James Callaghan

The passage of time since Jim Callaghan’s departure from Downing Street predictably encouraged obituarists to exploit the man’s memory in order to advance by insinuation their current political preoccupations. Thus The Guardian’s leader column maintained:

His term as prime minister was brief and transitional, but some of its values - the belief in collegiate leadership, the candour - are ones we could do with more of now.

The not-so-subtle dig at Tony Blair is history of the inept and the inapt variety. There was no “collegiate leadership” under Callaghan: while the Cabinet gave every show of debate, the really important decisions were taken by Callaghan alone. Denis Healey’s raising employers’ national insurance contributions in the summer of 1976, in order to bolster foreign confidence in the Government’s fiscal policy, escaped Cabinet scrutiny. In the Cabinet debates over the terms for the IMF loan later that year, Callaghan had already made up his mind that his Chancellor would prevail in making public expenditure cuts. He was never going to accept the alternative proposals of Tony Crosland (who advocated an off-the-cuff scheme of import deposits, which would undoubtedly have harmed developing countries’ exports) or, much less seriously, Tony Benn (who presented the Left’s ‘Alternative Economic Strategy’ of reflation, high public spending, compulsory planning ‘agreements’ with industry, nationalisation and protectionism).

In his memoir Inside the Treasury (1982, p. 154), Joel Barnett, Chief Secretary to the Treasury throughout the 1974-79 Labour governments, records that at the Cabinet meeting of 7 September 1978, Callaghan peremptorily stated that, contrary to all expectation, there would not after all be a general election till the next year:

The Prime Minister had no objection to our discussing his decision but he said: “I told the Queen of my decision last night.” In those circumstances, and as he had the right to make the decision anyway, there was not much to discuss.

Still, The Guardian was trying to be kind, unlike the professional philosopher who offered his instant thoughts under the sensitive headline “Callaghan dead”:

Thanks to him and his ilk we suffered 18 years of Tory misrule.

I do indeed recall that throughout the 1980s and early 1990s voters returned Conservative governments in protest at James Callaghan, evidently fearing that trade union militancy, Trotskyite entrism and unilateral nuclear disarmament were not given sufficient expression in the Labour Party. (There again, I shouldn’t make an admittedly feeble joke about this. A large proportion of the Labour Party in the 1980s really did take the view I’ve just stated.)

Some time ago I posted my ranking of British Prime Ministers since the war. I would put Callaghan in the top half. Whereas in his previous ministerial posts he had been undistinguished – failing to devalue sterling early enough; the Commonwealth Immigrants Act of 1968, which violated this country’s obligations to British citizens in East Africa; and his role in the defeat of industrial relations reform in 1969 – Callaghan was a good and effective Prime Minister. His greatest single achievement was to destroy Socialism as a serious proposition in British politics. The principal turning point in British politics and economic management in the past 60 years was not 1979, when Mrs Thatcher took office, but 1976, when Callaghan told the Labour Party conference:

We used to think that you could spend your way out of a recession, and increase employment by cutting taxes and boosting Government spending. I tell you in all candour that that option no longer exists, and that in so far as it ever did exist, it only worked by injecting a bigger dose of inflation into the system.

This remarkable speech (drafted by his son-in-law, Peter Jay) was an implicit indictment of Conservative profligacy under Reginald Maudling (whose expansionary policies Callaghan had tamed as Chancellor) and Anthony Barber (still the most incompetent Chancellor since the war), but also of traditional Labour policies. It represented a repudiation of the disastrous first 18 months of the 1974-79 Labour Government, when public expenditure and inflation ran unchecked. Tied with the acceptance of IMF terms – a one-off, necessary and rational course to avoid accelerating inflation, a collapsing pound and mass unemployment – it was the beginning of a fundamental change in economic management that successive governments capitalised on.

Whether the necessary reforms that took place under Mrs Thatcher – defeating the abuses of trade union power and bringing the unions under the rule of law, maintaining the control of inflation in preference to full employment as the prime objective of economic policy, abandoning the ineffective and damaging pursuit of incomes policies – would have come about had Labour won the 1979 election is a matter of historical debate. I think they probably would have done, if not necessarily at the time and in the order in which they were achieved.

Against that scenario, however, and even assuming a reelected Labour Government would have wished to do these things, there would have been a serious risk of Callaghan’s being succeeded as Prime Minister by Michael Foot. Foot came top of the first ballot in the leadership election of 1976, and of course did win the leadership in 1980, when Labour was in fractious opposition. Had he been elected leader when Labour was in government he would automatically have become Prime Minister. A less competent or knowledgeable political leader, or one more instinctively parochial, would have been hard to find. That prospect in itself would have justified a Conservative vote in the 1979 election (though I canvassed for Labour in that election – I was not yet of voting age – and my left-wing views have scarcely altered at all since then). Despite that caveat, I consider James Callaghan and Denis Healey deserve credit in the historical scheme.

The other main area of policy in which Callaghan merits praise is defence policy. It was always a prominent part of the prosecution case against Callaghan during Labour’s internal warfare of the 1980s that he had secretly continued with the modernisation of Britain’s Polaris fleet and prepared for its eventual replacement by a new generation of nuclear weapons, the American submarine-launched Trident system, in defiance of the views of the Labour Party conference. These charges were absolutely correct, and reflect much credit on Callaghan and his inner Cabinet.

Callaghan also did his best to cope with a feckless and vacillating US President with minimal experience in international affairs, Jimmy Carter. The fiasco of Carter’s first securing the agreement of Callaghan and the German Chancellor Helmut Schmidt to the deployment of the neutron bomb to counter Soviet intermediate-range missiles, and then deciding against the deployment, damaged the cohesion of Nato. It took resolution and character on the part of Europe’s two most prominent left-wing leaders both to face down their own parties on the issue and then to continue working effectively with the White House when their positions had been undermined.

A point that I did not see raised in the obituaries was that Callaghan, while being a model of loyalty to his party successors compared with the comparable relationships in the Conservative Party, was prepared to voice his opposition to Labour’s unilateralist disarmament policies in the 1980s. In the 1983 general election campaign he gave a terrific speech, which he made sure was televised, stating calmly but forcefully that Labour’s new defence policies were out of line with the party’s traditional stance and that he did not support them. At least one Labour MP – John Gilbert, who eventually returned to government as a defence minister after Tony Blair’s first election victory – was convinced that he had held his marginal seat only because Callaghan had spoken out. Predictably, Callaghan was castigated by more frenetic members of the Labour Party (‘Guilty Men’ ran the headline in the post-election issue of Tribune) but he was talking sense. At that year’s party conference, to a chorus of boos from constituency delegates, he stated the issue matter-of-factly:

What the movement has failed to understand is that it reversed the traditional policy of the Labour Party on which we had fought 11 successive elections without any real attempt to convince the British people that what we were doing was right. I happen to believe it is wrong. But you make a fundamental mistake by believing that by going on marches and passing resolutions without any attempt to try to tell the British people what the consequences were, you could carry their vote. And you lost millions of votes.

On that last sentence, Callaghan was drowned out by opposing cries of “you did” – which merely showed the unreality of Labour activists. I recall an incident when I was canvassing for Labour in that general election campaign. In an industrial constituency (Oxford East) we could find few people willing to admit they were voting Labour. (My own canvassing pitch was to advise existing Labour voters to stay with us because there was not the remotest possibility that our disgraceful manifesto would ever be implemented. I did not try to persuade anyone else to vote Labour, which I counted an impossible and probably undesirable brief.) One elderly man who did say he would vote Labour added very politely and amicably that he believed Labour would lose heavily and the reason was the party’s defence policies. To my incredulity, my fellow-canvasser (since 1997 a Labour MP, whose name will be unknown to you) turned to me and said he didn’t think this was right: Labour was merely not convincing enough people that we would be effective in reducing unemployment.

But Jim Callaghan knew, and said so.