Many people identify the “Winter of Discontent” in 1978/9 as the cause of the change of Government that year, leading to what might be called the neoliberal era for the next 30 years.

But perhaps we should go back further, to 1976. Dennis Healey was the Chancellor of the Exchequer. Recently looking back on his life, he was interviewed for his old college at Oxford. It is worth reading the following extract as he reflects on the mistakes at the time:

In 1976 he was forced to go to the International Monetary Fund for a loan, conditional on spending cuts and a tightening of the money supply. By this time, he recalls, “I had dropped the straightforward Keynesian view with which I had had total sympathy when I entered the Treasury.” He describes this later period at the Treasury – which also saw international factors once again impact upon his life in the form of a series of global oil shocks – as being “extremely difficult for me to cope with.” Whilst he admits to mistakes which contributed to Labour’s downfall in 1979, he is adamant that “we didn’t deserve the alternative we actually got.”

Perhaps one of the most unpopular aspects of the 1976 crisis was the high-profile cut in nurses’ pay. He said much later in life that this had been a cut too far, and that it had been unnecessary as economic matters turned out. But it set a collision course between low-paid workers and government policy which culminated in the “Winter of Discontent” a couple of years later.

We seem to be covering similar ground again. The banking crisis instead of the oil crisis, and doubts again about trying for a Keynesian bounce-back from austerity. Last time the swing in votes was from Labour to Tory; the worry is that this time it might be from Tory to UKIP.

http://www.balliol.ox.ac.uk/alumni-and-friends/floreat-domus/2007/denis-healey-an-international-life