It's a cautionary tale of a former Chancellor of the Exchequer taking over mid-term from a Prime Minister who had won three General Elections.

In 1976, it was Harold Wilson who was the man on his way out – electorally successful, but a bit too superficial, too fond of gimmicks and tainted by association with an unpopular American war. He never endeared himself to the Labour Party. Just as Tony Blair never did.

Callaghan, on the other hand, was solidly part of the Labour movement, a political heavyweight with long experience of office. Unflappable, straightforward and dependable. Certainly he was considered more than a match for the new leader of the Conservative Party, busily trying to forget the past and reinvent Tory philosophy for a new era.

And then things started going wrong.

The problems were mostly with the economy. In 1977, take-home pay fell by five per cent, while the price of food and fuel rose inexorably. Skilled workers, the low paid, pensioners and the middle classes all felt squeezed by the growing economic crisis.

Then the Government tried to impose a below-inflation pay settlement on public-sector workers. There were petrol shortages as tanker drivers went on strike. The burden of tax weighed ever heavier on
those who would normally be considered natural Labour voters.

Perhaps if Callaghan had called a General Election when everyone expected him to, he might have survived. But he backed away at the last moment, and the chance was gone. "Why run the risk?" he reflected later. And he deluded himself that things would work out: "The polls showed that as the country began to understand what we were trying to do, an increasing number liked what they saw."

But he was no longer in control of events, either economic or political. The rising tide of nationalism in Scotland and Wales, for example, gave concern over the future of the United Kingdom. The fact that he himself didn't represent an English seat did nothing to reassure the worriers.

His insistence on renewing the Prevention of Terrorism Act, emergency legislation introduced in the wake of the Birmingham pub bombings, was also causing disquiet on the left. Those concerned with civil liberties objected to giving
the police powers to detain suspects without charge for up to seven days.

There was even a crisis in the state of the national game. A decade earlier England had won the World Cup – now the team couldn't even qualify for major tournaments.

And behind it all was the inescapable conclusion within his own party that Callaghan wasn't acting in Labour's interest.

When the Government had to borrow money from the IMF to stave off economic collapse, the left began to ask why he was prepared to have his policies determined by the City and by international finance. There was a widespread feeling that he'd lost touch with ordinary voters.

That feeling was encapsulated in January 1979 at the start of a wave of public-sector strikes – what became known as the winter of discontent. Callaghan was abroad at the time, attending an international summit on the agreeably warm island of Guadeloupe, while the country froze in one of the bitterest Januarys on record. When he flew back, his mind clearly on loftier matters, he waved aside talk of mounting chaos at home.

His response was greeted by headlines that summarised his position as "Crisis? What crisis?" And, although he hadn't said that, had not even used the word "crisis", the expression attached itself to him instantly and came to symbolise his premiership in the popular memory, his apparent dislocation from every-day reality.

The impressionist, Mike Yarwood, adopted the phrase in his portrayal of Callaghan: "I portrayed him as permanently believing that everything in
the garden was lovely – 'Strike? What strike?'"

When the nation wanted its leader to admit that mistakes had been made, he appeared unable to do so.

The more one looks at Callaghan's period in office, the harder it is to escape the parallels with Gordon Brown. There are differences, of course, but mostly they're not very favourable to Brown.

For a start, Callaghan retained a high degree of personal popularity. Even during the 1979 General Election that saw him removed from office, he polled higher as a leader than his opponent, Margaret Thatcher. Today, Brown's own ratings are in free fall, while David Cameron is a more unifying figure than Thatcher was in opposition.

And Callaghan was surrounded by a Cabinet of big hitters, including the likes of Denis Healey, Tony Benn, Shirley Williams and Peter Shore. The current Cabinet members may yet prove themselves, but they don't look much like Premiership players at the moment.

Perhaps most worrying of all the echoes from the '70s is the way that senior figures in the Labour Party are beginning to brief off the record. A spell in opposition, they're whispering, wouldn't necessarily be a bad thing. It might give the party a chance to regroup and come back stronger.

The last time that happened, Labour were out of power for
18 years.

For Brown, the fear is that he might emulate Callaghan's unwanted record as a Prime Minister who never won a General Election. For the party more generally, there's a very real possibility that history might, indeed, repeat itself. And that the man who was dubbed Mr Bean by Vince Cable, might turn disaster into a farce.

To order a copy of Crisis? What Crisis? Britain in the 1970s
from the Yorkshire Post Bookshop, call free on 0800 0153232 or go online at www.yorkshirepostbookshop.co.uk. Postage and packing is £2.75.


Alwyn Turner is author of Crisis? What Crisis? Britain in the 1970s, published by Aurum, price £20.