Ian Mikardo

In this unhealthy atmosphere, the Gaitskellites were seeking their revenge. Their leader, far from discouraging them, was spurring them on, and some were aiming at expelling those who disagreed with him. A few of us, Barbara Castle, lan Mikardo and myself, felt that we should form a small tight group to work out our strategy and our week-by-week tactics. I was elected leader. We met at half-past one every Monday. I set myself the task of resisting extremism and provocative public statements.

For MPs to meet in unofficial groups, getting together informally, as distinct from in committees and sub-committees set up by the House of Commons itself, is probably as old as Parliament itself. King John could have written a thesis on the subject. But this was too much for Hugh Gaitskell, who would have been better advised to acknowledge that he led an unofficial group of his own. Immediately after the annual conference at Morecambe in 1952 he found his voice.

In a speech at Stalybridge, he repeated an allegation that one-sixth of the constituency party delegates at Morecambe were communist or communist-inspired. He drew the conclusion that at a time when communist policy was to infiltrate the Labour movement, the Bevanites were assisting them by their disruptive activities. Then, in a direct reference to us and our pamphlets, he went on: "It is time to end the attempt at mob rule by a group of frustrated journalists and restore the authority and leadership of the solid, sound, sensible majority of the movement.' He referred to 'the stream fit grossly misleading propaganda, with poisonous innuendoes and malicious attacks on Atlee, Morrison and the rest of the leadership."

Since the opening of the new session the Bevanites had sought to organize themselves into a more effective parliamentary group. On the suggestion of LAN Mikardo and on the precedent of the Keep Left group, it was agreed to elect a regular chairman - Harold Wilson was the first - and to meet at a regular time in the parliamentary week: 1.30 on Mondays. None of those participating in these secret rites thought at the outset that they might be indulging in some scandalous Mau Mau activity - (none at least except the compulsive informer in our midst who reported our proceedings regularly to Hugh Dalton and thereby to the Whips). Unofficial groups had existed in Parliament ever since the first Witenagemot, and the Bevanites of the early 1950s imagined they were following a more recent precedent set by others, notably the XYZ Club, which had been talking politics over exclusive dinner tables since its foundation by Douglas Jay and a few others in the early 1940s. No one, after all, had ever suggested that the Keep Left group should be outlawed. By January 1952 the new Bevanite arrangements were in full working order and the agenda was crowded.

I rejoice that we are not going to have any more personal attacks by members of the Parliamentary Labour Party on other members of the Parliamentary Labour Party. Never again, O my exhuberant heart, will I be referred to as one of "a band of splenetic furies". I rejoice.

Never again will there be talk of "parlour revolutionaries and other mischief-makers". That's a great step forward.

No more, never ever more, will those who write about Nye Bevan include me in the list of "sycophantic friends about him". Let us praise this day for evermore. For never again will even the more eminent amongst us refer to some of his comrades as "extreme Left-wingers… some with outlooks soured and warped by disappointment of personal ambitions, some highbrows educated beyond their capacity".

I rejoice at this new upsurge of self-restraint, even though it will undoubtedly rob us of many lambent pearls of English literature. We shall, for instance, have to sigh in vain for any more like "an uneasy coalition of well-meaning emotionalists, frustrates, crackpots and fellow-travellers, making Fred Karno's Army look like the Brigade of Guards".

But it ensures that we don't ever again hear some sizeable fraction of the constituency delegates to the party Conference (who include many Labour M.P.s) as appearing "to be Communist or Communist-inspired", or the proceedings of that Conference characterised as "mob rule by a group of frustrated journalists".

Zilly was in many ways the greatest international Socialist of my time. It is for that reason, and only for that reason, he earned the distinction of being refused a visa to the United States, and being refused a visa to the Soviet Union, and of being expelled from the Labour Party all within the same year. He never gave up fighting for the principles of the United Nations, based on the all-inclusive covenants of the Charter, no matter who opposed him, whether it was Ernest Bevin or Wall Street or Stalin. He was completely devoted in the best sense to the socialist causes which are the basis of peace.

In a way Zilly was a non-politician. Most people who didn't know him personally but knew him only from reading what he wrote and reading about him, would think of him pre-eminently as a politician, but he really wasn't. He was a man of political ideas, but he wasn't very good at politics. The tactics, the ritual dances of parliamentary procedure and the order paper, were in a language that wasn't contained within the eleven he spoke. They were all foreign to him and when it really came to the tough stuff and the in-fighting I sometimes thought of Zilly as a child walking around a jungle of man-eating animals. That's why he was more than once such an easy victim for the hatchet men. Zilly was preeminently an analyst, perhaps unparalleled as a political analyst, and perhaps even more than that a teacher, a great teacher, and not only those like myself of his own generation learned at his feet, but the next generation of people in our movement derived a great deal from him and many of the new, younger men we have had in the House of Commons in the last three years know a great deal of what they know because of what they learned from Zilly.

However, once the pay policy was in place in 1975, my overriding concern was to restore a healthy financial balance both at home and abroad. It had become customary among Keynesians - who had usually read no more of Keynes than most Marxists had read of Marx - to claim that there was no need to worry about a fiscal deficit when the economy was working below capacity, nor about a deficit on the current balance of payments when foreign capital was pouring into Britain. In 1975 unemployment was rising, and the Arab countries were parking their surplus oil revenues in British banks for the time being. So in theory there was no harm in running substantial deficits both at home and abroad.

However, the trouble with deficits is that they have to be financed by borrowing; and in the negotiation for a loan it is the lender who decides the interest rate and sets the conditions. It was obvious that before long the Arab countries would start diversifying their surpluses more widely round the world; and in any case their surpluses would shrink as their own development plans got under way. If we were not to become dependent on borrowing from other foreigners and from the IMF, we must try to eliminate our current account deficit within a few years. And we would be unable to reduce our external deficit if our internal fiscal deficit was still growing.

So I decided to reduce the PSBR by raising taxes and cutting public spending, so that firms would be compelled to export what they could not sell at home. It was a Herculean task. The enormous interest payments Britain had incurred by borrowing to finance its twin deficits since the Barber boom started in 1971, meant that we had to run very fast even to stand still. Yet we managed to complete the most important part of our task in just three years. In fact the latest statistics show that we had eliminated our balance of payments deficit in 1977. By the middle of 1978 our GDP was growing over three per cent a year, as against a fall of one per cent in 1975/6. Unemployment, which rose very fast in my first three years, had been falling for nine months; and inflation was below eight per cent. It was one of the few periods in postwar British history in which unemployment and inflation were both falling at the same time.
All this was achieved at a time when we were getting little benefit from North Sea oil. The capital investment required made it a net drain on our balance of payments in my early years. Even in 1978, North Sea oil was making good only half the impact of the OPEC price increase on our balance of payments, and was not yet producing any revenue for the Government.

Politically, by far the most difficult part of my ordeal was the continual reduction of public spending; almost all of the spending cuts ran against the Labour Party's principles, and many also ran against our campaign promises. Here again, my task was complicated by the Treasury's inability either to know exactly what was happening, or to control it. In November 1975 Wynne Godley, who had himself served in the Treasury as an economist, showed that public spending in 1974/5 was some £5 billion higher in real terms than had been planned by Barber in 1971. This was one of the reasons why I decided to fix cash limits on spending as well as pay, since departments tended to use inflation as a cover for increasing their spending in real terms. Cash limits worked all too well in holding spending down. Departments were so frightened of exceeding their limits that they tended to underspend, sometimes dramatically so. In 1976/7 public spending was £2.2 billion less than planned.

In the meanwhile the Callaghan Government dragged to its miserable close, and after its suicide in 1979 it was clear that Jim would resign from his office as Leader within the next year or eighteen months. When the time actually came, in October 1980, the question of who was to succeed him was complicated by the fact that, while the constitution provided that the Leader and his Deputy were elected by the Parliamentary Party alone, there was a proposal before the Party to amend the constitution so as to widen the franchise by setting up an electoral college of the PLP plus the Constituency Parties plus the trade unions, and that amendment was due to be put to a special Party Conference to be held a few months later.

The Left in the PLP were keen to postpone the election of a new Leader till then by appointing the current Deputy Leader, Michael Foot, as a caretaker for the short period up to the constitutional conference. The Right, by contrast, wanted the election held at once by the PLP alone, because they could be expected to elect the Right's favoured candidate, Denis Healey. Some of Callaghan's ex-Ministers issued statements in support of this proposal: they included three or more of those who later became the Gang of Four and a number of their friends who also defected to the SDP. They got their way, and the election went ahead with the PLP as the electoral constituency.

To go back to the beginning, Jim announced his resignation to the Shadow Cabinet at their regular Wednesday afternoon meeting on 15 October 1980. As soon as he'd finished his resignation statement Michael Foot paid a long and warm tribute to him. (Michael had characteristically given continuously faithful and selfless loyalty to Jim throughout the two turbulent years of Jim's premiership, and Jim returned evil for good by undermining Michael's leadership during the 1983 election campaign.) After the Shadow Cabinet meeting three of the left wing members of the Shadow Cabinet and one semi-left winger - Albert Booth, Stan Orme, John Silkin and Peter Shore - went off to Silkin's room to discuss what to do next. The remaining two of their little group, Michael himself and Tony Benn, were tied up and weren't able to attend. The four who were there agreed that their objective must be to try to prevent the election of Denis Healey: Peter Shore said that he thought he had a good chance of beating Denis; John Silkin went much further and claimed confidently that he would certainly beat Healey and anyone else who might stand.

The stop-Healey urge was one which I shared in full measure, but more than once I asked myself sharply why I was so keen to keep out of the Party's top position a man for whom I had, as I still have, great admiration and a very high regard. Denis is an outstanding talent, equalled by very few people I've met in the whole of my long innings. When he speaks on international affairs, he speaks with the authority that derives from an unmatched knowledge of what's going on in almost every country in the world, and his analysis of all those movements of events is almost always penetrating and enlightening. He is a cultured man of parts, of many interests outside politics (those politicians whose lives contain nothing but politics are always second-class politicians). He's a bubbly, witty man who can be a charming and entertaining companion.

Now that he has mellowed, as we all do (not least I) after we get our senior-citizens' bus-passes, he exudes the milk of human kindness; but in the 1960s and 1970s he was a political bully wielding the language of sarcasm and contempt like a caveman's cudgel. He didn't argue with those members of the Party who didn't agree with him, he just wrote them off. He once described a Cabinet colleague who dared to differ from him as having a "tiny Chinese mind". More than once, in my own arguments with him, he didn't reply to what I'd said but instead quoted me as saying something nonsensical which I had never said. He knew all the tricks, and used them ruthlessly.

When the leadership election loomed in 1980 my friends in the Tribune Group and many other people in the Party and the trade unions wanted to stop Healey because he was way out to the Right and was likely to go even further than Wilson and Callaghan in leading the Party away from its socialist principles. But even though I shared that view I had an even stronger motivation for frustrating his leadership bid. I had seen at first hand his emery-paper abrasive manner, his crude strong-arm all-in-wrestling ways of dealing with dissent, his undisguised contempt for many of his colleagues, his actual enjoyment of confrontation, his penchant for pouring petrol on the flames of controversy, and I was thoroughly convinced that if he became Leader of the Party it wouldn't be long before these aggressive characteristics of the would split the Party from top to bottom; and that was a prospect which scared me.