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?