Lord Varley: Miner's son who became a 'sensible and pragmatic' Labour minister but in 1984 quit politics for industry

Eric Varley was Harold Wilson's anointed. From 1968, when he was plucked out of the government whips' office to become the eyes and ears of the Prime Minister in the Commons, until at least 1976, when Varley was Secretary of State for Industry, Wilson saw Varley as his successor-but-one as Leader of the Labour Party.

He was a perfectly credible candidate, with impeccable credentials at a time when the Labour leadership seemed unduly weighted towards intellectuals. Varley had been an engineer, a skilled miner, and a man who early in his career had had to make a choice between politics and professional football.

Varley had an amazingly swift escalation to ministerial authority. Only three of his 20 years from 1964 as Member of Parliament for Chesterfield were spent as a backbencher. He was very blunt about it: the whole purpose of being in politics was to secure the power to implement policy and to put to the test one's political philosophy. No man was more contemptuous of posturing in politics or of others taking positions because they thought that it would be to their advantage in the party.

This was the root of his acid relationship with the man who ironically was to share responsibility for British industry, Tony Benn, who would be chosen by the Chesterfield Labour Party as Varley's successor to represent them in Parliament when Varley, in 1984, fed up with the fractious factions in the Labour Party and seeing no future constructive office, accepted an offer to become chairman of the fuel company Coalite, which meant severing his connection with the House of Commons.

Varley had the distinction of representing the town in which he was born and bred. His father, Frank Varley, was a miner prominent in the affairs of the NUM. However, his mother steered Eric away from the pit and persuaded him instead to take an engineering apprenticeship at the Staveley Ironworks. But the pressures of family tradition or, as he told me with a chuckle, the fact that most of his friends had gone into the mines, were too strong and in 1955 he left Staveley to join the National Coal Board as a craftsman at the local workshops.

The move involved switching from the Amalgamated Union of Engineering Workers to the National Union of Mineworkers (NUM), and soon he became a branch secretary and an enthusiastic student at the extra-mural department of Sheffield University where Professor Royden Harrison was mentor to a number of likely lads from the mining industry. It was a natural progression to Ruskin College, Oxford and to the vice-chairmanship of the Chesterfield Labour Party.

In a parallel life he had begun playing professional football for Worksop Town in the tough Midland League and was on the books of Chesterfield. I was once told by Bob Lord, the high-profile chairman of Burnley Football Club that Varley had had the potential talent to graduate from Chesterfield to a top division club and then be a contender for centre-half for England. That may be speculation but it was the opinion of one of the Football Association heavyweights of the day when he came to visit the Parliamentary Labour Party sports group of which I was then chairman.

A life in public service won the contest but Varley's attachment to the NUM not unfancifully echoes a footballer's devotion to the club that gave him his first chance. Varley told me several times: "I owe everything to the Derbyshire miners. I wouldn't be here in the House of Commons but for their support and their loyalty."

In 1964, the elderly MP for Chesterfield, Sir George Benson, retired. For 18 months I had served with Benson on the Public Accounts Committee of the House of Commons, of which he had been a stalwart member for 30 years. He told me that his successor, Eric Varley, a working miner, "a very different person from myself", would be a major figure in a Labour government. He was to be proved abundantly right.

When he first arrived in the House of Commons, Varley seemed shy and diffident, but John Silkin identified him as excellent material for the whips' office. Wilson, anxious to please the trade union group of MPs, partly on the advice of Ness Edwards, chairman of the trade union group, and a voice of the Welsh miners, chose Varley for the sensitive position of PPS. Displaying total loyalty to a prime minister in trouble, Varley was promoted after a couple of years to be Minister of State at the Ministry of Technology. Dick Crossman thought that one reason for that particular appointment was so that the Prime Minister could spy on the activities of Min Tech in general and its Secretary of State, Tony Benn, in particular.

In the second Wilson government, as Secretary of State for Energy, later as Secretary of State for Industry, Varley was a minister of crucial importance. He used his time well and, not least, he was proud of his part in establishing a £100m compensation fund for miners and ex-miners suffering from pneumoconiosis. One of the 34,000 beneficiaries was the 84-year-old Frank Varley, and Eric Varley was delighted to declare an interest when the issue came before the House of Commons.

The most pressing and delicate problem with which Varley had to deal as Secretary of State for Industry was that of British Leyland. On 21 July 1976 he told George Park, the veteran Coventry shop steward who had become MP for Coventry North East, that the National Enterprise Board had at Varley's request examined British Leyland's performance since October 1975 and had carried out a review of British Leyland's long-term corporate plans. The NEB had made a full report to him. It was satisfied that the corporate plan provided a sound framework for the future development of the company, and that the trend of improvement fully justified the Government's first tranche of £100m. Varley persuaded his Cabinet colleagues to accept these conclusions.

As the MP for the by-then beleaguered Bathgate factory, the truck and tractor division of BL and at that time the biggest concentration of machine tools under one roof in Europe, I was frequently in and out of his office. He went to infinite trouble with his officials to promote legislation which would be helpful. He continued to support the basic strategy set out in the Ryder Report, British Leyland: the next decade, with its emphasis on the programme of capital investment necessary to restore British Leyland's competitiveness. Varley told me about his first-hand contact with British Leyland management and workforce representatives which led him to endorse the NEB's view that the future was encouraging. No minister could have been more mindful of the job consequences involved in the health of Leyland, and particularly the ancillary industries.

Lord Healey, who was Chancellor of the Exchequer throughout the period when Varley was Secretary of State, described him as "an extremely sensible and pragmatic minister". After Labour's defeat at the 1979 general election, Eric Varley was one of the prime movers to get Denis Healey elected as Leader of the Labour Party, although he was beaten by Michael Foot. Healey and Varley remained great and lasting friends and later shared a room in the House of Lords (Varley was made a life peer in 1990).

In 1984 Varley, appalled by the previous year's Labour manifesto drawn up under Foot, which his great friend and ministerial deputy Gerald Kaufman memorably described as "the longest suicide note in history", jumped at the chance to become chairman and chief executive of Coalite (which he had first been offered and rejected in 1983). It appealed to him that they should be the leading manufacturers of the day of smokeless fuel, because his loyalty was to the mining community.

Kaufman says that "Eric was a man of great foresight. As Secretary of State for Energy, he created the British North Sea Oil Corporation. He was way ahead of us all on the importance of climate change. He led the 'Save It' campaign on waste disposal. He sorted out the mess which he inherited on land planning agreements. He entertained no fantasies about the pristine nobility of working-class people – since he was one of them – but wanted to serve them in their own best interests."

Varley's life was clearly and sharply divided between Westminster and Chesterfield. He had his home in the constituency and throughout his time in Parliament only on four occasions, he told me, did he not return to Chesterfield, where he pursued his love of gardening, which involved the coaxing of trees and heathers into a captive imitation of the Derbyshire moors.

On Radio 3's Man of Action programme, he demonstrated that his musical tastes were intellectual and discriminating. When asked the question customarily put to interviewees on Desert Island Discs, as to which one record he would take from his selection, he plumped for Dvorak's Sixth Symphony, "at the moment – but my tastes are faddish".

Tam Dalyell

Eric Graham Varley, miner, politician and industrialist: born Chesterfield, Derbyshire 11 August 1932; engineer's turner 1952-55; mining industry craftsman 1955-64; branch secretary, National Union of Mineworkers 1955-64; MP (Labour) for Chesterfield 1964-84; PPS to the Prime Minister 1968-69; Minister of State, Ministry of Technology 1969-70; PC 1974; Secretary of State for Energy 1974-75; Secretary of State for Industry 1975-79; Treasurer of the Labour Party 1981-83; chairman and chief executive, Coalite Group 1984-89; created 1990 Baron Varley; married 1955 Marjorie Turner (one son); died 29 July 2008.

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