THE LADY DOESN'T TURN
What if Callaghan holds on in 1979?
1979: James Callaghan (Labour minority with Liberal confidence and supply) [1]
1981: Denis Healey (Labour minority with Liberal confidence and supply) [2]
1983: Margaret Thatcher (Conservative minority) [3]
1985: Margaret Thatcher (Conservative majority) [4]
1986: Geoffrey Howe (Conservative majority) [5]
1988: Roy Hattersley (Labour minority with Liberal confidence and supply) [6]
1989: Roy Hattersley (Labour majority) [7]
1993: Roy Hattersley (Labour majority) [8]
1996: Llin Golding (Labour majority) [9]
[1] With the public unsure of the radical monetarist policies of opposition leader Margaret Thatcher, whose largely raw image is unappealing to many voters (and many right wing voters being sucked to the National Front), James Callaghan narrowly won re-election to the premiership as leader of a minority government with Liberal support. With oil revenues rushing into the Treasury and the economic troubles of the 1970s seeming on the cusp of resolution things seemed secure for Sunny Jim...
[2] Callaghan retires, and gets his desired successor. It was a Labour government with a very different feel to that of Callaghan; Europe and nuclear disarmament became major issues, as well as the ongoing squabbles on the reform of the trade unions, and the Liberals became increasingly belligerent in their demands for changes to the voting system. Healey, quick to turn a phrase, revived modest Labour support in Middle England but increasingly alienated support in the North and Scotland.
[3] The Liberals became increasingly concerned that Healey was attempting to capture areas of their vote, and in 1983 they pulled the plug from their support deal. Healey went into the election feeling confident of at least a narrow majority, but instead suffered a shock defeat to Thatcher. Having hung on through her embattled leadership, the Conservative victory was dampened by lacking the necessary seats for a majority. Furthermore the Liberals refused to pledge their support to her government, hoping to consolidate their modest gains into an independent 'neutral' bloc in Parliament.
[4] The First Thatcher ministry hobbled on for a little over fourteen months, relying on support from the Northern Irish parties that once taken the Conservative whip in the Commons to pass any kind of legislation. Whilst unable to fully implement her monetarist economic policies as planned, government spending had been cut compared with the Wilson, Callaghan, and Healey years. Sensing an opportunity, with the Tories' place in opinion polls ahead of both Healey's Labour and the re-energised Liberal Party, Thatcher took the nation back to the ballot box to seek her own mandate. Whilst she would find herself returned to No. 10 with a narrow majority, it was the surprising upset of Labour losses and Liberal gains that made much of the press & news coverage in the succeeding days & weeks.
[5] Thatcher is forced to resign over the Westland Affair.
[6] With the Conservative government in disarray, Howe pushed on through domestic unrest and a dramatic rise in both inflation and unemployment. Northern Ireland also continued to be a desperate issue. While personally a likeable figure, Howe began to lose the trust of the country. Citing backbench rebellions over Europe as an excuse, he called an election for 1988. The result was a hung parliament, with Roy Hattersley and Labour reviving their confidence-and-supply deal to evict Howe from Downing Street. The Liberal breakthrough that some had predicted simply did not materialize in the election, with the party losing roughly a third of MPs. This time, Hattersley permitted a referendum on AV (but it was handily defeated).
[7] Fifteen years and seven elections after their 1974 return to power, the Labour Party won a majority and returned to government stably again. Hattersley set out to invest in what he called a "Sovereign Wealth Fund" using the reserves built up due to North Sea Oil, but faced increased challenge from the left of his party...
[8] Hattersley smooths over party squabbles with oil-funded social expenditure, and wins an easy victory over a Conservative Party increasingly at odds with itself over Europe. The Liberals find themselves decimated after the shock arrest of retiring MP, Cyril Smith, three weeks before the election.
[9] With the memory of the Labour-Liberal coalition quickly fading, the Labour centre came under increasing attack from an energized Left. When Hattersley chose to stand down as Prime Minister in 1996, his critics rallied together to try and propel John Prescott to the leadership. Opposed to allow the militant unions to reclaim a major stake in Labour policy making, Hattersley and his team threw their support behind the moderate Llin Golding. The result was close, but after Golding clinched the leadership election the party rallied together once more.