WI/AHC: A deregulating UK Labour government in the 1980s

Both Australia and New Zealand had Labour governments during the 1980s that pursued the deregulatory/neoliberal reforms that became fashionable across much of the world during that decade (and in both cases they replaced a centre-right government that was at least somewhat resistive of the emerging consensus). Could this have plausibly been the case in the UK too? If so, who would have been the leader/s of such a government? What would the consequences for politics in the UK have been generally?
 
I guess the Leander's would be the people that left to found the SDP: Roy Jenkins springs to mind. But to get that, I think you'd need a "wet Tory" or moderate Conservative government dominate the 1970s while being committed to Keynes. That could lead Labour to opt for something different, alternatively, have monetarism take hold earlier and the post War consensus break down much earlier, maybe in the 60s. Thus, you get something like what happened with Thacher who was almost indestructible in elections, only 20 years earlier, and a Labour government sweeping to power after 10-15 years of conservative rule that has adopted some ideas of the Conservative Party to make them electable.
 
I guess the Leander's would be the people that left to found the SDP: Roy Jenkins springs to mind. But to get that, I think you'd need a "wet Tory" or moderate Conservative government dominate the 1970s while being committed to Keynes. That could lead Labour to opt for something different, alternatively, have monetarism take hold earlier and the post War consensus break down much earlier, maybe in the 60s. Thus, you get something like what happened with Thacher who was almost indestructible in elections, only 20 years earlier, and a Labour government sweeping to power after 10-15 years of conservative rule that has adopted some ideas of the Conservative Party to make them electable.

Have the Tories returned to power in February 1974 with a clear majority (as many were expecting, and indeed the polls were predicting), and you could have such a Labour government coming to power in 1979. I've always imagined Denis Healey being the main pursuer of such an agenda; it was under his RL chancellorship that the "end of Keynesianism" was declared after all, and like Paul Keating in Australia he was nonetheless a devoted and passionate Labour man. The same cannot quite be said of the SDP defectors; Jenkins himself is said to have been a Asquithian Liberal at heart.
 
The Labour Party had shown signs of being willing to reform in the 70s (Healey during the IMF talks, Callaghan with his speech saying thay you can't rely on wage and price tools alone to fight inflation and grow).

But when it came down to it, the political forces in the party were moving it away from its own membership in reform. Shop stewars radicalism was not dissipating at all, the nationalized industries and coal pits really were uneconomical and not much could be done to change that.

Now, if 1979 goes their way, what happens?

Do the unions take that as a sign of "we got lucky, best not push our luck again like that"?

Or do they see it as "We are the real power in this country and we have just proved it"?

And what exactly is their anti-inflationary policy going to look like? Wage restraint almost brought the country to the brink in its failure. Do they start attacking growth in the money supply? I am not so sure. That was controversial even for Thatcher as it did lead to a rise in unemployment, even if it reined in some inflation.

And I don't see them backing Tebbit style industrial relations reform, which is really what allowed the government to assert control over industrial action.

So I think the 80s see government policy dragged to the right, but not across anu red lines for the stakeholders in the Labour Party. The strikes will continue, inflation will recede a bit but not by as much as OTL, and Labour probably goes down in 1987 to a Tory Party less strident than Thatcher had been, leading to a put off of the real confrontation for the 90s.
 
In Australia the Eurocommunist influenced major Commo party got the commo led unions to get the labor led unions to get the labor party to agree to a wages and prices accord between labour, state and [you are encouraged to laugh] capital.

Did New Times prepare the way for 10 years in the UK in the 70s?
 
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