Most significant, however — and even more important than the work done for the 1979 general election campaign itself — was the ‘Labour Isn’t Working’ poster campaign in the summer of 1978. Tim, Gordon and Ronnie Millar came down to Scotney on a Saturday in June 1978 to get my agreement for a campaign on this theme. Again, it would break new ground. Unemployment, which would be depicted both by the wording and by a picture of a dole queue, though it had risen to almost 1.5 million, was traditionally a ‘Labour issue’. That is to say, it was a topic which we would not normally make a campaign priority because, like the Welfare State, it was one where the Labour Party was generally regarded as stronger than us. The poster would also break with the notion that in party propaganda you should not mention your opponent directly. Saatchis, however, understood — and convinced me — that political advertising of the sort proposed could ignore such considerations. It was designed to undermine confidence in our political opponents, and so it should limit itself to a simple, negative message.
Generally, Governments do well during the summer recess because the political temperature drops. The planned campaign would keep it high and doubtless provoke strong reactions. So after much discussion I agreed that the campaign should go ahead.
As expected, it evoked a response. Denis Healey launched a bombardment. But the more it was condemned by the Labour Party, the greater publicity it got. Simply in order to explain what the controversy was about, the newspapers had to print pictures of the poster, thus multiplying the effect. So successful was it that a further series was developed on other topics, on each of which Labour was ‘not working’. Partly as a result of all this, we came through to the autumn of 1978 in better political shape than might have been expected — and in August-September we were strengthening. That in turn may have been of some significance, insofar as it affected the Prime Minister’s decision on whether to call an election.
Only Jim Callaghan can say precisely why he did not call a general election that autumn. Certainly, I expected that he would, particularly after his speech to the TUC Conference which ended improbably with him bursting into song: ‘There was I, waiting at the church…’ — a teasing refusal to tell them what he was going to do. Then, just two days later, on Thursday 7 September while I was on a visit to Birmingham, the news was telephoned through to me from Downing Street that in the Prime Ministerial broadcast that evening, which we knew was booked, Jim Callaghan would announce that there would not in fact be an election.
The advance warning was given in confidence, which I respected. In fact, we did not even inform the Central Office team. It was an odd feeling, knowing as I did that there would be no immediate campaign, yet receiving the excited good wishes of supporters unaware of this fact. At one factory, opposite a skill training centre I was visiting, the workforce turned out, waving and shouting ‘Good luck, Maggie.’ I had to complete my schedule as stoically and inscrutably as possible, while considering the right response.
I shared the general sense of anti-climax which the Prime Minister’s announcement caused. But I knew that others, who had been working night and day to place the Party on a war footing in what had every sign of being a closely contested struggle, would feel the let-down even more. Later that night I telephoned through to Tim Bell to see how he and Gordon Reece had taken it. In fact, the two of them had restored their spirits over champagne in a West End restaurant and I had clearly woken Tim from the sleep of the just. I was asking where I could find Gordon when suddenly he said, ‘My God, I’ve been burgled.’ And so he had. He had managed to get to bed without noticing.
I gave my reactions the following evening in the slot given to the Leader of the Opposition to reply to a Prime Ministerial broadcast. Ironically, in the light of what subsequently happened, the Prime Minister had sought to justify his refusal to seek a new mandate by arguing that a general election would do nothing to make the situation easier in the forthcoming winter. I replied:
Well, some of us look further ahead than this winter. We don’t believe that Britain has to grind on in bottom gear. The longer he puts things off, the worse they will become, and the worse they become the longer it will take to put them right. But I believe they can be put right, once we’ve a government that has confidence. The confidence of the people and confidence in the people. A government with authority at home, and with authority abroad.
Would we have won a general election in the autumn of 1978? I believe that we might have scraped in with a small overall majority. But it would only have needed one or two mistakes in our campaign to have lost. And even if we had just won, what would have happened next? The Labour Government’s pay policy was now clearly coming apart. The TUC had voted against a renewal of the Social Contract — and the following month’s Labour Party Conference would vote to reject all pay restraint — so even that fig leaf would be removed. A strike of Ford car workers already looked impossible to settle within the Government’s 5 per cent ‘pay norm’. The distortions and frustrations of several years of prices and incomes policy were unwinding, as they had under the Heath Government, amid bitterness and upheaval.
If we had been faced with that over the winter of 1978/79 it might have broken us, as it finally broke the Labour Government. First, I would have had to insist that all the talk about ‘norms’ and ‘limits’ should be dropped immediately. For reasons I shall explain, that would have been very unpopular and perhaps unacceptable to most of the Shadow Cabinet. Secondly, even had we tried to use cash limits in the public sector and market disciplines in the private sector, rather than some kind of pay policy, there would have been a high risk of damaging strikes. Rather than giving us a mandate to curb trade union power, as they would in the following year, these would probably only have confirmed in the public mind the impression left by the three-day week in 1974 that Conservative Governments meant provoking and losing confrontations with the trade unions. Appalling as the scenes of the winter of 1978/79 turned out to be, without them and without their exposure of the true nature of socialism, it would have been far more difficult to achieve what was done in the 1980s.
But in any case, we could afford to wait. Although I cannot claim to have foreseen what followed, I was convinced that the Labour Party’s basic approach was unsustainable. In exchange for agreement with the trade union leaders on pay limits, the Labour Government had pursued policies which extended state control of the economy, reduced the scope for individual enterprise and increased trade union power. At some point such a strategy would collapse. The trade union leaders and the left of the Labour Party would find their power so strengthened that they would no longer have an interest in delivering pay restraint. Nor would union members respond to calls for sacrifice in pursuit of policies that had plainly failed. The effects of socialist policies on the overall performance of the economy would be that Britain would lag further and further behind its competitors on productivity and living standards. Beyond a certain point this could no longer be concealed from the general public — nor from the foreign-exchange markets and foreign investors. Assuming that the basic structures of a free political and economic system were still operating, socialism must then break down. And that, of course, is exactly what happened that winter.