Show Hide image

Jim's lessons

If the Prime Minister is to survive, he has to crush the cabals and replace cabinet "goblins" with h

Commentators are today understandably drawing comparisons between Gordon Brown's current predicament and the experience of James Callaghan's government, especially with reference to the "Winter of Discontent" in 1978-79. Having served with Callaghan in No 10 as head of his policy unit (as I did previously under Harold Wilson), I agree that there are some parallels.

Between 1976 and 1979 we had, as now, a new nonconformist prime minister who was politically very experienced, a strong party man who was a former chancellor of the exchequer and had succeeded a brilliant, if controversial predecessor who had won several general elections. Callaghan, like Brown, inherited the tail end of a series of Labour governments, by which time the electorate and the media were getting tired of Labour and ready for a change. Also like Brown, he was handed the premiership by the party and ducked the much-touted opportunity of getting an electoral mandate from an early general election (which he might or might not have won). Scotland similarly presented difficulties for Cal laghan - and finally brought him down in a Commons defeat. Above all, again like Brown, he faced a daunting economic climate with an energy crisis, threatening inflation and foolishly rebellious trade unions.

However, I am also struck by the differences between then and now. The 1970s were, after all, a generation ago and it was a very different age, dismal in many ways.

The economic climate facing Jim Callaghan was far worse than anything that confronts Brown or the Chancellor, Alistair Darling (when the latter finds time to read the economic history of the 1970s and early 1980s he will want to revise his curious claim that today's is the worst economic situation for 60 years). Inflation peaked around 30 per cent just before Callaghan took over, and was usually in double figures. Most other economic indicators were worse than today's, with growth and productivity very poor over a long period and strikes continually disrupting industry. Not for nothing was Britain then known as "the sick man of Europe".

Politically, the challenges facing Callaghan were daunting. Labour was in a Commons minority throughout his premiership (he skilfully cobbled together small majorities through pacts with the Liberals and the Ulstermen). Labour itself was riven by deep ideological differences of a kind and on a scale unknown today, with the strong left wing consistently on the edge of rebellion and limiting the policy options available to the government. The unions and activists facing Brown at this month's conferences are mere pussies compared to the wild men fighting Callaghan.

The parliamentary opposition facing Calla ghan, led by the formidable Margaret Thatcher, was much more threatening than that operating today, which has few figures of stature and even fewer alternative policies on offer. They have nobody to compare with Thatcher, Michael Heseltine, Geoffrey Howe, Nigel Lawson, Nicholas Ridley, Jim Prior and Keith Joseph. They have no policy programme comparable to Thatcher's liberating, if to some frightening, proposals for free markets, big tax cuts and reducing the monopoly power of our deeply unpopular trade unions.

Today the main opposition is the media, most of which have decided to try to destroy the Labour government and its prime minister, misrepresenting everything it attempts to do as foolish and a failure. The media are more powerful than in the 1970s. But the people will not be electing a cabinet of newspaper editors and Today programme egotists to run the country. A government can see off the media if it demonstrates that it is governing well.

Governing, not surviving

Yet, despite these daunting political and econo mic problems, Callaghan's government survived for three years. And it did more than just survive. For much of that time it governed impressively. Until the final shambles of the Winter of Discontent, when irresponsible trade union behaviour made Thatcher appear to many as the only way out of chaos, Callaghan's government won public approval. In the autumn of 1978 it was ahead of the Tories in the polls and won a key by-election. Callaghan ran well ahead of Thatcher and always dominated her in the Commons until those final months. Inflation was brought down into high single figures. Jim turned the 1976 IMF loan saga into a triumph of cabinet management. The first key steps were taken towards reforming our education system and bringing monetary policy under control.

Although we lost the 1979 election, the Tory lead was cut down from more than 20 per cent at the start of the campaign to 7 per cent on polling day and the defeat was by a modest 40-odd seats - not by the landslide that had appeared inevitable in the months before polling day (and which Charles Clarke fears now faces Labour).

Of course, we were defeated and the Tories were given 18 years of power blessed with North Sea oil. The Winter of Discontent was a gruesome experience for the country, a dreadful failure by the Labour government and by those trade unionists (not all) and the few marsh mallow ministers who inflicted the damage on their own movement and so gave Thatcher the opportunity to carry out her revolution and wreak revenge on the unions. Those 1976-79 years were not a time of proud Labour glory, but they contained many achievements against immense economic and political odds.

Politically, the main lessons were that a prime minister with national values, courage and leadership skills, working collegiately with a strong and loyal cabinet, keeping close to his parliamentary colleagues and remaining connected with the concerns of the public and party rank and file, can overcome most obstacles.

Callaghan had most of those values and skills. He trusted his cabinet colleagues (except perhaps Tony Benn, who behaved as if he was not part of the government, though Callaghan always showed him courtesy, which Benn commendably returned) and his cabinet colleagues trusted him. This collegiate atmosphere made for a relatively coherent government (given the doctrinal divisions) and presented to the nation from No 10 a sense of unity and purpose that is not always apparent today.

Callaghan did not usually - education was an understandable exception - interfere in the micro-details of departmental affairs. But he showed a close interest in his ministers' objectives, holding regular meetings with them individually in the No 10 study, discussing their policy programmes and always encouraging them. In the key Treasury area, he and my policy unit monitored economic policies closely and he held regular meetings with his admirable chancellor, Denis Healey. They had disagreements, but always in private. Callaghan, having expressed his views, then always backed his chancellor in cabinet and in public. His conduct of the 1976 IMF crisis, with seven tense cabinets in which he gave all sides every chance to argue their views and worked with his chancellor throughout, was a good example of how to conduct cabinet and was perhaps the last supreme example of British cabinet government before Thatcher and Tony Blair brought the institution into sad decline.

Gordon Brown (or any successor) could benefit from studying those events: Ken Morgan's biography of Callaghan and my recently published Downing Street Diary of the Callaghan years might be a helpful start. He would see that, even in an age of so-called presidential government, having a strong cabinet is a great asset. Certainly it is hard to be a strong and successful prime minister with a weak cabinet. Callaghan's cabinet - with Healey, John Smith, Merlyn Rees, Roy Hattersley, Shirley Williams, Bill Rodgers, Benn, David Owen and Harold Lever, to name but nine - was clearly stronger than Brown's today.

But it could have been even better and was not as impressive as Wilson's previous cabinet. Cal laghan sadly lost Tony Crosland due to death. He dropped Barbara Castle and did not discourage Roy Jenkins from leaving for Brussels (he almost encouraged him). The latter two were political heavyweights. I could understand Jim's personal feelings against Castle but he would have benefited from her experience and clout. Jenkins seemed semi-detached but he was a great loss and might have been persuaded to stay. When suffering the crunch of the Winter of Discontent Cal laghan might have been better placed with these giants beside him than with mediocrities such as David Ennals, John Silkin and Bruce Millan.

Brown could learn from that earlier experience. His own cabinet - with some commendable young exceptions - seems lightweight compared to Callaghan's and especially relative to the challenges that face it. Some of the biggest current Labour beasts are sadly (and, in my view, unnecessarily) outside the cabinet and if included would add weight and experience. John Reid, Charles Clarke, Alan Milburn and David Blunkett should, if they could be persuaded, be inside in senior positions.

Of course, they have had their problems with the Prime Minister in the past - and he with them. They may initially prefer the comfort of the back benches. The Prime Minister may personally like neither them, nor the way they have criticised him. But he should swallow his animosities and try to persuade them to join the team. Clarke will have offended some with his comments but he would add great weight to the cabinet and would be better occupied fighting the enemy from inside than trumpeting outside the castle walls. Certainly, such a cabinet of heavy hitters would outpunch David Cameron's team of Notting Hill Gate lightweights.

Once, in 1975, when Wilson had promoted a critic in a reshuffle, I protested, "Harold, have you seen what he has said about you?" He replied, "Bernard, that is not the point. My job is to construct the best possible Labour cabinet." That is Gordon Brown's job, too.

Journalists will sneer that these are "yesterday's men". So what? They are at least yesterday's big and experienced men. We need them for the next 18 months. Does anybody believe it would not be better to listen to one of them chewing up John Humphrys and Jeremy Paxman in defence of our government than some of the goblins who now appear?

The Prime Minister might also note that mutual loyalty is a political asset in government. Callaghan backed his ministers and encouraged them to back one another. Admittedly, the left wing plotted over weekend dinners in Hampstead, but Michael Foot continued to preach loyalty. Callaghan discouraged cabals and would not have allowed his deputy whip to plot against his chief whip. He certainly did not encourage No 10 to brief the media against ministerial colleagues. Loyalty is a kind of political cement and is very useful in stormy weather. If the present prime minister has not always demonstrated loyalty in the past, that makes it harder for him to expect loyalty now. But he could learn from Callaghan, who was himself not always loyal to Wilson earlier on but told me that when he suffered prostate cancer in 1972 he swore to reform. Wilson returned the feelings, to the benefit of them both in the crises of 1974-76.

The days of cabals are over

All the above is about the conduct of the job of prime minister, especially the handling of people, where personality is very important and not easy to change. Being prime minister is a uniquely difficult job and it is impossible to know if somebody can do it until they try. Callaghan showed he could do the job in No 10 - better than he ran the exchequer. Gordon Brown has not so far completely managed that, but he is a highly intelligent and experienced professional politician with strong Labour values and, given time, might learn to become a successful prime minister. As a lifelong Labour man, I (of course) hope he can learn, but I cannot be certain that he will. What I know is that he does not have much time.

I am sure he could learn from Jim Callaghan how to handle policy. He needs to focus the government's policy programme in such a way that it gives Labour a fair chance of winning the next election. Callaghan did not dabble in a wide range of policies. He left that to ministers. He did not launch an endless flow of policy initiatives to catch the froth of morning media headlines, which the public ignores or soon forgets. He prioritised a few key areas that mattered to ordinary people: especially controlling prices, sustaining jobs and improving education. In the end he failed on inflation. But he made a good fist of achieving these priorities and they gave his government a policy coherence and a clear political identity and purpose. The public knew what Jim Callaghan and his government were about.

Brown has not yet conveyed (as he did successfully with "prudence" in his early days at the Treasury) a clear sense of purpose. Hence his government appears to lack coherence, purpose and identity. It will not be easy for him to correct that while the media are bent on diminishing and destroying him. But he must try - or else Charles Clarke's stark warnings will be fulfilled.

What should he do? The answer is not easy and anybody who is off the pitch, such as myself, should be wary of advising the present team how to play. But I believe some things can be done quickly. The Prime Minister might, for example, do three things.

First, he should strengthen his cabinet by persuading some big beasts back inside in senior positions - one of them at the Treasury. Labour needs him to try sincerely, and them to agree.

Second, he should overtly try to create trust within his government by giving genuinely full support to his chosen ministers and making it clear that the days of cabals are over (he might wish to acknowledge the past sins of his own entourage in this area and the so-called Blairites could do the same).

Third, and above all, he should abandon micro-tinkering with a wide range of policies and focus on two or three major policy areas where he means to make progress in ways that matter to the mass of ordinary people. He should realise that Labour's legislative programmes in recent years have contained little political potency. I have read the Queen's Speeches in dismay and wondered, "Where are the votes in this?" They are usually full of administrative management and politically correct claptrap. We need a few policy initiatives on a dramatic scale if we are to change the current public mood - which is that it has made up its mind and wants change (Cal laghan told me in 1979 that "there is a sea change in the public mood and it is for That cher"). If that is the case now, we must still try to change it.

My own suggestion would be to take four million of the lowest-paid workers out of the tax net by the time of the next election. That would have an impact on millions of people who are our natural supporters and would offer desirable redistribution of income.

Trimming the fat

How could the £20bn-plus that it would cost be paid? It could be found not by further borrowing, but by cuts in public expenditure, where there is plenty of fat. We could abolish all consultancy in Whitehall (a useless exercise of buck-passing currently costing many billions). Various bureaucratic extravagances, such as "regional development", could be abolished and others, such as "health and safety", seriously trimmed. They were created for symbolic reasons, are costly and often offer little to the public good. The bureaucracy in the NHS might benefit likewise. Abolishing future child benefit beyond the third child (I had four) would save more than £1bn in the next six years.

The Prime Minister should urgently conduct some cabinets to cut bloated expenditure by the required amount. Jim Callaghan did that in 1976-78 and the resulting savings of more than £6bn would, in today's money, produce much of the revenue required.

Concentrating on a few major issues need not mean ignoring particular reforms, provided they matter practically to ordinary citizens. Harold Wilson asked us in 1974 to produce a list of "little things that mean a lot" (and did not cost too much). We did (for example, free TV for the elderly and rescuing the pint measure from Brus sels). Similarly, we could look at the closing of post offices, our appalling rubbish collections and recent proposals to cap or balance net immigration - issues that matter to people of all parties. The central point is that the government must reconnect with the concerns of ordinary people.

Executing such an exercise would require strong leadership and a courageous approach from the top. It would offend some interests, though not the mass of the people. However, the danger is that, without strengthening the cabinet and introducing a few bold policies that have a major impact on the public mood, the government will drift towards electoral defeat. It may be that the public mood is too hostile to change, but at least the effort should be made.

Certainly, Gordon Brown does not, as Jim Cal laghan did, face outwardly a formidable opposition nor (yet) suicidal trade unions inside our tent. The next election is not yet lost for Labour. But it will need a change of leadership style, improved ministerial performance and more politically attractive policies if the public mood is to be shifted. Learning lessons from Callaghan might achieve that.

Lord Donoughue's "Downing Street Diary: Volume 2 - With James Callaghan in No 10" is published this month by Jonathan Cape (£30)

This article first appeared in the 22 September 2008 issue of the New Statesman, The battle for Labour: How to save the party

Show Hide image

Why Jeremy Corbyn is a new leader for the New Times

In an inspired election campaign, he confounded his detractors and showed that he was – more than any other leader – in tune with the times.

There have been two great political turning points in postwar Britain. The first was in 1945 with the election of the Attlee government. Driven by a popular wave of determination that peacetime Britain would look very different from the mass unemployment of the 1930s, and built on the foundations of the solidaristic spirit of the war, the Labour government ushered in full employment, the welfare state (including the NHS) and nationalisation of the basic industries, notably coal and the railways. It was a reforming government the like of which Britain had not previously experienced in the first half of the 20th century. The popular support enjoyed by the reforms was such that the ensuing social-democratic consensus was to last until the end of the 1970s, with Tory as well as Labour governments broadly operating within its framework.

During the 1970s, however, opposition to the social-democratic consensus grew steadily, led by the rise of the radical right, which culminated in 1979 in the election of Margaret Thatcher’s first government. In the process, the Thatcherites redefined the political debate, broadening it beyond the rather institutionalised and truncated forms that it had previously taken: they conducted a highly populist campaign that was for individualism and against collectivism; for the market and against the state; for liberty and against trade unionism; for law and order and against crime.

These ideas were dismissed by the left as just an extreme version of the same old Toryism, entirely failing to recognise their novelty and therefore the kind of threat they posed. The 1979 election, followed by Ronald Reagan’s US victory in 1980, began the neoliberal era, which remained hegemonic in Britain, and more widely in the West, for three decades. Tory and Labour governments alike operated within the terms and by the logic of neoliberalism. The only thing new about New Labour was its acquiescence in neoliberalism; even in this sense, it was not new but derivative of Thatcherism.

The financial crisis of 2007-2008 marked the beginning of the end of neoliberalism. Unlike the social-democratic consensus, which was undermined by the ideological challenge posed by Thatcherism, neoliberalism was brought to its knees not by any ideological alternative – such was the hegemonic sway of neoliberalism – but by the biggest financial crisis since 1931. This was the consequence of the fragility of a financial sector left to its own devices as a result of sweeping deregulation, and the corrupt and extreme practices that this encouraged.

The origin of the crisis lay not in the Labour government – complicit though it was in the neoliberal indulgence of the financial sector – but in the deregulation of the banking sector on both sides of the Atlantic in the 1980s. Neoliberalism limped on in the period after 2007-2008 but as real wages stagnated, recovery proved a mirage, and, with the behaviour of the bankers exposed, a deep disillusionment spread across society. During 2015-16, a populist wave of opposition to the establishment engulfed much of Europe and the United States.

Except at the extremes – Greece perhaps being the most notable example – the left was not a beneficiary: on the contrary it, too, was punished by the people in the same manner as the parties of the mainstream right were. The reason was straightforward enough. The left was tarnished with the same brush as the right: almost everywhere social-democratic parties, albeit to varying degrees, had pursued neoliberal policies. Bill Clinton and Tony Blair became – and presented themselves as – leaders of neoliberalism and as enthusiastic advocates of a strategy of hyper-globalisation, which resulted in growing inequality. In this fundamental respect these parties were more or less ­indistinguishable from the right.

***

The first signs of open revolt against New Labour – the representatives and evangelists of neoliberal ideas in the Labour Party – came in the aftermath of the 2015 ­election and the entirely unpredicted and overwhelming victory of Jeremy Corbyn in the leadership election. Something was happening. Yet much of the left, along with the media, summarily dismissed it as a revival of far-left entryism; that these were for the most part no more than a bunch of Trots. There is a powerful, often overwhelming, tendency to see new phenomena in terms of the past. The new and unfamiliar is much more difficult to understand than the old and familiar: it requires serious intellectual effort and an open and inquiring mind. The left is not alone in this syndrome. The right condemned the 2017 Labour Party manifesto as a replica of Labour’s 1983 manifesto. They couldn’t have been more wrong.

That Corbyn had been a veteran of the far left for so long lent credence to the idea that he was merely a retread of a failed past: there was nothing new about him. In a brilliant election campaign, Corbyn not only gave the lie to this but also demonstrated that he, far more than any of the other party leaders, was in tune with the times, the candidate of modernity.

Crises, great turning points, new conjunctures, new forms of consciousness are by definition incubators of the new. That is one of the great sources of their fascination. We can now see the line of linkage between the thousands of young people who gave Corbyn his overwhelming victory in the leadership election in 2015 and the millions of young people who were enthused by his general election campaign in 2017. It is no accident that it was the young rather than the middle-aged or the seniors who were in the vanguard: the young are the bearers and products of the new, they are the lightning conductors of change. Their elders, by contrast, are steeped in old ways of thinking and doing, having lived through and internalised the values and norms of neoliberalism for more than 30 years.

Yet there is another, rather more important aspect to how we identify the new, namely the way we see politics and how politics is conceived. Electoral politics is a highly institutionalised and tribal activity. There have been, as I argued earlier, two great turning points in postwar politics: the social-democratic era ushered in by the 1945 Labour government and the neoliberal era launched by the Tory government in 1979.

The average Tory MP or activist, no doubt, would interpret history primarily in terms of Tory and Labour governments; Labour MPs and activists would do similarly. But this is a superficial reading of politics based on party labels which ignores the deeper forces that shape different eras, generate crises and result in new paradigms.

Alas, most political journalists and columnists are afflicted with the same inability to distinguish the wood (an understanding of the deeper historical forces at work) from the trees (the day-to-day manoeuvring of parties and politicians). In normal times, this may not be so important, because life continues for the most part as before, but at moments of great paradigmatic change it is absolutely critical.

If the political journalists, and indeed the PLP, had understood the deeper forces and profound changes now at work, they would never have failed en masse to rise above the banal and predictable in their assessment of Corbyn. Something deep, indeed, is happening. A historical era – namely, that of neoliberalism – is in its death throes. All the old assumptions can no longer be assumed. We are in new territory: we haven’t been here before. The smart suits long preferred by New Labour wannabes are no longer a symbol of success and ambition but of alienation from, and rejection of, those who have been left behind; who, from being ignored and dismissed, are in the process of moving to the centre of the political stage.

Corbyn, you may recall, was instantly rejected and ridiculed for his sartorial style, and yet we can now see that, with a little smartening, it conveys an authenticity and affinity with the times that made his style of dress more or less immune from criticism during the general election campaign. Yet fashion is only a way to illustrate a much deeper point.

The end of neoliberalism, once so hegemonic, so commanding, is turning Britain on its head. That is why – extraordinary when you think about it – all the attempts by the right to dismiss Corbyn as a far-left extremist failed miserably, even proved counterproductive, because that was not how people saw him, not how they heard him. He was speaking a language and voicing concerns that a broad cross-section of the public could understand and identify with.

***

The reason a large majority of the PLP was opposed to Corbyn, desperate to be rid of him, was because they were still living in the neoliberal era, still slaves to its ideology, still in thrall to its logic. They knew no other way of thinking or political being. They accused Corbyn of being out of time when in fact it was most of the PLP – not to mention the likes of Mandelson and Blair – who were still imprisoned in an earlier historical era. The end of neoliberalism marks the death of New Labour. In contrast, Corbyn is aligned with the world as it is rather than as it was. What a wonderful irony.

Corbyn’s success in the general election requires us to revisit some of the assumptions that have underpinned much political commentary over the past several years. The turmoil in Labour ranks and the ridiculing of Corbyn persuaded many, including on the left, that Labour stood on the edge of the abyss and that the Tories would continue to dominate for long into the future. With Corbyn having seized the political initiative, the Tories are now cast in a new light. With Labour in the process of burying its New Labour legacy and addressing a very new conjuncture, then the end of neoliberalism poses a much more serious challenge to the Tories than it does the Labour Party.

The Cameron/Osborne leadership was still very much of a neoliberal frame of mind, not least in their emphasis on austerity. It would appear that, in the light of the new popular mood, the government will now be forced to abandon austerity. Theresa May, on taking office, talked about a return to One Nation Toryism and the need to help the worst-off, but that has never moved beyond rhetoric: now she is dead in the water.

Meanwhile, the Tories are in fast retreat over Brexit. They held a referendum over the EU for narrowly party reasons which, from a national point of view, was entirely unnecessary. As a result of the Brexit vote, the Cameron leadership was forced to resign and the Brexiteers took de facto command. But now, after the election, the Tories are in headlong retreat from anything like a “hard Brexit”. In short, they have utterly lost control of the political agenda and are being driven by events. Above all, they are frightened of another election from which Corbyn is likely to emerge as leader with a political agenda that will owe nothing to neoliberalism.

Apart from Corbyn’s extraordinary emergence as a leader who understands – and is entirely comfortable with – the imperatives of the new conjuncture and the need for a new political paradigm, the key to Labour’s transformed position in the eyes of the public was its 2017 manifesto, arguably its best and most important since 1945. You may recall that for three decades the dominant themes were marketisation, privatisation, trickle-down economics, the wastefulness and inefficiencies of the state, the incontrovertible case for hyper-globalisation, and bankers and financiers as the New Gods.

Labour’s manifesto offered a very different vision: a fairer society, bearing down on inequality, a more redistributive tax system, the centrality of the social, proper funding of public services, nationalisation of the railways and water industry, and people as the priority rather than business and the City. The title captured the spirit – For the Many Not the Few. Or, to put in another way, After Neoliberalism. The vision is not yet the answer to the latter question, but it represents the beginnings of an answer.

Ever since the late 1970s, Labour has been on the defensive, struggling to deal with a world where the right has been hegemonic. We can now begin to glimpse a different possibility, one in which the left can begin to take ownership – at least in some degree – of a new, post-neoliberal political settlement. But we should not underestimate the enormous problems that lie in wait. The relative economic prospects for the country are far worse than they have been at any time since 1945. As we saw in the Brexit vote, the forces of conservatism, nativism, racism and imperial nostalgia remain hugely powerful. Not only has the country rejected continued membership of the European Union, but, along with the rest of the West, it is far from reconciled with the new world that is in the process of being created before our very eyes, in which the developing world will be paramount and in which China will be the global leader.

Nonetheless, to be able to entertain a sense of optimism about our own country is a novel experience after 30 years of being out in the cold. No wonder so many are feeling energised again.

This article first appeared in the 15 June 2017 issue of the New Statesman, Corbyn: revenge of the rebel

Martin Jacques is the former editor of Marxism Today. 

This article first appeared in the 15 June 2017 issue of the New Statesman, Corbyn: revenge of the rebel

0800 7318496