transcript

Speaker 1:
[00:11] They are punk rockers, the new craze, they tell me. They're heroes, not the nice clean rolling stones. You see, they're as drunk as I am. They're clean by comparison. They're a group called the Sex Pistols, and I am surrounded by all of them. Now, I want to know one thing. Beethoven, Mozart, Bach and Brahms.

Speaker 2:
[00:35] They're all heroes of ours, isn't they? Really?

Speaker 1:
[00:37] What? What were you saying, sir?

Speaker 2:
[00:39] Oh, they're wonderful people.

Speaker 1:
[00:41] Are they?

Speaker 2:
[00:43] Oh, yes. They really turn us on.

Speaker 1:
[00:46] Well, suppose they turn other people on.

Speaker 2:
[00:48] That's just their tough shit.

Speaker 1:
[00:50] It's what?

Speaker 2:
[00:51] Nothing. A rude word. Next question. No, no.

Speaker 1:
[00:56] What was the rude word?

Speaker 2:
[00:58] Shit.

Speaker 1:
[00:59] Was it really? Good heavens, you frightened me to death.

Speaker 2:
[01:05] That was an archive recording of the appearance by the punk rockers, the Sex Pistols on the early evening TV show Today, which went out only in London, actually, not nationally, just before 7 p.m. on the evening of the 1st of December, 1976. The presenter as voiced by Dominic was Bill Grundy. I mean, the poor man, he became completely defined by that one interview, didn't he? It's basically the only thing he's remembered for now. And he completely lost control of the interview. And for some inexplicable reason, he just kept kind of goading them into coming out with more and more foul language. I suppose the big question is, was he actually drunk as he said he was at the start of the show? I mean, it doesn't sound massively drunk, but maybe he was good at hiding it.

Speaker 1:
[01:52] Well, we discussed how I should do that beforehand, didn't we? You said I should do it slurring my words, obviously drunk. But actually, when you watch the clip, he isn't obviously drunk, I wouldn't say. I mean, it's just inexplicable why he goes them into more and more swearing, and we will come to this, won't we?

Speaker 2:
[02:07] I mean, Sex Pistols thought he was drunk when they were asked about it later.

Speaker 1:
[02:10] They did, yeah. But it got through the rest of the program, okay? This is just the very end of the program.

Speaker 2:
[02:14] And this is the moment when the Sex Pistols kind of explode onto national consciousness.

Speaker 1:
[02:19] Yes, it is. So this is 1976. And the next day, they were on the front pages of all the newspapers. The great headline in the mirror, I think it is, The Filth and the Fury. And from that moment on, they became household names.

Speaker 2:
[02:32] It's a rocky rose window.

Speaker 1:
[02:35] So I would say that if you look back at the previous 20 years, only the Beatles and the Rolling Stones had matched that level of fame or notoriety. And here's the funny thing. At this point, the Sex Pistols had not released a single record.

Speaker 2:
[02:52] It's Malcolm McLaren's masterpiece, isn't it?

Speaker 1:
[02:55] Yeah, that they are a media phenomenon in a way before they're a musical phenomenon. Anyway, we will come on to this interview later in the show, and maybe Tom will play another bit of that excellent archive footage.

Speaker 2:
[03:07] Because Suzy Su, as in The Banshees, is also there. I think it's the first TV appearance.

Speaker 1:
[03:13] I'm looking forward to hearing her.

Speaker 2:
[03:15] Yeah.

Speaker 1:
[03:15] So what's so interesting about this is that this was broadcast on the very evening that one of the most humiliating political and economic dramas in modern British history was coming to a climax. So it's an intersection point between two different but arguably related things. So the first is the economic crisis that we've been tracing through this series, the pound and freefall Britain staring into the economic abyss and the new Prime Minister, Jim Callaghan. He has been forced to go to the International Monetary Fund for humiliating record bailout of almost $4 billion. So his cabinet is divided and this very evening is the moment of decision. And the second thing is that against the backdrop of the economic crisis, the inflation, the surge in youth unemployment, the sense of national failure and national breakdown, this new kind of music has come out of Britain's art colleges and pubs and clubs. It was initially called by the press Dole Q Rock, better known as Punk, and embodied by John Lydon or Johnny Rotten and his fellow Sex Pistols. And this is the evening that defines them forever as the ultimate 1970s folk devils. And so this is the story of today's episode, the intersection of these two stories, obviously the primary focus being on the political one, and it's the climax of our series on 1975 and 1976. And we'll start with the main character in the drama, a man we introduced last time, top British Prime Minister, Jim Callaghan. So last time, Callaghan won the Labour leadership in the last episode, but we didn't really dig into his personality. And now at last, after 700 episodes of The Rest Is History, or whatever it is, we finally get to talk about one of the undisputed Great Britons, and that is Sonny Jim. So he was born Leonard James Callaghan in Portsmouth in 1912 in a working class house in the shadow of the docks, the Royal Navy docks. His father was a chief petty officer who died when Callaghan was nine. Callaghan was called Len, but when he became an adult, he renamed himself James because James was his father's name. So it's a little sort of nod to his late father, which I think is very nice.

Speaker 2:
[05:26] It wasn't that he thought that James would be likely to become Prime Minister.

Speaker 1:
[05:30] I don't think so, because Len Murray at the same time became head of the TUC.

Speaker 2:
[05:35] Len is the union name. I think James is the Prime Minister name.

Speaker 1:
[05:37] I think he would still have been Prime Minister if he was called Len. So he is shaped by his father's background to some extent. So the big thing he gets from his father is his love of the Royal Navy. And we admire that, don't we, Tom? We respect that.

Speaker 2:
[05:49] Very much.

Speaker 1:
[05:50] He adores the Navy. He adores its service, its duty, its patriotism, comradeship. Later on in life, he collects naval prints.

Speaker 2:
[05:58] We all like Keith Richards.

Speaker 1:
[05:59] Yes, exactly. He would have bonded with Keith Richards over naval prints. He sees the Navy, I think, as a model for the Labour Party and indeed for Britain. And then what he gets from his mother is his Baptist faith. So his mother is a very strict Baptist. He went to Sunday school every week. He learned passages of the Bible and he was very comfortable with kind of biblical references. Actually, it's something he has in common with Margaret Thatcher.

Speaker 2:
[06:21] I was just thinking that. I was thinking how many of the leading politicians in this generation and period come from low church backgrounds and how the collapse of kind of low church backgrounds and politics, I think, is a bit of a tragedy.

Speaker 1:
[06:34] I totally agree with you. It gives people a sort of moral core, doesn't it? And not just a moral core, it gives them a language, I think.

Speaker 2:
[06:40] Yeah, a sensibility.

Speaker 1:
[06:41] Exactly. All of that kind of thing, which Callaghan and Thatcher in their different ways completely embody. And it gives him actually that the Baptist stuff and the Royal Navy gives him this profound cultural conservatism, which we'll talk about in a second. He left Portsmouth Northern Secondary School when he was 17. He became a tax clerk, then trade union official. He served in the East Indies Fleet in the Second World War. He became a very young Labour MP in 1945, and then he was a junior minister at the age of 35. And through sheer sort of doggedness and resilience, he made it to the top. He was a useless Chancellor in the 1960s under Harold Wilson. But then Wilson gave him another chance as Home Secretary. He was very sort of solid, I think. He loved the police, so he sort of Home Secretary suited him.

Speaker 2:
[07:31] The late 60s is the period when the kind of permissive society is...

Speaker 1:
[07:34] Yeah, but he hates the permissive society and the people love that. Yeah. He's very much into policemen cracking students over the head, or giving them a clip round the ear. I think that's what he would say. Give them a clip round the ear and tell them to get their hair cut. And the Tom Holland tendency shake their head sadly at that, but the Dominic Sandbrooks cheer and applaud and tears of pride spring to their eyes. So I think that's very much his vibe. And then he was foreign secretary in the early 70s. In his politics, he is the quintessential embodiment of the old labor right. So the right of the party, but sort of backward looking, old fashioned, moderate, pragmatic, patriotic.

Speaker 2:
[08:15] Patriotic is the key word, isn't it?

Speaker 1:
[08:16] The friend of the British working man, that's his thing. So he was the parliamentary spokesman for the police federation. And that really sums him up. He's a big guy. He's breezy. As we said, by law, you have to call him a vuncular. He has this bruiser reputation, but he has flashes of self-doubt because as we learned last time, the fact that he didn't go to university and that he's not an intellectual weighs quite heavily on him. His great rival was Roy Jenkins, who absolutely despised him. Bailio man, Roy Jenkins said later, There is no case I can think of in history where a man combines such a powerful political personality with so little intelligence. But only one man in British history, as we said last time, has been Chancellor, Home Secretary, Foreign Secretary and Prime Minister and that man was not Roy Jenkins, it was Jim Callaghan.

Speaker 2:
[09:07] However, Jim Callaghan did not become European Commissioner.

Speaker 1:
[09:13] He wouldn't have wanted to, I think. It's not really his vibe.

Speaker 2:
[09:15] I'm just saying, I'm just sticking out for Roy.

Speaker 1:
[09:17] Sometimes people say of Callaghan, I think not unreasonably, he was the last true conservative to be Prime Minister, small c conservative. His likes are Rugby, the Labour Party, the trade unions, and like Harold Wilson, he loves the Boy Scouts.

Speaker 2:
[09:33] Did he wear tight trousers? I can't imagine him in tight trousers.

Speaker 1:
[09:36] Never. He wore long, baggy, high-waisted trousers. He hates it when his lefty activists exorcise the police or the armed forces or the Queen. The Queen, he loves the Queen. He's a teetotaler. He hates any hint of permissiveness or sexual misbehaviour. He and his wife Audrey met when they were 17 and 16 respectively, and they're incredibly devoted. When he was Prime Minister, he told his staff, there's a lovely bit, and Sir Bernard Donoghue carried on working for Callaghan after Wilson left, so we get these fantastic diaries. Callaghan says at one point, he's embarrassed by nudity on TV or on the stage. Whenever he sees nudity on TV, he has to turn it off, even though he's in his 60s. He said, he was completely unaware of homosexuality until well into adult life.

Speaker 2:
[10:25] This is a man who served in the Navy.

Speaker 1:
[10:27] Navy, exactly. He only found out about it when he became an MP. And he was amazed when some of his aides said to him, some of your MPs are gay. He was like, what? I don't believe that. And then at this point, in the same conversation, one of the MPs, they're all sitting around, kind of in a circle and one of the MPs tells a story about a very camp cook that he knew in the Royal Navy. Callaghan is stunned by this and he says, in the Navy? I never knew anybody like that when I was in the Navy. And they're all kind of smirking at this. They can't believe that he would be so innocent. And then he says to them brilliantly, you won't tell these stories in front of Audrey, will you? She would be very shocked. So, this is sort of Puritanism to the Callaghan's. And the most common comparison when he becomes Prime Minister is with another absolutely top person. So the champion of our first historical love island, 1920s and 1930s Prime Minister Stanley Baldwin. Everybody basically said, oh, it's like Stanley Baldwin's come back from the dead. Because although they're in different parties, they're both small-c conservatives, they're both pragmatic, they're both kind of good-humored, they're both nostalgic and they're both really, really good communicators. And like Baldwin, Callaghan cultivates this yeoman image. So he bought a farm in East Sussex and he would go and slightly ostentatiously spend his weekends inspecting his cows and trudging the fields under a sort of tweed hat.

Speaker 2:
[11:49] He's a bit like Marie Antoinette in a very real sense.

Speaker 1:
[11:53] That's not a comparison you often know.

Speaker 2:
[11:56] Improbable.

Speaker 1:
[11:57] No, that's a terrible comparison because I think he's John Bull. That's exactly what he is. He's big, he's heavy, he's kind of slightly slow, he's very solid, he's very respectable. As PM, he wears these pinstripe dark suits and he has these colossal glasses.

Speaker 2:
[12:13] Oh yeah, we mentioned them in the previous episode.

Speaker 1:
[12:16] People love it. So actually, when you look at the opinion polls, he's consistently an extremely popular Prime Minister and right to the end, he is far more popular than Margaret Thatcher. Basically if the 1979 election had been, you know, if you'd be able to mix and match what the British people actually wanted in 1979 was the Conservatives to win but with Callaghan as Prime Minister.

Speaker 2:
[12:35] I mean, would he have made a good Conservative Prime Minister? He's a monetarist. He doesn't like gay people.

Speaker 1:
[12:42] I don't think he dislikes gay people. He's just not aware they exist. He would have made a good front man for a sort of national government. He'd made a brilliant front man for a national government. But that said, he loves the Labour Party. I don't want to dismiss that element. He really loves the Labour Party and the British kind of working classes.

Speaker 2:
[12:58] More than Harold Wilson had done.

Speaker 1:
[12:59] Yeah, possibly. People when they watch him out on the stump, they say, God, he's so great with the public. I think it's partly his size. He's a big bloke and so people respect him and people are slightly frightened of him and he uses that to his advantage. Anyway, on paper, his government isn't massively different from Wilson's, so he keeps Dennis Healy as Chancellor. We talked a bit about Healy last time. He's going to play a big part today. Remember his eyebrows? He was the landing officer at Anzio and he's got a hinterland. He's the only person in history to have a cultural and intellectual hinterland. He likes effing and blinding and lesser mortals. During all this period, you have to imagine Dennis Healy, he's getting increasingly fatter with every week that passes because he's basically trapped behind his desk the whole time, desperately trying to cobble together money. He's incredibly red-faced, he's incredibly puffy, he looks like he's going to explode at any moment, but he's doing an amazing job. Actually, he and Callaghan work brilliantly together. It's one of the great partnerships between a Prime Minister and a Chancellor, because usually Prime Ministers and Chancellors end up hating each other. They're massively falling out, and they don't. Then there's a third person in there kind of triumvirate, who is Michael Foote, who we talked about last time again, the radical pamphleteer and fan of Jonathan Swift and Byron and co. Foote is on the left, but basically Callaghan brings him into the tent and says, will you be the leader of the House of Commons? So will you be in charge of keeping the Labour Party together? Foote is absolutely brilliant at it. He's completely loyal to Callaghan, even though he doesn't agree with him. He's really loyal to him. Callaghan later described him as a true comrade during all this time. Callaghan contrasted him with our old friend Tony Benn. Callaghan described Tony Benn not as a true comrade, but as, and I quote, a canting hypocrite. I mean, people think I'm very hard on Tony Benn, but actually I find Tony Benn immensely amusing. So I'm just quoting this in a good, humored, kind-hearted spirit rather than a condemnatory one. Now, Callaghan is less famous than Wilson, but almost all of their ministers thought that Callaghan was a better prime minister, that he was more decisive. He didn't take any nonsense. He was firm but fair.

Speaker 2:
[15:01] And he's quite wily as well, isn't he?

Speaker 1:
[15:03] Yeah, he is quite wily.

Speaker 2:
[15:04] He conceals his wiliness beneath a kind of bluff exterior.

Speaker 1:
[15:08] Yeah, exactly. So in 1978, one of his young ministers called Bill Rogers gave an off-the-record interview with the journalist Hugo Young and he said, Callaghan stands for stability, a stable style and stable government. What he cannot abide is the long-haired intellectual on all his works.

Speaker 2:
[15:23] To be fair, Michael Foote is a long-haired intellectual.

Speaker 1:
[15:26] He is, but he's also a true comrade and not a counting hypocrite. I think that's the key thing.

Speaker 2:
[15:30] If you're a long-haired intellectual, but you're not counting hypocrite, then he'll...

Speaker 1:
[15:33] Then you're right.

Speaker 2:
[15:34] Yeah.

Speaker 1:
[15:34] If you basically bend the knee and do Jim's will, then he will tolerate you. And actually, even the Tories at the time in the 1970s thought that he was good. So the future Thatcher minister Peter Walker said publicly in 1977, We have a prime minister who is good on television, who looks like Stanley Baldwin, who lives like Stanley Baldwin, and Stanley Baldwin, with the vote of the Labour Party in North Sea Oil, is a very formidable opponent.

Speaker 2:
[16:00] I mean, since he lives like Stanley Baldwin, I can't imagine James Callaghan writing pornography.

Speaker 1:
[16:06] The key variable there is that he didn't go to Harrow, because Stanley Baldwin did that at Harrow. That's well remembered. Also, Stanley Baldwin gave a tenth of his fortune to pay off the national debt. Let's remember that.

Speaker 2:
[16:16] And married a cricketer.

Speaker 1:
[16:17] Yeah, and married an excellent cricketer. Even Margaret Thatcher had warm words for Jim. She said he was a super politician and in other circumstances would have been a successful prime minister.

Speaker 2:
[16:26] And what circumstances are those, Dominic?

Speaker 1:
[16:28] Well, see, that's a very nice link, isn't it? That's nice. I wrote that as a segue into the circumstances. So first of all, he's got no parliamentary majority. We described last time, Labour have no majority in the House of Commons. So every vote now is knife edge. I mean, literally life or death. They are bringing people in. These were very famous scenes in the late 70s. They would bring elderly MPs in on ambulances to vote. And sometimes they would cheat. So there's one famous example where they basically, what they would often do is you do a thing called pairing, where you would basically, there's some 90 year old Labour MP who's dying. There's a 90 year old Tory MP who's dying. And you'd say, well, they cancel each other out and neither of them have to come in and vote. And you'd agree that beforehand. And then on one occasion, Labour completely shamed themselves going back on their word and bringing in this bloke on a trolley or whatever to vote. And that provoked a massive fight like a physical brawl where people are piling into each other. Of course, this is pre-television. And this was the occasion in which a young Michael Heseltine seized the mace and kind of whirled it around his head and made a spectacle of himself and then was called Tarzan forever because of that.

Speaker 2:
[17:35] It's the theme of a wonderful play by James Graham called This House, really excellent.

Speaker 1:
[17:40] Amazing play. That's one circumstance and the other circumstance is the economic legacy. Inflation has actually now started to fall, but it is still about 19 percent. And the bigger problem is that as we described last time, the international markets have now lost confidence in Britain's ability to run its economy, not least thanks to its massive borrowing. So when Callaghan has his first meeting with Dennis Healy, Healy says to him, look, the Bank of England have just spent two billion dollars in currency reserves. That's a third of their entire reserves propping up the value of sterling. And this can't continue. And the next person who comes in to see him is the governor of the Bank of England. It's called Gordon Richardson. He says to Callaghan, you know, we're still borrowing far too much and this pressure from the markets is not going to ease anytime soon. There is a very good chance that we're going to run out of money. And when we do that, we will have to ask the International Monetary Fund, the IMF, for a loan. Now, the IMF had been set up in 1945. It's one of the great kind of institutions of the New World Order.

Speaker 2:
[18:41] By John Maynard Keynes, who is British, so it's massively embarrassing.

Speaker 1:
[18:46] Oh, the International Monetary Fund, some of their staff are British, some of their key figures are British. That the fact that Britain, of all people, will have to crawl to them. I think that the technical term that you, again, by under UN regulations, you have to use for the IMF crisis. Britain goes cap in hand to the IMF.

Speaker 2:
[19:04] Because loans are meant to be given to bankrupt third world countries.

Speaker 1:
[19:08] Yes, exactly. A country like Britain, formerly the World Banker, should not be going to the IMF begging for cash. Now, our problem is the key contributors to the IMF are the Americans. And politics in America at this point is well to the right. The consensus in Washington is well to the right of what it is in London. The Americans will undoubtedly ask for very stringent terms, probably cuts. They'll say you can have the money, but you have to sort your economy out. And for a Labour Prime Minister, this is obviously a nightmare. This is a massive embarrassment because there's nothing more likely to inflame your own activists than you bending the knee to the forces of American international capitalism.

Speaker 2:
[19:47] Yeah.

Speaker 1:
[19:48] And whenever people would say to Dennis Healy, Labour people would say to Dennis Healy, sort of Zack Blansky style, they'd say, why are you taking orders from the money markets? Dennis Healy would say, well, I mean, if we don't want to take orders from the money markets, we just shouldn't borrow money from them. And in that case, we should manage our finances a bit better. What are we going to do about it? We shouldn't have got into this mess in the first place.

Speaker 2:
[20:07] Well, when you put it like that.

Speaker 1:
[20:08] Well, I mean, I agree with him, but it doesn't go down well. Well, with some of his own enthusiasts anyway. It takes two months for all this pressure to build. And by early June 76, it's really on. Now remember, there was a point in the last episode, the beginning of the week, when the pound was at $2.23. On the 3rd of June, it is down to $1.70. I mean, that is an extraordinary plunge. It's lost a considerable fraction of its value and it is still falling. The Bank of England say to Healy, we've run out of reserves to defend it, you've got to talk to the IMF. He needs $5 billion to defend the pound. And he can probably get that informally without having the humiliation of a proper application. So he talks to the IMF and they say, look, we've cobbled together some of the money, most of it from the US Federal Reserve. We can lend you the money, but there are conditions. The chairman of the Federal Reserve, Guy Arthur Burns, describes himself as a Neanderthal conservative. And he wants Britain's lefty government to learn a lesson in discipline. And then the US Treasury Secretary, Gerald Ford's Treasury Secretary, is a guy called Bill Simon. He's even more hawkish. In his memoirs, he said, I was keen to help a US ally, but I had no desire to play host to a parasite. That's harsh. He hates Britain. And Healy said of Bill Simon, he was far to the right of Genghis Khan.

Speaker 2:
[21:32] Displaying his hinterland there.

Speaker 1:
[21:34] Yeah, very good.

Speaker 2:
[21:35] A witty historical allusion.

Speaker 1:
[21:36] His historical knowledge.

Speaker 2:
[21:38] Yeah.

Speaker 1:
[21:39] You wouldn't get that from politicians today, would you? Such an obscure reference from Dennis Healy. So anyway, the deal is this. Britain will get its 5 billion, but it has six months to pay it back. And if Healy can't pay it back or if he needs more, he will have to make a formal humiliating application. That would mean opening Britain's books to the IMF. IMF inspectors, basically auditors, would have to fly into London to look at our books. And then they would tell us what cuts we had to do in order to get the money. I mean, that would be excruciating, excruciatingly embarrassing. And obviously people want to avoid that. Anyway, for now, he's got this 5 billion to tide him over. We're into the summer. The temperature is literally rising because this is the record-breaking summer of 1976. You surely must remember this.

Speaker 2:
[22:32] I do.

Speaker 1:
[22:33] Do you have amusing anecdotes?

Speaker 2:
[22:34] We went camping outside Porlock. Our second cousins who we'd never met came to meet us. They turned up, we didn't know who they were. And my brother threw a load of dry horse dung into their hair.

Speaker 1:
[22:46] Brilliant story. And it reflects so well on your brother.

Speaker 2:
[22:49] Even then he liked war.

Speaker 1:
[22:50] Yeah, he did. Yes. You can take the boy out of that pit where they do the We Have Ways Festival, but you can't take the pit out of the boy. So in those days, they used Fahrenheit. So it was 90 degrees day after day. There was no rain. There was a massive drought. The trains kept breaking down. The roads were literally melting because they were using the wrong tarmac or whatever. I know you love Star Wars, Tom. This is the point at which George Lucas and co. were filming Star Wars at Elstree. And it was so hot that the electricians in the gantry fainted from heat exhaustion.

Speaker 2:
[23:21] What about the poor bloke in the Chewbacca?

Speaker 1:
[23:23] Peter Mayhew, he collapsed with dehydration. While they were filming.

Speaker 2:
[23:27] But the green cross coat guy, he was all right, even though he was wearing black.

Speaker 1:
[23:29] Darth Vader, David Prowse. Didn't you meet him or something?

Speaker 2:
[23:33] I did in Salisbury Library. He came in, he came gliding in. Or, then he said, hello boys and girls. It was not what we were expecting.

Speaker 1:
[23:43] No, not at all. So all that summer, as the heat is rising, Callaghan's ministers are arguing ferociously about the road ahead. On the one hand, Healy says, we're going to have to make these cuts. We're going to have to make them first before the IMF get here. Basically, if we don't make them to appease the markets, the IMF will make them for us. And Healy wants to cut spending by more than a billion pounds, which is basically two and a half percent of everybody's budget. Now, a lot of people don't agree and they are led by our old friend Tony Ben.

Speaker 2:
[24:12] Are they using the word austerity at this point? Or is that a slogan of a later age?

Speaker 1:
[24:17] They're not using it. I think they might use it in passing every now and again, but they don't use it quite as much as would be used in the 2010s. It's not as common.

Speaker 2:
[24:24] But it's basically the same situation, isn't it?

Speaker 1:
[24:26] It's not a dissimilar situation. Now, Tony Ben says we don't need to make any cuts at all. He has another idea, which was called the alternative economic strategy with capital letters. This was the cherished dream of the Labour Left for about 15 years or so. What this was, was like capitalism is obviously terrible. Let's have a siege economy. We'll put up protectionist Trumpian tariffs. We'll have state controls, stop British money going out, stop foreign goods coming in. The state should take over businesses and we should force those businesses not taking over to sign planning agreements with the government. I mean, if that sounds like a parody, I'll quote Tony Ben himself, a real labour policy of shaving jobs, import control, control of the banks and insurance companies, control of export, of capital, higher taxation of the rich and Britain leaving the common market because of course this would be incompatible with European membership. When they argue about this, Dennis Healy says, this is absolutely bonkers. This would destroy people's living standards. And Tony Ben says to him, no, this is the patriotic alternative to surrendering to international capitalism. We should fight for our own people. The British establishment is now infected with the same spirit which afflicted France in 1940. The Vichy spirit of complete capitulation and defeatism. Of course, it's only 35 years since Vichy.

Speaker 2:
[25:53] But also since Healy had been storming the beaches at Anzio.

Speaker 1:
[25:56] So Healy is absolutely outraged by this. Healy had fought. Tony Ben had been in the RF but didn't see any action. And Tony Ben describes in his diaries, he says, Dennis sat there scarlet. He always blushes when he's in difficulty. I don't think he's in difficulty.

Speaker 2:
[26:12] Just furious. Puce with rage.

Speaker 1:
[26:14] But actually the cabinet agreed to support Healy. Fine, we'll have it. We'll cut a billion pounds in spending. The question is, will it be enough? So we come to late August, which is the holiday season. Jim Callaghan has his holiday on his Sussex farm, bringing in the harvest, which is Thomas Hardy's idea of fun. So that's what he's doing. Dennis Healy's idea of fun is James Boswell and Dr. Johnson's idea of fun.

Speaker 2:
[26:37] Okay, into Scotland.

Speaker 1:
[26:38] He goes on a Scottish tour with his wife. They drive all the way up to the Isle of Skye and then they end up in Ullapool, which is in the far northwest of Scotland.

Speaker 2:
[26:45] I imagine he's reading a bit of Boswell, a bit of Burns, a bit of Scott with his hinterland.

Speaker 1:
[26:50] He's got the Russians with him. He's probably got some Balzac and he's very performatively piling them up at the breakfast table. Anyway, they get to this hotel at Ullapool on the quay. They go to bed, Healy and Edna, his wife. Late at night, there's a call and he goes downstairs and it's a special branch. They said, there's an IRA death threat against you. We're sending agents. He says, fine. So he goes back upstairs to bed. Phone rings again. He goes downstairs. It's the Treasury this time. They say, we've got terrible news. The pound has been tanking. It's been a dreadful day. You're going to have to come back to London or something. Fine. He goes back upstairs to bed. Phone rings again. He goes down. It's the Bank of England. They say, we want permission to spend 150 million pounds to defend the pound. Yeah, fine. By the time he gets back to London, the news has got worse. The publicity for Britain is terrible. So on the 3rd of September, more than 20,000 British Leyland car workers, we haven't really talked about car strikes.

Speaker 2:
[27:45] Or British Leyland.

Speaker 1:
[27:46] In this series, I think people should just imagine that all this time, there have been constant car strikes and the major and faulty towers has been getting very cross about them.

Speaker 2:
[27:53] Has Red Robbo turned up?

Speaker 1:
[27:55] Red Robbo is the Union convener at Longbridge at the giant car plant in Birmingham.

Speaker 2:
[28:01] Do you know who loved Red Robbo? It was the two Ronnies. They couldn't get enough of car strikes at British Leyland.

Speaker 1:
[28:07] Yeah. I mean, I've written a whole chapter about Red Robbo and car strikes at British Leyland and I'm very happy to do. I don't feel that that would be an episode for our overseas listeners, frankly.

Speaker 2:
[28:17] We can indulge ourselves.

Speaker 1:
[28:18] To give you a little soup song, a little taste of what that chapter might involve. The 20,000 car workers have walked out because of a demarcation dispute about who is responsible, and I quote, for pressing the buttons on a new control panel. And this is the kind of thing about which tens of thousands of people would go out and strike and millions and millions of pounds would be lost. And this is the 11th major strike at Longbridge in six months, which gives you a flavour of the efficiency and the ruthlessness of the British car industry. So that was on what? Was that the 3rd of September? On the 7th of September, Labour's national executive votes for the government to nationalise the four biggest banks. Now, obviously, the government are going to ignore this. But this again doesn't play well with Britain's creditors.

Speaker 2:
[29:04] You say obviously, if Labour's party just voted for it, why aren't they doing it?

Speaker 1:
[29:08] Well, Tony Ben joins us now on The Rest Is History. This is exactly what Tony Ben would say. Tony Ben would say, the party has just told you to nationalise the four biggest banks. You're in government. You should be doing the bidding of the party. Why are you ignoring the party? And James Callaghan and Dennis Healy would say, I don't care what the party says, we'll do what we like. That's mad. And this was a constant problem for the Labour Party. And it reaches ahead in the early 1980s, and basically Ben and the activists launch a revolution against their own leadership and seize control of the party machinery from them effectively at the Labour Party Conference. And they said not unreasonably, we keep voting for these things and you just keep ignoring it and ripping up the manifesto and doing capitalist things. Callaghan would say, well, the reason we do that is because your ideas are mad. And this is probably not a recipe for harmony with inside a major political party. Anyway, not surprisingly, the markets are losing faith in the government's ability to govern. So the Bank of England spends another 175 million pounds in an hour on the 8th of September, another 50 million pounds in 10 minutes on the 9th and the pound keeps on falling. And on Monday, the 27th of September, it hits $1.63, it's lowest level yet. Now, on the same day, Monday, the 27th, the Labour Conference opens in Blackpool. You can well imagine what a happy occasion that's going to be given what's just happened. The heat wave is over. It's absolutely pouring with rain.

Speaker 2:
[30:35] Because they had appointed a minister for drought, hadn't they? And then immediately started bucketing down.

Speaker 1:
[30:41] Yeah. They appointed a minister for drought and he did a rain dance and then immediately it started.

Speaker 2:
[30:47] And shared his bath with his wife, didn't he?

Speaker 1:
[30:49] Yes. He encouraged people to share, save water. Exactly. So they all arrive in, they've been incredibly hot and sunburned and parched. Then they arrive in Blackpool, which I know you love Blackpool. I'm not a massive fan, frankly. It's pouring with rain and they're all really damp and miserable. The activists are furious with the government. So speaker after speaker gets up and denounces Dennis Healey's cuts and says, we want tariffs immediately, we want protectionism, we want nationalization of the banks, we want all this. Bernard Donoghue, who's gone up with Callaghan, writes in his diary, it was really terrible. Everybody was depressed, Jim said to me it was worse than ever before. But Tony Ben is in his pump, he loves it. He says to the conference, we are paying the price for 20 years in which we've played down our criticism of capitalism. It's time to fight back against the blunt and inhuman force of the market economy. People are sobbing with joy.

Speaker 2:
[31:41] Hey, brilliant.

Speaker 1:
[31:43] Yeah, brilliant. Love it. On day two of the conference, Callaghan gives his leaders speech, his first as Prime Minister. This is actually one of those few speeches in modern British history that's really consequential and important. It was written by his son-in-law, Peter Jay, who was the economics editor of the Times and was a convert to monetarism. It's a celebrated speech, and I think one of the bravest speeches ever given by a British party leader, because Callaghan gets up and he says to his party, his own party, you are totally wrong. Like we have been completely wrong. He says, and I quote, for too long we've been living on borrowed time. For too long, this country, all of us, yes, this conference too, has been ready to settle for borrowing money abroad, to maintain our standards of life instead of grappling with the fundamental problem of British industry. Then he goes on to say, the cozy world of the post-war consensus has gone. We used to think that you could spend your way out of a recession and increase unemployment by cutting taxes and boosting government spending. I tell you in all candor that that option no longer exists. And in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step. In other words, what we've been doing is wrong. And it didn't work. And it's been inflationary and Keynesian economics, which is basically you spend when things are going badly to create jobs for people and stuff.

Speaker 2:
[33:09] Pay people to dig a hole.

Speaker 1:
[33:11] Pay people to dig a hole. Stop paying people to dig a hole. You're just creating to great inflation. We can't print money. We've been paying ourselves more than the value of what we produce. It's a cold hard world out there. We need to cut our costs, tighten our belts, work harder, and earn our place in the world. Now you can imagine how well this goes down with his listeners. So very unusually, right? I've been very unusual for an incoming Prime Minister in his first conference. Many of his own national executive refused to clap him. There's no standing ovation. But the other party's papers, the Tory papers say what a good speech that was. You know, Jim speaks sense, Jim's facts of life, I think the Express called it. And Milton Friedman, the godfather of monetarism, said a few months later, it was one of the most remarkable speeches which any government leader has ever given. Today, historians say, well, this is a massive kind of way station on the road to Thatcherism. You know, Callaghan is basically anticipating Thatcherism. Actually, Callaghan, he's obviously not thinking that far ahead. He's thinking, as he said to his biographer, Kenneth Morgan, he said, I was sick of the extremism and economic illiteracy of my party activists. I wanted them to face up to reality. But reality is about to confront all of them. In fact, about to punch them all in the face very hard. Because that same day, the 28th of September, Dennis Healy is about to fly off. The Chancellor, he's not there. He's going to fly off to Hong Kong for a Commonwealth Finance Minister's meeting. And after Hong Kong, he's going to go to Manila for a meeting of the IMF, ironically. And all that morning, before Callaghan gets the speech, the pound has been falling. So Healy gets in the car from the Treasury to go to Heathrow Airport for his flight to Hong Kong. And during the journey from central London to Heathrow, the pound falls by another two cents. By the time he gets to the VIP lounge at Heathrow, he's in a massive dilemma. If he gets on the plane, he'll be out of communication for 17 hours. So if the pound falls more, no one will be able to talk to him or ask his advice. But if he doesn't go, the markets might completely panic. So he doesn't know what to do. And he rings Callaghan in Blackpool, Callaghan's about to give that speech. And Callaghan, he says, I don't know what to do. And Callaghan says, don't get on the plane. Forget the Far Eastern trip. Get back to the Treasury. So 15 minutes before the plane is about to leave, Healy's aides start loading his bags back off the plane and into the car in full view of the press. An hour later, he is back at the Treasury. The trip is off. What an extraordinary thing. He's turned around at the airport. The press, of course, go absolutely berserk. What's going on? The Chancellor changes his plans. I mean, literally at the last minute when the plane was about to leave. The next morning, the Treasury confirms that Healy has, after all, applied to borrow the maximum possible $3.9 billion from the IMF. This is going to be one of the great humiliations in British history. That night, Healy goes on TV and he says to the audience, we've applied for this loan. If we don't get the loan, the alternative would, and I quote, be policies so savage, I think they would lead to riots in the streets.

Speaker 2:
[36:31] So massive stakes, Dominic.

Speaker 1:
[36:33] Massive. Couldn't be higher.

Speaker 2:
[36:34] So is Healy going to get the money? How is Tony Benkin to take it? Will the Labour Party tear themselves apart? Can Sunny Jim cling on? And most importantly of all, will the Sex Pistols be back? Only one way to find out. Come back to us after the break.

Speaker 1:
[36:58] Are you worried or just enjoying yourself?

Speaker 2:
[37:01] Enjoying myself? I've always wanted to meet you.

Speaker 1:
[37:06] We'll meet afterwards, shall we?

Speaker 2:
[37:08] You dirty sod! You dirty old man!

Speaker 1:
[37:12] Well, keep going, chief, keep going. Go on, you've got another five seconds. Say something outrageous.

Speaker 2:
[37:17] You dirty bastard!

Speaker 1:
[37:19] Go on again.

Speaker 2:
[37:20] You dirty!

Speaker 1:
[37:25] What a clever boy!

Speaker 2:
[37:26] What a fucking rotter!

Speaker 1:
[37:29] Well, that's it for tonight.

Speaker 2:
[37:31] Brilliant. Thank you, Dominic. Thank, or should I say, Bill Grundy. Welcome back to The Rest Is History. That was more archive footage from the Sex Pistols' controversial appearance on The Today Show on the early evening of Wednesday, the 1st of December, 1976. And we'll be coming back to the Sex Pistols, won't we? But for now, there is high drama in the dimension of international finance. Top Emily Dickinson quota, Dennis Healy, with his big eyebrows. He'd been about to fly off to Hong Kong, but he's canceled it because the economy is tanking and now he's announced that Britain is going to have to apply to the IMF for a loan.

Speaker 1:
[38:09] Yes, exactly. So the timing is horrendous because the Labour Conference, of course, are meeting in Blackpool. The activists are not happy anyway, so what are they going to make of this latest surrender to the forces of international capitalism? Now, Healy had turned back at the airport on Tuesday, the 28th of September. He made the official application on the Wednesday. Now on Thursday, the 30th, as luck would have it, the conference, which is now in total tumult, is due to debate economic policy. Healy wants to fly up to the conference and make his case personally to the activists and Callaghan says to him, No, don't. It'll just inflame the delegates. They hate you already. And actually under the Labour Party's slightly bizarre rules, if you're not a member of the National Executive, you won't be allowed to speak from the platform. You'll have to speak from the floor like everybody else. And so Healy says, Well, fine. Well, I've made the application now. I've got nothing to do. So because he's got a great hinterland, I don't think we've mentioned that. Because of his hinterland, he says, I'll spend the day at the National Gallery looking at paintings from the Dutch Golden Age. And I'll pick some out from my office. He goes to the National Gallery and when he's there, an official rushes in and says Callaghan's changed his mind. He wants you to go to Blackpool after all. And he's got a plane waiting at RAF Northolt to fly you to Blackpool. It's the 70s, so the plane is massively delayed because of rain. And Sir Healey doesn't arrive in Blackpool's winter gardens until three o'clock and he's completely sodden. He walks in, he's incredibly red-faced. And as soon as he walks into the hall, the members of his own party start booing him, which is kind of a bad sign. He sits at the back and the cameras are on in the whole time. And as he sits there, I mean, it's beyond parody. Their conference are literally debating their plans to take Barclays Bank, Lloyds Bank, the Midland Bank, which is now HSBC, and NatWest into public ownership. And Healey's just sitting there shaking his head in horror and sort of scribbling notes. And then it's his turn to speak. He is the Chancellor of the Exchequer amid one of the worst financial crises in British history, but he's not allowed onto the platform and he's told he's got no more than five minutes to make his case. And when he watched the clip, I mean, he goes up to the front and he's not allowed onto the very top level and he's incredibly red faced, his tires all askew. He looks like he hasn't slept in a week.

Speaker 2:
[40:27] So he's reassuring international investors in Britain, in other words.

Speaker 1:
[40:30] Definitely he is. And people are jeering him and shaking their fists at him and stuff. And he basically has to shout to be heard above the jeers. He says to them, I come from the battlefront and all this stuff. And then he just gets, he slams the left. He says, there are some people who would like to stop the world and get off. They say, let us go to a siege economy, but they want to siege economy of a rather odd type. They want to stop the imports coming in, but to get total freedom for exports to get out.

Speaker 2:
[40:57] Is that true?

Speaker 1:
[40:58] Kind of is.

Speaker 2:
[40:59] Because that's never going to work. I thought that Tony Ben was saying, no, we don't, you know, we won't have any imports.

Speaker 1:
[41:04] No, we won't have any imports. But they never really contemplate what that means in terms of your exports. Because there's no world, right, in which you say to your trading partners, we're not going to have your imports, but you have to keep buying our stuff. I mean, that obviously doesn't happen. That's never going to happen. As Healy says, I've never heard of a siege in which you keep the enemy out of your castle, but the enemy allows you to come and go as you please. And he says that, and of course, that really inflames people because they don't like being laughed at. They don't like him talking down to them. There's great howling from them at this. And then he says, I'm going to negotiate with the IMF based on my existing policies. And people are screaming at him, Tory policies, because they think he's a Tory, you see. And he says, but when I say existing policies, I mean things we do not like as well as things we do like. It means sticking to the very painful cuts on public expenditure on which the government has already decided. And people are screaming at him, no, resign, you're a Tory and all this kind of thing. And it's five minutes are up. And so he just says, that's what it means, that's what I'm going to negotiate for. And I asked the conference to support me in this task. He's read a face than ever. He goes back to his seat. As he goes back to his seat, loads of people are sort of shaking their fists at him and shouting and all this kind of thing.

Speaker 2:
[42:15] Are they spittle flecked?

Speaker 1:
[42:17] Spittle, there's a lot of spittle. Tony Ben says in his diary, I couldn't clap him, his speech was so vulgar and abusive. It's great footage.

Speaker 2:
[42:26] Great TV.

Speaker 1:
[42:27] It's the kind of thing that basically you would never see now in British politics, but it's great fun. It's terrible publicity for Britain. A few days later, the Treasury and the Bank of England had to put up interest rates to 15%, which was the highest level in history. I repeat, 15% on your borrowing, on your mortgage, whatever. This is horrendous for the economy. Then the most obvious price that is paid for this is unemployment. Unemployment had started rising in the late 60s. At the end of 1971, it had reached 1 million. And at the time, this was under Ted Heath. People had said, God, this is the end of the world. This is the Great Depression all over again. A million people unemployed, unthinkable. And that's why Heath had thrown so much money around in an attempt to deal with it. Now under Callaghan, it's more like 1.5 million and nudging upwards. And it's worse for young people. So by 1979, almost half of all under 25-year-olds are out of work. So the unemployment that we associate with Thatcher and Thatcherism had already begun.

Speaker 2:
[43:31] And so what do you do in that situation except become a punk rocker?

Speaker 1:
[43:35] Well this is the thing. This is the social context for the rise of punk. So the look of punk and the style of it, the kind of ripped clothes, the hair, the sort of aggression, they're there in embryo in pubs and clubs in 1975, maybe even in 1974. But it's no accident, I think, that it ceases public attention in the summer and autumn of 1976, at precisely the point when the economy is tanking, when Britain is going to the IMF, and all the newspapers are full of laments about rising unemployment and there being no future, the Sex Pistols' great refrain. So the Pistols themselves had first been mentioned by the NME in December 1975. They're all about 12 years old and they're going to be the next big thing. I left that 12 years old. But then the first really big article is by Charles Shah Murray. He reviewed my first book.

Speaker 2:
[44:28] That's an honor.

Speaker 1:
[44:30] He called me the hoodie historian.

Speaker 2:
[44:32] Brilliant.

Speaker 1:
[44:33] Throwing whatever passes for gang signs at the University of Sheffield.

Speaker 2:
[44:38] What an honor.

Speaker 1:
[44:39] Well, anyway, Charles Shah Murray wrote the first big article on the Sex Pistols. Their music is coming from the straight out of school and onto the dole death trap, which we seem to have engineered for our young, the 76th British Terminal Stasis, the modern urban blind alley. You wanted Sex Pistols and now you've got them. Trouble is they look like they aren't going to go away. Now, this point, as we alluded to earlier, they haven't actually released a record. So anarchy in the UK didn't come out until the end of November. But just as the Beatles in the second half of 1963, the Beatles are perfectly cast really to seize the moment. The newspapers love the Beatles because they seem to reflect all sorts of other trends, you know, sort of meritocracy, the Northern cheekiness, sort of this kind of thing, that are very fashionable in 1963. And the optimism, the jollity in an age when the economy is booming. The Sex Pistols seem perfectly cast to capture the mood in 1976. So Tony Parsons in the NME in early October says, They're the quintessential product of the United Kingdom in the 1970s. The music they play reflects their times, no more, no less. And then they get their first appearance a week later in the national newspapers in The Sun. The Sun did a double page spread and it illustrated it with handcuffs and swastikas. It described them as hell's angels in a clockwork orange nightmare. And it had a nice quote from John Lydon, Johnny Rotten. We want chaos to come. Life's not going to get any better for kids on the dole until it gets worse first.

Speaker 2:
[46:14] It's quite like David Bowie.

Speaker 1:
[46:16] David Bowie and the fascism. There's a sort of nihilism, I think, in British popular culture in the mid-70s. It's sort of, we want to see everything get worse and only then will it get better. And a sort of exasperation. I think people of that generation looked at your Callahans and your Healers and your trade union leaders and stuff. And they just thought, I have nothing in common with these people. I'm sick of them going on about the war. I'm sick of their massive glasses and their beer and sandwiches and their pay deals. I just want to smash everything up. And I guess you could argue they got the Prime Minister that they deserved. Somebody who did smash everything up. Anyway, Johnny Rotten said he wanted everything to get worse. And frankly, it looks as though he's going to get his wish. Because at the beginning of November, the six-man IMF team fly into London. And this is seen in the newspapers and in the media generally, and I think by the public, as a moment of overwhelming national disgrace. It's like Britain is an incompetent business that's gone into administration. And all the newspapers are on profiles of these six people. There is an Englishman, an Australian, an American, a German, a New Zealander, and a Greek. So basically, it's the cast of a terrible, very, very inappropriate 1970s joke. They're all staying at Brown's Hotel under false names, excitingly. They go to see Dennis Healy in Downing Street. Remember, he now has to open the books. He has to show them Britain's accounts. And he says, you know, the books aren't ready. You'll have to hang around. So they're just hanging around London and waiting for the books to be ready.

Speaker 2:
[47:47] Well, in Brown, I mean, that's quite nice, isn't it? Nice hotel.

Speaker 1:
[47:49] It's lovely having tea in Brown's. I mean, what a nice thing. But actually, the real drama isn't Britain versus the IMF. It's Callaghan's government against each other. So the issue is whether they're going to make these cuts. And this sounds like a very dry, technical thing. But to any Labour government, this is absolutely existential. And there's history here. In 1931, Ramsey MacDonald's Labour government had come under similar pressure in the Depression. They too had been put under pressure to make cuts, the pound beleaguered, and the cabinet had split. And Ramsey MacDonald, the Prime Minister, had ended up basically leaving his own party, the Labour Party, to lead a Tory dominated coalition. And he was seen as the great traitor of Labour Party history for doing this. And the Labour left are obsessed with this. And Tony Benn starts, at this point, he starts going to meetings with the, he gets the minutes from the cabinet meetings from 1931. And he starts performatively walking around with them under his arm, putting them out on the table for everyone to see. Because he's basically saying to Jim Callaghan, you're Ramsey MacDonald, I know what you're like. And all this kind of thing. And also Tony Benn has lost patience with Callaghan because Callaghan, he thinks, has really let himself down and let the labour movement and socialism down because when Chairman Mao died, Callaghan refused to have a moment of reflection. Benn was absolutely appalled that Callaghan wouldn't pay tribute to Chairman Mao in British cabinet. He says in his diary, Mao merited a moment of reflection. He will undoubtedly be regarded as one of the greatest, if not the greatest, figures of the 20th century. He certainly towers above any other 20th century figure I can think of. In his philosophical contribution and military genius. And the fact that Callaghan refuses to see this, he says, is a sign that Jim is just a Tory. So I think listeners can make up their own minds about this. You with Chairman Mao or you with Jim Callaghan?

Speaker 2:
[49:52] I know who you're with, Dominic.

Speaker 1:
[49:53] Are you with Chairman Mao?

Speaker 2:
[49:54] I'm not with Chairman Mao. I hate Chairman Mao.

Speaker 1:
[49:56] Chairman Mao is a terrible man. He's an absolutely terrible man. He made war on birds. And you can't go around making war on birds. Tony Ben's terrible, terrible judgment. I mean, I like James Callaghan. Yeah, he's great.

Speaker 2:
[50:10] I like the fact he's from Hampshire. I like the fact he had a farm. I like the fact that he approved the Royal Navy. No, I like him.

Speaker 1:
[50:17] So Callaghan and Hill have a problem with Tony Ben. He despises them now for their lack of affection for Chairman Mao, but also their enthusiasm for cuts. The other person they have to worry about is Foreign Secretary who is called Anthony Crosland. I mentioned him briefly.

Speaker 2:
[50:30] Oh, the Lounge Lizard.

Speaker 1:
[50:31] Lounge Lizard. Actually, I basically fell down a rabbit hole of looking at photographs online of Tony Crosland to try and find the appropriate terminology. He looks uncannily, I think, like David Cameron. He's like a more Lounge Lizard-esque David Cameron.

Speaker 2:
[50:47] Kind of fleshy.

Speaker 1:
[50:49] He's become quite fleshy.

Speaker 2:
[50:50] Rubicund.

Speaker 1:
[50:51] He's much more baggy-faced by this point because he proves he would have been drinking a lot more and smoking and stuff. He was the great intellectual at the Labour Party in the 50s. He wrote a book called The Future of Socialism. And he basically said Britain should become a Scandinavian social democracy with American lifestyle. So massive taxes, huge fridges. His dream has been overtaken by events, but he still hankers after the sort of 1950s, 1960s Keynesian dream of like, let's tax and spend loads and all this. And he also sees Healy as a rival and he wants to use this against him. So his argument is, it's mad to have any cuts. We've got a million people unemployed. What are we thinking? It'll provoke loads of strikes. Just tell the IMF that they're being stupid. A cat, Crosland like Healy is incredibly arrogant. He says, just tell the IMF they're fools. Just tell them they're wrong and they'll have to listen. So Callaghan has this problem. He has got the foreign secretary against him. He's got Ben against him and he's got the IMF. How is he going to handle this and keep his government together? The answer is that he actually handles it brilliantly. It's one of the great examples of prime ministerial management in British history.

Speaker 2:
[51:58] I think it was cited by Daniel Finkelstein in The Times as an example that Keir Starmer could learn from.

Speaker 1:
[52:06] That's high praise because you know, Danny Finkelstein, do you know what one of his enthusiasms? It's a podcast called The Rest Is History. He's a big fan of The Rest Is History.

Speaker 2:
[52:15] Hello Danny, hope you enjoyed that mention.

Speaker 1:
[52:18] Yeah, he should write another column in The Times.

Speaker 2:
[52:19] About how good we are.

Speaker 1:
[52:22] He should write two columns, one about how good Jim Callaghan is and one about how good we are and everyone will enjoy that. So what Callaghan does in the next two months, he has 26 cabinet meetings and he basically says to his ministers, fine, you talk this out, you talk yourselves into exhaustion and I'll be the empire. And that's what he does. And basically Healy, the Chancellor, has to do 26 of these meetings where he allows his colleagues to argue with him and he basically has to fight back. And he's working these punishing days, he's redder than ever, he gets shingles. But he puts up a tremendous performance because this is what he's all about, basically fighting off. He loves a fight. He loves a bare knuckle intellectual brawl.

Speaker 2:
[53:04] Does he have any time off to read Emily Dickinson?

Speaker 1:
[53:07] No, he's having a terrible time. He's starting work at six and working till midnight, almost like our routine.

Speaker 2:
[53:13] Yes, tell me about it.

Speaker 1:
[53:15] So they have all these meetings. I guess the key one is the 23rd of November. Not only are they arguing with each other, they're arguing with the IMF. And Healy has persuaded the IMF to moderate their demand. So Britain will have to make one and a half billion dollars of cuts next year and another three billion in 1978-79. Healy says to his colleagues, look, this will be very painful, but the IMF will approve it. The Americans will approve it. It'll be good for our image. It'll be good for confidence. Let's do this. Crosland then speaks up and he says, this is mad. He says, and I quote, tell the IMF, the Americans and the Germans, if you demand any more of us, we should put up the shutters, wind down our defense commitments and introduce a siege economy. Now this, Crosland says, this will frighten them. They need our troops in West Germany. And they don't want us to have a siege economy and to be a North Korea off the coast of France. So they will blink. They will give us the money and they won't demand any cuts. We'll be laughing.

Speaker 2:
[54:11] So it's a bit Brexit.

Speaker 1:
[54:12] It's very Brexit. It's very Brexit. It's basically we'll blackmail the IMF. They need us more than we need them. Now we tried that with the European Union in the late 2010s, didn't we? And I don't feel it worked out brilliantly personally. I'm not expressing a view about Brexit. I'm expressing a view about a negotiating strategy. And I feel like the claim that German car makers, you know, we were so important that they would come to our rescue. That was not realized. Anyway, there was obviously no way the IMF would give into this blackmail. This is absolutely mad. But a lot of Callaghan's ministers quite like this because they will do anything to avoid the cuts. Again Callaghan plays it very cleverly. He says, look, take a week to think about it. We'll come back in a week. We'll come back next Wednesday and we'll make up our minds one way or the other. And over the weekend, he and Crosland have to go to the Hague for some European meeting. And on the way back, Callaghan says to Crosland, whatever happens, I'm going to side with Dennis. I'm telling you now, I'm siding with Dennis. And the implication is, if you keep fighting, you will bring down this government. And none of us want that. So the week goes by and we get to the decisive day, which is Wednesday, the 1st of December. Callaghan's ministers arrive at number 10. They're told there's a half hour delay, which is very unusual for a cabinet meeting. And the reason is that Callaghan has been locked in an upstairs room, or not locked in, but he's been in an upstairs room. He's locked in, that would be a bit weird.

Speaker 2:
[55:37] Oh, by Hester Threl.

Speaker 1:
[55:39] Yeah, yes, exactly. Barcy Williams has come back and locked them in the room so they can't have lunch. With the managing director of the IMF, who's flown in from Washington, and Callaghan has persuaded him to drop the one and a half billion cuts to just one billion cuts in the first year. So that's a bit of a win. A win for Britain. Callaghan finally comes downstairs, it's 10.30, he says, we'll go round the table and we'll decide what we're going to do. He starts with Tony Benn of The Critics. And Tony Benn says, let's have a siege economy, come on, let's become North Korea. And this completely backfires because basically, Callaghan's staff have secretly been preparing ammunition to use against Tony Benn and they've distributed it to Callaghan's younger loyalist ministers, who are people like Shirley Williams and Bill Rogers, who go on to form the breakaway Social Democratic Party in the in the 80s. And they get absolutely stuck into Benn. The question is that you are asking, Tom, who's going to lend us any money if we have a siege economy? How many people will lose their jobs because no one's buying our exports? What do you think our trading partners will do if you ban their imports? You know, they're not going to buy British goods anymore. What are you going to do about that? And Benn has to admit that people, he doesn't know the answers to these questions. And it's very sad, people start laughing at him. They start laughing at him and making fun of him in the meeting. And Callaghan actually has to intervene and to tell them to listen to him with respect, because they're being nasty to Tony Benn. So that's Tony Benn. And then it's Crosland, the Foreign Secretary. Crosland wants his blackmail plan. He says, let's threaten a siege economy or talk about our role in Cyprus or our troops in Germany or our membership of the EEC. And then Schmidt, the German Chancellor and Ford, the US President, will soon give way. But in the last week, people have been talking about this and they've lost some of their former enthusiasm. And the more he sort of says, it'll be fine, they'll give him. Of course, they'll blink. People think, will they really? Probably, they won't. And so that night, the night of Wednesday, the 1st of December, loads of ministers come to Crosland's room in the Commons. They say, we're not going to support you, we're going to support Dennis. And actually Crosland himself finally cracks and he goes to see Jim Callaghan. He says, I'm still right, but I guess I'll go along with you. Now, while this has been going on in the House of Commons, there has been another dramatic development. Because that evening, Thames TV's early evening, family-friendly Today Show was going to feature everyone's favorite band Queen. But Queen pulled out.

Speaker 2:
[58:12] Because Freddie had to go to the dentist.

Speaker 1:
[58:15] Is that right? He had to go to the dentist. That's a good fact. So their publicist to EMI said to the bookers at Thames, we've got another group, join our other group instead. And they said, sure, possibly go wrong. And this was the Sex Pistols. This was the genesis of their interview with Bill Grundy. So listeners will now have heard the original archive footage, won't they? And so you listening to this will be able to make up your own minds about what was going on. The Pistols, as you say, Tom, thought that Bill Grundy was drunk. I don't think he seems that drunk when you actually see the real archive.

Speaker 2:
[58:49] But he, I mean, maybe he's such a kind of consummate drunk that he can get away with it. I mean, Michael Parkinson said he was always drunk.

Speaker 1:
[58:57] Yeah, I know lots of people said he was a big drinker. But he, if so, then he would have been drunk and done loads of today programs. It's hard to work out exactly why he loses it so completely. Because actually, although people always use that or used it at the time, the newspapers said, oh, the pistols are scum and all this kind of thing, the swearing. It's kind of not their fault because he goads them. He tells them to do it. Go on, chief, say something outrageous and all this kind of thing. The result is this massive media furore. So I'm going to read a line that I've used so often in my books, but I don't really know what it means. The switchboard is jammed.

Speaker 2:
[59:36] I never know how that works.

Speaker 1:
[59:40] How many calls must you get? And I will say how many people realistically are ringing TV companies. Anyway, 10 people are ringing TV or whatever. The switchboard is jammed. And the next day's papers go completely berserk. And we have these tremendous headlines. The filth and the fury. Fury at filthy TV chat.

Speaker 2:
[60:00] And the BBC get the blame, don't they? Even though it wasn't on the BBC.

Speaker 1:
[60:03] I love this. Daily Express published a long editorial explaining why this was all the BBC. Even though it wasn't on the BBC, and the BBC had nothing to do with it.

Speaker 2:
[60:15] But the Express aren't going to let a little thing like that get in the way.

Speaker 1:
[60:18] No, the Express said, It's the BBC's fault because the BBC panders to the ignorance and tastelessness of those who enjoy the noises of punk rock. I love that, the noises of punk rock. Anyway, it completely changed the lives of the Sex Pistols, this interview, because it made them household names. They're plastered across the newspapers. It meant that from this point onwards, it would be impossible for them ever to be judged on the basis of their music.

Speaker 2:
[60:43] And they've got Silver Jubilee coming up.

Speaker 1:
[60:45] They've got the Silver Jubilee.

Speaker 2:
[60:46] Perfect timing.

Speaker 1:
[60:47] Exactly. And they become this, even though their music is not that popular, they become a genuine public phenomenon. They become the supreme emblems of the breakdown and nihilism of the 1970s and this before they've ever really had a hit. And as for Bill Grundy, Tom, a terrible fate, Bill Grundy.

Speaker 2:
[61:07] A warning from history.

Speaker 1:
[61:09] A warning from history. He literally ends up being banished to present a books podcast. So the next morning, the 2nd of December, as Callaghan's ministers assemble for another meeting, the papers are full of the pistols. But I'm happy to say there is no filth and fury in Downing Street.

Speaker 2:
[61:27] Very good.

Speaker 1:
[61:28] Look at that. That's elegant writing.

Speaker 2:
[61:29] So good.

Speaker 1:
[61:32] So Callaghan and Healy have won. Croson throws in the towel. Ben's grumpy about it. But the cabinet will take the deal. Britain will cut public spending by a billion pounds next year and one and a half billion pounds the year afterwards. And in return, it'll get $4 billion right now to defend the pound. It is at once a total humiliation for Britain and a great political achievement by Callaghan because he hasn't lost a single minister, he's kept his government together. This was a crisis that was brewing before he became PM. And he's somehow come out of it with his reputation enhanced. And even Tony Ben, who is usually, what did Callaghan call him? A canting hypocrite. And Tony Ben who is usually so scathing about any other Labour politician.

Speaker 2:
[62:15] Yeah, Harold Wilson's birthday, odious.

Speaker 1:
[62:18] Odious. In his diary, he wrote afterwards, Jim is a much better prime minister than Wilson. He's much more candid and open with people. He doesn't try to double talk them as Wilson did. Wilson has simply disappeared from sight. Nobody thinks about him anymore. Ten days before Christmas, they unveiled the deal to the House of Commons. There are going to be big cuts to all the budgets. There's going to be higher charges for things like gas and telephones, which of course in these days, in the 70s, are public utilities. But the Labour left don't rebel. Amazingly, Callaghan and Healy have got away with it. There's a little twist to the story. It actually turned out that because the Treasury had got their figures wrong, Britain was borrowing less money than everybody thought. So, Healy only needed half of the loan and was able to repay it early. Now, of course, people don't know that initially. And at the time, people saw this as the whole business was seen as an abject national humiliation. And on the left as well as on the right, there's a brilliant editorial in the Sunday Mirror. Perhaps the politicians who have got us into our present mess would like to know what the British people are fed up with most of all. Not the fall in the pound, not ever rising food prices, not the erosion of their pay packets, not even the weather. What the British people are fed up with most is feeling ashamed. That's terrible, isn't it? As for the political significance of this moment, the historic significance, it depends where you stand. So if you're like Tony Benn and you're on the left, you see this moment, the IMF bailout, as the definitive moment in British history when socialism was betrayed. So in the 1980s, the left of the Labour Party, lots of Labour activists said Callaghan and Healy were the people who prepared the way for Margaret Thatcher, and they never forgive them for it. Well into the 80s, when Healy would get up to give a speech, activists would scream, IMF, at him. They'd kind of chanted at him. Now if they hadn't won, what if Tony Benn had got his way, and we had had a siege economy? I think it's very unlikely, but I don't think the result would have been very good. I think it would have been high inflation, tanking living standards. I think there would have been a surge in unemployment, and there probably would have been an even greater swing to the right, eventually. Actually, François Mitterrand tried something a little bit similar in France in the 1980s.

Speaker 2:
[64:35] He gave it up after two years or something, didn't he?

Speaker 1:
[64:37] He got Jacques Delors in to sort out his finances and to swing to the right towards austerity. The French did try it and it didn't really work. I don't think it would have worked in Britain. However, I think Ben is right in one respect. I think this was a big turning point and I think he's actually right that Callaghan and Healy do prepare the ground for Margaret Thatcher to some degree. Because in the space of a few months, what they've basically done is they've ditched tax and spend Keynesianism, they've abandoned the idea of full employment and they're moving towards what they'd seen as monetarism. So a year later, a year after this, 1977, Healy said to his cabinet colleagues, he said, we'll never again live in a Britain where everybody has a job, Keynesianism has failed. And in 1979, there's a telling exchange which Ben records in his diaries between him and Callaghan about globalization. So Ben says, how is it that British businesses are allowed to order coal from Australia and ships from Japan just because they're cheaper than British products? That shouldn't be allowed. And Callaghan says to him, we mustn't be insular, Tony, the state can't do anything about this. If those goods are cheaper, we should buy them from wherever they come from. And of course, in our lifetimes, we have grown up thinking that he was right and that free trade and globalization are the way forward. But we now in the 2020s find ourselves in an age when the US president, I'm guessing, would have said that Tony Ben was right and that you should always put your own country first and that who cares? If tariffs are what you need, then tariffs is what you do.

Speaker 2:
[66:17] Though Tony Ben wouldn't have approved of attacking Iran, would he?

Speaker 1:
[66:20] No, I think that's probably the only respect in which they would be singing from the same hymn sheet, I guess. Anyway, Tony Ben much less orange.

Speaker 2:
[66:30] And I don't think Donald Trump has been stung on his penis by a wasp.

Speaker 1:
[66:36] That fact then may not even be true.

Speaker 2:
[66:40] Of course it's true, Dominic.

Speaker 1:
[66:41] Well, it's on The Rest Is History, so it must be.

Speaker 2:
[66:43] It's the single most important fact of post-war British politics.

Speaker 1:
[66:46] So anyway, this whole story ends with Britain a lot closer to Thatcherism at the end of 1976 than it was when we began at the beginning of 1975. To Thatcherism, but not to Thatcher. Because people may be wondering, they started the series with Margaret Thatcher becoming leader. Where has she been in all this? And the truth is, she's not been relevant. She's not part of the story. She's been Tory leader all this time, but she's been struggling in the House of Commons. Still, Callaghan is brilliant at dealing with her in a very, I have to say, a very sexist way. He basically pats her on her head when she gets up to oppose him. And at one point, he actually uses the expression, now, now, little lady to her, which drives her mad, but everybody kind of laughs. He is miles ahead in polls of who people would prefer as prime minister. Even with the Tory press, he's remarkably popular. And that Christmas, the rabidly right wing Daily Express says, Perhaps we are quite lucky in old Jim Callaghan. But his luck is about to run out because we will come back to the 1970s later on, not immediately, but later on, in a third and final series, which will come to the winter of discontent, the election of 1979, and Margaret Thatcher's transformation from an ugly duckling into an Argentine smiting swan. And that is all ahead.

Speaker 2:
[68:11] But Dominic, just because people are going to have to wait a year now for more 1970s Britain doesn't mean that there is going to be any lack of history in the intervening months. So we have coming up, the Mona Lisa, Battle Marathon, First World War, the Tudor Cold War, the Odyssey, loads and loads of stuff to come. And if you are an Athelstan, then we have an unbelievable treat for you because coming up is going to be the opportunity to win not just a copy of Dominic's great book, Seasons in the Sun, but a signed copy. So if you're an Athelstan and you want to be in with a chance of winning, just add your email address to the form in the episode description. But for now, Dominic, thank you. No one better in the whole world to talk about Britain in the 1970s than you. So what a treat it's been. Thank you everyone for listening and we will be back. With the Mona Lisa next week. Bye bye.

Speaker 1:
[69:12] Bye bye.