Lord McCarthy: Industrial relations expert whose expertise helped resolve many disputes

'What does Bill think we ought to do?' McCarthy in 1982 (Rex Features)

Bill McCarthy was the guru – and the very best species of guru – to whom Labour ministers turned throughout the Wilson and Callaghan governments when faced with a threatening industrial problem. "What does Bill think we ought to do?" was the question posed by politicians entertaining such different views of industrial relations as Ray Gunter, James Callaghan and Barbara Castle – understandably, since he was a deeply concerned and wise man. If anyone could arrive at a just solution, acceptable to all factions, it was Bill McCarthy. If he couldn't find a solution, ministers resigned themselves to the fact that for the time being there was no solution to be had.

Brought up in north London, McCarthy went to Ruskin College, Oxford, where he did so well that he gained entry to Merton College, Oxford. There he gained first class honours in PPE in 1957. Transferring to Nuffield College, he completed a DPhil in industrial relations in 1961. Later at Nuffield he was the supervisor of Norman Ellis, who served as General Secretary of the Civil and Public Services Association, and in 1973 they published an extremely influential pamphlet, Management by Agreement. Ellis reflected to me that McCarthy was suspicious of theoreticians. "He defended the closed shop from a right-wing Labour point of view when the left thought it anti-democratic and the instrument of right-wing trade union barons."

McCarthy came to prominence as the Research Director of the Royal Commission on Trade Unions and Employers' Associations (1965-68). He always maintained that had Gunter, or some orthodox Labour minister, accepted the conclusions of the Donovan Committee – which, thanks significantly to McCarthy's skill, had the acquiescence of most employers and trade unions – the history of the Labour government between 1966 and 1970 would have been very different; the acrimony of Barbara Castle's White Paper In Place Of Strife would have been avoided.

McCarthy told me that he thought that Castle knew little of the motor industry and was panicked into producing the highly divisive White Paper by the strike of some 12 people at the Girling Brake factory – which, she absurdly thought, would bring the motor industry grinding to a halt. McCarthy was very impatient with ill-informed politicians.

Perhaps his greatest contribution was in his enormously skilful chairmanship of the Railways Staffs National Tribunal. As a sponsored member in Parliament of the National Union of Railwaymen I am in a position to know the extremely high regard in which McCarthy was held by Sid Weighell, General Secretary, and his powerful colleague Charlie Turnock, who represented the London Underground. Although there were rail strikes during the period, they would have been far more frequent and longer lasting had it not been for McCarthy's handling of the NUR. the Transport and Salaried Staffs Association and, above all, the very aggressive leadership of the train drivers' union Aslef under the leadership of the able but irascible Ray Buckton. Peter Parker, the then Chairman of British Rail, told me he thought McCarthy was one of the most realistic and sensible academics he had ever come across.

When Castle became Secretary of State for Social Services she asked for McCarthy as an adviser. There was great resistance from the department since they thought he would be biassed towards the health service workers. In her diaries, Castle records the difficulties she had in appointing McCarthy, which she did finally in 1975, giving him the remit of looking at the workings of the Whitley Council in determining health workers' pay. He was instrumental in resolving health service disputes which threatened to bring hospitals to the point of closure.

In 1975-76 McCarthy was an influential member of the Houghton Committee on Aid to Political Parties. Had his recommendations, which grasped the nettle of MPs' pay, been followed, I believe we would have avoided the expenses scandal which continues to dog the political class. In 1976-77 the economic outlook was so bleak that McCarthy warned Callaghan of a "break-out year" for wage explosions in 1978-79; at the fag-end of Callaghan's premiership McCarthy had become one of his key advisers.

In 1977 he became a Special Commissioner on the Equal Opportunities Commission, and over the next three years, possibly more than any other male, he argued that Britain should pay far more attention to making it possible for women to play a prominent part in the workforce. He was also President of the British Universities Industrial Relations Association and was vocal in suggesting to universities that they should be far more sympathetic to the promotion prospects of women.

One of McCarthy's particular interests was in the ethics of newspaper advertising. Between 1981 and 1983 he laid down ground rules which were accepted by most proprietors and editors of the time. In the late 1980s he revisited his intense interest in the motor industry and from 1989-90 was the independent adviser into the delicate matter of the Rover closure proposals. He was later the adjudicator on the Nursing and Midwifery Staffs Negotiating Council, championing the nurses' case.

From 1980-1997 he was a fixture on the Opposition Front Bench in the House of Lords, particularly on the subject of employment, but more importantly he was crucial in giving advice to both Neil Kinnock and his successor as Labour leader, John Smith. Smith told me that McCarthy came up with solutions to problems rather than wringing his hands, and had a very clear idea of what the Labour Party's direction should be.

After 1994 McCarthy's influence declined, and with the coming of Tony Blair and his government he was not given the ministerial position he deserved. No resumé of Bill McCarthy's life would be complete without reference to his part in the all-party music and theatre groups. He was wonderfully knowledgeable about ballet in particular.

Tam Dalyell

William Edward John McCarthy, politician and industrial relations expert: born 30 July 1925; Research Director, Royal Commission on Trade Unions and Employers' Associations 1965–68; Chairman, Railway Staff National Tribunal 1973–86 5; Opposition front bench spokesman on employment 1980–97; cr. 1975 life peer, of Headington; married 1957 Margaret Godfrey; died 18 November 2012.