The misfortune of most Labour Treasury teams has been to spend most of their time in office preaching austerity to resentful colleagues. Joel Barnett, chief secretary to the Treasury, and Denis Healey, the chancellor, during the Harold Wilson/James Callaghan governments of 1974-79, were no exception. Their resistance to the demands of colleagues, interest groups and trade unions for more spending made them unpopular. Healey called himself Dr No while Barnett was Oddjob, after the villains in a contemporary James Bond film.
Labour ministers inherited a looming economic crisis from Edward Heaths government in March 1974. They then exacerbated it with reckless expansion of public spending and borrowing. The International Monetary Fund intervened in 1976 and a severe financial squeeze followed. Subsequent governments did not want to repeat the pattern.
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