What If... Callaghan Quit Right Away?

As the results flowed in from the May 1979 general election, it was clear that Margaret Thatcher's Conservative Party had beaten James Callaghan and his exhausted Labour government. Shortly after Mrs Thatcher appeared on the steps of No. 10 'quoting' St Francis of Assisi, Callaghan announced his resignation as leader of the Labour party, saying that a new leader was needed "to carry the fight into the 1980s." There had been rumours that he planned to hang onto the job, but in the face of the largest swing since 1945 it is hard to see how he could have carried on.

His resignation also had the benefit of catching the far-left elements within his party on the hop. They had been planning to use the conference in autumn 1979 to denounce the parliamentary party and push their ideas of greater internal democracy and a more radical socialist agenda. Instead, the conference was to mark the coronation of a new leader. And there was little doubt as to who this new leader would be. Denis Healey, the Chancellor of the Exchequer from 1974-1979, was Labour's biggest personality, a centrist very popular with the public. Against him, Peter Shore didn't stand a chance amongst MPs, getting 115 votes to Healey's 150. Left wingers were furious.

In his first address as leader, Healey made an impassioned plea for his party to unite to "face the real evil of Thatcher's 'sado-monetarism'." By keeping Michael Foot as his deputy, and promoting Shore to a senior Shadow Cabinet post, Healey proved that he was willing to give the left a role in the party.

But for many, especially left wing activists, this wasn't enough. With their figurehead of Tony Benn, they began to plot their next move. When they failed to get their hard left policies adopted by the party, many of them broke away and formed a new party, the Social Democratic Party (SDP) led by Benn. On Labour's other wing, the veteran Roy Jenkins moved to the Liberals. It seemed as if Labour was finished.

But not quite. Luckily for Healey, the majority of his party heeded the call of the Shadow Chancellor, David Owen, for Labour moderates to stay faithful. Shirley Williams led the attack on the SDP, warning it had no soul and no established principles. Crucially, Healey's assertion that, when offered extreme socialism, the public wouldn't want it, was proved to be right. Even as left-wingers rejoiced, the SDP failed to harm Labour in by-elections or the opinion polls. The departure of so many on the radical left also saved Healey the potentially painful fight to expel them.

As Mrs Thatcher's economic policies plunged the country into the abyss and her popularity plummeted, Healey went from strength to strength, riding high in the opinion polls and taking Crosby and Glasgow Hillhead from the Tories at by-elections. Not even the Falklands War could rescue Thatcher; a by-election in rock solid Tory Beaconsfield saw Labour's Tony Blair propelled into office even as the fighting raged. Despite retaking the islands, by 1983 the Conservatives had very little positive to show for their time in office. The election in that year saw Thatcher's majority cut to one; only a feeble economic recovery and the 2.5% taken by the SDP prevented Healey from winning. For the SDP the election was a disaster, with only 4 MPs surviving, and Michael Foot blasting their manifesto as "The longest suicide note in history." Benn lost his Bristol seat to the official Labour candidate, and his party slid into irrelevance.

Another election was clearly on the cards, and it was triggered by the attempt of Mrs Thatcher to silence her critic Ken Livingstone, the leader of the Greater London Council. The Bill to abolish the body was defeated in the Commons when some Tory MPs, including her arch-rival Michael Heseltine, voted against her, thus triggering a general election. In the ensuing election, Labour took 348 seats to Thatcher's 262, giving them an overall majority of 46. The SDP was wiped out, and suffered the fate of most far-left groups when it collapsed six months later.

Healey's 'new' Labour approach, which accepted the role of the free market but attempted to tame and direct it into helping the disadvantaged, proved very popular with a nation reeling from six years of Thatcherism. Economic growth slowly returned as the economy was rebalanced, while the plans for wide scale privatisation were shelved. In foreign policy, Healey was able to take much of the credit in helping to thaw the Cold War, which under Thatcher had veered at times towards nuclear war. However, the special relationship with the USA did not survive the gulf between Healey and President Reagan, so instead Britain turned to the EEC as its main ally.

After two years at the helm as PM, Healey retired on his 70th birthday, with Labour electing Shirley Williams as leader and therefore second ever female Prime Minister. Together they are remembered for the golden years of Labour rule until Ken Clarke brought the Tories back to power in 1999, albeit by promising never to return the country to its dark, free market days.

P.S. Healey Cabinet, 1985

Prime Minister- Denis Healey

Chancellor of the Exchequer- David Owen

Foreign Secretary- Shirley Williams

Home Secretary- Peter Shore

Defence Secretary- Bill Rodgers

Education Secretary- Neil Kinnock

Health and Social Security Secretary- John Smith

Trade and Industry Secretary- Roy Hattersley

Environment Secretary- Edmund Dell

Transport Secretary- Albert Booth

Employment Secretary- Gerald Kaufman

Energy Secretary- John Cartwright

Scottish Secretary- Robert Maclennan

Welsh Secretary- Ann Clwyd

Northern Irish Secretary- Tom Pendry

Leader of the House of Commons- Stan Orme

Leader of the House of Lords- Lord Cledwyn Hughes

Minister for Agriculture, Fisheries and Food- George Robertson