'If only...': What if Britain had not elected Margaret Thatcher?

Pundits have speculated as to how the country might look now, had Mrs Thatcher not come to power – and it was a very close run thing. Brian Brady uncovers new evidence to show how close Britain came to avoiding Thatcherism

Margaret Thatcher's ascent into Downing Street was inevitable. Wasn't it? From the moment she entered her first Conservative candidate selection contest to the day she unseated Edward Heath from the Tory leadership in 1975, every move was a momentous step towards her victory in the general election of 3 May 1979.

Everything else, the ground-breaking policies, Falklands war, and the annihilation of the opposition in elections throughout the 1980s, followed smoothly as if equally preordained.

Except they weren't. Many of the former leader's enemies – and some of her closest allies – maintain to this day that the forward march of Margaret Thatcher might have been stopped in its tracks, perhaps for ever, outside the gates of Downing Street seven months before she eventually arrived in triumph. And the man who could have stopped her was Jim Callaghan – the then Labour prime minister who fell so dismally before her in May 1979 – if only he had opted to call a general election (as prime ministers were then able to do) the previous autumn, before his fate was sealed by the Winter of Discontent.

"I'll go to my grave believing that, if we'd gone on 5 October 1978, we'd have won the general election," said Tom McNally, a Lib Dem peer who was Callaghan's political adviser in the late 1970s.

"We had an election poster prepared which showed a lighted candle in a darkened room, with a strapline saying, 'Remember what happened the last time the Tories said they could work with the unions?'.

"It would have been a very powerful message. But, by the spring, after the problems with strikes over winter, the posters were shredded."

Callaghan's troubled government reached the late summer of 1978 in a relatively hopeful condition. He had emerged from the embarrassment of asking the IMF for a £2.3bn loan in 1976 and responded to the loss of Labour's three-seat majority by securing a pact with the Liberal Party which allowed his government to struggle on.

The question still looming over Callaghan, however, was when to call a general election. He had a year to play with, but did not want to end up in a position where he was forced into an unwinnable election at the wrong moment. Towards the end of 1978, Labour had recovered to the point where some polls put them ahead of the Conservatives, while Callaghan's approval ratings were comfortably ahead of Thatcher's.

Many of the prime minister's colleagues believed the time had come to capitalise on the advantage and play the last valuable card available to him.

Baroness Williams, then simply Shirley Williams, a member of Callaghan's cabinet in 1978, said she had been "pretty thoroughly convinced" that Labour could win in the autumn, and urged the PM to move. She said: "There was a very substantial gap between support for Callaghan and support for Labour. He was a very popular PM and he had widened the gap between himself and Thatcher.

"Peter Shore and I pleaded with him to go for an early election, but Jim was very strongly against it."

The conviction that Labour could win in 1978 was not confined to the Labour Party; even within Thatcher's inner circle, there was a recognition that she was not guaranteed victory.

Lord Tebbit said last week: "Among Margaret Thatcher, Airey Neave, myself and Michael Dobbs, who were the regulars in the group which briefed Thatcher for PM's PQs, there was a strong feeling that if Jim Callaghan went for an election in the autumn of 1978 he would have a good chance of winning.

"It was therefore our tactic to try to keep him off balance and sufficiently unsure to delay his decision until the spring, since we thought things could only get worse for him."

The tactic may have helped, but Callaghan was also glumly reading the runes himself. The pollster Sir Bob Worcester recalled: "I was doing the private polling for Labour in July 1978, and the findings presented to the PM and his campaign team were bleak; the best Labour could hope for was another hung parliament, at the mercy of the Scot Nats.

"Rather than call the election and lose, or barely scrape home, be forced to call an election which would bring in the Tories and further divide the country, he said he thought if anyone could hold the country together during that winter, it was him, and better to stay and try to hold it together than to accentuate the divide; he couldn't, but it gave him another six months to try (his words, not mine)."

Lord McNally said: "Jim told me later that he had got The Times guide to elections and gone through every seat thinking whether he could win it or not. When he added it up, he did not have a comfortable majority."

The Labour peer Bruce Grocott was one of those consulted. His seat, Lichfield and Tamworth, had been won with a majority of barely 300 in 1974. In 1978, "I was regularly being asked by the party whether I'd keep my seat and I always said 'no'," he said. "Given that it was the fourth-most marginal, that was quite an important opinion.

Hindsight shows Callaghan had spurned Labour's last best chance to thwart Thatcher's rise. Lord Tebbit insisted that "had Margaret not won an autumn 1978 election, I think her position as leader would have been in danger from the Tory old guard". Baroness Williams agreed: "A number of people in her own party would have been able to put it down to the fact that she was a woman. The Tories would have been under greater pressure to remove her."

A Labour victory in 1978 might also have preserved the fragile unity of a party already lurching into bitter internal skirmishes between right and left, which led directly to the formation of the breakaway Social Democratic Party (SDP) in 1981.

Baroness Williams, one of the "Gang of Four" who created the new party, said: "If Jim had won again, there is a good chance that he would have been able to rally the party. In 1979, we had not broken away and we weren't going to."

In reality, however, Thatcher's victory in 1979 – and in 1983 and 1987 – was made much easier by the fragmentation of the opposition before her. Opponents were last week reduced to complaining that Thatcher was a lucky politician, but Callaghan's decision in 1978 was fateful for her and for his own party.

Lord Tebbit said: "Not that long before he died, I told him we thought he might have won had he called the election in the autumn of 1978. In essence, his reply was he'd had enough of being buggered about trying to govern without a decent majority, and although, like us, he thought that he would just get back in an autumn election, he had no wish for five years of governing without one."

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