Succeeding Harold Wilson’s surprise resignation in 1976, James Callaghan won leadership of the Labour Party and became Prime Minister. Sustained economic difficulties, high public expenditure and market forces resulted in the government accepting a loan from the International Monetary Fund (under settings implementing government spending controls).
In fact, his was a surprising career. He is the only individual ever to have held all four top positions in government. His life was full of brave decisions, remarkably on the unions and Northern Ireland. He saw himself not as Old but as “creative” Labour. As such, his attainments survive.
He answered to Britain’s expanding economic recession by accepting deflationary policies and more cuts in public expenditure, which projected the politics of Margaret Thatcher after 1979. He prospered in safeguarding some improvement in the nation’s situation, but then stanch a tactical error in delaying a general election until the spring of 1979, only to see his government totally disgraced by mass industrial aggressiveness during the 1978-1979 ‘winter of discontent’. Throughout his premiership Callaghan ran a minority government, dependent on the provision of smaller Westminster parties. Callaghan’s government lost a vote of no assurance in 1979.
He was particularly unpresidential. His style was cooperative, with cabinet government sheltered and an academic method inspiring directness and conviction. He was not a man for “sofa government” or for much rotation. His press secretary, Tom McCaffrey, was a quiet expert who knew his place. Callaghan’s own respect grew after the disbursement of the IMF crisis; he then hit out confidently in several policy areas, pushing Labour in instructions later related with New Labour. He examined postwar economic convention and emphasised the significance of inflation. He entitled for improved teaching principles in the nation’s schools. An old police adviser, he acknowledged Labour anew with a promise to law and order. More hesitantly, he presented Welsh and Scottish devolution. Abroad, he converted distinctly pro-European and helped Jimmy Carter to exchange the Camp David promise in Palestine.
In the late 1970s, the post-war economic boom came to an end. Prices of goods and raw materials initiated to rise sharply and the exchange rate between the pound and other currencies was unbalanced. This shaped a problem with the balance of payments: imports of goods were valued at more than the price paid for exports.
In the late 1970s, inflation had continued to be a problem; with a mixture of increasing oil prices and growing nominal wages. Again, the administration sought to control the wage inflation by imposing wage caps. But, again the unions were in no disposition for stiff wage expenditures. Strike action broke out across the country, spreading from the industrial cores to the public sector. Public servants from dustbin men to grave prospectors in Liverpool went on strike. Unburied coffins in Liverpool piled up, and in cities across the UK, garbage went uncollected.
In the end, his own unions and the Bennite left let him down in the winter of discontent. Yet his standing had risen progressively while at No 10, an unusual event. This old party man proved positive less in leading his unfraternal companions than in controlling the nation. His three years as premier, occasionally wrongly seen as just an break between the establishments of Wilson and Thatcher, had a confident worth all their own, but the “Winter of discontent” was not helpful
Like all political threats, the Winter of Discontent was a long time in the creation. It could hint it back to Keynes’ General Theory in the 1930s, which developed the drawing for Britain’s post war clearance, the stability between on the one hand, full occupation and a safety and on the other, economic development.
The conclusion of numerous histories was that the so-called Winter of Discontent remained the consequence of ground-swell of obstruction with the unsuccessful politics of the 1970s, with Keynesian economics, the business social contract and finally the social egalitarianism of the post-war years being uncontrolled by politicians, trade unionists and lastly the public themselves.
It resulted from the weight between contradictory demands: one the one hand, high state expenditure on welfare and on the other, keeping a place at the worldwide top table. Achievement depended on a robust economy. Instead, Britain appeared protected in a descending twisting where the decreasing value of sterling and inflationary remuneration prerogatives led to low manufacturing output and inflation that in turn led to a fragile pound.
One big problem were price rises to pay for salary contracts that were not warranted by higher efficiency. On the right, the power of trade unions – demonstrating more than half the work force, counting the rapidly increasing public sector – to go on strike without a ballot, authorized support or obligatory adjudication was extensively and excessively criticised.
But inflation had been cut from 27% to single numbers. But Jim Callaghan, Labour prime minister since 1976 and a man whose political occupation was constructed on his trade union circumstantial had decided a few more months would implant the economic turn around and prove he had beaten inflation.
The hazard for Labour was that it was now even additional narrowly branded with the unions, and their disapproval injured the party’s own standing. The trade unions had an exceptional political effect but at the expense of their members’ pay containers. And by 1978, their associates were not equipped to support it any more. They required a catch-up pay reimbursement, and a reappearance to free combined negotiating.
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