Crisis? What Crisis? Labour Lost Leader Poll – James Callaghan Era 1976-1980

Labour Lost Leader Poll

James Callaghan Era 1976-1980


When Harold Wilson returned as Prime Minister in 1974, he made virtue of the fact that he had assembled the ‘most experienced cabinet of the 20th century’.  He’d been leader since 1963 and remained unchallenged thirteen years later, when after fighting five elections and winning four of them, he resigned as PM.

The leadership election that followed would arguably see the strongest field in political history battle it out; Jim Callaghan, Michael Foot, Roy Jenkins, Tony Benn, Tony Crosland and Denis Healey. With such a strong and diverse field, James Callaghan emerged as the unity candidate and  in the final ballot, he beat the Employment Secretary Michael Foot, by 176 votes to 137. Had the moderates Jenkins and Crosland pulled out earlier and supported Denis Healey, the result might have been different.

It would be a tumultuous last period in office for Labour. I have written about the last days of the Callaghan government here Callaghan’s Minority Government Divided Labour For 18 Years – So What Chance Does The Maybot Have?

By 1976 Callaghan, and his Chancellor Denis Healey began imposing tight monetary controls as a condition of an IMF loan (discussed later in this piece). This included deep cuts to public expenditure on education and health. The decisions would cause a division within the party, that would help create a new breakaway political party, cries of red toryism and betrayal, leading to 18 years in the wilderness.

Could it have been different?

The Candidates

Tony Benn

The left-winger was given the title ‘the most dangerous man in Britain’ in the 1970s, but had much support amongst the workers and labour members. His ‘alternative economic strategy’ offered the most substantial change to Britain’s industry since the war.


Tony Benn’s grandfathers had been MPs, and his father, William Wedgwood Benn had been a Liberal and Labour MP before entering the House of Lords as 1st Viscount Stansgate.  Anthony Wedgewood Benn, as he was then known, joined the Labour party in 1943. He would be elected as an MP in 1950, becoming the ‘baby of the house’ at the end of the Attlee government.

After his father’s death he inherited his title, which immediately disqualified him from serving as an MP.  The Speaker barred him from the Commons, and the Labour leader Gaitskell initially refused to support Benn. Backed by a mass petition from his Bristol constituents, he fought and won the subsequent by-election by 13,044 votes. Again the Speaker barred him, and his defeated opponent took the seat in the House instead. Eventually, he won his battle to introduce the 1963 the Peerage Act, which enabled peers to renounce their titles for their lifetimes.

When Labour returned to power from 1974 to 1979 Benn was Secretary of State for Industry (1974–75) and  then Energy (1975–79). Before that, he inspired ‘Labour’s Programme’ 1973, which outlined a plan for a “fundamental and irreversible shift in the balance of wealth and power in favour of working people and their families”. He became Industry Secretary, at a time when Britain was seen as ‘the sick man of Europe’ and in ‘managed decline’.

He proposed ‘an alternative economic strategy’, developing the National Enterprise Board (NEB) and enforcing planning agreements between government and companies. He backed new workers’ co-operatives and plunged money into failing industries to save jobs, with British Leyland being the symbol of the failed policy. Chancellor Denis Healey later vetoed the policies.

In 1975 Benn campaigned for exit from the EEC, and four days later Wilson moved Benn to Energy. After this he became the most influential left-winger activist in the party and often found himself at odds with the leadership. He set out his programme in ‘Arguments for Socialism’, published in 1979. The “democratic socialism” would involve a large of public investment, public expenditure, and public ownership. He claimed the previous Labour government’s had betrayed their roots.

At 3.30am on April 2 1981, under the new leadership rules, he challenged Denis Healey for Deputy Leadership of the party and a six-month struggle ensued for the soul of the party began . Michael Foot was furious and asked Benn to challenge him instead of Healey. Seen as one of the most important moments in the party’s history, Healey shaded Benn by 50.46 to 49.54.

Nine MPs who backed Healey defected to create the SDP.  Benn said the outcome was “far more successful than I could possibly have dreamed”. Benn lost his seat in the disastrous 1983 election but returned to Commons in a by-election in 1984. He lost another leadership contest in 1988, and by the 1990s he was a strong critic of New Labour.

In 2001 Benn retired from Parliament ‘to spend more time on politics’. By the time of his death in 2014, he had become a national treasure and was no longer feared by the establishment.

Denis Healey

Denis Healey was a giant of British politics in the 1970s, serving as Defence Secretary and Chancellor in the most difficult circumstances imaginable. 


Denis Winston Healey was born in Kent in 1917 and he spent most of the war in north Africa and Italy and was the beach master at Anzio. The experience of war shaped his politics and he famously attended the 1945 Labour conference in his army uniform. By 1952 Healey had been elected to the Commons. A former communist, he moved to the right of the party where he became a critic of the Bevanite left

In 1959 Hugh Gaitskell appointed him to the Shadow Cabinet, before Wilson appointed him as his Defence Secretary. He slashed Britain’s military budget against a backdrop of an anti-nuclear and anti-American movement within his party. He boasted that Britain now spent more money on education than defence. In 1974 he was handed another poisoned chalice, the Chancellorship and the next five years at the Treasury were the most difficult of his life. I have written about the problems Healey faced in his first few months as Chancellor here The Shortest Parliament – Labour, 1974 and a doomed Minority Government

He inherited huge world-wide inflation problems and economic disruption caused by OPEC’s oil price increases. Unable to solve Britain’s economic problems, he was forced to obtain a 3.9 billion loan from the International Monetary Fund. Before flying out to Hong Kong to meet the IMF, he had to turn back at Heathrow airport, following a run on the pound and had to address the party conference. He later claimed it was the only time he felt ‘spooked’ by what was happening, and was close to “demoralisation”.

The loan was secured but the crisis continued, and he was forced to implement deep spending cuts as requested by the IMF the following year. The tight monetary controls included deep cuts in public spending on education and health. This set him on a collision course with the left wing again, and his critics argue that the cuts laid the foundations for Thatcherism and economic monetarism.

In 1980 Healey had been expected to take the leadership and had been the bookies favourite. Yet Healey was denied by Michael Foot, and had to become Foot’s deputy instead. Many believed that he had not campaigned hard enough to win. Yet rather than put the final nail in Labour’s coffin, he rejected the virtues of the SDP and helped lead the fightback, as a balanced deputy to the left-wing Foot.

He was forced into the bruising contest for the deputy leadership with Tony Benn, which debilitated the party for the whole of 1981. Healey believed he saved the party in its darkest hour, by breaking Benn’sambitions. He won by 0.852%, following an eight-month contest that highlighted the deep division within the party.

Healey retired to the back benches after the 1987 election before accepting a peerage in 1992. He became a critic of Tony Blair after 2004 and urged the party to put Gordon Brown in place. After this death in 2015, the Telegraph wroteHealey was, with Rab Butler, one of the tiny band who could count themselves unlucky not to have been prime minister.”

Merlyn Rees

Merlyn Rees, was a Welsh-born MP from 1963 until 1992, who served as Secretary of State for Northern Ireland (1974–76) and Home Secretary (1976–79)


The son of a miner, Rees was born in 1920 in South Wales. He spent his wartime service in the RAF before teaching economics and history at Harrow for eleven years. It was here that Rees become a failed parliamentary candidate for Harrow East, losing in 1955, 1959, and in a 1959 by-election.

He finally broke his duck in 1962, replacing Hugh Gaitskell in Leeds South following his death whilst leader of the party. Rees had struck up a friendship with James Callaghan, who although only a few of years older than him, had entered Parliament in 1946 and was about to become Shadow Chancellor. Rees became his PPS, and would become greatly influenced by Callaghan’s politics.

Whilst in opposition Rees began to specialise in Northern Irish politics and his breakthrough came in 1972 as the opposition spokesman on Northern Ireland. He would become the ideal candidate for Secretary of State for NI when Labour returned to power in 1974, although it remained the most difficult job in British politics.

As he began in the role, the power sharing agreement broke down and a crippling two-week strike began. Rees brought in new legislation to establish a future form of government but by March 1976 it had failed. Throughout his time in office Rees was accused of making sympathetic gestures towards the IRA and facilitating contact between civil servants and Sinn Fein. In 1975 he was criticised by the Tories for releasing detainees from prison without a trial.

When Wilson resigned, Rees successfully became Callaghan’s campaign manager and with his friend in Downing Street, he became a key figure in cabinet. In September 1976 he became Home Secretary. His tenure was marked by controversies over law and order the rise of the national front, security and civil liberties. As of the industrial conditions declined, many Conservatives claimed law and order was breaking down. He also had to battle with the police force over a £6 a week claim.

After Labour’s defeat, he stayed on as Shadow Home Secretary. At the height of the IRA hunger strike in 1981 he colleagues: “There is no solution to the Northern Ireland problem”. In 1981 he became Shadow spokesman on energy and remained in the party with Healey, rejecting the overtures of the SDP.

He remained active in the campaign to have the terrorism convictions of the “Guildford Four” set aside by the Court of Appeal, and in 1992 took his place in the Lords.

Shirley Williams

The daughter of the socialist writer Vera Brittain, Shirley Williams inherited her parent’s political views from an early age. By the time she reached Oxford in 1951, her tutors had touted her to be Britain’s first female Prime Minister.

Harold Wilson, Shirley Williams And Barbara Castle

According to fellow student, and veteran political interviewer Robin Day she was the most “celebrated female undergraduate of her time”. Following on from Oxford, she worked a journalist with the Daily Mirror and Financial Times before becoming General Secretary of the Fabian Society. She was elected as Labour MP for Hitchin in 1964, but before that she had already stood three times unsuccessfully in Harwich and in Southampton.

After Williams entered Parliament, she quickly rose through the ministerial ranks with junior ministerial appointments in the first Wilson government at the Ministries of Labour, Education, Science and the Home Office. When Labour returned to power in 1974, she joined the Cabinet as Secretary of State for Consumer Protection. Despite praise from the papers as “the shoppers’ champion”, inflation in Britain reached astronomical levels.

When she became Education Secretary in 1976 she continued the extension of the comprehensive school system and abolished many of the grammar schools . She became a media “darling” and many pundits expected her to become Britain’s first female prime minister. In 1967, The Sunday Times said, “There are shrewd judges who believe that she has a prime minister’s baton in her briefcase”. Williams was The Sun Woman of the Year in 1974 and they claimed she was “most likely” person to become the UK’s first female PM

However, she lost her seat in 1979 following a redrawing of her constituency boundary. Williams remained a member of the Labour NEC and created many enemies in a fight with the militant left tendency. To the dismay of the moderates, she looked at other potential careers and within months of her seat loss, she began teaching politics at Harvard and hosted her own TV show.

As the split within the party grew, she defected with Roy Jenkins, David Owen and Bill Rodgers to form the SDP in 1981. Europe had been the biggest issue, and Labour’s commitment to withdraw from the EEC had been the final straw. Winning a spectacular by-election in Crosby later that year, she then lost it in the 1983 general election, as the SDP failed in their historic breakthrough.

She became a leading figure in the Liberal Democrats, and can now be classed as  national treasure. In her final speech to the Lords, she urged for politicians to protect and preserve the “special genius” of the “great public sector imagination” and to defend the BBC, the NHS and the Open University.


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