James Callaghan

I

Introduction

James Callaghan (1912-2005), British politician and prime minister of the United Kingdom from 1976 to 1979.

Leonard James Callaghan, Baron Callaghan of Cardiff, was born in Portsmouth, England. He entered the British civil service in 1929 as a tax officer, where he became involved in trade union activities. Callaghan joined the Labour Party in 1930, and in 1937 he became a full-time union official. Callaghan served in the British Royal Navy during World War II (1939-1945). In 1945 Callaghan was elected to Parliament representing Cardiff.

II

Rise to Power

During the government of Clement Attlee, who succeeded Winston Churchill as prime minister, Callaghan served as secretary to the transportation minister during the nationalization of Britain’s railways. Callaghan was responsible for introducing safety features at railroad crossings on roads.

After the Conservative Party won the parliamentary elections in 1951, forcing the Labour Party into the opposition, Callaghan steadily rose through the party ranks. Following an unsuccessful bid for leadership of the party after the death of Hugh Gaitskell, Callaghan was appointed chancellor of the Exchequer in 1964 in the Labour government of Harold Wilson. In this role Callaghan attempted to manage a serious balance of payments deficit inherited by Wilson’s government that was eroding confidence in the British economy. Callaghan introduced a number of controversial new taxes intended to raise revenues, including an imports surcharge and other measures. For three years Callaghan stubbornly refused to devalue the British pound, despite ongoing speculative attacks on the currency. He lost credibility in 1967 when he was forced to accept a humiliating U-turn and devalue the pound.

---

---

Following the devaluation, Callahan stepped down from the office of chancellor of the Exchequer and was appointed home secretary. Two years later, in 1969, Callaghan was responsible for deploying the British army in Northern Ireland when sectarian violence exploded in the province. The Labour Party lost the parliamentary elections in 1970.

When Harold Wilson’s Labour government returned to power following elections in 1974, Callaghan was appointed foreign secretary. In this post, he renegotiated the terms of Britain’s membership in the European Community (EC, a forerunner of the European Union, or EU). During the election campaign, the Labour Party had promised to establish a new agreement with the EC that would reduce British financial contributions to the organization. In a 1975 referendum British voters narrowly endorsed continued membership in the EC.

In March 1976 Wilson unexpectedly resigned as party leader and prime minister. Callaghan was elected to replace Wilson in both posts. Callaghan became the first person to hold the positions of chancellor of the Exchequer, home secretary, and foreign minister before becoming prime minister.

III

Winter of Discontent

When Callaghan assumed power, the Labour Party held a slender majority in Parliament and the economy was severely troubled, with inflation hovering around 25 percent. To get legislation passed, Callaghan’s government was forced to depend on support from the Liberal Party and, after 1978, the Scottish Nationalist Party (SNP). In 1976 the value of the pound plummeted, forcing Britain to request a loan from the International Monetary Fund (IMF). The IMF imposed strict conditions on Callaghan’s government, including unpopular limits on government spending.

Labor unrest further undermined support for Callaghan’s government. Trade unions rejected government requests to restrain demands for higher wages, leading to a series of strikes during the so-called “winter of discontent” of 1978 to 1979. The strikes, which paralyzed a number of essential services, such as the national health service and garbage collection, resulted in pay increases demanded by the unions. The unrest—during an unusually cold winter—made Callaghan’s government exceptionally unpopular. Deserted by the SNP, Callaghan’s government fell on a vote of no confidence in March 1979. The Conservative Party capitalized on the Labour Party’s misfortunes, winning the subsequent 1979 parliamentary elections and bringing Prime Minister Margaret Thatcher to power.

IV

Later Career

Callaghan resigned as party leader in 1980 and was succeeded by Michael Foot—the leader of the Labour Party’s left wing. In 1987 Callaghan retired from the House of Commons and was made a life peer in the House of Lords as Lord Callaghan of Cardiff. Callaghan later emerged as a vocal critic of Labour leader Tony Blair, who was elected prime minister in 1997. Callaghan opposed Blair for urging centrist reforms that moved the Labour Party away from its traditional socialist-leaning policies and strong trade union links.