Rivers of Blood

Harold Wilson was always a sincere anti-racialist. He had felt strongly enough about the racialist behaviour of the Tory campaign at Smethwick in the Midlands in 1964 to publicly denounce its victor Peter Griffiths as a ‘parliamentary leper’. For Wilson, this was rare vehemence. But he did not try to repeal the 1962 Commonwealth and Immigrants Act, with its controversial quota system and in 1965, he and his Home Secretary, Frank Soskice, tightened it, cutting down the dependants allowed in, and giving the Government the power to deport illegal entrants, offering the first Race Relations Act as a sweetener. This outlawed the ‘colour bar’ in public places and discrimination in public services and banned incitement to race hatred. It was widely seen at the time as toothless. Yet the combination of restrictions on immigration and measures to better integrate the migrants already in Britain would form the basis for all subsequent policy. There would be a tougher anti-discrimination bill in 1968, and tougher anti-immigration measures to go with it. Never again would the idea of free access to Britain be seriously entertained by mainstream politicians.

One of the new migrations that arrived to beat the 1962 quota system just before Wilson came to power came from a rural area of Pakistan threatened with flooding by a huge dam project. The poor farming villages from the Muslim north, particularly around Kashmir, were not an entrepreneurial environment. They began sending their men to earn money in the labour-short textile mills of Bradford and surrounding towns. Unlike the West Indians, the Pakistanis and Indians were likelier to send for their families. Soon there would be large, inward-looking Muslim communities clustered in areas of Bradford, Leicester and other manufacturing towns. Unlike the Caribbean migrants, these were religiously divided from the whites around them and cut off from the main form of male white working-class entertainment, the consumption of alcohol. Muslim women were kept inside the house and the ancient habits of brides being chosen to cement family connections at home meant there was almost no sexual mixing, either. To many whites, the ‘Pakis’ were less threatening than the self-confident young Caribbean men, but also more alien.

Had this been all, then perhaps Enoch Powell’s simmering unease would have continued to simmer and his notorious ‘River of Blood’ speech would never have been made in the apocalyptic terms it was. Whatever the eventual problems thrown up by this mutual sense of alienation Britain’s fragile new consensus of 1962–5 was about to be broken by another form of racial discrimination, this time exercised by Africans, mainly of the Kikuyu people of Kenya. After the divisive terror and counter-terror of the Mau Mau campaign, Kenya had won independence under the leadership of Jomo Kenyatta in 1963 and initially thrived as a relatively tolerant market economy. Alongside the majority of Africans, however, and the 40,000-odd whites who stayed after independence, there were some 185,000 Asians in Kenya. They had mostly arrived during British rule and were mostly better-off than the local Kikuyu, well established as doctors, civil servants, traders, business people and police. They also had full British and colonies passports and therefore an absolute right of entry to Britain, which had been confirmed by meetings of Tory ministers before independence. These people have been called the Jews of Africa and the parallels between their position and that of European Jewry in the thirties are striking. Like the Jews they were an abnormally go-ahead, vigorous and prosperous group. Like the Jews they were the object of nationalist and racial suspicion, from black Africans rather than white Germans. They too were often accused of disloyalty. When Kenyatta gave them the choice of surrendering their British passports and taking full Kenyan nationality, or becoming in effect foreigners, dependent on work permits, most of them chose to keep their British nationality. In the unfriendly and increasingly menacing atmosphere of Kenya in the mid-sixties, it seemed sensible. Certainly there was no indication from London that their rights to entry would be taken away.

The pressure on them grew, in ways that also mimicked Nazi treatment of the Jews, at least before the industrial genocide of the Holocaust. The Asians were deprived of their jobs in the civil service. They found they were unable to work or trade in the better-off parts of the country. They faced increasingly unpleasant propaganda. The minority who had opted for Kenyan citizenship found it mysteriously difficult to obtain. And so, inevitably, they began to make for Britain, their obvious refuge. Through 1967 they were coming in by plane at the rate of about a thousand a month. The newspapers began to put the influx onto the front pages and the now-popular television news showed great queues waiting for British passports and for flights. Enoch Powell, in an early warning shot, said that half a million East African Asians could eventually enter which was ‘quite monstrous’. He called for an end to work permits and a complete ban on dependants coming to Britain. Other Tories, notably the former Colonial Secretary Iain Macleod, felt the party was entirely bound by the promises it had made when Kenya became independent; the Asians could not be left stateless. This division was echoed in the Labour government too, whose liberals, led by Roy Jenkins, believed the Asian migration could only be halted by pleading with Kenyatta for better treatment at home. The new Home Secretary Jim Callaghan, however, was determined to respond to the apparent mood of worry and anger about the migration. This would mean revoking or cancelling the right of Kenyan Asians to enter. It would be a betrayal of a promise.

Shamefully the same Conservative politician who had made the promise originally, Duncan Sandys, was now leading calls to cancel it. By the turn of the year around 2,000 Kenyan Asians a month were arriving: almost every aircraft seat from East Africa to London, direct or indirect, was booked. Callaghan decided to act. As his colleague Crossman recorded of a crucial cabinet committee meeting in February 1968, ‘Jim arrived with the air of a man whose mind was made up. He wasn’t going to tolerate this bloody liberalism. He was going to stop this nonsense, as the public was demanding and as the Party was demanding. He would do it come what may and anybody who opposed him was a sentimental jackass.’29 The Commonwealth Immigrants Act, which effectively slammed the door, while leaving a catflap open for a very small annual quota, was rushed through Parliament that spring. Yet this not only broke the word of the British Government at the time of Kenyan independence, it also left 20,000 people adrift and stateless in a part of Africa that no longer wanted them. The bill has been described as ‘among the most divisive and controversial decisions taken by any British government. For some the legislation was the most shameful piece of legislation ever enacted by Parliament, the ultimate appeasement of racist hysteria’ while for others it was the moment when the political elite, in the shape of Jim Callaghan, finally listened to their working-class voters.30 Polls of the public showed that 72 per cent supported the act.

This was the background to Powell’s famous speech in Birmingham, at a small room in the city’s Midland Hotel, on 20 April 1968, three weeks after Callaghan’s bill had become law and the planes carrying would-be Kenyan Asian migrants had been turned round. Powell had argued before that the passport guarantee was never valid originally. He was contemptuous of the Commonwealth by now, seeing it as a high-minded constitutional myth, which stopped Britain from pursuing her self-interest freely. Most of his political fire was directed at the absurdities, as he saw them, of trying to control the level of the currency and direct the economy. Despite Heath’s growing despair about his stiff-necked determination to challenge orthodoxy, Powell was still a member of the shadow cabinet. It had just agreed to cautious backing for Labour’s tougher Race Relations Bill (the flip side of the Callaghan restrictions). Powell had gone uncharacteristically quiet. He was however quite aware of the size of the political explosion he was about to detonate, telling a local friend ‘I’m going to make a speech at the weekend and it’s going to go up “fizz” like a rocket; but whereas all rockets fall to earth, this one is going to stay up.’³¹ The friend, Clem Jones, the editor of Powell’s local newspaper, the Wolverhampton Express and Star, had advised him to time the speech for the early evening television bulletins, and not to distribute it generally beforehand. He would regret the advice.

Here is some of what Enoch Powell said. He quoted a Wolverhampton constituent, a middle-aged working man, who told him that if he had the money, he would leave the country because ‘in fifteen or twenty years time the black man will have the whip hand over the white man’. Powell continued by asking rhetorically how he dared say such a horrible thing, stirring up trouble and inflaming feelings. ‘The answer is I do not have the right not to do so. Here is a decent, ordinary fellow-Englishman, who in broad daylight in my own town says to me, his Member of Parliament, that this country will not be worth living in for his children. I simply do not have the right to shrug my shoulders and think about something else. What he is saying, thousands and hundreds of thousands are saying and thinking . . .’ Those whom the Gods wish to destroy, he reminded his audience, they first make mad. ‘We must be mad, literally mad, as a nation to be permitting the annual inflow of some 50,000 dependants, who are for the most part the material of the future growth of the immigrant-descended population. It is like watching a nation busily engaged in heaping its own funeral pyre.’ The race relations legislation was merely throwing a match on gunpowder. Powell then quoted another constituent, this time an elderly woman whom he said was persecuted by ‘Negroes’. She had excrement stuffed through her letter-box and was followed to the shops ‘by children, charming wide-grinning piccaninnies. They cannot speak English, but one word they know. “Racialist”, they chant.’ He concluded with the peroration which gave the speech its slightly inaccurate popular title: ‘As I look ahead, I am filled with foreboding. Like the Roman, I seem to see “the Tiber foaming with much blood”.’ If Britain did not begin a policy of voluntary repatriation, she would soon face the kind of race riots that were disfiguring America.

The speech was claimed by Powell to be merely a restatement of Tory policy. But its language and Powell’s own careful preparation suggest it was both a call to arms by a politician who believed he was fighting for white English nationhood, and a deliberate provocation aimed at Powell’s enemy Heath. At any rate, after horrified consultations when he and other leading Tories had seen extracts of the speech on the television news, Heath promptly ordered Powell to phone him, and summarily sacked him. Heath announced that he found the speech ‘racialist in tone and liable to exacerbate racial tensions’. As Parliament returned three days after the speech, a thousand London dockers marched to Westminster in Powell’s support; by the following day he had received 20,000 letters, almost all in support of his speech, with tens of thousands more still to come. Smithfield meat porters and Heathrow airport workers also demonstrated in his support. Powell also received death threats and needed full-time police protection for a while; numerous marches were held against him and he found it difficult to make speeches at or near university campuses. Asked whether he was a racialist by the Daily Mail, he replied: ‘We are all racialists. Do I object to one coloured person in this country? No. To 100? No. To a million? A query. To five million? Definitely.’

There can be no serious doubt that most people in 1968 agreed with him.

Plot! Lord Louis and the King Thing

Forty years on, the paranoid atmosphere after only a few years of Wilson’s first administration is hard to credit, but there was a rising conviction among some in business and the media that democracy itself had failed. Cecil King, the tall and megalomaniac nephew of those original press barons, Lords Rothermere and Harmsworth, and the effective proprietor of IPC, which owned the Daily Mirror, was at the centre of the flapping. He had originally supported Wilson, both in Opposition and in the period immediately after the 1964 election, but was deeply offended when Wilson, who had egalitarian convictions, then offered King only the modish life peerage. King was outraged. He wanted a hereditary title, as befitted the boss of a popular socialist newspaper, preferably an Earldom. Wilson, to his credit, refused to budge. To the Prime Minister’s discredit, though, he desperately flattered King, courted him and gave him a string of other baubles, including a damehood for his wife and positions for himself – director of the Bank of England, a seat on the National Coal Board and another on the National Parks Commission, plus repeated offers of junior government jobs and a life peerage. None of it made the slightest impression on the sulking press tycoon, who went round London telling anyone who would listen that Wilson was a dud, a liar and an incompetent who was ruining the country and who should be removed as soon as possible.32

King’s theme, not uncommon in business circles, was that Britain needed professional administrators and managers in charge, not dodgy politicians. He insisted that ‘We are coming near to the failure of parliamentary government.’ The politicians had made ‘such a hash of our affairs that people must be brought into government from outside the rank of professional politicians’. His private views came close to a call for insurrection or a coup, to be fronted by himself and other business leaders. This culminated in a clumsily attempted plot. On 8 May 1968, according to King’s brilliant editor-in-chief Hugh Cudlipp, the two of them had a meeting with Lord Louis Mountbatten, whom we have met in his role negotiating India’s independence. As a war hero, former Chief of the Defence Staff and close member of the Royal Family, Mountbatten had a unique role in public life. He stood above politics, though many believed he liked the notion of being thought a man of destiny, and he was much discussed by those who dreamed of an anti-Wilson putsch. He had made his worries about the country known to Cudlipp, though denying he wanted ‘to appear to be advocating or supporting any notion of a Right Wing dictatorship – or any nonsense of that sort.’ Indeed, Mountbatten’s idea of the possible leader of some kind of emergency government supplanting Wilson was . . . Barbara Castle.

Nevertheless, when King, Cudlipp and Mountbatten met, with the government’s chief scientific adviser Sir Solly Zuckerman, the talk was wild. King told the Queen’s uncle-in-law that in the coming crisis, ‘the government would disintegrate, there would be bloodshed in the streets, the armed forces would be involved’ and asked Mountbatten whether he would agree to be titular head of a new administration. According to Cudlipp, Mountbatten then asked Zuckerman what he made of it. The scientist rose, walked to the door and replied: ‘This is rank treachery. All this talk of machine guns at street corners is appalling. I am a public servant and will have nothing to do with it. Nor should you, Dickie.’ Mountbatten agreed. Later, he recorded that it was he who had told King the idea was ‘rank treason’ and booted him out. King’s account of the meeting is different, though hardly less alarming. He claimed Mountbatten had said morale in the armed forces was low, the Queen was worried and asked for advice. To which the newspaperman replied: ‘There might be a stage in the future when the Crown would have to intervene: there might be a stage when the armed forces were important. Dickie should keep himself out of public view so as to have clean hands . . .’33 Whichever account is more accurate, the meeting certainly took place and Mountbatten then seems to have reported the conversation to the Queen. King, unabashed, unleashed a front page attack in the Daily Mirror on Wilson, headlined ‘Enough is Enough’, and calling for a new leader. He was himself putsched by a board which realized he had become a serious embarrassment, shortly afterwards.

Does any of this matter? There is no evidence that the talk of a coup was truly serious, or that the security services were involved, as has been publicly asserted since. Yet the Cecil King story counts in two ways. First, it gives some indication of the fevered and at times almost hysterical mood about Wilson and the condition of the country that had built up by the late sixties – a time now more generally remembered as golden, chic and successful. A heady cocktail of rising crime, student rioting, inflation, civil rights protests in Northern Ireland and embarrassments abroad had convinced some that the country was ungovernable. Because British democracy has survived unscathed through the post-war period, to suggest it was ever threatened now seems outlandish. Perhaps it never was. There is a lurid little saloon bar of the mind where conspiracy theorists, mainly on the left, and self-important fantasists, mainly on the right, gather and talk. The rest of us should be wary of joining them for a tipple. Yet the transition from the discredited old guard of Macmillan-era Britain to the unwelcomed new cliques of Wilson-era Britain was a hard time.

Wilson was a genuine outsider so far as the old Establishment was concerned, and he ran a court of outsiders. The old Tory style of government by clique and clubmen gave way to government by faction and feud, a weakness in Labour politics throughout the party’s history. Wilson had emerged by hopping from group to group, with no settled philosophical view or strong body of personal support in the party. Instead of a ‘Wilson party’, represented in the Commons and country, he relied on a small gang of personal supporters – Marcia Williams most famously, but also the Number Ten insiders Peter Shore, Gerald Kaufman, George Wigg and for, a while in these earlier years, Tony Benn too. Then there were the outside advisers. Some were brought in from academic life, such as the Hungarian-born economists Thomas Balogh and Nicholas Kaldor (popularly known as Buddha and Pest). Some came from business, such as the notorious Gannex raincoat manufacturer Joseph Kagan, or from the law, such as the arch-fixer of the sixties Lord Goodman. Suspicious of the Whitehall Establishment, with some justification, and cut off from both the right-wing group of former Gaitskellites, and the old Bevanites, Wilson felt forced to create his own gang. A Tory in that position might have automatically turned to old school tie connections, or family ones, as Macmillan did. Wilson turned to an eclectic group of one-offs and oddballs, producing a peculiarly neurotic little court, riven by jealousy and misunderstanding.

This anti-court gave easy material to Wilson’s snobbish and suspicious enemies in the press, ranging from Private Eye, which constantly taunted the insiders with foreign-sounding names, to the MI5-connected ‘red conspiracy’ merchants, and even scions of the Fleet Street purple. Many in that old Establishment – the top brass, the City grandees, the clubmen – struggled to accept that Wilson was a legitimate leader of the United Kingdom. Wilson was paranoid but plenty of powerful people were out to get him, or at least to get him out.

In Place of Beer

Until the end of the decade the sixties had not been particularly strike-prone compared to the fifties. Strikes tended to be local, unofficial and quickly settled. Inflation was still below 4 per cent for most years and, being voluntary, incomes policies rarely caused national confrontation. But by 1968–9 inflation was rising sharply. Wilson had pioneered the matey ‘beer and sandwiches’ approach to dealing with union leaders (though he found on his first attempt the sandwiches were too thinly cut to satisfy union appetites). But he was becoming disillusioned. That seamen’s strike of 1966 had been a particularly bruising experience. So for once it was Wilson who took a stand. He was supported by an unlikely hammer of the unions, the veteran left-winger Barbara Castle, now made Secretary for Employment. In a homage to her early hero, Nye Bevan’s book In Place of Fear, she called her plan for industrial harmony ‘In Place of Strife’. It proposed new government powers to order pre-strike ballots, and a 28-day pause before strikes took place. The government would be able in the last resort to impose settlements for wildcat strikes. There would be fines if the rules were broken. This was a package of measures which looks gentle by the standards of the laws which would come later. The leading trade unionists of the day, once famous men like Jack Jones and Hugh Scanlon, saw it as an unacceptable return to legal curbs they had fought for decades to lift.

The battle that followed nearly ended Wilson’s career, and Castle’s. Their defeat made the Thatcher revolution inevitable, though it would not come for a further decade. The failure of ‘In Place of Strife’ is one of the great lost opportunities of modern British politics. Why did it fail? The easy explanation is that the unions were too powerful and yet also still too popular, not least on the Labour backbenches. Barbara Castle was neither the most tactful negotiator nor the niftiest tactician. Her angry harangues put up the backs of male newspaper commentators and MPs, who compared her to a fishwife and a nag, just as they would Margaret Thatcher. She made silly mistakes, such as going away on holiday in the Mediterranean on the yacht owned by that arch capitalist Lord Forte during one of the most sensitive weeks, lying in the sun and talking of resignation. Later while Wilson sat up companionably with union leaders, quaffing brandies and puffing cigars, she would creep off exhausted to bed. Yet both Wilson and Castle were fully aware that this was a struggle for authority a serious government could not afford to lose.

In a famous confrontation in the summer of 1969 when union leaders were given a private dinner at Chequers, Scanlon had warned the two ministers directly again, that he would not accept any legal penalties, or even any new legislation. Wilson replied that if he as Prime Minister accepted such a position he would be running a government that was not allowed to govern. If the unions mobilized their sponsored Labour MPs to vote against him, ‘it would clearly mean that the TUC, a state within a state, was putting itself above the government in deciding what a government could and could not do.’ Uttered privately this was just the language which would be heard publicly from Heath and later even more starkly from Thatcher. Scanlon retorted that Wilson was becoming that arch turncoat, a Ramsay MacDonald. Wilson hotly denied it and referred to the Czech reformist leader who had been crushed by the Red Army the previous year: ‘Nor do I intend to be another Dubček. Get your tanks off my lawn, Hughie!’

But the tanks stayed resolutely parked under his nose, Scanlon and Jones unblinking, their gun-barrels pointing at Labour’s reputation. Wilson and Castle now contemplated a joint resignation. For the Prime Minister also had a weapon of last resort. If he walked away then the Tories would surely return, with tougher measures still. But as the stand-off continued, the unions merely suggested a series of voluntary agreements and letters of intent. They were toughing it out because they had excellent intelligence from inside the government and knew very well that Wilson and Castle were isolated. Not only were the usual forces of the left against reform of industrial relations – all those Tribune MPs attacking Castle for betraying her principles, the scores of pragmatic rebels on the Labour benches and the trade union sponsored MPs whose paymasters were jerking the reins – but also some key right-wing ministers too. As so often, below the great issue of the hour, personal vanity and ambition were writhing. Jim Callaghan, with his strong trade union links, was utterly against legal curbs on the unions. Now Home Secretary, a former trade union official himself, he voted against his own government’s plans at a meeting of Labour’s national executive. His enemies were convinced that he thought the failure of union reform would finish Wilson off. ‘In Place of Strife’ would become ‘In Place of Harold’.

Callaghan’s objections to the package went beyond pure self-interest but his own ideas about how to deal with the unions were thin to the point of absurdity. As Prime Minister much later he would be richly and fairly repaid for what he did in 1969. At the time he was reviled by the pro-reform ministers. In a bitter cabinet meeting, Callaghan retorted to Crossman’s plea that they must all sink or swim together, with the words, ‘sink or sink’. Crossman spat back: ‘Why don’t you go? Get out!’ Callaghan’s fellow Cardiff MP, later the Speaker, George Thomas, described him as ‘our Judas Iscariot’. Other ministers had their own agendas too, of course, and began to peel away from Wilson and Castle. Tony Crosland, another key figure on the Labour right, hoped that if Callaghan succeeded Wilson, he would finally achieve his great ambition and become Chancellor. Jenkins, however, was not mainly motivated by the hope of toppling Wilson. For one thing, no one could tell whether Wilson’s fall would mean his success, or Callaghan’s. Furthermore, Jenkins knew that since his main criticism of the Prime Minister was lack of principle, to stab him in the back when he did make a stand would look absurd and discreditable. Yet late in the day Jenkins eventually ratted because he said he feared ‘a government smash’ if the plans were forced through. Tony Benn, who had been warmly backing Barbara Castle before, changed his mind too. After the crucial cabinet meeting, Wilson stormed out, saying to his staff, ‘I don’t mind running a green cabinet, but I’m buggered if I’m going to run a yellow one!’34

It is possible to argue that Castle’s plans were too hardline for 1969, though late in life Callaghan eventually recanted and admitted penal sanctions had been necessary.35 But had the Labour Government been united behind Wilson on this, then legislative reform of trade union practices might have been forced through even the Parliamentary Labour Party of the day, and much subsequent grief avoided. Wilson’s reputation, Labour’s reputation and the story of British politics would have been markedly different. But with the cabinet as well as the backbenches in rebellion, Wilson had no choice but to give way. His earlier threats to resign were swiftly forgotten. In a brutal aside about Castle which perhaps reflected the strain he was under, he said to an official: ‘Poor Barbara. She hangs around like someone with a still-born child. She can’t believe it’s dead.’³⁶ The two of them reached a toothless ‘solemn and binding’ agreement under which unions said they would accept TUC advice on unofficial strikes. Solomon Binding was meant to be a face-saver but instead became a national joke. Hypocritically, the cabinet applauded Wilson for his brilliant negotiating and, hypocritically, he accepted their praise – though Castle, on the edge of physical collapse, gave them a blast of honest contempt. The Tories and the press were rightly derisive. In his memoirs Jenkins admitted that Wilson, whom he generally did not admire, came out of it all with a touch of King Lear-like nobility. ‘He did not hedge and he did not whine . . . It was a sad story from which he and Barbara Castle emerged with more credit than the rest of us.’ The great background question about the Labour governments of the sixties is whether with a stronger leader they could have gripped the country’s big problems and dealt with them. How did it happen that a cabinet of such brilliant, such clever and self-confident people achieved so little? In part, it was the effect of the whirling court politics demonstrated by ‘In Place of Strife’.

Election Upset

In the end, the Wilson government was felled not by wild-eyed plotters but entirely conventionally by the electorate. When Wilson called the election in 1970 he was feeling optimistic despite the failure of ‘In Place of Strife’. He knew his enemy. Heath had been the Leader of the Opposition since 1965, with Tory MPs voting in a secret ballot for the first time. Seen as a ruthless modernizer, he began to reshape the Tory front bench. Out went many of the cod-Edwardian grandees. In came people like Peter Walker, another grammar school boy who had made his money in the City, Geoffrey Rippon, the young former mayor of Surbiton, Tony Barber, the former RAF man and lawyer, and Margaret Thatcher, a grocer’s daughter, none of them from rich families. Though a pre-1970 election policy conference at the Selsdon Park hotel outside London was much over-hyped as a lurch to the right (Wilson talked of ‘Selsdon Man’, as some kind of ape-like throwback), Heath was a staunchly pro-business politician. In the sixties and early seventies, after so many years of the more languid, aristocratic Tory Party, he seemed like a blast of fresh air.

Wilson and Heath cordially detested one another. Perhaps it was because they had so much in common. They came from traditionalist, pious, lower-middle-class, provincial families. They were born in the same year, 1916, Heath four months after Wilson. His family was poorer than Wilson’s and his working-class origins stronger. Heath’s father was a carpenter who worked for a building contractor and his mother was a lady’s maid who later took in lodgers. Like Wilson, Heath rose through fierce academic ability and scholarships. Both seem to have been rather solitary and awkward as young men but benefited from the richness of pre-television community life, Wilson throwing himself into the world of Scouting and Methodist clubs, and Heath into music and choirs. Both arrived at Oxford at much the same time and were on the edge of the glamorous and passionate politics of the pre-war period there, though they never seem to have met. As we have seen, the two of them represented the triumph of the grammar school boy in politics, a class breakthrough comparable to what happened at the same time in business, the arts and the professions. Governing consecutively during 1964–76 they would oversee the near-total destruction of the grammar school in England and Wales. Both would represent moderation in their respective parties, harried by the hard left and the hard right, accused of weakness and appeasement. Each was essentially a believer in managerialism and compromise. Patriots and equally proud men, they would come to be reviled, identified with a time of national collapse and failure. They were certainly easy to caricature, Wilson’s pudgy face and pipe, against Heath’s vast manic grin and yacht-sailing.

There were good reasons for Labour to think that they would see off the Tories yet again. Jenkins seemed to have pulled the economy around and was self-confident enough not to use his last budget for pre-election bribes. It was in fact quite popular. The opinion polls were onside and the press was generally predicting an easy Labour victory. Even right-wing commentators lavished praise on Wilson’s television performances and mastery of debate, though he pursued an avowedly presidential style and tried to avoid controversy.

Heath was regarded as a dull dud by comparison and harried by Powell who had returned to the attack again and again before the 1970 election, provoking Heath to denounce him as inhumane and unchristian, and to make it clear that he would never be asked to serve in a Conservative government. At the height of their battle for the soul of the party, in summer 1969, a Gallup poll suggested 54 per cent agreed with Powell on grants to repatriate what it called coloured immigrant families. By early 1970, 66 per cent of those polled said they were either more favourable to Powell or felt the same about him and only 22 per cent said their view of him was less favourable. Powell was by now attacking Heath over a broad front of policy, over the need for tax cuts, privatization and freer markets in economics; over Northern Ireland, or Ulster; and over British membership of the EEC, which Powell opposed as strongly as Heath supported it. So Powell’s battle-cry for repatriation and an end to immigration was taken by the Tory leadership as part of his campaign to unseat Heath and then replace him.

There were plenty in the party and the country who yearned for just that. Apart from the dockers and other marchers, wealthy backers wanted to fund a campaign for Powell’s leadership. Marcel Everton, a Worcestershire industrialist, raised money for a national federation of Powellite groups and talked of a march on Conservative headquarters to oust Heath. Wilson’s call for an election, however, created an obvious trap which Powell could see very clearly even if his supporters ignored it. His best chance by far would be if Heath lost the election. Then he could attack him openly and perhaps even seize control of the party. Everton, like others, openly said that it would be better for right-wingers to vote Labour so that the Tory party would ‘fall into Enoch’s lap like a ripe cherry’.37 Yet if Powell seemed to toy with this, he would be forever branded a traitor by tens of thousands of loyal Conservatives. Either Heath would win and Powell would be finished, or he would lose and Powell would be blamed by so many Tories the party might split.

The campaign was characterized by huge coverage of Powell, in the case of some newspapers, engorging half their reporting of the Tories’ entire campaign. It has been described as the only general election campaign in British history in which immigration and race have played a significant part. Conservative meetings were full of home-made ‘Enoch’ signs. Heath and his colleagues were constantly irritated and embarrassed by being asked whether or not they supported their fallen angel in Wolverhampton. Unsurprisingly, Powell was portrayed by Labour and Liberal politicians as the right-wing ideologue behind whom Ted Heath anxiously waddled. Tony Benn went furthest in this, calling him ‘the real leader of the Conservative party. He is a far stronger character than Mr Heath. He speaks his mind . . . Heath dare not attack him publicly even when he says things that disgust decent Conservatives.’ Benn went on to assert that ‘the flag hoisted at Wolverhampton is beginning to look like the one that fluttered over Dachau and Belsen.’

Late in the campaign Powell, who had been hounded by left-wing protesters, finally gave a clear and unequivocal endorsement to the official Tory campaign. Because there was indeed a late surge of support for Heath, it has been argued that Powell was responsible for his victory. But the evidence is thin to prove it and Powell himself fastidiously declined to claim such a thing. Just before the campaign had begun Jenkins learnt, too late, that yet more bad balance of payments figures were to be published along with bad inflation figures. This helped tip things away from Wilson. When the results were in the Tories had won an overall majority of thirty. Polls afterwards scotched the idea that Jenkins’s pre-election budget had lost Labour the election. In fact it was quite popular. Powell, according to his biographer, once he realized the consequences of Heath’s victory, ‘sat around on his own with his head in his hands, deep in gloom. He had realised immediately that, after Wilson, he had been the great loser of the election.’³⁸

And Wilson was bitterly disappointed. He was also surprised. With no home of his own on the mainland, he had to take up Heath’s offer of a last weekend in Chequers while he desperately searched around for somewhere to live.

Blood and Shame: the Irish Tragedy Begins

Of the great crises that link Wilson and Heath together, that of Northern Ireland had as much effect on the tenor of mainland British life as any. It brought surprise and embarrassment to millions watching the violence on the streets of the province. It brought bombings, murder and shame. The longer origins of the conflict, from the settlement of Ulster by Scots Presbyterian farmers to the Partition of Ireland in 1921 and the civil war are outside the limits of this book. In the fifties and through most of the sixties, Northern Ireland barely appeared on the Westminster radar. There was a devolved Northern Ireland government, with its own prime minister and a distinct party system, along with the contingent of grey, reliable, conservative-minded Unionist MPs who rarely made ripples in London, never mind waves. The bigotry of the Protestant majority was the butt of jokes and official disapproval.

Yet there was limited English or Scottish sympathy for the cause of Irish unification – hostility to Catholicism and memories of the inglorious role played by the Republic during the war against Hitler remained strong. If the Belfast shipyards of Harland & Wolff were barred to Catholics, then too were some well-known concerns on the mainland. If there was unfairness in the allocation of housing in Londonderry, so there was in Leicester or Nottingham. There was, admittedly, a blatant form of anti-Catholic constituency-rigging, the gerrymandered boundaries designed to maximize Unionist representation. As early as 1964, when Wilson first met the Stormont Prime Minister Captain Terence O’Neill, who had been elected the previous year on a programme of mild reform, he was pressing him to end gerrymandering. Mostly, though, this was a time of dozy neglect which turned out from 1969 to have been a terrible failure of imagination – malign neglect, whose effects would haunt Britain for the next thirty years.

For under the surface, the unfairness and discrimination in jobs, in housing and in politics, had taken the temperature in the Catholic ghettos to simmering point. The changed international climate had something to do with this. Rebellion against injustice was in the air, or at least in the newspapers. Rising protests about apartheid in South Africa and the struggle for equal rights in the southern states of the US had focused attention on the squalid half-secret on Britain’s doorstep. O’Neill’s cautious moves towards reform had produced a hardline Protestant backlash, led by demagogues including a young and turbulent preacher called Ian Paisley. In 1967 a civil rights movement had been formed, using the language and tactics of the Deep South, and the following year, marches and demonstrations were being met with police violence. A largely Catholic and nationalist party, the Social Democratic and Labour Party, was formed. Bernadette Devlin of the more radical Ulster Unity Party was elected in 1969 to the Commons, the youngest ever woman MP, on a civil rights ticket. She treated MPs to what one of her listeners described as ‘the authentic, bitter and resentful voice of Catholic Ulster’.39 Wilson told O’Neill he thought he should go further and faster, both on housing and on local government boundaries. O’Neill replied that this would require an election. During it, his Unionist Party split and he received a bloody nose, handing over to another, though less effective, moderate, James Chichester-Clarke. At this stage, apart from occasional raids on arms dumps, the ageing and sparsely manned Irish Republican Army was little heard of.

Then, in the summer of 1969, the politics of Northern Ireland erupted. The Apprentice Boys of Derry, a Loyalist anti-Catholic organization, had planned their annual march at Londonderry on the same day and over the same route that a civil rights march was planned. There had been civil rights marches before, but they had been peaceful. This time, ordered not to march, they did so and were attacked by the police. Members of the so-called B-Specials, an unpaid and part-time but armed 12,000-strong wing of the Royal Ulster Constabulary, were particularly brutal. Among the seventy-five marchers injured that day were leading political figures, such as Gerry Fitt who would become an MP and a peer, and a powerful anti-IRA voice for moderation. The bloodied heads and the vengeful use of batons horrified millions watching that evening’s television bulletins. In response the Stormont government promised reforms to local elections, housing lists and parliamentary boundaries. This sparked off Loyalist protests. More civil rights marches followed, and more attacks on them, until at the beginning of August, there was a serious pitched battle between Catholic residents, Loyalist extremists and police in the middle of Belfast. Hundreds of houses burned. Harold Wilson, who was on holiday on the Isles of Scilly, flew to Cornwall for a brief talk with his Home Secretary, Jim Callaghan. They agreed to send in the British Army if asked, in return for the abolition of the B-Specials and promises of further reforms. It was a momentous decision, taken without the involvement of the cabinet. As Crossman recorded in his diary: ‘Harold and Jim had really committed the cabinet to putting the troops in and once they were there, they couldn’t be taken out again, so we had to ratify what had been done.’ Tony Benn wrote: ‘It looks as though civil war in Ulster has almost begun.’

One of the myths about the moment when Britain sent in the troops to Northern Ireland was that it was done with little understanding of the dangers, no thought about alternatives and no appreciation that, arriving to protect Catholic homes, the troops might find themselves a target for Irish nationalists. This is all untrue. Wilson and Callaghan were acutely aware of the dangers and had put maximum pressure on Chichester-Clarke and the Unionists to hurry through political change, and they got some of what they wanted over the B-Specials and housing. In casting around for alternatives, Wilson even apparently toyed with the idea of a reverse ‘plantation’, evacuating the entire Ulster Protestant community out of Ireland and giving them new homes in England and Scotland.40 When Wilson’s press secretary, Joe Haines, suggested to him that the troops could be there for months, he grimly replied: ‘They’re going to be there for seven years at least.’ Callaghan, whose handling of the crisis was his finest hour, was under no illusion that the troops would soon be facing both communities, and would indeed become a target. Benn, attending cabinet with a freshly grown beard which caused much amusement around the table, mused whether this was not ‘the beginning of ten more years of Irish politics at Westminster which could be very unpleasant’.⁴¹ Meanwhile over in Northern Ireland itself, the hard men were at work. Loyalist mobs reacted with fury to the proposed disbanding of the B-Specials and IRA men were digging into the various civil rights and citizens’ defence organizations of Catholic Belfast and Derry. In November, at a tense meeting in Dublin, the IRA split, and the pro-violence Provisional Army Council or ‘Provos’ came into existence.

Now the nature of the conflict would change. It had begun as a protest about unfairness, bigotry and political corruption. It turned into a fight to force an end to the United Kingdom and to bring about the unification of Ireland. Inspired by a heady mix of Marxism, romantic nationalism and the example of overseas guerrillas from Vietnam to Cuba, the Provos believed that so long as they had the support of most Catholics, they could end the partition of the island. Winning over much of the minority community took time. The IRA’s first success was to convince many Catholics living in Belfast, where they were heavily outnumbered, that only they could protect them against the Loyalist thugs and that the British Army was bloodied hand in bloodied glove with their enemies. This was not so but rumour and stone-throwing provocation, followed by over-reaction and army brutality, would soon make it seem that way. In the Irish Republic, many were instinctively with the IRA. In 1970 two Dublin cabinet ministers, Charles Haughey and Neil Blaney, were sacked for being sympathizers with the Provos, though acquitted later of trying to illegally import arms into the Republic. Most of £100,000 voted by the Dail, the Irish Parliament, for the relief of Catholics in the North a year earlier had, in fact, been spent on arms and ammunition. Community defence was morphing into nationalist uprising.

This was the crisis inherited by Heath, the nearly man in Irish peace-making, in 1970. He knew little about Northern Ireland when he arrived in office, though he had once been smuggled across the border under a blanket for lunch in the Republic. In one crucial respect he advanced on the underlying assumption of the Labour ministers. It would not be enough to protect Northern Catholics. Heath thought they would have to be given a stake in the running of Northern Ireland too. Eventually, he hoped, greater prosperity in Ireland, more trade across the border and common membership of Europe would ease the two communities towards an easier relationship. This is what happened, though only after decades of murder had exhausted them, too.

The Yachtsman

Heath’s reputation has sunk particularly low. Perhaps this is not surprising. He was defeated as leader in 1975 after losing two generation elections and fell out spectacularly with the new order, Thatcherism. The triumph of Margaret Thatcher’s optimistic if divisive free-market politics attracted a blaze of intellectual, media and parliamentary support which saw her success as a refutation of Heath’s time. The brighter she burned then, by narrative necessity, the duller he must be. Certainly, his attempts to rein in trade union power and to conquer inflation failed. The cause that excited him more than any other, Europe, also inflamed his enemies who accused him of lying to the country about the true, political nature of the coming European Union. Heath did not help his cause by the implacable sulk that followed his ousting, a huff he managed to maintain for thirty years. His own account of his government is wooden and wearisomely self-justificatory, in prose almost as bad as Harold Wilson’s. Further, as a loner who could be extraordinarily rude even to his admirers, Heath never accumulated a team of public defenders. Those who worked with him and thought him a fine leader, such as Douglas Hurd, were rarely able to make themselves heard against the surging self-belief and vituperative journalism of the Thatcher years. Finally Heath had little time in office compared to Wilson’s near-eight, just three and a half years.

Almost friendless, Heath is a political leader whose reputation deserves to be revisited. He was the first outsider to break through the class barriers of the old Tory party and he promoted others like him to the cabinet. His European vision came first-hand. Before the war, on a student visit to Germany, he had literally rubbed shoulders with Hitler and met other Nazi leaders. Later he returned as a fighting officer to see their final defeat in 1945 and the war marked him more strongly than it marked Wilson. As Heath wrote later: ‘My generation did not have the option of living in the past; we had to work for the future. We were surrounded by destruction, homelessness, hunger and despair. Only by working together right across our continent had we any hope of creating a society which would uphold the true values of European civilisation.’ He was a genuinely compassionate and unusually brave politician, whose analysis of what was wrong with Britain in the seventies was far more acute than Wilson’s. His struggle with trade union power, conducted at the worst possible time, was relentless but he was up against forces too big to conquer quickly. Like Margaret Thatcher, he believed Britain was in danger of becoming ungovernable. His strategic mistake was to attack union power head-on and in a single act, rather than piecemeal, as her wilier government would. Like her, he cut taxes and even began privatization. Unlike her, he was ruling at a time when public sympathy was more with unions than with government, and when huge rises in the price of oil and other commodities were knocking Western economies sideways. His 1972 U-turn on incomes policy and industrial intervention was indeed a humiliating moment for parliamentary democracy but, while stiff-necked and difficult, mostly Edward Heath was plain unlucky.

He had risen through the Tory Party in Parliament as a tough chief whip and then as an equally tough negotiator on Europe in the Macmillan years. But Heath’s greatest achievement as a minister had come in 1964 when, as President of the Board of Trade, he abolished Resale Price Maintenance, or RPM. This is one of those reforms which sound dull and are now largely forgotten but which really did reshape the country. RPM allowed manufacturers to order shops to sell their products at a particular price. A shop which cut prices would be breaking the law. It therefore discriminated heavily in favour of small, relatively expensive shops rather than superstores; under RPM the supermarket revolution would have been much less dramatic and the ‘Tesco-ification’ of Britain impossible. Heath believed it stood in the way of proper competition and choice, and was inflationary. Yet were not small shopkeepers natural Conservatives? Many in the party and government opposed him, but he carried the day, a crucial defeat of producer interest by the new consumerism.

Ugandan Asians

Heath in power showed that he was desperately worried about the anti-immigration mood revealed in this most bitter of elections. While denouncing Powell, he moved quickly to pass a highly controversial and restrictive piece of legislation which removed any right to immigrate to Britain from anyone who did not have a parent or grandparent born in the country. Heath’s manifesto had promised ‘a new single system of control over all immigration from overseas’. Nobody had spelled out that this system would be designed to exclude blacks but not whites, yet the grandparent rule was transparently designed to allow Australians, Canadians, South Africans and New Zealanders of white British origins to return to the UK, while keeping out the black and coloured people of the Commonwealth and colonies. Powell himself likened the distinction to a Nazi race purity law; he wanted a new definition of British citizenship instead. The grandparent rule was defeated by the right and the left combining for opposite reasons, though restored two years later. Had this been all, then Heath would go down in history as being yet another panicked Establishment man, slamming the door to keep his party happy.

It was not all. For the Kenyan crisis was about to be replayed, at speed, in Uganda. Here the anti-British Prime Minister, Milton Obote, had just been replaced in a coup by the fat, swaggering, Sandhurst-educated Idi Amin who announced that he had been told in a dream he must expel that country’s Asians, just as the Kenyans had theirs. Amin was clearly a monster, whose thugs clubbed his enemies to death with staves, who threatened to kill British journalists, who was rumoured to keep human flesh in his fridge and to feast on it, and who enthused about the way the Nazis had dealt with the Jews. Though Powell argued angrily that Britain had no obligation to allow the trapped Ugandan Asians into her cities, Heath acted decisively to bring them in. Airlifts were arranged, with a resettlement board to help them, and 28,000 people arrived within a few weeks in 1971, eventually settling in the same areas as other East Africans – even though Leicester, becoming the ‘least white’ city in England, had published adverts in Ugandan newspapers pleading with migrants not to come there.

Within a few years Powell would no longer be a Conservative. Heath had confronted him head-on and beaten him. Once seen as a future prime minister, or at least as a brilliant chancellor-to-be, Powell would spend the rest of his life far from even the fringes of power. His ideas, however, would continue to grow in power and influence. His hostility to European union would inspire the biggest revolt in the modern Tory Party, one which kept Britain out of the euro. His belief in rigorous free-market economics would powerfully influence Margaret Thatcher and her circle so that he would be treated as a prophet, Old Testament Enoch. On race and immigration, the picture is more mixed. His views frightened many and made him one of the most detested as well as admired politicians of post-war times. Those who knew him best insist he was not a racialist. The newspaper editor Clem Jones, who tried and failed to track down the little old lady chased by ‘piccaninnies’ from Powell’s speech nevertheless said ‘he was never a racist.’ Jones thought he had been affected by the anger of white Wolverhampton people who felt they were being crowded out; even in Powell’s own street ‘of good, solid, Victorian houses, next door went sort of coloured and then another house, and he saw the value of his own house go down’. But, added the newspaperman, Powell would work very hard as an MP for constituents of any colour: ‘We quite often used to go out for a meal, as a family, to a couple of Indian restaurants, and he was on extremely amiable terms with everybody there, ’cos having been in India and his wife brought up in India, they liked that kind of food.’42

On the numbers migrating to Britain, and the consequences for the population of non-whites living in the country, Powell’s figures which were much ridiculed at the time were not far out. Just before his 1968 speech, he suggested that by the end of the century, the number of black and Asian immigrants and their descendants would number between five and seven million, or about a tenth of the population. According to the 2001 census, the relevant figures were 4.7 million people identifying themselves as black or Asian, or 7.9 per cent of the total population, though with large-scale illegal immigration since then, the true numbers are certainly higher. Immigrants are far more strongly represented, in percentage terms as well as raw numbers, in London and the English cities than in Scotland, Wales or Northern Ireland. It can also be argued that Powell did British democracy a kind of service by speaking out on an issue which had been up to then cloaked in elite silence and so provoking a debate which needed to happen at some time. Against that, his language still feels shockingly inflammatory and provocative nearly forty years later. He was talking just after the formation of the racist and fascist National Front in 1967 and though Powell himself was anti-Nazi and indeed had returned from Australia on the outbreak of war to fight the Germans, his words attracted the enthusiastic support of the would-be gauleiters of provincial Britain. Further, his core prediction, of civil unrest comparable to that suffered in the southern states of the United States, has not come about. Five notable outbreaks of inner city rioting since then, and a rise in street crime linked to disaffected youths from Caribbean and other immigrant communities do not add up to the conflagration he predicted.

Immigration has changed Britain more than almost any other single social event in post-1945 Britain – more than the increase in longevity, or the Pill, the collapse of deference or the spread of suburban housing. The only change which eclipses it is the triumph of the car. It was not a change that was asked for by the white population – though the terms and circumstances of 50 million people choosing suddenly to ask such a question are impossible to imagine. The majority of British people did not want the arrival of large numbers of blacks and Asians, just as they did not want an end to capital punishment, or deep British involvement in the European Union, or many of the other things the political elite has opted for. At no stage was there a measured and frank assessment of the likely scale of immigration led by party leaders, voluntarily, in front of the electorate. And while allowing this change by default, the main parties did very little to ensure that mass immigration from the Caribbean and the Indian subcontinent was successful. West Indians got none of the help and forethought lavished on the demobilized Poles, or even the less adequate help given to the Ugandan Asians. There was no attempt to create mixed communities, or avoid mini-ghettos. Race relations legislation did come, but late and only to balance new restrictions: it simply castigated racialism in the white working-class community, rather than trying to understand it.

So this is another example of Britain’s history of rule by elite, of liberal politicians acting above their electorates. The real question is whether this neglect of public opinion, and then of the consequences of immigration, not least for the immigrant families, has produced a better or worse country. The scents, flavours, controversies and rawness of Britain in the twenty-first century divide the country from its former self. It is not just those who have come, but the huge numbers of white British who have left, to South Africa, Australia, Canada and New Zealand, well over half a million in the sixties alone. Britain has become a world island, a little America, despite itself. Having once acquired an Empire in a fit of absent-mindedness, the British have become multi-coloured in much the same way. With new migrations from Eastern Europe, Iraq, Somalia and Ethiopia, it is now clear that this is a far bigger story than simply a tidying-up after Empire.

Floating

If Heath is associated with a single action, it is British entry into ‘Europe’ but throughout his time in office the economy, not Europe, was the biggest issue facing him. British productivity was still pitifully low compared to the United States or Europe, never mind Japan. The country was spending too much on new consumer goods and not nearly enough on modernized and more efficient factories and businesses. Prices were rising by 7 per cent and wage earnings by double that. This was still the old post-1945 world of fixed exchange rates which meant that the Heath government, just like those of Attlee and Wilson, faced a sterling crisis and perhaps another devaluation. It is hard to describe quite how heavily, how painfully, relative economic decline weighed on the necks of politicians of thirty and forty years ago. The unions, identified by Heath as his first challenge, had just seen off Wilson and Barbara Castle. Heath had decided he would need to face down at least one major public sector strike, as well as removing some of the benefits that he thought encouraged strikes. Britain not only had heavy levels of unionization through all the key industries but also, by modern standards, an incredible number of different unions – more than 600 altogether. Leaders of large unions had only a wobbly hold on what actually happened on the factory floor. It was a time of political militancy well caught by the 1973 hit from the folk-rock band the Strawbs, who reached number two with their anthem, ‘Part of the Union’. Its chorus ran, ‘Oh you don’t get me, I’m part of the union’ and different verses spelt out why: ‘With a hell of a shout, It’s out brothers, out . . . And I always get my way, If I strike for higher pay . . . So though I’m a working man, I can ruin the government’s plan.’ And so they could.

Almost immediately Heath faced a dock strike, followed by a big pay settlement for local authority dustmen, then a power workers’ go-slow which led to power cuts. Then the postal workers struck. The mood of the government was less focused and less steely than it would be nine years later when Margaret Thatcher came to power. Douglas Hurd, later seen as a ‘wet’ in her cabinet, was Heath’s political secretary at the time, and recorded in his diary his increasing frustration. ‘A bad day. It is clear that all the weeks of planning in the civil service have totally failed to cope with what is happening in the electricity dispute: and all the pressures are to surrender.’ Later, Hurd confronted Heath in his dressing-gown, warning him that the government machine was ‘moving too slowly, far behind events’. Things were so bad in the car industry that Henry Ford III, with his right-hand man Lee Iacocca, came to warn Heath that they were thinking of pulling out of Britain entirely. Yet Heath’s Industrial Relations Bill of 1971 was meant to be balanced, giving new rights to trade unionists while at the same time trying to make deals with employers legally enforceable through a new system of industrial courts. It was the Tories’ first stab at the kind of package which had been offered to the unions by Wilson. There were also tax reforms, meant to increase investment, a deal with business on keeping price increases to 5 per cent, and even some limited privatization – the travel agents Thomas Cook and Lunn Poly were then state owned, and sold off, along with some breweries.

But the Tory messages were still, to put it gently, mixed. Cuts in some personal taxes encouraged spending and inflation. With European membership looming, Barber, Heath’s Chancellor, was dashing for growth, which meant further tax cuts and higher government spending. Perhaps the most significant move in the long term was the removal of lending limits for the high street banks, producing a vast surge in borrowing. Lending had been growing at around 12 per cent a year already but in 1972 rose by 37 per cent and the following year by 43 per cent. This, obviously, further fuelled inflation but it also gave a fillip to the ancient British fetish for house price ownership and borrowing. The huge expansion of credit and the unbalanced amount of capital sunk in bricks and lawns in modern-day Britain can be traced back partly to this decision, then the new credit boom of the Thatcher years. It is not even mentioned in Heath’s memoirs.

At the same time one of the historic constraints on British governments had gone. In the summer of 1971 President Nixon unilaterally tore up a key part of the post-war financial system by suspending the convertibility of the dollar for gold and allowing exchange rates to float. His problem was the awesome cost of the war in Vietnam (though it would cost only 60 per cent in real terms of the later post-September 11 conflicts in Afghanistan and Iraq), combined with rising commodity prices. The effect on Britain was that the government and Bank of England no longer had to be quite so obsessed by sterling reserves, though this remained a problem until 1977. But it opened up new questions, about how far down sterling could go and how industrialists could be expected to plan ahead.43 Heath’s instincts on state control were quickly tested when the most valuable parts of Rolls-Royce faced bankruptcy over the cost of developing new aircraft engines. Heath briskly nationalized the company, saving 80,000 jobs and allowed it to regroup and survive, to the relief of the defence industry. Rolls-Royce duly did revive and returned to the private sector, making this a clear case of one nationalization that with hindsight clearly ‘worked’.

Into Europe, with the Peasants

We have seen how deeply the cause of Europe had marked Heath, and how hard he had struggled as a negotiator in the early sixties in the face of President de Gaulle’s ‘Non’. He had done the time, served in the tobacco-smoked rooms, haggled over the detail. As a keen European he knew his French partners better than any other senior British politician. Long before winning power as Prime Minister, he had identified Georges Pompidou who replaced de Gaulle as President as his likely interlocutor. At a meeting at Chequers, Heath later revealed, Pompidou had told him, in French, ‘If you ever want to know what my policy is, don’t bother to call me on the telephone. I do not speak English, and your French is awful. Just remember that I am a peasant, and my policy will always be to support the peasants.’⁴⁴

This was fair warning about the vast expense of the Common Agricultural Policy but it was not a true reflection of Pompidou’s wider vision. In fact, he wanted a Europe of large manufacturing companies able to take on the United States and the Far East. By 1970, after a decade during which Britain had grown much more slowly than the Six members of the Common Market, Heath was in some ways in a weaker position than Macmillan had been. On the other hand, Heath had some advantages. He was trusted as a serious negotiator. Britain’s very weakness persuaded Paris that this time, ‘les rosbifs’ were genuinely determined to join. Pompidou also thought the time was right. A ‘Oui’ would get him out of the great dead general’s shadow. France like the rest of the Community had for years been struggling to understand what Britain really wanted. This had been particularly difficult in the Wilson years, when the British left had been riven by the issue.

Heath had only promised to negotiate, not to join. His enthusiasm, however, was in total contrast to Wilson’s wiggling. The best historian of Britain’s relations with the rest of the EU described the difference between the two: ‘It probably mattered quite a lot to the direction of later events that in early September 1939, as Ted Heath was making it back to Britain from Poland by the skin of his teeth before war was declared, Harold Wilson was motoring to Dundee to deliver an academic paper on exports and the trade cycle, and that later, while Heath was training to run an anti-aircraft battery, Wilson became a potato controller at the Ministry of Food.’45 Yet opinion polls suggested that Heath’s grand vision was alien to most British people and that the former potato controller’s warnings about prices had much more effect.

With Heath in power, over eighteen months of haggling in London, Paris and Brussels, a deal was thrashed out. It infuriated Britain’s fishermen, who would lose most of their traditional grounds to open European competition, particularly from French and Spanish trawlers. It was a second-best deal on the budget which would later be reopened by Margaret Thatcher. Above all it left intact the previous Common Market designed for the convenience of French farmers and Brussels-based bureaucrats, not for Britain. Vast slews of European law had to be swallowed whole, much of it objectionable to the British negotiators. Only at the very margins, dealing with New Zealand butter, for instance, did the Six make concessions – and the Commonwealth farmers’ deal was won at the expense of a worse agreement on the budget. The truth was that the British negotiators had decided it was essential to the country’s future to get in at any price. At a press conference at the Élysée Palace in Paris in 1971, Heath and Pompidou, after a long private afternoon of talks between just the two of them, language notwithstanding, revealed to general surprise that so far as France was concerned, Britain could now join the Community. Heath was particularly delighted to have triumphed over the media, who had expected another ‘Non’.

Now there would have to be a national debate about the terms of entry and a vote in Parliament. But in Opposition, Wilson was playing true to form. When Heath began negotiations, as we have seen, Wilson was a publicly declared supporter of British membership. But the tactical Wilson soon displaced the statesman. As British accession loomed, he cavilled and sniped. As ever, he was looking over his shoulder. Jim Callaghan, a potential successor, was campaigning openly against Europe, partly on the grounds that a French-speaking institution threatened the language of Chaucer, Shakespeare and Dickens. The left was in full cry. A special Labour conference in July 1971 confirmed how anti-EEC the party had become, voting by a majority of five to one against. Labour MPs were also hostile by a majority of two to one. Wilson now announced that he would oppose British membership on the Heath terms. He was not against in principle, he insisted, just here-and-now. After the long and tortuous journey this disgusted the Labour pro-Europeans. It did not much enthuse the Labour anti-Marketeers, who simply did not believe Wilson’s apparent change of heart and assumed he would sign up if he returned to Number Ten. So even Wilson’s great cause, Labour unity, was lost.

When the Heath proposals for membership were put to the Commons sixty-nine Labour pro-Europeans defied the party and voted with the Conservatives. They were led by Roy Jenkins, though to his later embarrassment he did not continue voting against his party on every detail. The left, led by Barbara Castle, Michael Foot and Benn, were livid with the rebels. A divide which would eventually lead to the breakaway SDP was just beginning to be visible. For the Labour conference majority, staying out was a matter of principle. For the sixty-nine, going in was a matter of principle. Forms of words, pious evasions and bluster might patch over the cracks in opposition but this quite clearly had the potential to destroy Labour should it return to power. Caught between the moral self-belief of the Castles and Benns, and the steely self-certainty of Jenkins, Wilson protested to the shadow cabinet that ‘I’ve been wading in shit for three months so others can indulge their conscience’ and threatened to quit as party leader: ‘They can stuff it as far as I’m concerned.’ It was only a tantrum but as he struggled to hold things together, the left-wing New Statesman delivered a withering verdict on ‘the principal apostle of cynicism, the unwitting evangelist of disillusion . . . Mr Wilson has now sunk to a position where his very presence in Labour’s leadership pollutes the atmosphere of politics.’46

After winning his Commons vote on British membership of the Community, Heath went quietly to Downing Street to play Bach on the piano in a mood of triumph. For the Labour party it had been a dreadful night, with screaming matches in the voting lobbies and ghastly personal confrontations between the sixty-nine rebels and the rest.

The hero of the hour turned out to be Tony Benn, then haring leftwards at a keen lollop. ‘Tony immatures with age,’ said Wilson but on this issue he proved a lot shrewder than the Labour leader. Benn began to argue that on a decision of such importance the people should vote, in a referendum. His constituency was in Bristol, whence the great eighteenth-century MP and writer, Edmund Burke, had sent a letter to his electors explaining that he owed them his judgement, not his slavish obedience to their opinions. In a reversal of the argument, the other Bristol MP argued instead that a democracy which denied its people the right to choose a matter of such importance directly would lose all respect. To begin with Benn had almost no support for this radical thought. Labour traditionalists despised referendums as fascist devices, continental jiggery-pokery not to be thought of in a parliamentary democracy. Though at this stage Benn was ambivalent about the Common Market, pro-Europeans also feared this was the first move towards committing Labour to pulling out.

Harold Wilson had committed himself publicly and repeatedly against a referendum. Slowly and painfully, however, he came to realize that opposing Heath’s deal but promising to renegotiate, while offering a referendum could be the way out. This could be sold to the anti-Marketeers as a swerve against Europe but the pro-Marketeers would realize he was not actually committed to withdraw. And the referendum promise would gain some political high-ground. He would ‘trust the people’ even if the people were, according to the polls, already fairly bored and hostile. When Pompidou suddenly announced that France would have a referendum, Wilson snatched at the Benn plan. It was an important moment. The referendum would make the attitude of the whole country clear, at least for the seventies. It was to be a device used again by politicians faced with particularly important or tricky constitutional choices.

A Dream Disintegrates

On the afternoon of May Day 1971 John Evans, the manager of the hugely popular Kensington boutique Biba, walked nervously downstairs into the basement. There had been a series of outlandish phone warnings about some kind of bomb, which to start with had simply been ignored by the girl on the till. Outside on the street were some 500 women and children who had by now been hurriedly evacuated. When Evans pushed open the door of the stock-room, there was an almighty bang, a flash of flame and a billow of smoke. The Angry Brigade, middle Britain’s very own terror group, had struck again. In their communiqué explaining the attack, they misquoted Bob Dylan – ‘if you’re not busy being born, you’re busy buying’ – and went on: ‘All the sales girls in all the flash boutiques are made to dress the same and have the same make-up . . . Life is so boring there’s nothing to do except spend all our wages on the latest skirt, or shirt. Brothers and Sisters, what are your real desires? Sit in the drugstore, look distant, empty, bored, drinking some tasteless coffee? . . . The only thing you can do with modern slavehouses – called boutiques – is WRECK THEM.’47 What they did not seem to realize was that its customers found Biba not oppressive but liberating.

There are hundreds of dates and events you could pick to date the end of the sixties dream, but the Biba bombing has a piquancy all of its own. Two of the main forces behind the flowering of youth culture were at war. On the one side is the fantasy of revolution, anarchist or Leninist according to taste, the world of Che Guevara on the wall and obscure leftist handbooks by the bed promising a world in which Starbucks would never have got started. On the other side is the fantasy of benign, hippy business as part of the consumer culture, the world of eyeliner, cool clothes and gentle people making money. The two organizations, Biba and the Angries, sum up much of the underlying argument of sixties youth culture.

The small group of university dropouts who made up the grandly titled Angry Brigade would go to prison for ten years after 123 attacks and are little remembered now. But they were the nearest Britain came to an anarchist threat. They took their philosophy from two counter-culture theorists, the Frenchman Guy Debord and the Belgian poet and teacher, Raoul Vaneigem, who argued that capitalism and Soviet Communism were equally repressive. All organizations were eventually taken over by capitalism which turned everything into a commodity for sale. Even attacks on capitalism could be marketed and sold – witness all those commercially produced Che Guevara badges and posters of Mao. Debord in particular extended his attack from old-style Communists, Western politics, the media and other familiar targets, to the drug-taking hippy culture, modern architecture, even tourism. Once people had so many things they were bored of simply possessing, then capitalism would sell them experiences too, such as foreign travel and nostalgia.

So the ‘Situationists’, as they called themselves, resolved to attack targets such as shopping centres, museums, and the media, where ‘scandalous activity’ might provoke repression, and therefore help the scales to drop from people’s eyes. They staged a little revolution at Strasbourg University, where they took control of the student union and mocked their contemporaries for merely pretending to be radical, while actually being seduced by ‘clothes, discs, scooters, transistors, purple hearts’, proving them to be merely conventional consumers. It was a shrewd assessment of what would happen to most radical students.

Debord himself was almost a caricature French intellectual. He was disdainful of Anglo-Saxon culture, committed to fine food, drink, free love and philosophical conversation. His work had been badly translated and spread among students in Britain. At Croydon Art School it had influenced a group calling itself King Mob (after graffiti used by the mob in a London riot in 1790). A belief in anarchy and disorder was spread by this and other groups in magazines and handbills whose scrawled writing and cut-out letters look remarkably like the punk fanzines of the seventies. This is not coincidental. Among the British admirers of the ‘Situationists’ was the young art student Malcolm McLaren, later the creator of the Sex Pistols. Notes for a film he wrote in 1971, insisting ‘the middle classes invented the commodity. It defines our ambitious, our aspirations, our quality of life. Its effects are repression – loneliness – boredom’ could have come from an Angry Brigade communiqué of the same time.48 When McLaren and Vivienne Westwood opened their clothes-to-shock shop in Kings Road, they were producing just the rebel imagery dreamed of by political rebels a few years earlier. Punk in England in the seventies had roots in what happened in Paris in 1968.

Nothing might have followed Debord’s calls to revolution in London, had it not been for another European influence, this time dating back to the Spanish Civil War. Anarchists who continued small-scale guerrilla attacks on the Franco regime had developed the key techniques which would later be copied by terrorist groups from the IRA to the Baader Meinhoff group, indeed to al Qaeda – the use of a cell structure to make the group harder to break, and public communiqués, issued to the mainstream media with code-words, to explain their actions. They were a little more serious.

From 1966 the First of May group was carrying out machine-gun attacks and small-scale bombings across Western Europe. Within a few years they were in contact with British admirers, in particular former students from Cambridge and Essex Universities. At Essex, a new and bleak place then, Anna Mendelson, from a girls’ high school in Stockport, and Hilary Creek, from a private school in Bristol, had been eagerly watching the 1968 revolt. So over at Cambridge had John Barker, from the posh Haberdashers’ Aske’s School, a journalist’s son, and Jim Greenfield, a lorry driver’s son from Widnes in Cheshire, studying medicine. They had studied the ‘Situationists’ and joined the ‘Kim Philby Dining Club’ in honour of the University’s most famous traitor. All of them committed radicals, they got to know each other through communes and the squatting movement in London, then threw themselves into the Claimants Union, an organization set up to try to extract maximum welfare payments for as many people as possible – and successful enough to have eighty branches across the UK by 1971. Through a young Scottish anarchist called Stuart Christie, who had spent three years in a Spanish prison for his part in a bungled plot to blow up General Franco, the university quartet – a strikingly handsome group – made contact with the First of May group. With others, including a petty criminal and heroin addict called Jake Prescott and a Vietnam Solidarity Campaign activist called Ian Purdie, they began to make and use bombs.

As well as Biba their targets included the Miss World contest at the Albert Hall, a Spanish airline plane at Heathrow, the Commissioner of the Metropolitan Police, Sir John Waldron, the site of the new Paddington Green police station (where IRA and al Qaeda suspects would later be held), the police computer, a Territorial Army centre in Holloway, the home of the chairman of Ford in Britain, a Rolls-Royce showroom in Paris, and two Conservative cabinet ministers – the trade minister, John Davies, and the employment secretary, Robert Carr, who was struggling to get Heath’s trade union legislation through Parliament, and whose white stuccoed home was hit by two bombs, one at the front door and one at the back. In all these attacks, no one was actually killed and just one person, a bystander, was hurt. The Angry Brigade issued regular communiqués under names from films such as Butch Cassidy and the Sundance Kid or The Wild Bunch and announced that their targets had been selected for execution. They would take on ‘High Pigs, Judges, Embassies, Spectacles, Property’ they said, and attack ‘the shoddy alienating culture pushed out by TV films and magazines . . . the ugly sterility of urban life’. After nine months the Angry Brigade were picked up by the police after a trip to Paris to collect gelignite. Raiding their squats, guns and bomb-making equipment were discovered and all the key players were given long prison sentences. The judge blamed their actions on ‘a warped misunderstanding of sociology’ and the English revolution was again postponed for lack of interest. The violent fringe of protest would continue, but always over secondary issues, such as Scottish and Welsh nationalism and the Irish ‘troubles’.

Though in many ways the Angry Brigade were a non-event they represent the only direct confrontation between revolutionary protest, supposed to be one of the key ingredients of the sixties, and the evolving economy of pleasure which was the sixties’ real story. Other left-wing groups, mainly Trotskyists, would argue with each other and march, protest and publish about employment and foreign affairs. Revolutionary protest was only felt in its full force in Ireland.

Bloody Sunday

Heath had worked closely with the Taoiseach (Prime Minister of the Irish Republic), Jack Lynch, and the new Stormont leader, Brian Faulkner, who, as a middle-class businessman by origin, was more in Heath’s image than the Old Etonian landowner, Chichester-Clark, had been. Eventually he had even managed to get the leaders of the Republic and Northern Ireland to sit and negotiate at the same table, something that had not happened since Partition in 1920. A measure of the intricate diplomacy required was that Heath served a bottle of Paddys whiskey, from the Republic, at Lynch’s end of the table, and Bushmills, made in Ulster, at Faulkner’s, with a bottle of Scotch between them, and considered it a significant sign when they both opted for Scotch. Chichester-Clark had simply demanded more and more troops, more and more repression, but Faulkner was open to a political solution. Inside Downing Street, three options were being studied. Northern Ireland could be carved into smaller, more intensely Protestant areas, with the rest surrendered to the Republic, thus effectively getting rid of many Catholics. Or it could be ruled by a power-sharing executive, giving Catholics a role in government. Or, finally, it could be governed jointly by Dublin and London, with its citizens having joint citizenship.

Though Heath rejected the first option because it would be crude and leave too many people on the wrong side of borders and the last one, because the Unionists would refuse it, his second option would be followed by the British governments that followed him. A fourth option, advocated by Enoch Powell who continued his political odyssey by becoming an Ulster Unionist MP, was that the UK should fully incorporate Northern Ireland into British structures and treat it like Kent or Lincolnshire, but this was never taken seriously by Heath. His readiness to discuss other radical solutions gives the lie to the idea that London was pig-headed or unimaginative. But before he had a chance to open serious talks, the collapsing security situation had to be dealt with.

Now politics shrivelled.

If there was one moment when the ‘troubles’ became unstoppable it was 30 January 1972, ‘Bloody Sunday’, when troops from the Parachute Regiment killed thirteen unarmed civilians in Londonderry. Ordered in from Belfast to put a stop to stone-throwing Bogside demonstrators, they erupted into the Catholic ghetto and began firing, as it turned out, at unarmed people, many of them teenagers. Some were killed with shots to the back, clearly running away. It was the climax of weeks of escalation. Reluctantly, Heath had introduced internment for suspected terrorists. Reprisals against informers and anti-British feeling meant that the normal process of law was entirely ineffective against the growing IRA threat so, despite the damage it would do to relations with other European countries and the United States, he authorized the arrest and imprisonment in Long Kesh of 337 IRA suspects. In dawn raids, 3,000 troops had found three-quarters of the people they were looking for. Many were old or inactive. Many of the real Provo leaders escaped south of the border. Protests came in from around the world. There was an immediate upsurge in violence, with twenty-one people being killed in three days. The bombings and shootings simply increased in intensity. In the first eight weeks of 1972, forty-nine people were killed and more than 250 seriously injured.

This was the background to the events of ‘Bloody Sunday’ which, despite endless continuing inquiries and arguments, remains disputed territory. Who shot first? How involved were the IRA in provoking the confrontation? Why did the peaceful march split and stone-throwing begin? Why did the paratroopers suddenly appear to lose control? Whatever the answers, this was an appalling day when Britain’s reputation was damaged around the world. In Dublin, ministers reacted with fury and the British embassy was burned to the ground. ‘Bloody Sunday’ made it far easier for the IRA to raise funds abroad, particularly in the United States. The Provos hit back with a bomb attack on the Parachute Regiment’s Aldershot headquarters, killing seven people there – none of them soldiers. The violence led to yet more violence and by degrees to the imposition of direct rule by London and the no-jury Diplock Courts. In July 1973, twenty bombs went off in Belfast, killing eleven people. Mainland Britain became a key Provo target. In October the following year, five people were killed and sixty injured in attacks on Guildford pubs and in December, twenty-one people were killed in pubs in Birmingham city centre.

Assassinations would follow, of Tory MPs such as Airey Neave, Mrs Thatcher’s close adviser, and Ian Gow, her popular former parliamentary private secretary. Vocal opponents of the IRA such as Ross McWhirter, would be gunned down and in 1975 a couple in London’s Marylebone were taken hostage by an IRA gang in the Balcombe Street Siege. Later IRA ‘spectaculars’ included the murder of Lord Mountbatten of Burma when boating with his family in Sligo in 1979, and culminated in the attempted assassination of Mrs Thatcher and her cabinet in Brighton in 1984. The ‘troubles’ in Northern Ireland itself would see endless tit-for-tat car bombings and shootings, routine murder, torture and knee-capping of suspected informers and a quiet steady migration of ambitious people from the province. The security services would break the law in their desperate search for suspected terrorists. ‘Dirty protests’, involving the smearing of excrement on cell walls and fatal hunger strikes, would be used by republican prisoners in their war against the British State. Within a few years, what had been essentially a policing role by the British Army, separating Protestant bigots from rebellious Catholics, had become a full-scale terrorist or counter-insurgency war with all the paranoia, the kidnappings, the apparatus of repression and the corruption of political life that it brings.

In his last attempt to avert what was coming, Heath believed he needed to persuade Dublin to drop its longstanding constitutional claim to the North, and to persuade mainstream Unionists to work with Catholic politicians. He failed, but not through want of trying. His first Secretary of State for Northern Ireland, a new job made necessary by direct rule, was the bluff, amiable Willie Whitelaw. He met Provisional IRA leaders, including Gerry Adams, for face-to-face talks, a desperate gamble which, however, led nowhere: there was no compromise yet available. So, ignoring the IRA, the Sunningdale Agreement proposed a power-sharing executive, with six Unionists, four SDLP members and one from the non-sectarian Alliance Party. There would also be a Council of Ireland, bringing together politicians from Dublin and from the North, with authority over a limited range of issues, in return for Dublin renouncing authority over Northern Ireland. It was an ingenious multi-sided deal not so different in essence from what was later proposed by John Major and Tony Blair in the nineties. But too many Unionists were implacably opposed to it, and the moderates were routed at the first 1974 election. Meanwhile, in the Republic, its leader’s renunciation of the territorial claim to the North was declared unconstitutional and illegal. Heath concluded, with understandable bitterness: ‘Ultimately it was the people of Northern Ireland themselves who threw away the best chance of peace in the blood-stained history of the six counties.’

Authority Undermined

Then the miners struck. At the beginning of 1972 the National Union of Mineworkers began their first national strike since the dark days of the twenties, pursuing a pay demand of 45 per cent. The government, with modest coal stocks, was quickly taken by surprise at the discipline and aggression of the strikers. A young unknown militant, a miner from Woolley colliery, organized some 15,000 of his comrades from across South Yorkshire in a mass picket of the Saltley coke depot, on which Birmingham depended for much of its fuel. Arthur Scargill, a rousing speaker, former Communist Party member and highly ambitious union activist, later described the confrontation with Midlands police at Saltley as ‘the greatest day of my life’. Soon he would be catapulted up as agent, then president of the Yorkshire miners. Heath blamed the police for being too soft. Scargill’s greatest day was, for the Prime Minister, ‘the most vivid, direct and terrifying challenge to the rule of law that I could ever recall emerging from within our own country . . . We were facing civil disorder on a massive scale.’ It was clear to Heath that the intention was to bring down the elected government but he decided he could not counter-attack immediately. Confronted with ‘the prospect of the country becoming ungovernable, or having to use the armed forces to restore order, which public opinion would never have tolerated’, Heath turned to a judge, Lord Wilberforce, for an independent inquiry into miners’ wages. From his point of view, it was a terrible mistake. Wilberforce said they should get well over 20 per cent, nearly 50 per cent higher than the average increase. The NUM settled for that, plus extra benefits, in one of the most clear-cut and overwhelming victories over a government that any British trade union has ever enjoyed.

Heath and his ministers knew that they might have to go directly to the country with an appeal about who was in charge but before that, they tried a final round of compromise and negotiation. Triggered by the prospect of unemployment hitting one million, there now follows the famous U-turn which afterwards so scarred Heath’s reputation. It went by the ungainly name of ‘tripartism’, a three-way national agreement on prices and wages, investment and benefits, involving the government, the TUC and the CBI. The Industry Act of 1972 gave a Tory government unprecedented powers of industrial intervention, gleefully cheered by Tony Benn as ‘spadework for socialism’.49 There was much earnest wooing of moderate trade union leaders. Money, effort and organization went into Job Centres as unemployment rose steadily towards a million. The industrialists did as much as they could, sitting on yet more committees when in truth they might have been more usefully employed trying to run their companies. The unions, however, had the bit between their teeth. By first refusing to acknowledge Heath’s industrial relations court ‘as really legitimately a law of the land’ and then refusing to negotiate seriously until he repealed the Act, they made the breakdown of this last attempt at consensual economics inevitable. Within a year the CBI too would be calling for it to be scrapped.

By now Heath had leaned so far to try to win the unions over that he was behaving like a Wilson-era socialist. He was reinstating planning, particularly regional planning. He was bailing out failing companies such as Upper Clyde Shipbuilders, partly because of the work-in discussed elsewhere – something Heath later believed was a mistake. He was offering the unions a privileged place in the running of the nation. From his perspective this was a last attempt to run the economy as a joint enterprise of British patriots, in which individual roles – trade union leader, company director, party politician – took second place behind a general belief in the common good, the wider politics of ‘Buy British’. Individuals followed the logic of their own interests instead. Trade union leaders had got their jobs by promising their members higher wages and better conditions. They could hardly be blamed for doing everything they could within the law to carry out the role they had been given. Industrialists, similarly, would live or die by profit margin and return to investors. They were not auxiliary politicians. Thatcherites later criticized Heath’s government for doing things which a government ought not to do, and not doing things it ought to. Governments should not try to run businesses, or do the wage bargaining of trade union officials and companies for them. They should not tell factories where to go. They should not attempt to control prices.

All these things, said Tories of ten years later, were better left to the market. What government should do instead was set tough and clear rules by which the other forces in society had to live. Government should ensure low inflation by controlling the supply of money. It should enforce strong laws against intimidation or law-breaking at work. It should allow firms that fail to suffer the consequences. Overall, the Thatcher critique has been applauded, not simply in Britain but around the world, and Heath’s tripartism, or ‘corporatism’ has been derided and forgotten. Yet he started with an almost identical view to her later one. He had been an enthusiast for letting the market decide prices. He promised not to let lame ducks survive. At the time, Thatcher was his fervent supporter and even her outrider Sir Keith Joseph only converted to a full free-market philosophy in the middle of the seventies, after the fall of the Heath government in which he had been a notably high-spending minister. The argument between the two sides of the Conservative Party was not one between toffs and the hard-nosed middle classes, or ‘ordinary people’, as many Thatcherites would later claim. Heath was no toff and his nose, though famously Concorde-large, was as hard as any.

Heath was blown off course by a political version of the impossible storm that later wrecked his beloved yacht Morning Cloud. Much of the country was simply more left-wing than it was later. The unions, having defeated Wilson and Castle, were more self-confident than ever before or since. Many industrial workers, living in still-bleak towns far away from the glossy pop world of the big cities, did seem underpaid and left behind. After the Macmillan, Douglas-Home and Wilson experiences, politicians did not have the automatic level of respect that they had enjoyed when Heath had first entered the Commons. Heath always argued that he was forced to try consensus politics because in the seventies the alternative policy, the squeeze of mass unemployment which arrived in the Thatcher years, would simply not have been accepted by the country. And given the very rocky ride Mrs Thatcher had a full ten years later, after industrial and some social breakdown had softened the way for her radicalism, he was surely right.

What finally finished off the Heath government was the short war between Israel and Egypt in October 1973, the Yom Kippur War. Israel’s swift and decisive victory was a humiliation for the Arab world and it struck back, using oil. OPEC, the organization of the oil-producing countries dominated by the Saudis, had seen the price of oil rising on world markets for some time. They decided to cut supplies to the West each month until Israel handed back its territorial gains and allowed the Palestinians their own state. There would be a total embargo on Israel’s most passionate supporters, the United States and the Netherlands. And those countries which were allowed oil would pay steadily more for it. In fact, prices rose fourfold. It was a global economic shock, shovelling further inflation into the industrialized world, but in Britain it arrived with special force. The miners put in yet another huge pay claim, which would have added half as much again to many pay-packets. Despite an appeal by its leader, the moderate Joe Gormley, the NUM executive rejected a 13 per cent pay increase and voted to ballot for another national strike. These were the days, just, before North Sea oil and gas were being produced commercially. Britain could survive high oil prices, even shortages, for a while. The country could hold out against a coal strike, for a while. But both together added up to what the Chancellor, Barber, called the greatest economic crisis since the war. It certainly compared to that of 1947. Coal stocks had not been built up in preparation. Now a whole series of panic measures were introduced.

Plans were made for petrol rationing and coupons printed and distributed. The national speed limit was cut by 20 miles per hour to 50 miles per hour to save fuel. Then in January 1974 came the announcement of a three-day working week. Ministers solemnly urged citizens to share baths and brush their teeth in the dark. Television, by now the nation’s sucky-sweet, was ended at 10.30 p.m. each evening. It is remembered as the darkest day (literally) in the story of mid-seventies Britain, and it was an embarrassing time in many ways. Yet it also gave millions an enjoyable frisson, the feeling of taking a holiday from everyday life. The writer Robert Elms recalls that though ‘this proud nation had been reduced to a shabby shambles, somewhere between a strife-torn South American dictatorship and a gloomy Soviet satellite, Bolivia meets Bulgaria, a banana republic with a banana shortage . . . The reality of course is that almost everybody absolutely loved it. They took to the three-day week with glee. They took terrible liberties.’50

Heath and his ministers struggled to try to find a solution to the miners’ claim, though the climate was hardly helped when Mick McGahey, the legendary Scottish Communist mineworkers’ leader, asked by Heath what he really wanted, answered ‘to bring down the government’. Much messing about with intermediaries and many mixed messages, not least from the government’s own Pay Board, ensured that no effective compromise could be found. When the miners voted, 81 per cent were for striking, including those in some of the most traditionally moderate areas in the country. In February 1974 Heath asked the Queen to dissolve Parliament and went to the country on the election platform he had prepared two years earlier: ‘Who governs?’ The country’s answer, perhaps taking the question more literally than Heath had hoped, was ‘Not you, mate.’

Harold Wilson had expected the Tories to win again, and began the campaign in a depressed mood. A year earlier in Opposition he had prepared his own answer to inflation and the unions, the so-called Social Compact, or Social Contract. Agreed jointly between the union leaders and the Labour shadow cabinet, it was essentially a return to the politics of the forties, with price controls, a complex system of food subsidies, direct redistribution of wealth, controls on housing and investment and the end of the Tory union laws. In return for this Attlee-age manifesto from the politicians, the unions gave vague promises of voluntary pay restraint. It was a one-way deal but it was in Wilson’s interests to pretend that he could find practical agreements where Heath could not. It was in the unions’ interests to pretend they were signing up to a new era, if that would help expel the Tories and destroy their legislation. Outside observers saw it more plainly as a recipe for inflation which also offered the TUC a privileged place in government in return for very little.

But what was the alternative? The three-day week was not, it later turned out, quite the economic disaster it seemed. Industry had maintained almost all production – which shows how inefficient five-day working must have been – and relatively few jobs had been lost. But politics is half symbol, and Heath’s authority had gone. In the election campaign a public fed up of chaos and desperately looking for good news clutched at the Social Contract. Wilson was able to appear as the calm bringer of reason and order. This time, he was lucky as well. A slew of bad economic figures arrived during the campaign. Enoch Powell, Heath’s ancient nemesis, suddenly announced that he was quitting the Conservatives over their failure to offer the public a referendum on Europe, and called on everyone to vote Labour. A mistake by the Pay Board suggested that the miners were in fact relatively lower paid than had been recognized. And a surge in Liberal support, which took them from single-figure support to the backing of a quarter of those voting, turned out to help Labour more than the Tories. All this helped produce a late surge in Wilson’s favour. By the end of the campaign he had recovered some his old chirpiness and bounce. Having decided that Heath should not rule, however, the country seemed unsure that Wilson should either. Though Labour had won the most seats, 301 against the Conservatives’ 297, no party had an overall majority. Heath hung on, trying to do a deal with the Liberal leader Jeremy Thorpe, who had 14 MPs, but eventually conceded defeat. Rather fatter, greyer and more personally conservative than he had been ten years earlier, Harold Wilson was back.

So Mick McGahey and friends had brought down the Heath government, with a little help from the oil-toting Saudi Royal Family, the Liberals and Enoch Powell. A more bizarre coalition of interests is hard to imagine. Edward Heath’s three and three-quarter years in Number Ten will be remembered for the three-day week, a rare moment when politics actually shakes everyday life out of its routine; and for taking Britain into Europe. But other important changes happened on his watch, too. The school-leaving age was at last raised to sixteen. To cope with international currency mayhem caused by that Nixon decision to suspend convertibility, the old imperial sterling area finally went in 1972. The Pill was made freely available on the National Health Service. Local government was radically reorganized, with no fewer than 800 English councils disappearing and huge new authorities, much disliked, being created in their place. Heath defended this on the basis that the old Victorian system could not cope with ‘the growth of car ownership and of suburbia, which were undermining the distinction between town and country’. Many others saw it as dreary big-is-better dogma. There was more of that when responsibility for NHS hospitals was taken away from hundreds of local boards and passed to new regional and area health authorities, at the suggestion of a new cult then just emerging – management consultants.

Political cynicism had been provoked in the fifties and sixties by the behaviour of the cliques who ran the country. By the seventies it was driven more by a sense of alienation. To many older Britons these were years of out-of-control change. Much of the loathing of Heath on the right of politics came from British membership of the Common Market which seemed the ultimate emblem of this rage for bigger and untraditional systems. Decimalization was almost as big a change to daily life. Though the original decision had been taken in 1965 during the first Wilson government, the disappearance in 1971 of a coinage going back to Anglo-Saxon times was widely blamed on Heath. Away flew the florins and half-crowns, halfpennies, farthings and sixpences, away went all the intricate triple-column mathematics of pounds, shillings and pence; and in came an unfamiliar if more rational decimal currency. Where would this end? Negotiators in Europe specifically fought to maintain the British pint measures in beer and milk, and the mile continued to keep the kilometre at bay. But in the seventies, the familiar seemed everywhere in retreat.

Wilson

At least Wilson was familiar. His February election victory meant he was governing without a Commons majority. He was trying to do so at a time when the economy was still shaking with the effect of the oil price shock, with inflation raging, unemployment rising and the pound under almost constant pressure. Further, the fragile and implausible Social Contract now had to be tested. Almost the first thing Labour did was to settle with the miners for double what Heath had thought possible. The chances of the new government enjoying easy popularity were nil, though at least an Opposition so internally divided between bruised Conservatives, Liberals, Nationalists and Northern Irish Unionists was unlikely to combine often to defeat it.

The new Chancellor, Denis Healey, introduced an emergency Budget a few weeks after the election, followed by another in the autumn, during which he raised income tax to 83 per cent at the top rate, or 98 per cent for unearned income, a level so eyewateringly high it was used against Labour for a generation to come. In the spirit of the Social Contract Healey also increased help for the poorest, with higher pensions and housing and food subsidies. He was trying to deliver for the unions, as Wilson did in abolishing the Conservative employment legislation. For the time being Heath remained as Tory leader, despite some grumbling from the party. He was convinced that before long Wilson would have to call a second election and his chance for revenge would arrive. In October, however, the second election confirmed the earlier verdict, with Labour gaining eighteen seats and a precarious but quite workable overall majority of three.

The fetid atmosphere of Wilson’s new government was like that of the mid-sixties, only more so. Marcia Williams still had him mesmerized. As one young Number Ten aide recalled, her dramatic and sometimes destructive power ‘was not only exercised through her bewitching domination of the prime minister himself. Once launched against any human obstacle or perceived personal enemy, her frenzied tirades were very impressive and virtually ungovernable.’51 It was alleged that she would swear and curse like a trooper at Wilson, storm out of dinners and meetings, and threaten him with terrible revenge if he crossed her. Some sources claimed that in Opposition, she had locked all his personal papers in a garage and refused to let him see them. Desperate to write his account of the 1964–70 governments, Wilson had been forced to team up with her brother Tony, break into her garage, and steal them back, although only the three of them would know if this were true. Now, she gave him a new problem when a press furore broke about land deals. The brother, a geologist, had bought slag heaps and quarries and then moved into land speculation, falling in with dodgy Midlands businessmen. There was a forged letter purporting to come from Wilson. There was no evidence that Marcia knew of the deal, but the close connections between Marcia and her brother, and the Prime Minister, began a media frenzy which prefigured many of those directed at the Labour ministers of the nineties and early 2000s. Wilson stood by his inner circle while the attacks rose in intensity, eventually making Williams a peeress, Lady Falkender. This was described by one of Wilson’s biographers as ‘a magnificently arrogant gesture, contemptuous of almost everybody’⁵² and the whole experience broke for ever his once-good relations with the press. The old rumours about links with Russian intelligence and affairs resurfaced and the mood of bitterness and paranoia inside Number Ten was as grim as anything in the equally harassed administrations of John Major and Tony Blair.

In another way, however, Wilson had changed. He interfered far less and seemed less worried by the manoeuvrings of his ministers. He wasn’t planning to stay long. There are many separate records of his private comments about retiring at sixty, after another two years in power. If he had not privately decided finally that he would go in 1976, he certainly acted as if he had. The question of who would succeed him, Jenkins or Callaghan, Healey or even Benn, had become one about the direction of the Labour government, rather than a personal threat to Harold Wilson, so there was less rancour around the cabinet table. Wilson was visibly older and more tired. He seems likely to have known about the early stages of Alzheimer’s, which would wreak a devastating toll on him in retirement. He forgot facts, confused issues and repeated himself. For a man whose memory and wit had been so important, this must have been a grim burden. There is therefore no need to assume that dark forces, some nether world of MI5 plotters and right-wing extremists, finally removed him from power with threats of blackmail and dirty tricks.

Wilson himself was as fascinated as ever by Security Service plotting and had Marcia Williams dig out files on Jeremy Thorpe’s lover, Norman Scott, to try to show that he was being framed by the South African secret service, BOSS. At other times he would suggest Israel’s Mossad were after him. In a famous interview given to two BBC reporters, Barry Penrose and Roger Courtiour, after his retirement, he claimed that right-wing officers in the Security Service had been plotting against him. Wilson’s state of mind is vividly evoked by his fantastical language to them: ‘I see myself as the big fat spider in the corner of the room. Sometimes I speak when I’m asleep. You should both listen. Occasionally when we meet I might tell you to go to Charing Cross Road and kick a blind man standing on the corner. That blind man may tell you something, lead you somewhere.’ The Cecil King plot of 1967 and later memoirs by a wild MI5 man show that Wilson’s fears were not completely groundless, but this sounds like the raving of a deluded old man.

The Stairs Were on Fire

If Roy Jenkins had in many ways been the most important minister during the mid-sixties, it was Denis Healey who dominated public perceptions of Labour in the mid-seventies. As a Chancellor of the Exchequer during the worst economic storm of post-war times, through both the Wilson and Callaghan governments, he rivalled each of them as a public icon. His scarlet face, huge eyebrows and rough tongue were endlessly caricatured and mimicked, above all by the TV impressionist Mike Yarwood, who invented ‘you silly billy’ as Healey’s catchphrase, one quickly taken up by the Chancellor himself. Healey was one of the most widely read, cultured, intelligent and self-certain politicians of modern times, whose early Communism, active war service and vast range of international contacts helped mulch and decorate his famous beyond-politics ‘hinterland’. But there was little poetry, relaxation or fun about the job he took up in 1974 and would hold, through near-farcical crises and grim headlines, for the next five years. He described the economy he had inherited from Heath and Barber as ‘like the Augean stables’. Much of his energy would be thrown into dealing with the newly unstable world economy, with floating currencies and inflation-shocked governments. In effect, after the great devaluation argument of the first Wilson administrations, this one was quietly devaluing all the time, as the pound sank against the dollar.

Where were the levers of control? Healey was taxing and cutting as much as he dared but his only real hope was to control inflation by controlling wages. Wilson insisted that an incomes policy must be voluntary. After the torture and defeat of Heath there must be no going back to legal restraints. The unions, under the leadership of men who had risen as shop stewards in the great revolt of the fifties and sixties, the Spanish Civil War veteran Jack Jones, the wily and cynical Hugh Scanlon, and the grammar school boy and ex-Communist Len Murray, became increasingly worried that rampant inflation might destroy Labour and bring back the Tories. So for a while the Social Contract did deliver fewer strikes. From 1974 to 1975, the number of days lost to strikes halved, and then halved again the following year. Contrary to popular myth, the seventies were not all about mass meetings and walk-outs. After Heath had been beaten, the real trouble did not start again until 1978–9. But the other half of the Social Contract was meant to deliver lower wage settlements and that was an utter failure. Despite Labour delivering on its side of the bargain, by the early months of 1975 the going rate for increases was already 30 per cent, a third higher than inflation. By June inflation was up to 23 per cent, and wage settlements even further ahead. The unions suggested a new deal of a cash limit of an extra £6 a week for most workers. The government did introduce an element of compulsion, but targeted employers who offered too much, not workers who demanded too much.

Yet persuading people not to make deals about pay is extremely difficult. It cannot last long in a free society. There will always be special cases, and one special case inspires the next. Healey reckoned two-thirds of his time was spent trying to deal with the inflationary effects of free collective bargaining and the rest with the distortions caused by his own pay policy. As he reflected later: ‘Adopting a pay policy is rather like jumping out of a second-floor window: no one in his senses would do it unless the stairs were on fire. But in postwar Britain the stairs have always been on fire.’53 By refusing to allow companies to pass on inflationary wage increases as higher prices, and by endless haggling with union leaders who were themselves alarmed about the fate of the country, Healey did manage to squeeze inflation downwards. He believed that if the unions had kept their promises it would have been down to single figures by the autumn of 1975.

In all this, Healey was under constant pressure to show that he was delivering for socialism. He could not spend more. So he sent what signals he could by skewing the tax system dramatically against higher earners, concentrating any tax cuts on the worse off. Though notorious for warning that he would make the rich ‘howl with anguish’ and often misquoted as promising to squeeze the rich ‘until the pips squeak’, Healey argued that it was the only way of making the country fairer. He never accepted the Conservative argument that high taxes stopped people working harder and blamed Britain’s poor industrial performance instead on low investment in industry, poor training and bad management. A villain and bogeyman for many in the middle classes, Healey did at least suffer from his own policies: ‘As a result of my tax changes and my determination to prevent ministerial salaries from rising as fast as the pay norm, my own real take-home pay as Chancellor fell to only half what I had been earning as Defence Secretary, although I was working harder and longer.’

Referendum

Wilson carried out his promised renegotiation of Britain’s terms of entry to the EEC and then put the result to the country in the Benn-inspired 1975 referendum. The renegotiation was largely a sham but the referendum was a rare political triumph for that bleak decade in the story of Westminster. On the continent, the reopened talks were understood to be more for Wilson’s benefit than anything else. Helmut Schmidt, the new German Chancellor, who travelled to London to help win round the Labour conference, regarded it all as a successful cosmetic operation. Wilson had needed to persuade people he was putting a different deal to the country than the one Heath had won. This he was able to do, though, when the referendum actually arrived, Wilson’s old evasiveness returned and he mumbled vaguely in support, rather than actively or enthusiastically making the European case.

There were plenty of others to do it for him. To preserve longer-term party unity, he had allowed anti-Brussels cabinet ministers to speak from the ‘No’ platform and Barbara Castle, Benn, Peter Shore and Michael Foot were among those who did so, in alliance with Enoch Powell, the Reverend Ian Paisley, the Scottish Nationalists and others. But the ‘Yes’ campaign could boast most of the Labour cabinet, with Roy Jenkins at the front, plus most of the Heath team, and the popular Liberal leader Jeremy Thorpe. It seemed to many people a fight between wild-eyed ranters, the outlandish and the discontented, on the one hand and sound chaps on the other hand, men and women with that curious but apparently essential British quality ‘bottom’. More important, perhaps, was the bias of business and the press. A CBI survey of company chairmen found that out of 419 interviewed, just four were in favour of leaving the Community.54 Almost all the newspapers were in favour of staying in, including the Daily Mail, Daily Telegraph and Daily Express. So was every Anglican bishop.

A fight between the Establishment and its critics was funded accordingly. Britain in Europe, leading the ‘Yes’ campaign, outspent the ‘No’ camp by more than ten to one. In this grossly unequal struggle, both sides used scare stories. Britain in Europe constantly warned of a huge loss of jobs if the country left the Community. The ‘No’ camp warned of huge rises in food prices. Yet this was also an almost carnival-like participatory argument of a kind post-war Britain has rarely known. There were meetings, several thousand strong, night after night around the country – proper meetings with hecklers and humour. Despite miserable weather, including a showering of June snow, there were stunts of all kinds and the country seemed covered with posters. The spectacle of politicians from rival parties who normally attacked one another sitting down together agreeing was a tonic to those watching.

There were good television arguments, notably between Jenkins and Benn. And on the Labour side there were awkward moments when rhetoric got too fierce, and Wilson had to intervene to rebuke warring ministers. Even Margaret Thatcher was out campaigning, for Brussels of course, in a spectacularly hideous jumper with the flags of the member states knitted across her breasts. In the end, to the simple question, ‘Do you think that the United Kingdom should stay in the European Community (The Common Market)?’, 68.3 per cent, or around 17 million people, said ‘Yes’ and 32.8 per cent, some 8.5 million, said ‘No’. Only Shetland and the Western Isles of Scotland voted ‘No’. Symbolically, Jenkins thought, the sun came out and there followed a baking, almost cloudless few weeks. Benn instantly conceded full defeat though privately considered the vote ‘some achievement considering we had absolutely no real organisation, no newspapers, nothing’. Powell, however, warned that the decision was only ‘provisional’ and might be reopened in the future. As so often, his was a lone voice.

More than thirty years later, the biggest question both about Heath’s triumph in engineering British membership and then about the Labour referendum, is whether the British were told the full story and truly understood the supranational organization they were signing up to. Ever since, many of those among the 8.5 million who voted against, and younger people who share their view, have suggested that Heath and Jenkins and the rest lied to the country, at least by omission. Had it been properly explained that Europe’s law and institutions would sit above the ancient Westminster Parliament, it is said, they would never have agreed. What is the truth? The Britain in Europe campaigners can point to speeches and advertisements which directly mention loss of sovereignty. One of the latter read: ‘Forty million people died in two European wars this century. Better lose a little national sovereignty than a son or a daughter.’ Yet both in Parliament and in the referendum campaign, the full consequences for national independence were mumbled, not spoken clearly enough. Geoffrey Howe, as he then was, who drafted Heath’s European Communities Bill, later admitted that it could have been more explicit about lost sovereignty. Heath talked directly about the ‘ever closer union’ of the peoples of Europe but was never precise about the effect on British law, as compared, say, to Lord Denning who said the European treaty could be compared to ‘an incoming tide. It flows into the estuaries and rivers. It cannot be held back.’ Hugo Young, the journalist and historian who studied the campaign in great detail, wrote: ‘I traced no major document or speech that said in plain terms that national sovereignty would be lost, still less one that categorically promoted the European Community for its single most striking characteristic: that it was an institution positively designed to curb the full independence of the nation-state.’

There were, of course, the explicit warnings about lost sovereignty delivered by the ‘No’ campaigners among the more populist arguments about food prices. They came above all from Enoch Powell, Michael Foot and Tony Benn. Powell’s language can be gauged from a speech he gave to political journalists in the Commons while the Bill was being debated. He lamented that the Commons was ‘perishing by its own hand. Week by week, month by month, the House of Commons votes to divest itself of what it had gained through a length of time not much shorter than the history of England itself.’55 Foot, though recovering from an operation and so partly out of action, wrote in The Times that the British parliamentary system had been made farcical and unworkable. Historians, he said, would be amazed ‘that the British people were urged at such a time to tamper irreparably with their most precious institution; to see it circumscribed and contorted and elbowed off the centre of the stage.’⁵⁶ Benn, confiding to his diary his reaction on the possibility of a Europe-wide passport, showed how much the left’s instincts could chime with those of the right-wing opponents of European change: ‘That really hit me in the guts . . . Like metrication and decimalisation, this really strikes at our national identity.’ All these arguments were made in the press, despite its overall bias, and repeatedly in public meetings and broadcast debates.

So it was not as if people were not told. The truth revealed by opinion polls is that sovereignty as an issue did not concern the public nearly as much as jobs and food prices. By later standards the position of Parliament was not taken terribly seriously in public debates. It may be that sovereignty is always of absorbing interest to a minority – the more history-minded, politically aware – and of less interest to the rest, except when a loss of sovereignty directly affects daily life and produces resented laws. In the seventies, Britain’s political class was not highly respected, and Europe seemed to offer a glossier, richer future. Though the pro-Community majority in business and politics did not strive to ram home the huge implications of membership, they did not deceitfully hide the political nature of what was happening, either. It was just that, when the referendum was held, people cared less. The argument would return, screaming, demanding to be heard, fifteen years later.

Power Ages

As to the rest of Wilson’s short final government, much of his energy was spent on foreign affairs. Despite American disapproval the Labour government began the final withdrawal from east of Suez, giving up any pretensions of British influence in the Far East. The Empire was formally over. A scattering of individual outposts and impoverished islands too weak to enjoy independence were all that was left, a few last governors in places like Hong Kong and Bermuda. In the Middle East, British pens in British fingers had drawn many of the lines on the map – Transjordan, the new state of Israel, Iraq – and all that uncertainty went. It went after guerrilla war and partition among the lemon groves of Cyprus, after gruesome murders of British soldiers in the Holy Land, a nasty little colonial war in Aden which left behind a Marxist and Soviet satellite. It left an unstable and unpopular king in Iraq, soon overthrown by military coup, leading to the regime of Saddam Hussein. In Iran, the British-backed Shah was many years later overturned by Ayatollah Khomeni’s Islamic revolution. The decades that followed have been awful ones for the region, marked by major and minor wars, the regular use of torture, assassination, repression, censorship and suicide bombings. The Middle East, rich in oil and history, has become the world’s most dangerous zone; and many of the decisions that made it so dangerous originated in Europe, including London, as well as in Washington.

There remained that strange half-life empire called the British Commonwealth, an illogical world-straddling organization that embraced republics such as India, despotisms and democracies, slavish admirers of Britain and frank opponents of London, as well as all the former white dominions which retained their loyalty to the Crown. The Commonwealth was not a coherent policy-setting organization, particularly after Britain decided to join the European Economic Community. Her members often had diametrically opposed trading interests. When it came to defence, some were firmly non-aligned, even at times leaning to Moscow or Beijing, while others such as the Australians looked increasingly to the United States not Britain. Time and again, on issues such as apartheid South Africa, or Rhodesia, or the misbehaviour of newly independent rulers, or questions of migration, the Commonwealth would fracture, or embarrass London. Lacking an army, trade agreements or common views, it seemed to many a pointless organization, fit for nothing more than acrimonious summits and regular athletic Games which functioned as a low-rent version of the real ones, the Olympics. Was it kept going merely out of sentimentality or to give the Queen something to do? At least it has done no harm and kept different parts of the world in contact. Outside football, it is also the last English-speaking worldwide organization not dominated by the Americans.

Wilson spent much of his domestic energy on resisting the attempt by Tony Benn (by now his bugbear) to introduce a socialist economy via the National Enterprise Board. Benn hoped that this would be a generously funded body which would take over a large range of companies, successful and unsuccessful, bringing state ownership and direction into the heart of the economy. Wilson, by now clearly to the right of his party, was equally determined that this should not happen. He had his way. When it eventually arrived, the NEB was a weak, ill-funded repository for lost causes, British Leyland in particular. Benn’s enthusiasm for workers’ control continued to amuse and infuriate most of the other ministers and civil servants he worked with and he confided in his diary that he felt as if he was ‘trying to swim up the Niagara Falls’. He was particularly keen about cooperatives and took up the cause of the Meriden motorcycle factory, struggling to survive under workers’ control. He was much excited by what he took to be its Chinese Communist atmosphere: ‘I described our industrial policy, and then they sang “For he’s a jolly good fellow” which was very touching.’

It wasn’t only Wilson who thought Benn’s socialist affection for cooperatives and nationalization was out of time. Jack Jones pinned him down over lunch at the Westminster restaurant Locket’s to warn: ‘Nationalization is no good. People don’t want it. Management in nationalized industries is very bad.’ Benn explained that he wanted to take over other firms, including the Scottish Daily News and challenged Jones about British Leyland itself. The fiery trade unionist, to Benn’s astonishment, suggested selling it off to General Motors. The final phase of nationalization produced little except heartache, though the struggling Chrysler car factory at Linwood in Scotland was kept going for a while. These were truly the last days for planning and public control, which had been so widespread immediately after the war. We should see Benn as a traditionalist in this, as much as a radical. Later Healey would brutally sum up his contribution as a minister to British industry. There were only two monuments to Benn in power, he said: a uranium mine in Namibia he had authorized as energy secretary, which helped support apartheid; and Concorde, used by rich people on expense accounts and subsidized by poorer taxpayers. The only planning agreement actually existing when he left office was the old Farm Price Review ‘chaired in my time by the Duke of Northumberland’.

Monuments for this last Wilson government were few. One was the radical refashioning of the failing pensions system by Barbara Castle and her team, with the State Earnings Related Pension, or Serps, which linked pension to rises in earnings or prices, whichever was higher. It was notably generous, particularly to women whose pension rights had been whittled away by years of caring for children or elderly relatives, and in allowing people to claim a pension based on their best twenty years of earnings, not necessarily their final earnings. Castle had won a reputation as a battler for feminism much earlier, in 1968 during the celebrated women’s strike at Ford’s plant in Dagenham. The women were operating sewing-machines to upholster car seats but were paid only 85 per cent of men’s wages for doing the same job. After Castle intervened directly, the company closed most of the gap, and other women took action round the country too. She had also intervened to stop the Commons voting male MPs better pensions than female ones. Though Castle always jibed at being called a feminist, and had underestimated the cost of Serps, so that the earnings link would eventually be broken again by the Conservatives to keep the price down, it was a rare civilizing reform which stuck, at least for a decade.

Meanwhile Wilson, quietly preparing a scandalous resignation honours list for his cronies, and muttering about moles, plots and the possible activities of South African and British agents, left future British governments with one final gift. Working as secretively as Attlee he authorized a vastly expensive modernization and replacement of Britain’s nuclear deterrent Chevaline, the cost of which would rise from a planned £24m to more than £1,000m within a few years. He then retired as he had always said he would, at sixty, leaving much of his cabinet utterly astonished and London awash with rumours. Power ages, as well as corrupts and Roy Jenkins speculated that perhaps he had faked his birth certificate and had been ten years older than he admitted all along. It would certainly have explained his precocious rise and precocious retirement. But Wilson was still wily enough to give his preferred successor Callaghan (‘I’m making way for an older man’) a tip-off which helped him steal a march on the rest, including Healey, who only heard the news from Wilson in the gents toilet before the cabinet meeting when he formally announced it. Wilson would retire to see his reputation sink steadily downwards as his memory started to go. For such a pugnacious and fundamentally decent man, whatever his political failures, it was a sad way to subside.

Peasants Revolt: One, the Right

The underlying political story of the middle and later seventies would not, however, be played out mainly in Parliament. It is the story of how, across the quivering body of a profoundly sick country, two new rival forces emerged to fight for the future. The first came from the right.

In the middle of June 1974, something unusual had happened. A politician said sorry. He did not say sorry for something in his personal life, an error of judgement or even a failed policy. He said sorry for Everything. He said sorry for what had happened to Britain since 1945, and his party’s role in that, and his role in that party. The serial apologist was a haggard, anguished-looking man. The son of a rich London businessman, he had risen to become housing and then health minister, and had been until then a conventional-looking Tory. Under Macmillan he had ordered the smashing down of old terraces for new tower blocks. Under Heath he had spent heavily on a bigger bureaucracy for the NHS and higher social security levels. Now Sir Keith Joseph was quite literally wringing his hands and rolling his eyes with mortification. There had been thirty years of interventions, good intentions and disappointments, thirty years of socialism under both Labour and the Tories: ‘I must take my blame for following too many of the fashions.’

Joseph’s conversion to free-market, small-state economics had the force of a religious experience. Crucial to it would be controlling the amount of money in the economy to keep out inflation, which meant squeezing how much was borrowed and spent by the State. He had joined the Tories in the early fifties but had not been a Conservative, he said: ‘I had thought that I was a Conservative but now I see that I was not really one at all.’ This kind of thinking would lead within five years to the Thatcher revolution, and the wholesale rejection of the Heath years, taking the economic ideas of intellectuals who featured earlier in this history right into the centre of British public life. Other fellow travellers were professors, Americans or a few Powellite Tories outside the mainstream of the party. But Joseph was different, a former cabinet minister with close and direct experience of government. With his Centre for Policy Studies, he was the rain-maker, the storm-bringer, the Old Testament prophet denouncing his tribe.

Joseph argued that Britain by the mid-seventies had a fundamental choice to make between a socialist siege economy or a breakaway into proper liberal capitalism – in effect, Benn or Joseph. He could not have formed his ideas without the libertarian and monetarist thinkers of the fifties and sixties, men we met earlier. During the Tories’ years in opposition from 1964 to 1970 he had educated himself in free-market economics and was soon using as his speechwriter the violently spoken, irrepressible Alfred Sherman, an East End boy from a left-wing family who had fought as a machine-gunner in the Spanish Civil War before swinging right round later and becoming an insistent right-wing critic of the British way. It was well said of Sherman that by the fifties his enthusiasm for the free market ‘put him as much on the fringes of Macmillan’s Britain as Communism had put him on the edge of politics in Neville Chamberlain’s Britain’.57 But to Sherman’s disappointment, when Joseph returned to office in 1970 as Secretary for Health and Social Security, his radicalism went into hiding again, he forgot his enthusiasm for introducing more private money into health, and Sherman took to describing him dismissively as ‘a good man fallen among civil servants’.

But the defeat of 1974 had shaken Joseph. With other monetarists he began a thorough rethink of the Heath years, culminating in a shadow cabinet post-mortem, when they argued that the early radicalism of 1970–1 had been right, and the subsequent U-turn a disaster. Heath blankly refused to listen, or at any rate to heed, the attack. Heath’s haughty assessment in his autobiography was that Joseph ‘had resumed a friendship with a person called Alfred Sherman, a former communist, and undergone what he liked to call “a conversion” as a result . . . [this] failed to cut any ice with the great majority of his colleagues, though we did them the courtesy of listening.’ In fact, many Tories were beginning to listen. With Joseph were Geoffrey Howe and the quiet, watchful figure of Margaret Thatcher. Early on, Howe warned, ‘I am not at all sure about Margaret. Many of her economic prejudices are certainly sound. But she is inclined to be rather too dogmatic for my liking on sensitive matters like education and might actually retard the case by simplification.’⁵⁸ There were other new radicals, such as the Powellite Tory MP John Biffen, the young economics writer Nigel Lawson and a crowd of journalists and academics.

Here was an intellectual analysis, hard and uncompromising, which excited a generation of new recruits to the party, while it repelled Tories of the comfortable Macmillan persuasion. Macmillan himself said of Joseph that he was ‘the only boring Jew I’ve ever known’ and later there would be much snide muttering about the men Thatcher learned from and worked with – Hayek, Sherman, Joseph, Lawson and Friedman. The truth was that Jews were prominent in intellectual thinking on the right, as on the left, bringing opposite lessons to Britain from the disasters of continental Europe. A serious commitment to ideas and old-fashioned attitudes to education gave them their unique influence in politics. Thatcher was open to the ideas, ready to listen, unprejudiced; many traditional Tories were not.

In the winter of 1974–5 after Heath had lost his second successive election, there was no such thing as ‘Thatcherism’. She was expressing her public support for the policies of consensus, whatever her developing inner feelings. She backed intervention in the housing market and had queried council house sales. There was no sign that she would become leader. Heath was anyway stubbornly determined to stay on. He insisted his supporters, who included most of the well-known Tories of the day, back him. Polls suggested 70 per cent of Conservative voters wanted him to stay. Yet there was deep dissatisfaction on the Tory benches in Parliament. A City slicker, Sir Edward du Cann, who chaired the backbenchers’ 1922 Committee, began to take soundings about challenging Heath. He was backed by the war hero, Tory MP and arch-intriguer, Airey Neave, but Neave soon pulled out. Joseph stepped up to the plate before making a catastrophically ill-judged and offensive speech in which he seemed to suggest that working-class women were having too many babies and should be stopped because they were degrading the gene pool. This finished the man Private Eye was already calling the ‘mad monk’. So who could the right find as a candidate?

If Heath had realized that two successive election defeats meant he really had to go, and had he allowed other Tory moderates to prepare campaigns to replace him, Mrs Thatcher would have had no chance. Had Joseph not made a disaster of a speech, she would have been committed to backing him, and so would not have stood herself. Had du Cann stood, the brilliant campaign manager Neave would not have worked for her. Many Tory MPs were persuaded by him to vote for her because she had no chance, as a way of easing out Heath. Then more ‘serious’ candidates could stand. It was a brilliant ruse. On 4 February 1975, she shocked everyone by defeating Heath in the first ballot by 130 votes to 119. She then went on to beat the also-rans easily. A current of right-wing free-market thinking that had been gurgling almost unnoticed underground since the fifties would break ground in spectacular fashion, changing Britain for ever. ‘Josephism’ became ‘Thatcherism’. Few of the Tory MPs in what was called ‘the peasants’ revolt’ realized quite where their new leader would take them. For the next few years, supercilious smirks and patronizing remarks from Wilson and then the new Prime Minister, James Callaghan, would be her lot. And then she would show them.

Beyond Pop

The seventies was an extreme decade; the extreme left and extreme right were reflected even in its music. Drawing neat lines between popular culture and the wider world of politics and economics is a dangerous game. Any art follows its own internal logic and much of what happened to British music and fashion during the seventies was driven by the straightforward need to adopt then outpace what had happened the day before. Clipped, hard-edged styles appear on the street to mock floppy, romantic ones, and then it happens in reverse. The high-gloss extravagance of the late Teds is answered by the neat, fresh, cool look of the Mods, which will be met by the psychedelic extravagance and hairiness of the Hippies. They are answered by the super-Mod working-class cool of the first skinheads, though in due course wannabe Ziggy Stardusts will bring androgyny and excess back to the pavement and playing ground. Leather-bound punks find a new trump card to offend the older rockers; New Romantics with eyeliner and quiffs challenge Goths. Huge baggy trousers are suddenly in then disappear as quickly. Shoes, shirts, haircuts, mutate and compete. For much of the time, this game doesn’t mean anything outside its own rhetoric, it simply is – and then isn’t.

Exactly the same can be said about musical fads, the way Soul is picked up in Northern clubs from Wigan to Blackpool to Manchester; the struggle between the concept albums of the art-house bands and the arrival of punkier noises from New York in the mid-seventies; the dance crazes that come and go. Often the motivation for change is boredom. We have heard enough of that three-minute noise and it’s time for something shorter and louder, or longer and quieter. Nothing lasts long. Like fashion, musical styles begin to break up and head in many directions in this period, coexisting as rival subcultures across the country. Rock and roll is not dead, nor is Motown, when reggae and ska arrive. The Rolling Stones and Yes carry on oblivious to the arrival of the Sex Pistols and the Clash. Every individual who drank in popular culture feels a sudden rush of remembrance of days past when a particular band, song or look is revived. But we should not fool ourselves that emotion equals meaning. The life lived and its soundtrack are not quite the same.

Yet in this musical and stylistic chaos, which runs from the early seventies to modern times, there are moments and themes which stick out. Perhaps the most important statistic to hold in mind is that between the early fifties and the mid-seventies, real disposable income – what people had in their hand to spend, taking inflation into account – exactly doubled. Between Lonnie Donegan and Led Zeppelin, as it were, people became twice as well off. Yet from 1974 until the end of 1978, living standards actually went into decline.59 The long working-class boom had ended. Broadly speaking, British pop was invented during the optimism of 1958–68, when the economy was most of the time still booming and was evolving in its fastest and most creative spirit. Then the mood turned in the later sixties and seventies towards fantasy and escapism in wider and wilder varieties, as unemployment arrived and the world seemed bleaker and more confusing. This second phase involved the sci-fi ambiguities and glamour of Bowie, the gothic, mystical hokum of the heavy bad-boy bands like Black Sabbath and Led Zeppelin, and the druggy obscurities of Yes. The second half of the seventies were the years of deep political disillusion, strains which seemed to tear at the unity of the UK: Irish terrorism on the mainland, a rise in racial tension and widespread industrial mayhem. The optimism which had helped fuel popular culture suddenly gurgled dry. So it is not perhaps a coincidence that this period is a darker time in music and fashion, a nightmare inversion of the sixties dream. After the innocent raptures of England’s 1966 World Cup victory and Manchester United’s European Cup triumph two years later, the mid-seventies invent the modern football hooligan and by the eighties, English clubs were being banned from European competitions because of their followers. Vivienne Westwood and Malcolm McLaren turn from creating cod-fifties drape coats and beatnik jumpers to the ripped T-shirts and bondage gear of punk; the Sex Pistols portray themselves as a kind of anti-Beatles; older musical heroes flirt with fascism.

Westwood was in many ways a perfect inheritor of Quant’s role a dozen years earlier. Like Quant, she was brought up to make clothes herself and came through art college. Like Quant she had a male partner who had a touch of business genius. Like Quant she was interested in the liberating power of clothes. Like Quant she set herself up in the Kings Road in a shop which first of all had to be braved rather than simply patronized. Her clothes would shock passers-by just as Quant’s had horrified Michael Caine’s mother. Like Quant she was sardonic and fearless and later on, she out-Quanted Quant as the grand dame of British fashion. Westwood received a Damehood from the Queen whose face she had famously impaled with a safety-pin earlier on, and was honoured with a huge retrospective show at the Victoria and Albert Museum.

Yet this daughter of a Derbyshire mill-weaver and a shoe-making family was also startlingly different from Quant, the Welsh teachers’ child. Westwood had first mixed and matched to create a style of her own at the Manchester branch of C&A and said with only a twinge of irony, ‘my work is rooted in English tailoring.’60 Her vision of fashion was anything but uncluttered. It was a magpie, rip-it-up and make-it-new assault on the history of couture, postmodern to Quant’s straightforward modern. And in the mid-seventies, working from a shop recently renamed simply Sex, Westwood’s vision was a fetishistic, rubbery, vaguely sado-masochistic assault on mainstream decencies. Chains, zips in odd places, rips, obscene slogans and provocative images, referring for instance to a notorious serial rapist, all featured. She once declared that she had ‘an in-built perversity, a kind of in-built clock which reacts against anything orthodox’. Her helper and model Jordan (aka Pamela Rooke) used to set off on a commuter train to the shop, wearing rubber clothes, fishnet stockings and a beehive hairdo and attracted so much attention British Rail put her in a first class compartment for her own protection. Quant’s vision had been essentially optimistic – easy to wear, clean-looking clothes for free and liberated women. Westwood’s vision was darker. Her clothes were to be worn like armour in the street battle with authority and repression, in the England of flashers and perverts.

Nor was her then partner Malcolm McLaren in any way like Plunkett Alexander-Greene, the aristocratic businessman husband of Quant. McLaren was also an art college product and, as we saw earlier, had been influenced by the radical anger of the ‘Situationists’ and the raw typography of King Mob. The son of a dysfunctional Jewish and Scottish family he had drifted through the worlds of fringe politics, music and film-making but was now remaking himself as a kind of wideboy entrepreneur of street culture, a latter-day Svengali modelled on ‘Flash Larry’ Parnes. He had already offered style advice to the New York Dolls and was on the lookout for his anti-Beatles, duly forming the Sex Pistols in December 1975. Steve Jones, Paul Cook, John Lydon and Glen Matlock – who much admired the Beatles – were another working-class quartet in their late teens. But they expressed the self-loathing spirit of the times as the Beatles had expressed the geeky optimism of an earlier Britain. Pockmarked, sneering, spiky-haired, exuding violence and playing with a wild and simple thrash of a sound, they dutifully performed the essential duty of shocking a still easily shocked nation. Their handful of good songs have a leaping energy which really did take the ageing, lumbering rock establishment by storm, but their juvenile side quickly became embarrassing.

Compared to the most self-important assertions of John Lennon, their notorious performance on the London television show Thames Today with Bill Grundy, was desperate stuff. (Grundy: ‘Go on, you’ve got another ten seconds. Say something outrageous’. Steve: ‘You dirty bastard.’ Grundy: ‘Go on, again.’ Steve: ‘You dirty fucker!’ Grundy: ‘What a clever boy!’ Steve: ‘You fucking rotter!’ It leaves later satirical attempts to depict punk rockers as in the television comedy The Young Ones floundering.) But the tabloid papers and stupider backbench MPs duly played their allotted role and helped fan the Sex Pistols’ publicity engine. McLaren thrived on outrage and played up to the role of cynical charlatan for all he was worth. The Pistols played a series of increasingly wild gigs, including in the broken-up set of the bankrupt Biba shop (everything connects) and made juvenile political attacks in songs such as ‘Anarchy in the UK’ and, in the year of the Silver Jubilee, ‘God Save the Queen’. (Jim Callaghan can be accused of many things, but presiding over a ‘fascist regime’ is not one of them.) Yet punk was the first revival of fast, belligerent popular music to concern itself with the politics of the country, and this was the first time since the brief ‘street fighting man’ posturing of the late sixties when mainstream society needed to notice rock.

On the other side of the political divide was an eruption of racist, skinhead rock, and an interest in the far right. Among the rock stars who seemed to flirt with these ideas were Eric Clapton, who said in 1976 that ‘Powell is the only bloke who’s telling the truth, for the good of the country’ and David Bowie, who spoke of Hitler as being the first superstar, musing that perhaps he would make a good Hitler himself. Though the Sex Pistols liked to see themselves as vaguely on the anarchist left, their enthusiasm for shocking, particularly after the nihilistic and amoral Sid Vicious joined them, at least left room for ambiguity. McLaren and Westwood had produced clothing with swastikas and other Nazi emblems, if only to outrage people (it worked) while Vicious’s contribution to political thought can be summed up by his lyric ‘Belsen was a gas / I read the other day / About the open graves / Where the Jews all lay . . .’

Reacting to the surrounding mood, Rock Against Racism was formed in August 1976, helping create the wider Anti-Nazi League a year later. Punk bands were at the forefront of the RAR movement, above all the Clash whose lead singer Joe Strummer became more influential and admired than Johnny Rotten or the rest of the Sex Pistols, and bands such as the Jam. Black music – reggae, ska and soul – was popular enough among white youths for it to have had a real influence in turning the fashion in street culture decisively against racism. Ska revival bands such as the Specials and the reggae-influenced Police and UB40 (the latter from the West Midlands, home of Powellism) had an effect which went beyond the odd memorable song. Hard-left politics had often been a joyless business but the seventies produced, in the middle of visions of social breakdown, a musical revival which cheered up the lost generation. The racist skinhead ‘Oi’ bands found themselves in a violent and uncomfortable ghetto. As one cultural critic of the time put it, ‘A lifestyle – urban, mixed, music-loving, modern and creative – had survived, despite being under threat from the NF.’61 The streets might be dirty and living standards falling, but it was not all bad news.

Sunny Jim, Stormy Winter: the Callaghan Years

Jim Callaghan has featured already, both as hero in Northern Ireland and as rather a villain when he stabbed Wilson and Castle in the front over trade union reform. In the spring of 1976 he finally entered Number Ten after a series of votes by Labour MPs shaved off his rivals – Denis Healey, Tony Crosland and Roy Jenkins on the right, and Michael Foot and Tony Benn on the left. After three ballots, he beat Foot by 176 votes to 137 and replaced Wilson as Prime Minister. For three turbulent years he would run a government with no overall majority in Parliament, kept going by deals and pacts, and in an atmosphere of repeated, though not quite constant crisis. Callaghan was by now a familiar and reassuring figure in Britain, tall, ruddy, no-nonsense, robust and, by comparison with Wilson, straightforward. He had had all the top jobs in politics, though had not distinguished himself either as Chancellor or as Home Secretary. Latterly he had been Foreign Secretary, deeply involved in the early stages of détente, bringing an end to the Cold War, and forging close personal relations with Germany’s Chancellor, Helmut Schmidt, America’s Henry Kissinger and the amiable but derided President Ford. At sixty-five he was one of the most experienced politicians to become Prime Minister. After Wilson and Heath he was the third and last of the centrist seekers after consensus, the wartime avoiders of national confrontation. Yet behind the genial, occasionally stubborn-looking face with its protuberant lower lip and owlish glasses there was a man who, in the growing contest between hard left and right, was a Labour leader now instinctively looking to the right.

Churchill apart, all of his post-war predecessors had been Oxbridge men. Callaghan had not been to university at all. The son of a Royal Navy chief petty officer who had died young, and a devout Baptist mother from Portsmouth, he had known real poverty and had clawed his way up as a young clerk working for the Inland Revenue, and then as a union official, before wartime naval service. One of the 1945 generation of MPs, he was a young rebel who drifted right, though always keeping his strong pro-trade union instincts. His wounding experiences as Chancellor during the dark days of 1966–7 had nearly broken him but he had found, as the best politicians do, that what did not kill him made him stronger. He was a social conservative, uneasy about divorce, homosexuality and vehemently pro-police, pro-monarchy, pro-armed forces, though he was anti-hanging and strongly anti-racialist too. As Home Secretary he had announced that the permissive society had gone too far. As Prime Minister, he would try to initiate a ‘great debate’ against trendy teaching in schools, calling for an inquiry into teaching methods, standards, discipline and the case for a national curriculum. On the economy, he would become steadily more impressed by the case for monetarism, then raging on the right. Famously, he told a stunned 1976 Labour conference used to the Keynesian doctrines about governments spending their way out of recession, cutting taxes and boosting investment: ‘I tell you in all candour that that option no longer exists and that insofar as it ever did exist, it worked by injecting inflation into the economy . . . Higher inflation, followed by higher unemployment. That is the history of the last twenty years.’

Yet even if he could read the runes, in the national memory Callaghan is forever associated with failure. There is the humiliating, cap-in-hand begging for help from the International Monetary Fund, the soaring inflation and interest rates of the late seventies and finally the piled rubbish, vast strike meetings and unburied dead of the 1979 ‘winter of discontent’. There is an arc which plummets through earlier crises under Wilson and Heath, before crashing into final chaos and destruction under Callaghan. Only after the wasteland of his time in office can the bold remaking of Britain under Margaret Thatcher begin. And Callaghan himself had been part of the problem. His sentimental failure to understand the aggression of the union challenge to elected power, and his earlier lack of interest in radical economic ideas, came home to haunt him in Downing Street. But the story of the Callaghan and Healey years, for the two must be taken together, is more intriguing than its body-strewn, gore-splattered final act. It is also a story of comparative success, of wrenching inflation down again, doing the best deals with international bankers that could be done, and facing up to challenges that had been dodged for decades. It did not end well for the protagonists, but then few interesting tragedies do.

Callaghan had a brutal side to him. In remaking his cabinet, he purged much of the left, leaving Michael Foot as his loyal and invaluable leader in the Commons delivering the votes, but sacking Barbara Castle as ‘too old’ and too left wing. The leader of the right, Roy Jenkins, was out too, off to take up the job of European Commissioner in Brussels. Crosland, briefly Foreign Secretary, died, so Callaghan had no serious rivals left. He responded by constructing the most right-wing Labour cabinet since the war, whose new faces included Bill Rodgers, Shirley Williams and David Owen. All would later join Jenkins in the breakaway Social Democratic Party (SDP). By the standards of New Labour after 1997 this was still a left-wing government, keen on redistribution, still describing itself as socialist, levying high rates of income tax. It believed in nationalization, adding shipbuilding, the new oil industry and the aircraft manufacture to the State’s bulging holdings, and in such traditional anti-privilege issues as the abolition of pay beds in NHS hospitals. Some of its cabinet members, including Shirley Williams, joined the picket line during the violent 1977 Grunwick dispute at a film processing laboratory in London – one where Asian female workers, barred from joining the union APEX, had some moral right on their side but which became a bloody mob confrontation. It is hard to imagine New Labour ministers doing the same.

But by the standards of Labour’s history, Callaghan’s suspicion of liberalism, his admiration for American republicans like Kissinger and Ford, his new faith in monetarism and his increasingly aggressive attitude to high pay demands, put him to the right even of Wilson. In private he toyed with policies which would later make Mrs Thatcher famous, such as selling off council houses. His famous and much-quoted remark to an aide, just as Labour was losing power in 1979, that the country was going through a once-in-thirty-years sea change suggested that he half accepted the consensus years had failed: ‘There is a shift in what the public wants and what it approves of. I suspect there is now such a sea-change – and it is for Mrs Thatcher.’ About this, he was right. But if as Enoch Powell said, all political careers end in failure, then what happened before Callaghan’s final failure is still an extraordinary story of despair, courage, hope and bungled accounting.

Cap in Hand

Jim Callaghan’s first few days as Prime Minister in April 1976 must have brought back some grim memories. A dozen years earlier, as Chancellor, he had been confronted with awful economic news which nearly crushed him and ended in the forced devaluation of the pound. Now, on the first day of his premiership, he was told the pound was falling fast (it had been ‘floating’ since the Heath years but this had become a euphemism). A devaluation by sterling holders was likely. The Chancellor, Denis Healey, had negotiated the £6 pay limit and this would feed through to much lower wage increases and eventually to lower inflation. Cash limits on public spending brought in under Wilson would also radically cut public expenditure. But in the spring of 1976 inflation was still rampant and unemployment was rising fast. Healey now told Callaghan that because of the billions spent by the Bank of England supporting sterling in the first few months of the year, a loan from the International Monetary Fund looked essential. In June standby credits were arranged with the IMF and countries such as the United States, Germany, Japan and Switzerland. What would follow was about as humiliating as peacetime politics gets.

Healey had imposed tough cuts in the summer but by its end, as he returned from a desperately needed break in the Scottish Highlands, the pound was under intense pressure again. On 27 September 1976 Healey was meant to fly out to a Commonwealth finance ministers’ conference in Hong Kong with the Governor of the Bank of England. But so great was the crisis and so panicked were the markets that he decided he could not afford to be out of touch for seventeen hours’ flying time. (This was before in-flight phones.) In full view of the television cameras, he turned round at Heathrow airport and went back to the Treasury. There he decided to apply to the IMF for a conditional loan – one which gave authority to the international banking officials above Britain’s elected leaders. With exquisite timing, the Ford workers began a major strike. Healey was close to collapse, to ‘demoralization’, he later said, for the first and last time in his life.

Against Callaghan’s initial advice, he decided to dash to the Labour conference in Blackpool and make his case to an anguished and angry party. As we have seen there was a powerful mood at the time for a siege economy, telling the IMF to get lost, cutting imports and nationalizing swathes of industry. Given just five minutes to speak from the floor because of the absurdities of Labour conference rules, the Chancellor warned his party this would mean trade war, mass unemployment and the return of a Tory government. But, he shouted against a rising hubbub, with something of the young Major Healey who had visited the 1945 conference in battledress, he was speaking to them from the battlefront. He would negotiate with the IMF which would mean ‘things we do not like as well as things we do like. It means sticking to the very painful cuts in public expenditure . . . It means sticking to the pay policy.’ As Healey ruefully recorded in his autobiography, he had begun with a background of modest cheers and a rumble of booing: ‘When I sat down, the cheers were much louder. So were the boos.’ Benn called his speech vulgar and abusive: in fact Healey’s final arm-clasp of triumph was a last throw by one of politics’ great showmen.

So, with the cabinet nervously watching, the negotiations with the IMF started. Callaghan and Healey naturally wanted to limit as far as they could the cuts being forced on them. The IMF, with the US Treasury standing behind them, was under pressure to squeeze ever harder. The British side was in a horribly weak position. The government was riven by argument and threats of resignation, including from Healey. There were incredibly long and difficult cabinet arguments about what levels of cuts were acceptable and whether there was any real alternative in a leftist siege economy. In deepest secret, Callaghan and the lead IMF negotiator from Washington had bitter private talks, in which the Prime Minister warned that British democracy itself would be imperilled by mass unemployment. When it came to the very end of the tense and complicated haggling, the IMF was still calling for an extra billion pounds’ worth of cuts and it was only when Healey, without telling Callaghan, threatened the international bankers with yet another ‘Who runs Britain?’ election, that they gave way. The final package of cuts was announced in Healey’s budget, severe but not as grim as some had feared, and greeted with headlines about Britain’s shame.

But the truly extraordinary thing about this whole story is that it was unnecessary from the start. The cash limits Healey had already imposed on Whitehall would cut spending far more effectively than anyone realized. More startling still, the public spending statistics (on which the cuts were based) were wildly wrong. Public finances were stronger than they appeared. The Treasury estimate for public borrowing in 1974–5 had been too low by £4,000m, a mistake greater than any tax changes ever made by a British Chancellor; but the 1976 estimate was twice as high as it should have been. The IMF-directed cuts were more savage than they needed to have been. As to the bloated State, another major issue of the day, the amount of Britain’s wealth spent by government was miscalculated too. A government white paper early in 1976 had put it at about 60 per cent – huge by the standards of the West. But this was, as Healey put it, ‘unforgiveably misleading’. When Britain’s spending was defined in the same way as other countries’ and at market prices, the figure fell to 46 per cent. By the time Labour left office it was 42 per cent, about the same as West Germany’s and well below that of social democratic Scandinavian countries. Britain’s balance of payments came back into balance long before the IMF cuts could take effect and Healey reflected later that ‘If I had been given accurate forecasts in 1976, I would never have needed to go to the IMF at all.’

In the end only half the loan was used, all of which was repaid by the time Labour left office. Only half the standby credit was used and it was untouched from August 1977 onwards. During the IMF negotiations Healey had talked about ‘Sod Off Day’ when he and Britain would finally be free of outside control. That came far sooner than he had expected. Of course, at the time, nobody did know that Britain’s finances were so much stronger than they had seemed. Yet all the lurid drama which imprinted itself on Britain’s memory – the rush back from Heathrow, the dramatic scenes at the Labour conference, the humiliating arrival of the IMF hard men, backed by Wall Street, a political thriller which destroyed Labour’s self-confidence for more than a decade and which was used repeatedly in the Thatcher years as clinching evidence of its bankruptcy – all this could have been avoided. That is only the start. It was the prospect of ever greater cuts in public spending, inflation out of control, and the economy in the hands of outsiders that helped break the Labour Party into warring factions and gave the hard left its great opportunity. Had the IMF crisis not happened would the ‘winter of discontent’ and the Bennite uprising have followed?

Healey later said he forgave the Treasury for its mistakes in calculating public sector borrowing needs, because nobody had got their forecasts right. He and they were operating in a new economic world of floating exchange rates, huge capital flows and speculation still little understood. It made him highly critical of monetarism, however, and all academic theories which depended on accurate measurement and forecasting of the money supply. He liked to quote President Johnson, who at about this time reflected that making a speech on economics ‘is a lot like pissing down your leg. It seems hot to you, but it never does to anyone else.’ Healey was bitter, though, about the Treasury’s mistakes over the true scale of public spending which so hobbled his hopes of being seen as a successful Chancellor. He said later he could not forgive them: ‘I cannot help suspecting that Treasury officials deliberately overstated public spending in order to put pressure on governments which were reluctant to cut it. Such dishonesty for political purposes is contrary to all the proclaimed traditions of the British civil service.’62

The Callaghan government is remembered for the IMF crisis and for the ‘winter of discontent’. His defenders point out that Callaghan actually presided over a relatively popular and successful government for more than half his time in power – some twenty months out of thirty-seven. Following the IMF affair, the pound recovered strongly, the markets recovered, inflation fell, eventually to single figures, and unemployment fell too. By the middle of 1977, the year of the Queen’s Silver Jubilee, North Sea Oil was coming ashore to the tune of more than half a million barrels a day, a third of the country’s needs. Britain would be self-sufficient in oil by 1980 and already was in gas. The pay restraint agreed earlier with Healey was still holding, though only just. The new American President, Jimmy Carter, visited for a much-praised summit. Callaghan, for the first time, was getting a good press while the Tory opposition under Margaret Thatcher seemed to be struggling. After having to rely on an odd mixture of nationalist MPs for its precarious Commons majority, Labour entered a deal with David Steel’s Liberals from March 1977 to August of the following year, giving Callaghan a secure parliamentary position for the first time. The Lib-Lab pact gave the smaller party, which then had only thirteen MPs, rights only to be consulted, plus vague promises on possible voting system changes: it was much more helpful to Labour. Labour regained a modest majority over the Tories in the opinion polls and the prospect of Callaghan and Labour continuing to govern well into the eighties looked perfectly reasonable. This did not look like a dying government, still less the end of an era.

Peasants’ Revolt: Two, the Left

We have seen the peasants’ revolt of the right, but there was another too, from the left. This would be publicly associated with Tony Benn, the face of the left in Labour’s highest circles. But it was a wide and a deep political force, with complicated roots. The Communist Party of Great Britain had almost collapsed, so great was the disillusion with the Soviet system to which it pledged undying and largely uncritical obedience. By the seventies it was riven by arguments of the kind that split most declining organizations. Further left were a bewildering number of Trotskyist groups, all hostile to the Soviet Union, all claiming to be the true party of Lenin, all denouncing one another over ideological and tactical detail. They tended to be dour and puritan. Only two had any real following: the Socialist Workers’ Party, or SWP, and the Militant Tendency. Each had descended by political split and fusion from earlier groups which had first organized in Britain in the forties.

Militant would later cause a huge convulsion in the Labour Party. Wilson complained a lot about ‘Trots’ trying to take the party over but in the seventies he was largely ignored and Militant built up strong local bases, particularly in Liverpool. The SWP, outside the Labour Party, campaigned on specific issues such as strikes and racism. Their distinctive clenched fist logo and dramatic typography appears in the background of countless industrial and political marches, pickets and rallies. The SWP’s single biggest influence was in combating the rise of the National Front.

The NF, under its tubby would-be führer Martin Webster and the bullet-headed John Tyndall, had been founded in 1967 after the original British National Party and the old League of Empire Loyalists joined together. Electorally it was struggling, though Webster polled 16 per cent in the West Bromwich by-election of May 1973 and in the two 1974 general elections the NF put up first fifty-four and then ninety candidates, entitling them to a television broadcast. More important to their strategy were the street confrontations, engineered by marching with Union Jacks and anti-immigrant slogans through Bangladeshi or Pakistani areas in Leeds, Birmingham and London. A more extreme offshoot of the original skinheads attached themselves to the NF’s racialist politics and by the mid-seventies they too were on the march. The SWP determined to organize street politics of their own and bring things to a halt and formed the Anti-Nazi League in 1977. The League drew in tens of thousands of people who had no particular interest in the obscurities of Leninist revolutionary theory, but who saw the NF as a genuine threat to the new immigrant communities. And the young flooded to their rallies, marches and confrontations, during which there were a couple of deaths as the police weighed in to protect the National Front’s right to march. Beyond Militant and the SWP, other far-left groups inside and outside the Labour Party would achieve brief notoriety because they were supported by a famous actress, such as Vanessa Redgrave, or through influence in a local party or borough. Eventually the ‘loony left’ would come to the boil, enjoying enough influence, particularly in London, to shred Labour’s credibility. But in the seventies, this was still a slowly developing, obscure story.

Much more important then was the influence of socialists who were not working for secretive Trotskyist or communist parties, but had simply wanted to bring down Wilson and were now gunning for Callaghan and his friends. Like Thatcher and Joseph, they believed the old consensus politics was failing. Some of their thinking was also shared by the right – they were mostly hostile to the European Community, for example, opposed Scottish and Welsh nationalism, and were hostile to America. But that was where the similarities ended. The Labour left wanted to deal with world economic chaos by pulling up the drawbridge, imposing strict controls on what was imported, taking direct control of the major industries, and the City too. The left thought planning had failed because it was too weak, and should therefore be dramatically extended. Any strongly held political view which is excluded from the centre of power tends to develop a conspiracy theory. The Powellites believed Heath had lied to the British people. The Labour left believed Wilson, Callaghan and Healey had been captured by international capitalism, as had many MPs. The answer was to make them accountable to ‘ordinary people’, as the obsessive meeting-attenders of Labour politics innocently believed themselves to be. So the siege economy or ‘Alternative Economic Strategy’ and mandatory reselection of MPs became the two main planks of the left.

Tony Benn became the voice and leader of Labour’s peasants’ revolt. His enthusiasm for workers’ cooperatives and a National Enterprise Board had already made him a figure of ridicule in Fleet Street. Later he would become a kind of revered national grandfather, a white-haired, humorous sage whose wry memories of Attlee and Wilson would transfix audiences of all ages and views. His unbending hostility to nuclear weapons, American and British war-making, and market capitalism would inspire hundreds of thousands deep into the years of New Labour. But between the eager-beaver Anthony Wedgwood Benn, champion of Concorde, and the paternal Grandpa Tony, came the turbulent years of ‘Bennism’, the central phase of his political life. Radicalized by his children towards the politics of feminism, anti-nuclear campaigning and much else, he became increasingly detached from his colleagues as the Wilson–Callaghan government staggered towards collapse. Benn had come close to leaving it over his opposition to Labour’s deal with the Liberals, and he fell out badly with the other notably left-wing cabinet minister Michael Foot over parliamentary tactics on Europe.

His general attitude to the party is well caught by his diary entry for 15 January 1978: ‘The whole Labour leadership now is totally demoralised and all the growth on the left is going to come up from the outside and underneath. This is the death of the Labour Party. It believes in nothing any more, except staying in power.’ Benn was in the curious position of still being a senior member of the government when he wrote this, attending intimate gatherings at Chequers, hobnobbing with visiting Americans, hearing deep military and security secrets, while at the same growing the eyes and ears of an outsider. He was on the side of the strikers who brought much of the country to a halt and his new friend Arthur Scargill, the miners’ leader, was telling Benn he could be the next Labour leader himself. Though it seemed a fantasy in 1978, within a few years Benn would come within a hair’s breadth of winning the deputy leadership on a left-wing socialist ticket, during the middle of a vicious and deeply damaging Labour civil war.

Then Was the Winter of their Discontent

The ‘winter of discontent’, a Shakespearean phrase, was used by Callaghan himself to describe the industrial and social chaos of 1978–9. It has stuck in people’s memories, as few political events do – the schools closed, the ports blockaded, the rubbish rotting in the streets, the dead unburied. Actions by individual union branches and shop stewards were reckless and heartless. Left-wing union leaders and activists whipped up the disputes for their own purposes. Right-wing newspapers, desperate to see the end of Labour, exaggerated the effects and rammed home the picture of a nation no longer governable. But much of the fault for this was Callaghan’s. It was not just that he had opposed the legal restrictions on union power pleaded for by Wilson and Castle, and then fought for vainly by Heath. It was not even that he and Healey, acting in good faith, had imposed a more drastic squeeze on public spending and thus on the poorest families, than was economically necessary . . . though none of that helped. It was also that by trying to impose an unreasonably tough new pay limit on the country, and then dithering about the date of the election, he destroyed the fragile calm he had so greatly enjoyed.

Most people, including most of the cabinet, had assumed that Callaghan would call a general election in the autumn of 1978. The economic news was still good, Labour was ahead in the polls. Two dates in October had already been pencilled in, though 12 October had been ruled out because it was Margaret Thatcher’s birthday. But Callaghan, musing at his Sussex farm during the summer, decided that he did not trust the polls. He would wait, soldiering on until the spring. When the Prime Minister invited half a dozen trade union leaders to his farm to discuss the election, they left still thinking he was going in the autumn. Then, at the TUC conference, with the world agog for an announcement, Callaghan sang a verse from an old music hall song, originally by Vesta Victoria:

There was I waiting at the church, waiting at the church, waiting at the church

When I found he’d left me in the lurch, Lor’ how it did upset me

All at once he sent me round a note, here’s the very note, this is what he wrote,

Can’t get away to marry you today, My wife won’t let me.

While a good enough song in its day, it was hardly a clear message to Britain. Was the jilted bride Mrs Thatcher? The trade union movement? Callaghan’s intention was to suggest that he was delaying the election but many trade union leaders and newspaper correspondents assumed just the opposite. When he finally came clean to the cabinet, they were shocked.

This might not have mattered so much had Callaghan also not promised a new 5 per cent pay limit to bring inflation down further. Because of the 1974–5 cash limit on pay rises at a time of high inflation, take-home pay for most people had been falling. Public sector workers had had a particularly hard time. There were the inevitable stories of fat cat directors and bosses awarding themselves high settlements. The union leaders and many ministers thought that a further period of pay limits would be impossible to sell, while a 5 per cent limit, which appears to have come from Callaghan almost off the cuff, was widely considered to be ludicrously tough.

Had Callaghan gone to the country in October then the promise of further pay restraint might have helped boost Labour’s popularity, while the unions could have comforted themselves with the thought that it was probably mere window-dressing. By delaying the election until the following spring, Callaghan ensured that his 5 per cent would be tested in Britain’s increasingly impatient and dangerous industrial relations market. First up, almost as soon as Callaghan had finished his music-hall turn, were the 57,000 car-workers employed by Ford, the US giant. The Transport & General Workers’ Union called not for 5 per cent but for 30 per cent, on the back of high profits (and, it has to be said, an 80 per cent pay rise just awarded to Ford’s chairman). Callaghan was badly embarrassed – his son, as it happened, worked for the company – and when after five weeks of lost production, Ford eventually settled for 17 per cent, he became convinced he would lose the coming election.

There was a vale of tears to be endured first. Oil tanker drivers also in the TGWU came out for 40 per cent, and were followed by road haulage drivers, workers at Ford’s nationalized rival British Leyland, then water and sewerage workers. BBC electricians threatened a blackout of Christmas television. The docks were picketed and closed down. Blazing braziers, surrounded by huddled figures in woolly hats, with snow whirling round them, were shown nightly on the television news. Hull, virtually cut off, was known as the ‘second Stalingrad’. The effects were felt directly by ministers along with the rest of the country. Bill Rodgers, the transport minister, whose mother was dying of cancer, found that vital chemotherapy chemicals were not being allowed out of Hull. Later, when the Health Secretary David Ennals was admitted to Westminster Hospital the local shop steward announced gleefully that he was ‘a legitimate target’ for action: ‘He won’t get the little extras our members provide patients. He won’t get his locker cleaned or the area around his bed tidied up. He won’t get tea or soup.’63 In the middle of it all Callaghan went off for an international summit on the Caribbean island of Guadeloupe, staying on for talks and sightseeing in Barbados. Pictures of him swimming and sunning himself did not improve the national mood. When he returned to Heathrow, confronted by news reporters asking about the industrial crisis, he replied blandly: ‘I don’t think other people in the world will share the view that there is mounting chaos.’ This was famously translated by the Daily Mail and then the Sun into, ‘Crisis? What Crisis?’ The nation’s mood grew no sunnier.

As the railwaymen prepared to join the strikes, the worst blow for the government came from the public sector union NUPE, who called out more than a million school caretakers, cooks, ambulance men, refuse collectors on random stoppages for a £60 a week guaranteed minimum wage. Strikes by car workers were one thing. But now the public was being hit directly, and the most vulnerable were being hit the hardest. Children’s hospitals, old people’s homes and schools were all plunged into trouble. The single most notorious action was by the Liverpool Parks and Cemeteries Branch of the General & Municipal Workers’ Union, who refused to bury dead bodies, leaving more than 300 to pile up in a cold storage depot and a disused factory, and Liverpool council to discuss emergency plans for disposing of some corpses at sea. Funeral corteges were met at the cemeteries by pickets and forced to turn back. Strikers were confronted in local pubs and thumped.

In the centre of London and other major cities, huge piles of rotting rubbish piled up, overrun with rats and a serious health hazard. Inside government, ordinary work almost ground to a halt. It must be recorded that most of those striking, the public sector workers in particular, were woefully badly paid and living in relative poverty; and that they had no history of industrial militancy. Nor was the crisis quite as dreadful as some of the papers and politicians showed it. As with Heath’s three-day week, many people gleefully enjoyed the enforced holiday from their public sector jobs. Nobody was proved to have died in hospital as a result of union action, there was no shortage of food in the shops and there was no violence. Troops were never used. This was chaos, and a direct challenge to the authority of the government. It was not a revolution, or an attempt to overthrow a government.

Yet that is the effect it had. The revolution would bring in Thatcherism not socialism, and Labour would be overthrown, plunging quickly into civil war. A ‘St Valentine’s Day concordat’ was eventually unveiled between the government and the TUC, talking of annual assessments and guidance, targeting long-term inflation, virtually admitting the 5 per cent limit had been a mistake. After all the drama, it was a fig-leaf so thin and ragged it was barely worth holding up. By March most of the action had ended and various large settlements and inquiries had been set up. But in the Commons, the government was running out of allies, spirit and hope. The failure of the referendum on Scottish devolution meant that under previously agreed rules, the act would have to be repealed. This in turn gave the Scottish Nationalists no reason to continue supporting Labour. The Liberals, facing the highly embarrassing trial of Jeremy Thorpe for conspiracy to murder (he would later be acquitted), had their own reasons for wanting an early election. In the drink-sodden, conspiracy-ridden, frenetic atmosphere of an exhausted Parliament, in which dying MPs had been carried through the lobbies to keep the government afloat, final attempts were made by Michael Foot and the Labour whips to find some kind of majority – Ulster Unionists, Irish Nationalists, renegade Scots were all approached. Callaghan, by now, was in a calmly fatalistic mood. He did not want to struggle on through another summer and autumn. Finally, on 28 March 1979, the game ended when the government was defeated by a single vote, brought down at last by a ragged coalition of Tories, Liberals, Scottish Nationalists and Ulster Unionists. Callaghan was the first Prime Minister since 1924 to have to go to Buckingham Palace and ask for a dissolution of Parliament, because he had lost a vote in the Commons.

The five-week election campaign started after the Irish assassination of Mrs Thatcher’s wily leadership campaign manager, the Tory MP Airey Neave, murdered by a car-bomb on his way into the Commons underground car-park. On the Labour side it was dominated by Callaghan, still more popular than his party, who emphasized stable prices and his deal with the unions, if such it was. On the Tory side, Thatcher showed a new media savvy, working with the television news teams and taking the advice of her advertising gurus, the Saatchis. Callaghan, who had never expected to win, was soundly beaten. The Conservatives took sixty-one seats directly from Labour, gaining nearly 43 per cent of the vote, and a substantial overall majority, with 339 seats.

What of the players in the last act of Old Labour and the Broken Consensus? Callaghan would stumble on as leader before retiring in October 1980. Healey would fight a desperate struggle against the left, as his party did its level best to commit suicide in public. Numerous moderates would form the breakaway SDP. The Scottish Nationalists, derided by Callaghan when they voted him down as ‘turkeys voting for Christmas’, lost eleven of their thirteen MPs. The unions would eventually lose almost half their members and any political influence they briefly enjoyed. More important than all that, mass unemployment would arrive in Britain. The one economic medicine so bitter that no minister in the seventies had thought of trying it was duly uncorked and poured into the spoon. It was time for Britain to grimace and open her mouth.

 

Part Four

THE BRITISH REVOLUTION

 

Margaret Roberts, Superstar

In politics, if your tactics work and if you are lucky – then you will be remembered for your principles. Margaret Thatcher’s tactics did work; she was shrewd, manipulative and bold, verging on reckless. She was also extremely lucky. Had Labour not been busy disembowelling itself and had a corrupt, desperate dictatorship in South America not taken a nationalistic gamble with some island sheep-farmers, her government would probably have been destroyed after a single term. Had the majority in her cabinet who disagreed with her about the economy been prepared to say boo to a goose, she might have been forced out even before that. In either case her principles, ‘Thatcherism’, would be a half-forgotten doctrine, mumbled about by historians instead of being the single most potent medicine ever spooned down the gagging post-war British.

Looking back more than a quarter of a century later, the epic events of the early eighties seem to have a clear pattern. Powerful ideas challenge the consensus and, after a nail-biting struggle, defeat the consensus. The early reverses of the Thatcherites, the ‘New Right’ promising ‘a New Enlightenment’, are turned into massive, nation-changing victories. Freedom wins. Yet if you stand back and ask what sort of Britain Mrs Thatcher, the grocer’s daughter, the devout Lincolnshire Christian, hoped to create, the story is odder. She did not believe in privatizing industries or defeating inflation for merely economic reasons. She wanted to remoralize society, creating a nation whose Victorian values were expressed through secure marriages, self-reliance and savings, restraint, good neighbourliness, hard work. Though much attacked by church leaders she talked of God and morality a lot: ‘I am in politics because of the conflict between good and evil.’ Yet Thatcherism heralded an age of unparalleled consumption, credit, show-off wealth, quick bucks and sexual libertinism. That is the thing about freedom. When you free people, you can never be sure what you are freeing them for.

In the index to Lady Thatcher’s memoirs of her years as Prime Minister, under ‘monetary policy’, 115 separate page references are given. For ‘unemployment’ there are fifteen. This is a fair clue to the economic experiment which began immediately after she took office in 1979 and provides the first, the most important, and still the most controversial part of her story. An attentive reader of the Conservative manifesto for the 1979 election would have missed it. After four years of her leadership the Tories were still talking about a wages policy and the importance of consulting with the trade unions, perhaps on the German model. There was talk too of the need to control the money supply and offer council house tenants the right to buy their homes. But other privatization barely featured. Only the comparatively insignificant National Freight Corporation was to be sold. As to unemployment, Mrs Thatcher herself had been vigorously attacking the Labour government for its failure there. In 1977, when it stood at 1.3 million, she had told the country it was absolutely wrong to associate the Tories with people losing their jobs: ‘We would have been drummed out of office if we’d had this level of unemployment.’ And in case anyone had forgotten the message, the most successful Conservative campaign poster of the election, created by Charles and Maurice Saatchi, her advertising maestros, featured a long queue of gloomy-looking people (in fact Tory activists from North London) filing under a sign reading Unemployment Office, with the headline: ‘Labour Isn’t Working’.

If voters had studied the new Prime Minister a little more closely they would have noticed a more abrasive edge. She had been aggressive about the failure to control the trade unions – ‘Never forget how near this country came to government by picket’ – and had already won the insult from the leaders of the Soviet Union of ‘Iron Lady’ for a powerfully anti-communist speech in 1977. It was an insult that pleased her very much rather as the derisive cartoon lampooning Harold Macmillan as ‘Supermac’ had become a badge of honour for him and ‘Tarzan’ would for Michael Heseltine. Irony rarely works with politicians of the first rank. But the voter might then have looked at the people around the Iron Lady and noted just how many of them were old-style mainstream Conservatives in the Heath tradition. To the extent that she was radical, she was clearly completely surrounded and outnumbered. It was calculated that of the possible Tory cabinet members, just two (Keith Joseph and Norman St John Stevas) had actually voted for her in the leadership contest of 1975. There had even been a bizarre notion to lure the former Labour Chancellor, Roy Jenkins, back from Brussels, where he was in rather happy self-imposed exile from British politics, to take over the Treasury again as Mrs Thatcher’s Tory Chancellor. The mind boggles – as it presumably did in 1977, for the offer was never made.1 A cabinet of ruddy-faced middle-aged Tory squires and former Heath supporters hardly looked like a revolutionary economic cabal. The man who did become Chancellor, Geoffrey Howe, was eye-rubbingly reassuring, blander than warm milk. Denis Healey had memorably compared being attacked by him in the Commons to being savaged by a dead sheep. A magazine competition of the time asked readers to think of a line to use if the door rang one night and neighbours you could not stand were on the doorstep keen to join a party. The winning answer was: ‘Oh, do come in. Sir Geoffrey’s on sparkling form tonight.’ What could possibly be threatening about this lot?

The answer was buried in the personality of the Prime Minister herself, a far more determined woman than most people realized. The single most important influence through her life seems not to have been an economic theorist or even her husband Denis, but her father. Alderman Alfred Roberts was a self-made, austere, hard-working owner of a grocer’s shop strategically placed on the main road north from London, the A1, at Grantham in Lincolnshire. He did not believe in fripperies or waste – there was no inside loo or hot running water in Margaret’s childhood – and was a strong Methodist. Though an independent in local politics and keen enough for municipal action when he became mayor in 1945, Roberts was of Tory instincts. He was a pillar of the local community in an age when both pillar and community meant something – not only serving as mayor but chairing local charities, the Workers’ Educational Association and acting as a director of a local bank. He was a living exemplar of the kind of independent-minded local politics that would be devastated by the governments of his daughter and her successor. Meanwhile, he taught his daughter to argue. In this he was extremely successful.

Margaret Roberts was not only self-certain but clever. She won a scholarship place at the local grammar school. She went to Oxford to study chemistry, taught by among others the Nobel Prize-winning Dorothy Hodgkin, who rated her, and whose portrait hangs in Downing Street to this day. More significantly, she joined the University Conservatives, something regarded as eccentric in Attlee-era Oxford. Her early career was as an industrial chemist and she can be blamed for the waxy, air-filled texture of cheap ice creams sold from vans in summertime. She moved on to become a tax barrister, though not the kind who used the Bar as a training for politics. Tax law and chemistry meant an attention to facts and to detail. None of this was glamorous. At Oxford and in London, she was more the anonymous hard worker, like that other provincial Methodist who recoiled from public schoolboy flash, young Harold Wilson. But she was a Tory and ambitious; unlike Wilson who kept his Yorkshire accent as a badge of belonging, she lost her Lincolnshire burr as a passport in her direction of travel. In the words of her biographer Hugo Young, she ‘was born a northerner but became a southerner, the quintessence of a Home Counties politician’.

Her two failed attempts to enter Parliament for Dartford in Kent brought her the other crucial figure in her life, her husband Denis. A divorced Kent businessman who had had a good war, his political views were to the right of hers. A keen rugby coach and good golfer, he would become much satirized later as bumbling and henpecked, always with a large G&T in one hand a nervous glance for She Who Must Be Obeyed. In fact Denis was a highly successful executive, rising through the sale of a family paint and chemicals company to the top of Burmah Oil, and retiring very rich in 1975. He provided her with the money and the political, moral support which allowed them to have twins while Mrs Thatcher, as she now was, devoted herself to politics. In the eighties, he managed to keep out of the limelight so that his hard-right views on South Africa, immigrants, the BBC and the feckless working classes created no scandal.

It was a loving marriage which sustained her superbly. In the fifties there was nothing distinctive about the politics of his young wife. It was enough that she was fighting to win a seat as one of the very few women in the Commons, something achieved when she was elected for the well-off middle-class seat of Finchley in 1959. Her politics were formed, nevertheless, by the experience of the post-war years. Seen from above, the socialist experiment in planning and fair shares might have looked noble, she concluded. But from below it was a maze of deprivation, shortage and envy. The Housewives’ League has been mentioned earlier in this book. Far later, Thatcher looked back: ‘No one who lived through austerity, who can remember snoek, Spam and utility clothing, could mistake the petty jealousies, minor tyrannies, ill-neighbourliness and sheer sourness of those years for idealism and equality.’2

As we have seen, Thatcher had risen quietly through the party until as Heath’s Education Secretary she had presided over a joyous, reckless slaughter of grammar schools and played her part in the high-spending consensus policies she later repudiated. When Joseph had his great conversion to free-market economics and monetarism she was with him but still several paces behind. She had won the leadership from Heath to general stupefaction and had been patronized and sneered at as Opposition leader. Only a few commentators had spotted what was coming. In romantic vein the former Labour MP and now television interviewer Brian Walden was telling people that the country needed someone like Margaret Thatcher: ‘In years to come great novels and poems will be written about her.’³ But this was not the general view. During the 1979 election, using all the skills of her new image-makers and advertising agency, and with a shrewd understanding of the importance of television, she was still trailing Callaghan in the personal popularity stakes, by six points at the beginning of the campaign and a whopping nineteen points by the end. It was Labour unpopularity that cost the party power, not Mrs Thatcher’s allure.

The quotation chosen for her to say as she stood for the first time as prime minister on the steps of Number Ten was popularly but wrongly attributed to St Francis of Assisi. It was in fact Victorian. It was also endlessly used to show what a hypocrite she was. Taking what she said as a whole, this is not fair. It read: ‘Where there is discord, may we bring harmony. Where there is error, may we bring truth. Where there is doubt, may we bring faith. Where there is despair, may we bring hope.’ The harmony, it is fair to say, she rather fell down on. As for truth, in politics it is in the eye of the observer. But for the people she had determined to govern for, the inflation-ravaged and despairing middle classes who doubted whether Britain had a future and believed the unions could never be tamed by the State, she brought both faith and hope. And more than any Prime Minister since the war, she made the difference herself. Without her the Tory government of 1979–83 would have been entirely different. Without that confrontational self-certainty and determination not to be bested, Britain would have been back with a pay policy, Keynesian public spending policies and a business-as-usual deal with the European Community within eighteen months. Only a few had the chance to see the real Thatcher before she won power. The British ambassador in Iran was one. In 1978 he had been with her on a visit to Tehran, when she suddenly said that there were still people in the Conservative Party who believed in consensus politics. The ambassador, Sir Anthony Parsons, replied that most British people did, including him. ‘I regard them as Quislings, as traitors,’ she replied. Strong language? ‘I know. I mean it.’ The ‘Assisi’ quotation was pious and a hostage to events but it was not cynical. Had people been able to hear her words to Parsons at the time, they would have had the full picture.

The crucial issue was grip, which in 1979 meant gripping inflation, which to the Thatcherites meant monetarism. As we have seen, modern monetarism originated in the fifties but had only really become fashionable by the mid-seventies after Heath and Barber let the money supply out of control and huge inflation followed. Its most prominent theorist, the American economist Milton Friedman, was awarded the Nobel Prize in 1975. Denis Healey had pursued a policy of restraining public spending through cash limits and tax rises which had the effects monetarism suggested, though never believing in the numbers and targets he was obliged to publish. The basic proposition of monetarism is almost universally accepted, which is that inflation is related to the quantity of money in the economy. Where it diverges from Keynesian economics is in arguing that the sole important job of government in economic management is therefore to control the money supply and that this can be scientifically measured and calibrated. The other issues, unemployment, productivity and so on, will eventually resolve themselves. The intellectual attraction is obvious. Conventional economic management had become a horrendously difficult and uncertain business, juggling uncertain and out-of-date information about output, the balance of payments, unemployment, inflation – a game with one too many rules ever to fully grasp. Monetarism swept away all that. Only hold firm to the principle, get the money supply down, and you will succeed. In 1979 it had not been widely tested outside the military dictatorship of Chile.

In practice Thatcher and her tight circle of economic ministers and advisers, who kept the rest of the cabinet in the dark, did have other objectives. They could have restricted the money supply by raising income tax but she was a tax-cutter. Almost immediately Howe cut the basic rate of income tax from 33 per cent to 30 per cent and the top rate from 83 per cent to 60 per cent. Spending cuts were agreed too but to make up the difference a huge rise in value added tax, doubling to 15 per cent, came in. Money was being redistributed from the masses, paying more for meals, clothes and other items, to higher-rate taxpayers. One of the Tory moderates, Jim Prior, following the manifesto, unveiled a bill for trade union reform that banned the closed shop unless 80 per cent of workers wanted it, provided public money for strike and union ballots, and outlawed secondary picketing of the kind that had been so widely seen during the ‘winter of discontent’. It would have been radical under another government. Thatcher expressed bitter disappointment that it did not go further and outlaw all secondary action. She castigated him as a ‘false squire’, one of a class of Tories who ‘have all the outward show of a John Bull – ruddy face, white hair, bluff manner – but inwardly they are political calculators who see the task of Conservatives as retreating gracefully before the Left’s inevitable advance.’4 This was a mean and foolish verdict; Prior was simply a shrewd politician, taking one step at a time. In frustration Thatcher suddenly announced that strikers would now be assumed to be getting union strike pay and so would not qualify for social security. The battle lines were being clearly set.

Howe pursued his strategy through a second Budget in 1980 setting out the scientific sounding Medium-Term Financial Strategy, or MTFS, with detailed predictions about the growth of the chosen measurement of money, sterling M3. But with inflation raging, a recession biting and credit restrictions loosened, it was impossible to enforce, just as Healey had predicted. The money supply was meant to be growing for 1980–1 at around 8 per cent but actually grew at nearly 19 per cent. The monetarists risked looking like fools. Strike-ravaged and low-productivity British Leyland came begging for yet more money but instead of telling the State car-maker to close, or ordering it to be sold off, Thatcher gave way, very much as Heath had when Rolls-Royce had tested his opposition to bail-outs. Rolls-Royce eventually thrived, however, while BL died. There was a steel strike and though the government talked tough and stood firm, the eventual settlement was high and the unions were certainly not humiliated. By the second half of the year unemployment was up by more than 800,000 and hundreds of manufacturing businesses were going bust, throttled by the rising exchange rate. Industrialists, who had looked to the Tories with such delight, were beginning to despair. Prices were up by 22 per cent in a year, wages by a fifth. At the Tory conference of 1980 cabinet dissidents began to make speeches subtly criticizing the whole project. These coded bat-squeaks of alarm, demonstrating early on that the Tory left had little real fight in it, were dismissed by Thatcher in a phrase found for her by the playwright Ronald Millar: ‘You turn if you want to. The lady’s not for turning.’

The word ‘wet’ was a public schoolboy term meaning soppy or weak. It was being applied by monetarist Tories to their Heathite opponents by the mid-seventies. In the great Thatcher cabinet battles of the early eighties it was appropriated to refer particularly to the senior ministers who did not agree with her – notably Prior, Francis Pym, Sir Ian Gilmour, Mark Carlisle, Norman St John Stevas, Peter Walker, Christopher Soames and (arguably) Michael Heseltine. All had subtly different analyses but all were panicking about the deflation being visited upon an already weak economy by Howe. She would punish them for their lack of faith. They were in the majority and had they revolted the history of Britain would have been very different. But ‘wet’ was accurate in a wider sense. They rarely tried to face her down, they did not settle on joint action to make her change course and though there were many threats to resign on points of principle, the cabinet dissidents waited till she fired or demoted them.

The great confrontation would have come in 1981. Howe believed that despite unemployment at 2.7 million and heading towards 3 million, despite the economy continuing to shrivel, with new bankruptcies being reported by the day and the biggest collapse in industrial production in a single year since 1921, and despite the lack of any clear control over the money supply, he must go further still. Swingeing cuts and rises in taxes, this time by freezing tax thresholds, would take a further £4 bn out of the economy. Thatcher told her new economic adviser Alan Walters that ‘they may get rid of me for this’ but that it would be worth it for doing the right thing. Outside her circle, it seemed anything but right. Famously, 364 economists wrote to the papers denouncing the policies. The Conservatives crashed to third place in the opinion polls behind the SDP and the left-wing Labour Party of Michael Foot. On the streets rioting seemed to be confirming all the worst fears of those who had predicted that monetarism would tear the country apart.

This was the moment when Thatcher’s self-certainty would be tested most clearly. Any normal politician would have flinched. Churchill, Macmillan, Heath, Wilson and Callaghan would have ordered in the Chancellor and called quietly for a change in direction, blowing smoke in all directions to hide the retreat. Thatcher egged her Chancellor on. If anything, she thought he had not gone far enough. In ringing terms she told the Tory Party faithful to stay calm and strong: ‘This is the road I am resolved to follow. This is the path I must go. I ask all who have spirit – the bold, the steadfast and the young at heart – to stand and join with me.’ In early April 1981 riots broke out in Brixton. Shops were burned and looted, streets barricaded and more than 200 people, most of them police, were injured. Mrs Thatcher’s response was to pity the shopkeepers. Lord Scarman was asked to hold a public inquiry; but in the first week of July, trouble began again, this time in the heavily Asian west London suburb of Southall, with petrol-bombs, arson attacks and widespread pelting of the police. Then Toxteth in Liverpool erupted, the worst of all, and continued for nearly two weeks. Black youths, then whites, petrol-bombed the police, waved guns and burned both cars and buildings. The police responded with CS gas, the first time it had been used on the streets of mainland Britain, and with baton charges. As in London, hundreds were injured and here one man was killed. Toxteth was followed by outbreaks of looting and arson in Manchester’s Moss Side.

With unemployment reaching 60 per cent among young blacks, and both Liverpool and Manchester having suffered badly from recent factory closures, many saw this as clearly linked to the Thatcher–Howe economics; what Denis Healey, from opposition, was now calling ‘sadomonetarism’. (He had called it punk monetarism but his children told him this was unfair to punk rockers.) Michael Heseltine at his own insistence was despatched for a series of extraordinarily frank exchanges with young black men in Toxteth. He took up their frank allegations of racism with the local police and bullied local bankers and industrialists into coming with him to see how bad conditions were at first hand. Back in London he wrote a famous internal memorandum, ‘It Took a Riot’, calling for a change of industrial and social polices to help places like Toxteth – government money to bring in private investment, job creation schemes and a minister for Liverpool, for the next year at least; Heseltine argued that anything less was not compatible with the best traditions of the Tory Party. He stuck with Liverpool for well over a year, helping bring renovation projects, new money and a morale-boosting garden festival, attended by 3 million people.

Mrs Thatcher knew a rival when she saw one. There was only room in this party for one blonde. She described the Heseltine initiative merely as ‘skilful public relations’. She had also visited Liverpool and drew very different conclusions:

I had been told that some of the young people involved got into trouble through boredom and not having enough to do. But you only had to look at the grounds around these houses with the grass untended, some of it almost waist high, and the litter, to see this was a false analysis. They had plenty of constructive things to do if they wanted. Instead, I asked myself how people could live in such circumstances without trying to clear up the mess.

The problem was lack of initiative and self-reliance created by years of dependency on the State, and compounded by the media. It was nothing whatever to do, she snorted, with sterling M3*. No better expression can be found of the gap between the monetarist true believers and the old Tories.

Her views unaltered, Thatcher then went into full-scale battle with the ‘wets’. The provocation on both sides was Howe’s discovery that after the ferocious Budget of 1981, he would need to implement yet another tight squeeze in the coming year. Another £5 bn cut was needed for the 1982 Budget. There was something like a full-scale cabinet revolt. Heseltine, fresh from Liverpool, warned of despair and electoral meltdown. Other ministers called for a return to planning, warned wildly of what had happened in Hitler’s Germany and, in the case of Gilmour, lethally quoted Churchill too: ‘However beautiful the strategy, you should occasionally look at the results.’ Even monetarist true believers seemed to be deserting. Thatcher herself called it one of the bitterest arguments in a cabinet in her time. She became extremely angry. She had once said that given six strong men, she could get through what was ahead. Now she was well short. Drawing the meeting to a close, she prepared to counter-attack. St John Stevas had already been sacked. Now Soames, Mark Carlisle and Gilmour went too, while Prior was moved away from the centre, to Northern Ireland. She had realized she could afford to take her internal critics out, department by department, clever riposte by clever riposte.

They might have guessed. It was not just on the economy that she was, by the old standards of the seventies, ferociously determined. In a series of strikes she had intervened to stop ministers settling with public sector workers, even when it would have been cheaper to do so. She had already shown her contempt for the top civil servants. She had kept the trade union leaders locked out. Len Murray, the TUC chairman who had spent half the Wilson and Callaghan years sitting round tables with the two of them, lugubriously grazing on the taxpayers’ sandwiches, was allowed into Downing Street just three times in Mrs Thatcher’s first five years. But the best evidence of the Thatcher style to date had been the struggle with the other European leaders to reclaim roughly £1 bn a year of net British payment to the Community – or, in Thatcherspeak, to get our money back. Doing so involved an anti-diplomatic brawl that careered from Dublin to Luxembourg and from Luxembourg to Brussels. She would not shut up and she would not back down.

The German Chancellor, Helmut Schmidt, pretended to go to sleep and the French President, Valéry Giscard d’Estaing, began to read a newspaper, then got his cars outside to rev their engines – not a subtle hint. She was entirely unfazed. In an epic four-hour meeting over dinner, she simply refused to shut up. Diplomats from all sides suggested interesting side-deals, trade-offs, honourable compromises. She brushed them all aside. Astonishingly, in the end, she got three-quarters of what she had first demanded. Astonishingly, she then said ‘No’. It was only when almost her entire cabinet were in favour of settlement that she grudgingly agreed, like a bloodied prizefighter desperate for just another slug, hauled away by worried friends. She might have had the mother of all makeovers – softer voice, softer hair, better teeth – but she was a raw, double-or-quits killer when she was cornered. The press and the country were beginning to notice it. And she wanted supporters, not colleagues, alongside her. Into the ring came Nigel Lawson, Cecil Parkinson and Norman Tebbit. She would need them. For a while chaos inside the Labour Party had helped protect her from the electoral consequences of her move away from the centre-ground. The Tories might be hated but Labour were unelectable.

The Left at War With Itself

Civil wars tend to start with arguments about constitutions, which are always about raw power. Labour’s was no different. In its detail it was mind-dazingly complicated. It involved a host of organizations on the left, an alphabet soup of campaigns, coordinating committees and institutes run by people most of whom then disappeared from public life. It began with arguments which seemed merely about party rules, such as whether or not MPs should be able to be sacked by their local parties, and the exact percentage of votes for a Labour leader held by the unions, the party activists and MPs. It was nasty, personal, occasionally physical, and so disgusted the outside world that Labour very nearly disappeared as an effective organization. Those who mocked the smoothness and blandness of Tony Blair’s New Labour rarely remembered the voter-repelling punch-up that preceded it. This fight would be fought far from Westminster, in the bars and halls of Blackpool, Brighton and Wembley at Labour and trade union conferences. The issue was simply control – who ran the Labour Party and where was it going?

There was widespread bitterness about what was considered to be the right-wing politics of the defeated Wilson–Callaghan government, and the paltry number of conference decisions which had actually made it into Labour’s election manifesto. For years lobby groups had beavered away to change the party’s policy, then finally won some ‘historic’ conference vote, only to see the Labour leadership ignore it all, and then lose anyway. Callaghan, for instance, had simply vetoed an elaborately prepared pledge to abolish the Lords. At the angry Labour conference of 1979 the party’s general secretary, no less, told him he wished ‘our prime minister would sometimes act in our interests like a Tory prime minister acts in their interests’. One former Labour MP, Tom Litterick, angrily flung a pile of Labour handbooks whose pledges on Europe, housing, women’s rights, the disabled and so on had been ditched by Callaghan from the manifesto: ‘“Jim will fix it,” they said. Aye, he fixed it. He fixed all of us. He fixed me in particular.’5

In this atmosphere, the left wanted to take power away from right-wing MPs and the traditional leaders and carry out a revolution from below. They believed that if they could control the party manifesto, choose the leader and bring the MPs to heel, they could turn Labour into a radical socialist party and then, when Thatcher’s economics destroyed her, win a general election. Some idea of their ultimate objective is clear from the agenda voted through at Labour’s October 1980 conference at Blackpool, which called for taking Britain out of the EC, unilateral nuclear disarmament, the closing of US bases in Britain, no incomes policy and State control of the whole of British industry, plus the creation of a thousand peers to abolish the House of Lords. Britain would become a North Sea Cuba. The Trotskyite Militant Tendency, which had infiltrated the Labour Party, believed in pushing socialist demands so far that the democratic system would collapse and full class revolution would be provoked. Benn, who thought that ‘their arguments are sensible and they make perfectly good radical points’, saw Militant as no more of a threat than the old Tribune group or the pre-war Independent Labour Party. Always a thoroughly decent man, Benn believed the left would end up with a thoroughly decent socialist victory. In fact thuggish intimidation in many local Labour parties by Militants was driving moderate members away in droves. In alliance with them were many mainstream trade unionists who simply felt let down by the Callaghan and Wilson governments; left-wing activists who were not Marxists, and those who were driven above all by single causes such as nuclear disarmament.

Shrewd tactics and relentless campaigning enabled a small number of people to control enough local parties and union branches to have a disproportionate effect in Labour conference votes, where the big and undemocratic union block votes no longer automatically backed the leadership. At the 1980 conference the left won almost every important vote, utterly undermining Callaghan, who quit as leader two weeks later. Because new leadership rules were not yet in place, awaiting a special conference in January, Labour MPs had one final chance to choose their new leader. Michael Foot, the old radical and intellectual who had begun his time in Opposition, characteristically, by composing a book of essays about Swift, Hazlitt, Paine, Disraeli and other literary-political heroes, was persuaded to stand. Benn would have had no chance among Labour MPs, many of whom now saw him as a menacing figure, allied with the Trotskyist sans-culottes outside who would take away their privileges. But Foot was a great parliamentarian and someone had to be found to beat Denis Healey. The former Chancellor, whose natural pugnacity and abusive wit made him plenty of enemies at party conference, had become the villain of the Labour left.

Early on Healey had pinpointed the fatal flaw in their strategy which was that if they did take over the Labour Party, the country wouldn’t vote for it. Activists, he told them, were different from ‘the great mass of the British people, for whom politics is something to think about once every year at most’.6 His robust remarks about what would later be called the loony left were hardly calculated to maximize his chances, despite his popularity in the country at the time. At any rate he was eventually beaten by Foot by 139 votes to 129. There are plenty who believe that Foot, who would endure much mockery as a party leader for his shabby appearance and rambling media performances, was actually the man who saved the Labour Party since he was the only leader remotely acceptable to both the old guard and the Bennite insurgents. It was a job that Foot took on entirely out of a sense of duty. With his old-style platform oratory, his intellectualism and his stick, he was always an unlikely figure to topple Margaret Thatcher. Worzel Gummidge against the Iron Lady; it was the stuff of children’s pop-up books. It was also the last blast of a romantic socialist intellectualism against the free market.

The left marched on. At the special party conference Labour’s rules were indeed changed to give the unions 40 per cent of the votes for future Labour leaders, the activists in the constituencies 30 per cent and the once-dominant MPs only 30 per cent. Labour’s struggle now moved to its next and decisive stage, with the left in exuberant mood. It was decided that Benn must challenge Healey for the deputy leadership the following year. This would signal an irreversible move. A Foot–Benn Labour Party was a very different proposition from one in which Healey had a strong voice. Both sides saw it as the final battle. Around the country Benn went campaigning with verve and relentless energy. At public meetings, Healey was booed and heckled and spat at. The vote was clearly going to be very close though with the complicated new electoral college system, no one knew how close.

At this point, two other characters need to be reintroduced, both miners’ sons, both left-wingers, both men who had made their names by attacking Heath, one on picket lines and the other on the floor of the Commons. They were Arthur Scargill, the NUM boss, and Neil Kinnock. The intimidation of anyone who would not back Benn was getting worse though Benn himself sailed imperturbably through all that, apparently not noticing what was being said and done in his name. Scargill was one of the most aggressive, enough to finally provoke Kinnock into deciding that he could not support Benn. Nor could he support Healey, a right-winger. So he would abstain. He announced his decision in the Labour newspaper Tribune. Kinnock had been slowly moving away from the hard left, and had taken a position as the party’s education spokesman. He had run Foot’s campaign. Popular in the party, he was regarded with increasing suspicion by Benn himself. But this open break with the left’s champion shocked many of his friends. At the conference in Brighton, Benn was eventually beaten by Healey by a whisker, less than one per cent of the votes. Kinnock and Scargill clashed angrily on television. The seaside town was awash with ugly scenes and talk of betrayal. Kinnock was involved in several scuffles and finally, when attacked by a man in a public toilet, ‘beat the shit out of him . . . apparently there was blood and vomit all over the floor’. It was the inelegant end to an inelegant revolt; after that the left would be powerful in the party but could never hope to seize it.

The Nice Gang

By then, however, many thought it was already too late. For a breakaway had begun and a new party was being formed. The idea had come first from Roy Jenkins before the Bennite revolt, as he contemplated the state of the British party system from his grand offices in Brussels, where he was President of the Commission. Offered a BBC lecture in 1979 to ruminate about the future, he argued that perhaps the two-party system established since Victorian times had come to the end of its useful life. Coalitions, he said, were not such a bad thing. It was time to strengthen ‘the radical centre’ and find a way through that accepted the free market economy but which also took unemployment seriously. His lecture was coded, tentative but clear enough. He was no longer a Labour politician and he was looking around. He was in touch with David Steel, the Liberal leader, but felt that although he was close to Liberal thinking, only a new party would give British politics the hard poke it needed. Always a famous host, he began holding lunches for old friends from the right of the Labour party, including Bill Rodgers, who was still in the shadow cabinet, and Shirley Williams, who had lost her seat but was still one of the best-liked politicians in the country. Then Jenkins made a second speech to journalists and their guests, Kinnock among them, in the Commons where he speculated more openly about a new party as ‘an experimental plane’ which might just take off. At this stage the public reaction from Labour MPs was discouraging. Williams had said that a new centre party would have ‘no roots, no principles, no philosophy and no values’. David Owen, the young doctor who had been a rare glamorous star as Foreign Secretary in the Callaghan government and was now fighting against unilateral nuclear disarmament, said Labour moderates must stay in the party and fight even if it took ten or twenty years.

The Bennite revolt changed many minds. After the Wembley conference, at which Owen was booed for his views on defence, he, Jenkins, Williams and Rodgers issued the Limehouse Declaration, describing Wembley as ‘calamitous’ and calling for a new start in British politics. That was duly formalized as the Social Democratic Party or SDP two months later, in March 1981. In total thirteen Labour MPs defected to it and many more might have done had not Roy Hattersley and others fought very hard to persuade them not to. Within two weeks 24,000 messages of support had flooded in and a temporary headquarters, manned by volunteers, had been found. Peers, journalists, students, academics and others were keen to join. The nice people’s party was on its way. Public meetings were packed from Scotland to the south coast of England. Media coverage was lavish and flattering. In September an electoral pact was agreed with the Liberal Party after delirious scenes at the party’s Llandudno conference, and the Alliance was formed. Trains proved an unlikely theme of the new party, with the SDP holding (literally) rolling conferences for their first two years, journalists and politicians crammed together singing their way round provincial Britain. After giving Labour a terrible shock in the Warrington by-election, the SDP won their first seat when Shirley Williams took Crosby from the Conservatives in November, with nearly half the votes cast, followed by Jenkins winning Glasgow Hillhead from the Tories the following year. Some sense of the early excitement can be captured by the thought that had they taken their stratospheric opinion poll ratings seriously (which sensibly they did not) the SDP could have expected to win nearly 600 out of the then 635 parliamentary seats.

His victory allowed Jenkins to become the leader of the party in the Commons. But he had lost his old mastery of the place; or perhaps leading a rump group caught between Thatcher’s Conservatives and the baleful Labour ex-comrades was simply impossible. In due course Jenkins would lose his seat at the general election and Owen would take over as leader. The personality problems that would later cause such mayhem were soon unavoidable. David Owen was handsome, romantic, arrogant, dogmatic, Welsh, patriotic and never a team player. He had always believed that leadership was more rightly his and feared that Jenkins was leading the SDP towards a merger with the Liberals. Owen saw himself still as a socialist although of a new kind. Jenkins, for his part, found his old protégé Owen prickly and arrogant. In short, their relationship was every bit as cordial as that between Tony Blair and Gordon Brown in later years. As with that, personal rivalry did hold the party back. The upsurge of the SDP shook even Mrs Thatcher, while it led some in the Labour Party to fear their cause was finished.

It also gave a new lease of life to the Liberals. In the early fifties, the once mighty party of Gladstone and Asquith had been a negligible force, down to half a dozen MPs and 3 per cent of the national vote. Under Jo Grimond it had enjoyed a revival as the party of genuine liberalism and in the sixties it attracted an increasingly radical wing, anti-nuclear, anti-apartheid, in favour of community politics and, in general, amiably stroppy. Liberal conferences were distinguished by stalls of organic apples, large hairy men in sandals and enthusiasts for obscure forms of land taxation, as if a medieval fair had somehow collided with a chartered surveyors’ seaside outing. Yet so great was the public disenchantment with conventional politics that this unlikely caravan rumbled ahead, particularly under the flamboyant, dandyish, sharp-witted Jeremy Thorpe. Faced with allegations about a homosexual affair and a murder plot (though only a dog perished, and the prosecution failed), Thorpe resigned. By the early eighties the party was being led by Steel, ‘the boy David’, looking for a strategy. The SDP provided a route back to the centre ground but Owen was not alone in despising the Liberals and the eventual merger between the parties was bitter and difficult. Nevertheless, by the early spring of 1982 the SDP and Liberals could look forward with some confidence to breaking the mould of British politics. Mrs Thatcher was hugely unpopular. Labour was in uproar. What could possibly go wrong?