James Callaghan - was defeated by one vote in a motion of no confidence by the House of Commons
From Wikipedia, the free encyclopedia - https://en.wikipedia.org/wiki/James_Callaghan
James Callaghan in 1978
Leonard James Callaghan, Baron Callaghan of Cardiff, KG, PC (/ˈkæləˌhæn/; 27 March 1912 – 26 March 2005), often known as Jim Callaghan, was a British politician who served as Prime Minister of the United Kingdom from 1976 to 1979 and Leader of the Labour Party from 1976 to 1980.
So far the only holder of all four of the Great Offices of State, Callaghan served as Chancellor of the Exchequer (1964–1967), Home Secretary (1967–1970) and Foreign Secretary (1974–1976) prior to his appointment as Prime Minister. As Prime Minister, he had some successes, but is mainly remembered for the "Winter of Discontent" of 1978–79. During a very cold winter, his battle with trade unions led to immense strikes that seriously inconvenienced the public, leading to his defeat in the polls by Conservative leader Margaret Thatcher. Callaghan was the last Prime Minister born before the First World War.
Upon entering the House of Commons in 1945, he was on the left wing of the party. Callaghan steadily moved towards the right, but maintained his reputation as "The Keeper of the Cloth Cap"—that is, he was seen as dedicated to maintaining close ties between the Labour Party and the trade unions. Callaghan's period as Chancellor of the Exchequer coincided with a turbulent period for the British economy, during which he had to wrestle with a balance of payments deficit and speculative attacks on the pound sterling (its exchange rate to other currencies was almost fixed by the Bretton Woods system). On 18 November 1967, the government devalued the pound sterling. Callaghan became Home Secretary. He sent the British Army to support the police in Northern Ireland, after a request from the Northern Ireland Government.
After Labour was defeated at the 1970 general election, Callaghan played a key role in the Shadow Cabinet. He became Foreign Secretary in 1974, taking responsibility for renegotiating the terms of the UK's membership of the European Communities, and supporting a "Yes" vote in the 1975 referendum to remain in the EC. When Prime Minister Harold Wilson resigned in 1976, Callaghan defeated five other candidates to be elected as his replacement. Labour had already lost its narrow majority in the House of Commons by the time he became Prime Minister, and further by-election defeats and defections forced Callaghan to deal with minor parties such as the Liberal Party, particularly in the "Lib–Lab pact" from 1977 to 1978. Industrial disputes and widespread strikes in the 1978 "Winter of Discontent" made Callaghan's government unpopular, and the defeat of the referendum on devolution for Scotland led to the successful passage of a motion of no confidence on 28 March 1979. This was followed by a defeat at the ensuing general election.
Callaghan remained Labour Party leader until November 1980, in order to reform the process by which the party elected its leader, before returning to the backbenches where he remained until he was made a life peer as Baron Callaghan of Cardiff. He went on to live longer than any other British prime minister in history—92 years and 364 days.
Early life and career
Leonard James Callaghan was born at 38 Funtington Road, Copnor, Portsmouth, England, on 27 March 1912. He took his middle name from his father, James (1877–1921), who was the son of an Irish Catholic father who had fled to England during the Great Irish Famine, and a Jewish mother. Callaghan's father ran away from home in the 1890s to join the Royal Navy; as he was a year too young to enlist, he gave a false date of birth and changed his surname from Garogher to Callaghan, so that his true identity could not be traced. He rose to the rank of Chief Petty Officer.[1][2]
His mother was Charlotte Callaghan (née Cundy, 1879–1961) an English Baptist. As the Catholic Church at the time refused to marry Catholics to members of other denominations, James Callaghan senior abandoned Catholicism and married Charlotte in a Baptist chapel. Their first child was Dorothy Gertrude Callaghan (1904–82).[1]
James Callaghan senior served in the First World War on board the battleship HMS Agincourt. After he was demobbed in 1919, he joined the Coastguard and the family moved to the town of Brixham in Devon, however he died only two years later of a heart attack in 1921 at the age of 44, leaving the family without an income, and forced to rely on charity to survive. Their financial situation was improved in 1924 when the first Labour government was elected, and introduced changes allowing Mrs Callaghan to be granted a widows pension of ten shillings a week, on the basis that her husband's death was partly due to his war service.[3][4][5]
In his early years, Callaghan was known by his first name Leonard, when he entered politics in 1945 he decided to be known by his middle name James, and from then on he was referred to as James or Jim.[6] He attended Portsmouth Northern Secondary School (now Mayfield School). He gained the Senior Oxford Certificate in 1929, but could not afford entrance to university and instead sat the Civil Service entrance exam.[7] At the age of 17, Callaghan left to work as a clerk for the Inland Revenue at Maidstone in Kent. While working as a tax inspector, Callaghan joined the Maidstone branch of the Labour Party and the Association of the Officers of Taxes (AOT) a trade union for those in his profession. and within a year of joining he became the office secretary of the union. In 1932 he passed a Civil Service exam which enabled him to become a senior tax inspector, and that same year he became the Kent branch secretary of the AOT. The following year he was elected to the AOT's national executive council. In 1934, he was transferred to Inland Revenue offices in London. Following a merger of unions in 1936, Callaghan was appointed a full-time union official and to the post of Assistant Secretary of the Inland Revenue Staff Federation (IRSF), and resigned from his Civil Service duties.[8]
During his time working as a tax inspector in the early-1930s, Callaghan met his future wife Audrey Moulton, and they were married in July 1938 at Maidstone.[9]
His union position at the IRSF brought Callaghan into contact with Harold Laski, the Chairman of the Labour Party's National Executive Committee and an academic at the London School of Economics. Laski encouraged him to stand for Parliament, although later on he requested Callaghan several times to study and lecture at the LSE.
Following the outbreak of World War II Callaghan applied to join the Royal Navy in 1940, but was initially turned down on the basis that a Trade Union official was deemed to be a reserved occupation. He was finally allowed to join the Royal Navy Volunteer Reserve as an Ordinary Seaman in 1942. While he trained for his promotion his medical examination revealed that he was suffering from tuberculosis, so he was admitted to the Royal Naval Hospital Haslar in Gosport near Portsmouth. After he recovered, he was discharged and assigned to duties with the Admiralty in Whitehall. He was assigned to the Japanese section and wrote a service manual for the Royal Navy The Enemy Japan. He then served in the East Indies Fleet on board the escort carrier HMS Activity and was promoted to the rank of Lieutenant in April 1944.[10][11] Callaghan would become (as of 2019) the last British prime minister to be an armed forces veteran and the only one ever to have served in the Royal Navy.
Whilst on leave from the navy, Callaghan was selected as a Parliamentary candidate for Cardiff South—he narrowly won the local party ballot with twelve votes against the next highest candidate George Thomas with eleven. He had been encouraged to put his name forward for the Cardiff South seat by his friend Dai Kneath, a member of the IRSF National executive from Swansea, who was in turn an associate and friend of the local Labour Party secretary, Bill Headon.[12]
By 1945 he was serving on HMS Queen Elizabeth in the Indian Ocean. After VE Day, he returned along with other prospective candidates to the United Kingdom to stand in the general election.[13]
Parliament and Cabinet, 1945–76
The Labour Party won the overdue general election in a landslide victory on 26 July 1945, bringing Clement Attlee to power; in charge of the first-ever majority Labour government. Callaghan won his Cardiff South seat at the 1945 UK general election (and would hold a Cardiff-area seat continuously until his retirement in 1987). He defeated the sitting Conservative MP, Sir Arthur Evans, by 17,489 votes to 11,545. He campaigned on such issues as the rapid demobilisation of the armed forces and for a new housing construction programme.[14] He stood on the left-wing of the Party, and was a vocal critic of the United States in 1945, and joined 22 other rebels in voting against accepting the Anglo-American loan.[15] Callaghan did not join the Keep Left group of left-wing Labour MPs, but he did sign a letter in 1947 with 20 other MPs from the group calling for a 'socialist foreign policy' which would create a 'middle way' between the capitalism of America, and the totalitarianism of the USSR.[16]
Callaghan was soon appointed Parliamentary Secretary to the Ministry of Transport in 1947 where, advised by the young chief constable of Hertfordshire, Sir Arthur Young, his term saw important improvements in road safety, notably the introduction of zebra crossings, and an extension in the use of cat's eyes. He moved to be Parliamentary and Financial Secretary to the Admiralty from 1950, where he was a delegate to the Council of Europe and resisted plans for a European army.
Callaghan was popular with Labour MPs, and was elected to the Shadow Cabinet every year while the Labour Party was in opposition from 1951–64. He was now a staunch Gaitskellite on the Labour right-wing. He was Parliamentary Adviser to the Police Federation from 1955–60 when he negotiated an increase in police pay with then-General Secretary Arthur Charles Evans. He ran for the Deputy Leadership of the party in 1960 as an opponent of unilateral nuclear disarmament, and despite the other candidate of the Labour right (George Brown) agreeing with him on this policy, he forced Brown to a second vote. In November 1961, Callaghan became Shadow Chancellor. When Hugh Gaitskell died in January 1963, Callaghan ran to succeed him, but came third in the leadership contest, which was won by Harold Wilson. However, he did gain the support of right-wingers, such as Denis Healey and Anthony Crosland, who wanted to prevent Wilson from being elected leader but who also did not trust George Brown.
Chancellor of the Exchequer (1964–67)
In October 1964, Conservative Prime Minister Sir Alec Douglas-Home (who had only been in power for twelve months since the resignation of Harold Macmillan) was forced to call a general election, the parliament being about to expire. Labour won a narrow majority, gaining 56 seats for a total of 317 to the Conservatives' 304. The new Labour government under Harold Wilson immediately faced economic problems; Wilson acted within his first hours to appoint Callaghan as Chancellor of the Exchequer. The previous Chancellor, Reginald Maudling, had initiated fiscally expansionary measures which had helped create a pre-election economic boom; by greatly increasing domestic demand this had caused imports to grow much faster than exports, thus when Labour entered government they faced a balance of payments deficit of £800,000,000 (equivalent to £15,924,010,000 in 2018),[17] and an immediate sterling crisis. Both Wilson and Callaghan took a strong stance against devaluation of sterling, partly due to the perception that the devaluation carried out by the previous Labour government in 1949 had contributed to that government's downfall. The alternative to devaluation, however, was a series of austerity measures designed to reduce demand in the economy in order to reduce imports, and to stabilise the balance of payments and the value of sterling.[18]
Just ten days after taking up his post, Callaghan immediately introduced a 15% surcharge on imports, with the exception of foodstuffs and raw materials. This measure was intended to tackle the balance of payments deficit, however it caused an uproar amongst Britain's international trading partners. The outcry was so intense that it caused the government to announce that the surcharge was a temporary measure. Callaghan later admitted in his autobiography that he could have handled the matter better, and in his haste to tackle the balance of payments problem, had failed to consult foreign governments.[18]
On 11 November, Callaghan gave his first budget and announced increases in income tax, petrol tax and the introduction of a new capital gains tax, actions which most economists deemed necessary to take the heat out of the balance and sterling deficit. In line with Labour's manifesto commitments, the budget also contained social measures to increase the state pension and the widows pension; measures which were disliked by the City and speculators, causing a run on the pound. On 23 November, it was decided to increase the bank rate from 2% to 7% which generated a large amount of criticism. Handling the situation was made more difficult by the attitude of Lord Cromer, the Governor of the Bank of England, who argued against the fiscal policies of the new Labour government. When Callaghan and Wilson threatened to call a new general election, the governor soon raised a £3,000,000,000 loan to stabilise the reserves and the deficit.[18]
His second budget came on 6 April 1965, in which he announced efforts to deflate the economy and reduce home import demand by £250,000,000. Shortly afterwards, the bank rate was reduced from 7% down to 6%. For a brief time, the economy and British financial market stabilised, allowing in June for Callaghan to visit the United States and to discuss the state of the British economy with President Lyndon B. Johnson and the International Monetary Fund (IMF).[18]
In July, the pound came under extreme pressure and Callaghan was forced to create harsh temporary measures to demonstrate control of the economy. These include delaying all current government building projects and postponing new pension plans. The alternative was to allow the pound to float or to devalue it. Callaghan and Wilson, however, were again adamant that a devaluation of the pound would create new social and economic problems and continued to take a firm stance against it.[18] The government continued to struggle both with the economy and with the slender majority which, by 1966, had been reduced to one. On 28 February, Harold Wilson formally announced an election for 31 March 1966. On 1 March, Callaghan gave a 'little budget' to the Commons and announced the historic decision that the UK would adopt decimal currency. (It was actually not until 1971, under a Conservative government, that the United Kingdom moved from the system of pounds, shillings and pence to a decimal system of 100 pence to the pound.) He also announced a short-term mortgage scheme which allowed low-wage earners to maintain mortgage schemes in the face of economic difficulties. Soon afterwards, at the 1966 general election Labour won 363 seats compared to 252 seats against the Conservatives, giving the Labour government an increased majority of 97 seats.[19]
Callaghan introduced his next Budget on 4 May. He had informed the house that he would bring a full Budget to the House when he made his 'little budget' speech prior to the election. The main point of his budget was the introduction of a Selective Employment Tax, penalising the service industry and favouring the manufacturing industry.[20][21] Twelve days after the budget, the National Union of Seamen called a national strike and the problems facing Sterling were multiplied. Additional strikes caused the balance of payments deficit to increase, however a £3,300,000,000 loan from Swiss banks was due by the end of the year. On 14 July, the bank rate was increased again to seven percent, and on 20 July Callaghan announced a ten-point emergency package to deal with the crisis which included further tax rises and a six-month freeze on wage increases. By early 1967, the economy had begun to stabilise once again with the balance of payments moving into equilibrium, the bank rate was reduced to 6% in March and 5.5% in May.[22]
It was under these conditions that Callaghan beat Michael Foot in a vote to become Treasurer of the Labour Party.[23]
The economy was soon in turmoil again by June, with the Six-Day War between Egypt and Israel: several Arab countries such as Kuwait and Iraq announced an oil embargo against Britain, accusing it of intervening in the Israeli side in the conflict, resulting in a rise in oil prices which had a disastrous effect on the balance of payments. Furthermore, the economy was hit in mid-September when a national dock strike lasted for eight weeks. The final straw however was a EEC report which suggested that the pound could not be sustained as a reserve currency and it was suggested again that the pound should be devalued, Callaghan responded by pointing out that had it not been for the Middle East crisis; Britain would have been heading for a balance of payments surplus in 1967, however rumours that devaluation was on the cards led to heavy selling of Sterling on world markets. Wilson and Callaghan refused a contingency fund offered from the IMF because of several conditions attached which they believed would allow the IMF to interfere with economic policy. On Wednesday 15 November, the historic decision was taken to commit the government to a 14.3% devaluation from the existing fixed exchange rate of $2.80 to the pound, to $2.40 to the pound.[24][25] They intended to announce the decision publicly on the 18th, however in the run up to the public announcement, Callaghan found himself in a tricky situation when answering questions in the House of Commons: One backbencher Robert Sheldon tabled a motion concerning a rumour that Britain would be receiving a loan from banks. Callaghan did not wish to lie to the Commons, but at the same time going public about the devaluation decision before the 18th would be financially disastrous for the country. He answered the initial question by stating that he did not comment on rumours. However a follow up question was made by Stan Orme suggesting that devaluation was preferable to deflation, which caused a major problem; Callaghan replied that he had "nothing to add or subtract from, anything I have said on previous occasions on the subject of devaluation"... Speculators seized on the fact that he had not denied there would be a devaluation and started selling Sterling. Over the next 24 hours, the flight from Sterling cost the country £1,500 million.[26] The situation was a great political controversy at the time. As Denis Healey in his autobiography, notes:
Nowadays exchange rates can swing to and fro continually by amount greater than that, without attracting much attention outside the City columns of the newspapers. It may be difficult to understand how great a political humiliation this devaluation appeared at the time—above all to Wilson and his Chancellor, Jim Callaghan, who felt he must resign over it. Callaghan's personal distress was increased by a careless answer he gave to a backbencher's question two days before the formal devaluation. This cost Britain several hundred million pounds.[27]
Before the devaluation, Jim Callaghan had announced publicly to the Press and the House of Commons that he would not devalue, something he later said was necessary to maintain confidence in the pound and avoid creating jitters in the financial markets. Callaghan immediately offered his resignation as Chancellor, and increasing political opposition forced the Prime Minister to accept it. Wilson then moved Roy Jenkins, the Home Secretary, to be Chancellor of the Exchequer; Callaghan became the new Home Secretary on 30 November 1967.[28]
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