Wednesday, 29 October 2008

Consensus' End

I finished the second volume of Bernard Donoughue's memoirs (Downing Street Diaries) this week, which are an account of working in No10 under Jim Callaghan between 1976 and 1979. He was a political advisor who worked closely with the PM and various civil servants on policy (ie not spin, though he did have words of spin-related advice for Jim).

What is fascinating is the way the three years, seen from inside No10, veer from immediate crisis, to an eighteen month period of calm, to total and utter chaos. It is also curious (though i've heard this before in contemporary accounts) that Donoughue, as a Labour man, is frustrated by the actions of the unions, but also feels strongly that the British people themselves are to blame: they've lost their elan, their desire to work, their whole spirit. He ends his accountin May 1979, believing that the Tories and anyone else would fail if they could not get the people as a whole up and running again, with belief and commitment in their work.

The central stumbling block during 1978-79 seems to be the 5% pay policy, which had to be thrashed out in the teeth of ministerial opposition and then had to be enforced - which, especially after the laws on sanctions for companies who broke the policy were defeated in the Commons, was impossible. Inflation had been brought down to 7% during 1978 and though Donoughue does not mention it, it was clearly rising again at the end of the year.

But the way in which things, aided by the weather, collapse utterly between December 1978 and February 1979 is startling even to someone who's taken an interest in this period for years. Mad pay demands, threats to strike even during the negotiation process, wildcat strikes, secondary picketing, a Labour party so bewildered by the betrayal of its people that it did not know where to turn. In this quick period, No10 seem to become convinced that the Labour movement has been betrayed. Donoughue writes at one point that what they were doing was not Trades Unionism, but capitalism in its rawest form - we want whatever we can get and stuff everyone else.

He reserves his sharpest scorn for public sector unions, and particularly the ones responsible for picketing hospitals.

This whole experience leaves him convinced that Britain in general really is sick.

It does leave me wondering, if this account is reliable, and if Labour had won decisively in the autumn of 1978 (as many had though might happen) what would have been the course until 1983. I doubt, strongly, whether incoming North Sea Oil would have made any difference. I think it would have been used as fuel for more pay demands, because the political will for union and public sector reform generally was only just gestating at the time of the 1979 election within Labour and would have been delayed even longer than it actually was. Some movement into tax cutting territory might have happened, and there would not have been the great shift to indirect taxation. It is also clear that Britain would have deindustrialised, just as it did, though probably more slowly. In the Diaries, the Cabinet are shown to have no idea what do about the collapse of Steel except let it happen. They know it's useless, they know the collapse will be desperate, but they cannot afford to bail it out and don't really have the political will or nous to do so. They just let it go, slowly but definitely. And that's what would have happened if Jim had been in power in that 1980-81 period. Some more investment in bad products made with bad practices, no reform, same result. Possibly less painful in the short term, but leading to a similar result: the death of the traditional industries in Britain. Even in 1978 Donoughue talks about "another wave of deindustrialisation", admitting that it has been going on for years.

But that's not really an informed view. That's just me, thinking on the basis of one book's ideas. But it is interesting to see things one normally associates with THAtcher, already happening. Another one is monetary policy, forced onto the government by the IMF.

Of note in the diaries is the constant, weaselly treachery of Tony Benn; the desire of Labour not to lose the Catholic vote by being too extreme on abortion (unlike today, when Labour seems desperate to lose the left-footer vote and indeed has); the self-interest and laziness of the Civil Service.

I think the book is well written, clearly prejudiced like any first person account but overall fair both to its subject (Jim) and the times. It steers well clear of "revelations" and personal stuff (except in small doses), and it does not seek to backstab. Above all, it's been hidden for 30 years, rather than the two minutes we've come to expect from "I Was There" books.

What did Jim famously say?

"You cannot now, if you ever could, spend your way out of a recession."


Hey Darling, your tax or mine? fnarr fnarr.

No comments: