its December 1971 fixed value of $2.60,
it was soon not so much floating as sinking, the extent of Heath’s extravagantly reflationary policies worrying holders of sterling into selling it. Alarmed as the pound’s descent
gathered momentum, and also concerned at soaring inflation, Heath changed course and tried deflationary measures and – a heresy to those who believed in the free market – a statutory
incomes policy. It was ‘stop–go’ economics at its most primitive. Interest rates were raised to record levels and public spending cut. Indirect controls were forced upon bank
lending. Then, in December 1973, with winter temperatures chilling the country, the National Union of Mineworkers chose its moment to call a ‘work to rule’ overtime ban in support of a
35 per cent pay increase.

It was the miners’ second strike in successive years. Such had been the success of their picketing of power stations in 1972 that Heath had called a state of emergency. Businesses and
houses lost electricity for several hours each day until Heath hoisted the flag of surrender. In the succeeding months, the Arab–Israeli Yom Kippur War and the embargo on Western countries
enforced by the oil producers’ cartel, OPEC, quadrupled the price of petrol. To the miners’ leaders, it was the perfect opportunity to strike again. Facing acute energy shortages in
mid-winter, the government once more fell back on emergency powers, this time forcing businesses to cut down to a ‘three-day week’. With the nation’s power supply switched off,
Britons were reduced to groping around by candlelight. Taking malicious glee in this humbling of a once mighty power, Uganda’s military dictator, Idi Amin, duly launched a ‘Save Britain
Fund’, urging Ugandans to ‘come forward and help their former colonial masters’.
¹⁶

The sense of defeatism went to the heart of Whitehall. Feebly, the best that Heath’s unofficial ‘deputy prime minister’ and head of the civil service, Sir William Armstrong,
could offer his colleagues was to announce that the government’s task was to ‘oversee the orderly management of decline’. Even a fighting retreat proved beyond the
administration’s reach, with Sir William a personal casualty in the rout. Suffering a mental breakdown, he was at one stage found under his table muttering incoherently about ‘moving
the red army from here and the blue army from there’, although he later recovered sufficiently to be appointed chairman of the Midland Bank.
¹⁷
More telling
was the experience across the English Channel. There, the British shambles was not repeated. Other major European economies were still expanding, their ability to
cope with the oil price shock only rubbing in Britain’s humiliation. The extent to which Heath had lost control was the unfortunate sub-text of his February 1974 general election slogan
‘Who Governs?’ If the question had to be asked, then the answer was clear. Albeit by the narrowest of margins, Labour returned to power amid hopes that it could find a workable
compromise with the trade unions. Seventy million working days had been lost to strikes during Heath’s three and half years in Downing Street. Labour quickly bought off the miners and by 1976
relative industrial peace had broken out for the first time in the decade.