Maggie Thatcher and her ploicies have been derided by televison, the press and pop stars. This article from the Telegraph shows the state Britain was in before she came to power.
Jimbert
Year Britain nearly gave away the bomb
By Ben Fenton and Peter Day
Last Updated: 12:01am GMT 29/12/2006
James Callaghan was prepared to abandon Britain's nuclear bomb in return for a loan from the International Monetary Fund to rescue the country from its worst post-war economic crisis.
James Callaghan in 1976
The then prime minister and Denis Healey, the chancellor, were desperately trying to shore up British credibility abroad, especially in America, when they learned that one of Margaret Thatcher's team was in Washington trying to scupper their plans.
Papers from No 10 released today show just how desperate the situation was in December 1976 when IMF inspectors were in London demanding swingeing cuts in public spending. Otherwise, they said, Britain would not get the £2.3 billion loan it needed to stop the economy going into freefall.
Mr Callaghan warned his closest allies, Gerald Ford, the US president and Helmut Schmidt, the West German leader, that "social cohesion" would be at risk if the deal failed to work, with the country dangerously divided between extremes of Left and Right.
He also told them that Britain would no longer be able to play its part as a Nato ally in securing western Europe against invasion by Soviet armies.
advertisement
But what he did not say, and what the 1976 papers make clear, is that he had been told by his most senior civil servant that meeting IMF demands would probably mean giving up Britain's status as a nuclear power.
Sir John Hunt, the cabinet secretary, said in a memo of which only three copies were made that there were only two ways to achieve the £100 million needed in defence cuts: abandoning the bomb or the upgrading of it, or making huge cuts in the 55,000-strong British Army of the Rhine [BAOR].
Sir John said: "It is very unlikely that any other country would agree to replace our troops: and the process of unravelling Nato would have begun."
He said it was "preferable" to consider leaving the "nuclear club". He added: "It would leave France as the only nuclear power in Europe, which would be unwelcome to most members of the alliance: and it would be seen as a proof of Britain's definitive disappearance as a major military power.
"But it would be preferred by our partners to a withdrawal of BAOR."
On Nov 12, Mr Callaghan had warned the US of military cuts if it did not help shore up the pound, which had dropped by 50 cents against the dollar in six months and threatened to increase inflation and wreck Labour's fragile deals with union leaders to restrain pay demands.
A few days earlier, in scrambled call, Mr Schmidt told him that Sir Keith Joseph, the policy guru of Mrs Thatcher, the new leader of the Opposition, had been working against Labour's diplomacy in America.
"Are you aware that Mr Keith Joseph is trying to influence people in Washington against you?" he asked. "I am told that he has established very good contacts in every quarter in Washington, and bears some influence there."
Among the files on the IMF crisis is a brown envelope marked "never to be destroyed" which holds the scribbled notes of Mr Callaghan from the Cabinet meetings when he had to sell the IMF deal to reluctant comrades.
They show how he countered Michael Foot, Tony Benn and Peter Shore, who represented the Left and were pressing for an alternative policy of protectionist import restrictions, tax rises and job creation schemes.
His notes included the phrase "no debate on alternative strategy", showing how keen he was to stage-manage the Left out of the argument.
In the end, on Dec 2, a deal was agreed by a majority in Cabinet. Defence was cut by £100 million but Mr Callaghan seems to have called the bluff of Sir John because neither the nuclear bomb nor the BAOR was lost.
Such fraught days were the last scenario expected by Harold Wilson when he surprisingly resigned as prime minister in March that year.
Mr Wilson told colleagues that whoever succeeded him would have a relatively easy time because he was leaving the ship of state on a steady course.
In his address to the Cabinet, Mr Wilson said that counter-inflation tactics were working, exports were rising, and deficits on the import-export balance of payments were coming down.
He added: "We inherited a dangerously distorted and unbalance economy. We are beginning to get it right."
To his successor, he offered this reflection on the job on offer: "This is an office to cherish; stimulating and satisfying. You will never have a dull moment; you will not get bored."
If Mr Wilson had a high opinion of his stewardship, it was nothing to what Idi Amin thought of him.
(A sort of addendum for Flashman. Jimbert)
In an unctuous message to the departing prime minister, the Ugandan dictator, not known for his admiration of British leaders, wrote: "I wish to congratulate you for your brilliant leadership and great wisdom in guiding your country through a very difficult period economically and politically."
Free Forum Hosting
Important Announcement
First 