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Leonard James Callaghan, Baron Callaghan of Cardiff (27 March 1912 – 26 March 2005), was a British Labour politician, who was the Prime Minister of the United Kingdom from 1976 to 1979 and Leader of the Labour Party from 1976 to 1980. Commonly known as Jim Callaghan (and nicknamed Sunny Jim, Gentleman Jim, Lucky Jim or Big Jim), Callaghan is the only person to have served in all four of the Great Offices of State: Prime Minister, Chancellor of the Exchequer, Home Secretary and Foreign Secretary.

Callaghan was Chancellor of the Exchequer from 1964 to 1967 during a turbulent period in the British economy in which he had to wrestle with a balance of payments deficit and speculative attacks on the pound sterling. In November 1967, the Government was forced to devalue the pound sterling despite having already denied this would be done, both publicly and to the House of Commons. Callaghan offered to resign, but was persuaded to swap his ministerial post with Roy Jenkins, becoming Home Secretary from 1967 to 1970. In that capacity, Callaghan took the decision to use the Army to support the police in Northern Ireland, after a request from the Northern Ireland Government.

The Labour Party lost the General Election in 1970, but Callaghan returned to office as Foreign Secretary in March 1974, taking responsibility for renegotiating the terms of the United Kingdom's membership of the European Economic Community (EEC or "Common Market"), and supporting a 'Yes' vote in the 1975 referendum for the UK to remain in the EEC. When Harold Wilson resigned in 1976, Callaghan was elected the new Labour leader.

Labour had already lost its majority in the House of Commons when he became Prime Minister and lost further seats at by-elections and through defections, forcing Callaghan to deal with minor parties such as the Liberal Party especially in the Lib-Lab pact from 1977 to 1978, the Ulster Unionists, Scottish National Party and even Independents. Industrial disputes and widespread strikes in the "Winter of Discontent" of 1978–79, made Callaghan's government unpopular and the defeat of the referendum on devolution for Scotland led to the passage of a motion of no confidence on 28 March 1979. This was followed by a defeat by Margaret Thatcher's Conservative Party in the ensuing general election.

1912 to 1944: early life and career

James Callaghan was born at 38 Funtington Road, Copnor, Portsmouth, England on 27 March 1912. He was named after his father, also James Callaghan, who was a Royal Navy Chief Petty Officer; he died in 1921, when Callaghan was nine years old. His mother was Charlotte Callaghan née Cundy (born 1880). He had an older sister, Dorothy Gertrude Callaghan, (born 1904). 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.

At the age of 17, Callaghan left to work as a clerk for the Inland Revenue. While working as a Tax Inspector, Callaghan was instrumental in establishing the Association of Officers of Taxes as a Trade Union for those in his profession and became a member of its National Executive. Whilst at the Inland Revenue offices in Kent, in 1931, he joined the Maidstone branch of Labour Party. In 1934, he was transferred to Inland Revenue offices in London. Following a merger of unions in 1936, Callaghan was appointed as a full-time union official and to the post of Assistant Secretary of the Inland Revenue Staff Federation and resigned from his Civil Service duties.

His union position at the Inland Revenue Federation 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. Callaghan joined the Royal Navy Volunteer Reserve as an Ordinary Seaman in World War II from 1942 where he served in the East Indies Fleet and was promoted to the rank of Lieutenant in April 1944. While training for his promotion, his medical examination revealed that he was suffering from tuberculosis and 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.

Whilst on leave, 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 votes. He was 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. During 1945 he was assigned to the Indian Fleet and served on HMS Queen Elizabeth in the Indian Ocean. After VE Day, along with other prospective candidates he returned to the United Kingdom to stand in the general election.

1945 to 1976: parliament and cabinet

Labour won a landslide victory on 26 July 1945 bringing Clement Attlee to power. Callaghan won his Cardiff South seat in the 1945 UK general election (and would hold a Cardiff-area seat continuously until 1987). He defeated the sitting Conservative incumbent candidate, 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. At the time of his election, his son Michael was born.

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 to 1964. He was Parliamentary Adviser to the Police Federation from 1955 to 1960 when he negotiated an increase in police pay. 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 1961 Callaghan became shadow chancellor. When Hugh Gaitskell died in January 1963, Callaghan ran to succeed him but came third. 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 didn't trust George Brown.

Chancellor of the Exchequer

In October 1964, Conservative Prime Minister Sir Alec Douglas-Home called a general election. It was a tough election, but Labour won a small majority, gaining 56 seats (a total of 317 to the Conservatives 309). The new Labour government under Harold Wilson immediately faced economic problems and Wilson acted within his first hours to appoint Callaghan as Chancellor of the Exchequer. The new government had to cope with a balance of payments deficit and speculative attacks on Sterling. It was the policy of the whole government, and one in which Callaghan concurred, that devaluation should be avoided for as long as possible and he managed to arrange loans from other central banks and some tax rises in order to stabilise the economy. Callaghan's time as chancellor was to be during a time of crisis; with high inflation, high unemployment and an unstable economy with a deficit in the budget, a deficit in the balance of import and exports and most importantly conflict over the value of the pound.

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, though international bankers disagreed.

On 23 November, it was decided to increase the bank rate from 2% to 7% which generated a large amount of criticism. Handling the crisis 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 billion loan to stabilise the reserves and the deficit. His second budget came on the 6 April 1965, in which he announced efforts to deflate the economy and reduce home import demand by £250 million. 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 Baines Johnson and the International Monetary Fund (IMF).

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 suspending 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. 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 the 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, Labour won 363 seats compared to 252 seats against the Conservatives, giving the Labour government a large majority of 97.

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 manufacturing industry and favouring the service industry. 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 and the 3.3 billion loan was now due. On 14 July, the bank rate was increased again to seven percent. On the 20 July, Callaghan announced an emergency ten-point programme with a six-month freeze on wage and salary increases. By 1967, the economy had begun to stabilise once again and the bank rate was reduced to 6% in March and 5.5% in May.

It was under these conditions that Callaghan beat Michael Foot in a vote to become Treasurer of the Labour Party.

The economy was soon in turmoil again, with the Middle East crisis between Egypt and Israel raising oil prices. Furthermore, the economy was hit in mid-September when a national dock strike lasted for eight weeks. A run on Sterling began with the six-day war and with the closure of the Suez Canal and with the dock strike, the balance of payments deficit grew to a critical level. A Common Market report suggested that the pound could not be sustained as a reserve currency and it was suggested again that the pound should be devalued. Wilson and Callaghan refused a contingency fund offered from the IMF because of several conditions attached. On Wednesday 15 November, the historic decision was taken to commit the government to a 14.3% devaluation. The situation was a great political controversy at the time. As Denis Healey in his autobiography, notes:

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 Wilson to accept it. Wilson then moved Roy Jenkins, the Home Secretary, to the Chancellor of the Exchequer and Callaghan became the new Home Secretary on 30 November 1967.

Home Secretary

Callaghan's tenure as Home Secretary was marked by the emerging conflict in Northern Ireland and it was as Home Secretary that he took the decision to deploy British Army troops in the province after a request from the Ulster Unionist Government of Northern Ireland.

Callaghan was also responsible for the Commonwealth Immigration Act 1968; a controversial piece of legislation prompted by Conservative assertions that an influx of Kenyan Asians would soon inundate the country. It passed through the Commons in a week and placed entry controls on holders of United Kingdom passports who had "no substantial connection" with the United Kingdom by setting up a new system. In his memoirs Time and Chance, Callaghan wrote that introducing the Commonwealth Immigrants Bill had been an unwelcome task but that he did not regret it. He claimed the Asians had "discovered a loophole" and he told a BBC interviewer: "Public opinion in this country was extremely agitated, and the consideration that was in my mind was how we could preserve a proper sense of order in this country and, at the same time, do justice to these people - I had to balance both considerations". An opponent of the Act, Conservative MP Ian Gilmour, asserted that it was "brought in to keep the blacks out. If it had been the case that it was 5,000 white settlers who were coming in, the newspapers and politicians, Callaghan included, who were making all the fuss would have been quite pleased".

Also significant was the passing of the Race Relations Act in the same year, making it illegal to refuse employment, housing or education on the basis of ethnic background. The Act extended the powers of the Race Relations Board at the time, to deal with complaints of discrimination and unfair attitudes. It also set up a new supervisory body, the Community Relations Commission, to promote "harmonious community relations". Presenting the Bill to Parliament, the Home Secretary, Jim Callaghan, said, "The House has rarely faced an issue of greater social significance for our country and our children."

In 1969 Callaghan, a strong supporter of the Labour/Trade Union link, led the successful opposition in a divided cabinet to Barbara Castle's White Paper "In Place of Strife" which sought to modify Trade Union law. Amongst its numerous proposals were plans to force unions to call a ballot before a strike was held and the establishment of an Industrial Board to enforce settlements in industrial disputes. Ironically, if the proposals had become law, many of the activities of the trades unions during the Winter of Discontent a decade later would have been illegal.

After Wilson's unexpected defeat by Edward Heath in the 1970 General Election, Callaghan declined to challenge him for the leadership despite Wilson's vulnerability. This did much to rehabilitate him in Wilson's eyes. He was in charge of drawing up a new policy statement in 1972 which contained the idea of the Social Contract between the government and trade unions. He also did much to ensure that Labour opposed the Heath government's bid to enter the Common Market—forcing Wilson's hand by making his personal opposition clear without consulting the Party Leader.

Foreign Secretary and election as Leader of the Labour Party

When Wilson won the next general election and returned as Prime Minister in March 1974, he appointed Callaghan as Foreign Secretary which gave him responsibility for renegotiating the terms of the United Kingdom's membership of the Common Market. When the talks concluded, Callaghan led the Cabinet in declaring the new terms acceptable and he supported a 'Yes' vote in the 1975 referendum.

Early in his second term, Wilson announced his surprise resignation on 16 March 1976, and unofficially endorsed Callaghan as his successor. Callaghan was the favourite to win the leadership, although he was the oldest candidate; he was also the most experienced and least divisive. Popularity with all parts of the Labour movement saw him through the ballot of Labour MPs to win the leadership vote. On 5 April 1976, at the age of 64 years and 9 days, Callaghan became Prime Minister - the oldest person to become Prime Minister at time of appointment since Winston Churchill.

1976 to 1979: Prime Minister

Callaghan was the only Prime Minister to have held all three leading Cabinet positions - Chancellor of the Exchequer, Home Secretary and Foreign Secretary - prior to becoming Prime Minister.

During his first year in office, Callaghan started what has since become known as 'The Great Debate', when he spoke at Ruskin College, Oxford about the 'legitimate concerns' of a public about education as it took place in the nation's maintained schools. This discussion led to greater involvement of the government, through its ministries, in the curriculum and administration of state education, leading to the eventual introduction of the National Curriculum some ten years later.

Callaghan's time as Prime Minister was dominated by the troubles in running a Government with a minority in the House of Commons: he was forced to make deals with minor parties in order to survive - including the Lib-Lab pact, and he had been forced to accept referendums on devolution in Scotland and Wales (the former went in favour but did not reach the required majority, and the latter went heavily against).

Despite these difficulties, by late 1978, most opinion polls showed Labour ahead, and the expectation grew that Callaghan would call an autumn election. Famously, he strung along the opposition and was expected to make his declaration of election in a broadcast in early September 1978. His decision to go on was, at the time, seen by many as a sign of his domination of the political scene and he ridiculed his opponents by singing old-time music hall star Vesta Victoria's song "Waiting at the Church" at that month's Trades Union Congress meeting: now seen as one of the greatest moments of hubris in modern British politics, but celebrated at the time. Callaghan intended to convey the message that he had not promised an election, but most observers misread his message as an assertion that he would call an election, and the Conservatives would not be ready for it.

'The Winter of Discontent'

Callaghan's way of dealing with the long-term economic difficulties involved pay restraint which had been operating for four years with reasonable success. He gambled that a fifth year would further improve the economy and allow him to be re-elected in 1979, and so attempted to hold pay rises to 5% or less. The trade unions rejected continued pay restraint and in a succession of strikes over the winter of 1978-79 (known as the Winter of Discontent) secured higher pay. The industrial unrest made his government extremely unpopular, and Callaghan's response to one interview question only made it worse. Returning to the United Kingdom from an economic summit held in Guadeloupe in early 1979, Callaghan was asked, "What is your general approach, in view of the mounting chaos in the country at the moment?" Callaghan replied, "Well, that's a judgement that you are making. I promise you that if you look at it from outside, and perhaps you're taking rather a parochial view at the moment, I don't think that other people in the world would share the view that there is mounting chaos." This reply was reported in The Sun under the headline "Crisis? What Crisis?". Callaghan also later admitted in regard to the Winter of Discontent that he had "let the country down".

On 28 March 1979, the House of Commons passed a Motion of No Confidence by one vote, 311–310, which forced Callaghan to call a general election that was held on 3 May. The Conservatives, with the advertising agency Saatchi and Saatchi, ran a campaign on the slogan "Labour isn't working". Margaret Thatcher won the election, even though Callaghan was more popular personally than Thatcher with the electorate.

Callaghan's defeat meant that he was one of the few prime ministers to leave office having never won a general election. It would be 31 years before another prime minister left office without having won a general election, when Gordon Brown resigned after the 2010 general election.

Resignation, backbenches and retirement

Callaghan resigned as leader of the Labour Party on 15 October 1980, shortly after the 1980 party conference had voted for a new system of election by electoral college involving the individual members and trade unions. His resignation ensured that his successor would be elected by MPs only. In the second round of a campaign that laid bare the deep internal divisions of the Parliamentary Labour Party, Michael Foot narrowly beat Denis Healey to succeed Callaghan as leader.

In 1982, along with his friend Gerald Ford, he co-founded the annual AEI World Forum.

In 1983, Callaghan became Father of the House as the longest continuously serving member of the Commons and one of only two survivors of the 1945 general election - Michael Foot being the other, but he had been out of the House from 1955 to 1960. In 1987, he was made a Knight of the Garter and stood down at the 1987 general election after 42 years as a member of the Commons. Shortly afterwards, he was elevated to the House of Lords as Baron Callaghan of Cardiff, of the City of Cardiff in the Royal County of South Glamorganshire. In 1987, his autobiography, Time and Chance, was published. He also served as a non-executive director of the Bank of Wales.

In 1988, Callaghan's wife Audrey, a former chairman (1969–1982) of Great Ormond Street Hospital, spotted a letter to a newspaper which pointed out that the copyright of Peter Pan, which had been assigned by J. M. Barrie to the hospital, was about to expire. Callaghan moved an amendment to the Copyright Bill then under consideration in the Lords to extend the term under which the hospital could continue to collect royalties, despite the lapse of copyright, and this was accepted by the government.

On 14 February 2005, he became the longest-lived British Prime Minister, surpassing Harold Macmillan, and had the longest life of any British prime minister when he died at his farm in Ringmer, East Sussex on 26 March 2005, on the eve of his 93rd birthday. At the time of his death, Callaghan had lived 92 years 364 days, exceeding by 42 days the life span of Macmillan.

Personal life

James Callaghan's interests included rugby, tennis and agriculture. He married Audrey Elizabeth Moulton, whom he had met when they both worked as Sunday School teachers at the local Baptist church, in July 1938 and had three children — one son and two daughters. Lady Callaghan died on 15 March 2005. Although there is much doubt about how much belief Callaghan retained into adult life, the Baptist nonconformist ethic was a profound influence throughout all of his public and private life.

James Callaghan died on 26 March 2005, 11 days after his wife's death and one day before his 93rd birthday, of lobar pneumonia, cardiac failure, and kidney failure.

One of their daughters, Margaret, became Baroness Jay of Paddington and was Leader of the House of Lords from 1998 to 2001.