Friday, December 29, 2006

Callaghan, economic troubles and Nukes

Oliver notes in this post that:

Ford worked with two Prime Ministers, one of them appalling (Harold Wilson) and one, in my minority view, good and underrated (James Callaghan). Wilson - a man of colossal vanity who was convinced he was held in high regard in Washington - wrote to Ford in October 1974 in effect giving an ultimatum that Britain would make defence cuts regardless of the damage to Nato's capabilities. Ford responded with a measured statement of fact, worrying about the effect on US allies and expressing the hope that the US would not be the only power capable of international intervention. When Callaghan sought Ford's assistance in the sterling crisis of 1976 - a long story, much recounted, in which I consider that Callaghan and his Chancellor, Denis Healey, performed with credit and to the lasting benefit of the country - the President immediately offered to help.


New government documents released today (about 20 years too late) appear (at least on the Guardian's reporting) to refine this story - Callaghan might have also made a similar threat:

As telephone transcripts released today show, Callaghan used the questions over Britain's Nato commitment in an attempt to win American and German support to press the IMF to come up with more flexible terms for the loan. He told President Gerald Ford that without an IMF solution "we would be forced into action which would put at risk this country's contribution as an ally and a partner in the western alliance".

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