In 2005, when Tony Blair was still prime minister and people still believed he was presiding over a British economic miracle, his party conference speech made a pointed historical detour. Jim Callaghan, his predecessor as Labour premier, had died a few months earlier. Blair paid him, and other Labour politicians who ran Britain in the 1970s, a distinctly double-edged tribute: "they were great people. But [they] were not ready… to see change was coming."
Conservatives are less restrained about Britain's 1970s governments. The IMF crisis, the winter of discontent, overwhelmed ministers, Britain at a dead end—such bogeymen have sustained right-wing speeches and editorials for decades. Even now, with many of the economic and political orthodoxies of the last 30 years in doubt, the conviction endures that the regimes of Callaghan, Heath and Wilson were uniquely incompetent, short-sighted and obsolete in their thinking.
But how justified is this? It would take a bloody-minded revisionist to argue that the decade was a golden age. Footage of Wilson's return to Downing Street after the February 1974 election shows the mischievous ringmaster of postwar Labour politics looking worn out, slack-shouldered, and joyless. For my book on the 1970s I interviewed his chancellor, Dennis Healey. Faced with an oil crisis, inflation and out-of-control state spending, Healey cheerfully told me that for his first year in the job: "I knew bugger all about economics."
Yet the damaging phase of drift and panic lasted only about 18 months: from autumn 1973, when an overconfident Heath was ambushed by an approaching miners' strike, and responded heavy-handedly with the three-day week, to spring 1975, when Healey began curbing public spending and the economy haltingly began to pull back from the brink. "The bottomless slump had been something of an illusion," wrote historian Keith Middlemas in the 1991 volume of his trilogy, Power, Competition and the State, a rare book addressing the 1970s crisis without melodrama or exaggeration.
But hindsight is not a good way to judge governments. Predictions of an oil crisis in the 1970s were as rare as predictions of banking meltdown in the noughties. Like most democratic administrations in times of turbulence, 1970s governments performed undignified U-turns. In 1976 Jim Callaghan abruptly abandoned the Keynesianism that had dominated postwar economic policy. But was that very different to Brown and Alistair Darling's sudden loss of confidence in lightly regulated markets? At crisis management, cunning old "uncle Jim" was at least their equal. Between 1976 and 1979 he survived without a commons majority, with an often sickly currency, restive unions and IMF bailiffs banging on the gates. Callaghan and Healey had to manoeuvre between an IMF pushing to the right and a Labour party moving to the left; between conservative US officials who wanted Britain to get loans only in return for vast public spending cuts and a cabinet who mostly wanted no cuts at all; and between treasury officials whose economic forecasts and political loyalties were questionable. The compromise reached in December 1976 arguably saved postwar British social democracy—at least for another three years. Indeed, during 1977 and 1978, the economy recovered so impressively that the IMF approached Healey to become its managing director.
One problem for the reputations of Callaghan, Wilson and Heath has been the prime minister who came after them. Margaret Thatcher had more ideas, a stronger nerve and better luck. Heath met an oil crisis with a general election looming; she faced one, in 1979, with the next election years off. Callaghan, like her, had to deal with an Argentinian threat to seize the Falkland Islands. But he warned them off so effectively that almost no one now recalls the naval task force he despatched towards the south Atlantic in 1977, and which returned without firing a shot. She, by contrast, failed to take Argentina seriously until it actually invaded, then exploited the crisis to save her premiership.
Another problem for defenders of 1970s governments is that few people care to remember their complexities. Far easier to see the IMF crisis as the national humiliation it partly was, and to recall the Callaghan administration not for its skilful rearguard actions, but as it ended—with the winter of discontent and the prime minister suddenly paralysed, hiding away in his Downing Street study where, he told colleagues, he "fiddled around with this
and that" while the strikes spread.
Those who hope for a fair hearing for the Brown regime from future historians face an awkward fact. People take longer to register the successes of troubled governments than their failures. Sometimes they never register the successes at all.
