James Callaghan

I

Introduction

James Callaghan (1912-2005), British politician and Prime Minister (1976-1979). Callaghan was born in Portsmouth, the son of a chief petty officer in the Royal Navy. He was educated at Portsmouth Grammar School, and joined the civil service in 1929 as a tax officer. He soon became involved in trade union activities as a member of the Inland Revenue Staff Federation, of which he became a full-time official in 1937 (see Trade Union Movement in Britain). Callaghan served in the Royal Navy during World War II before being elected to Parliament for Cardiff South in the July 1945 general election that brought to power the Labour government of Clement Attlee.

II

Parliamentary Career

Callaghan served as parliamentary secretary to the Ministry of Transport between 1947 and 1950, during which time he was responsible for the introduction of cats’ eyes and zebra crossings on roads, and then (1950-1951) as financial secretary at the Admiralty. After the defeat of Labour in the October 1951 general election, Callaghan was elected to the shadow Cabinet (serving as spokesman on colonial affairs between 1957 and 1961, and as shadow Chancellor of the Exchequer between 1961 and 1964) and he joined the party’s National Executive Committee in 1957. His effective performance in the House of Commons established him as a leading figure in the Labour Party, and after the death of Hugh Gaitskell in 1963 he stood as a candidate for the party leadership (eventually won by Harold Wilson). On Labour’s return to power in 1964 Callaghan was appointed Chancellor of the Exchequer. In this role he was active in securing the system of Special Drawing Rights in the International Monetary Fund (IMF). Domestically he introduced a number of controversial new tax schemes including corporation and capital gains tax. However, he lost credibility when he was forced to accept devaluation of the pound in 1967, and resigned as Chancellor.

Subsequently, he was appointed home secretary, and was responsible for the mobilization of the army in Northern Ireland in 1969 to deal with the increased sectarian violence in the province (see The Troubles). In the same year Callaghan, who remained close to the trade unions, criticized plans for union reform (in a white paper titled In Place of Strife) drawn up by Barbara Castle and supported by Wilson. Callaghan’s opposition helped to prevent the plans being adopted, and the unions maintained their independence throughout the 1970s. The dispute contributed to Labour’s defeat at the June 1970 general election. In opposition Callaghan served as spokesman on foreign affairs. With Labour’s return to government after the close election of 1974, Callaghan was appointed foreign secretary. In this post he renegotiated Britain’s terms of entry with the European Economic Community (now the European Union), and oversaw the referendum that confirmed Britain’s membership in 1975. Wilson unexpectedly resigned as party leader and prime minister in March 1976 and Callaghan defeated the leading figure of the Labour left, Michael Foot, to become his successor in both posts.

III

Prime Minister

Callaghan inherited a severely troubled economy, with inflation at around 25 per cent and a looming balance of trade crisis. He also had only a slender majority in Parliament, and so depended on support from the Liberal Party and (after 1978) the Scottish National Party (SNP). Another sterling crisis in 1976 required a rescue package from the IMF, which imposed strict conditions for the loan, including unpopular cuts in government spending, carried out by Callaghan’s Chancellor of the Exchequer, Denis Healey. Callaghan’s government also introduced proposals for devolved government in Wales and Scotland (see Devolution), though in March 1979 these plans were rejected in a referendum in Wales and passed with an insufficient majority in Scotland.

By January 1978 inflation appeared to be under control, and Callaghan’s consensual, pragmatic approach to government helped to shore up his popularity among voters. However, Callaghan chose not to call a general election at what seemed to be his best opportunity later that year, and in the final months of his government the tide turned irrevocably against him. The trade unions were increasingly frustrated at the continued wage restraint that the government demanded, and in January 1979 a wave of strikes broke out—this period of industrial unrest came to be known as the “winter of discontent”. Deserted by the SNP, the government fell on a vote of confidence in March 1979 and was defeated in the subsequent election by the Conservative Party led by Margaret Thatcher.

Callaghan resigned as party leader in 1980, to be succeeded by Michael Foot. In 1987 he retired from the Commons and was made a life peer as Lord Callaghan of Cardiff. Callaghan was a public critic of the reforms of Tony Blair that he believed moved the Labour Party away from its traditional values and trade union links.

IV

Assessment

Uniquely in British politics, James Callaghan held all four of the great offices of state (Chancellor of the Exchequer, foreign secretary, home secretary, and prime minister). He was loyal to the traditional idea of the labour movement as an alliance between the Labour Party and the trade unions, though his government introduced ideas of monetary restraint that challenged the Keynesian consensus in British politics. The achievements made under the difficult circumstances of Callaghan’s brief tenure as prime minister were overshadowed by his government’s failure in the 1979 general election that opened the way for 18 years of Conservative rule.