‘Our best prime minister since Attlee.’ That was Denis Healey’s verdict at Jim Callaghan’s memorial service in Westminster Abbey last July. After 1979, assessments of his reputation had been less amiable. His government was seen as embodying the tired corporate ancient régime of post-war Britain.
To the hard left, he was a closet conservative, pursuing a monetarist policy and public expenditure cuts that opened the door to Thatcherism. ‘Jim fixed it for me all right,’ a defeated leftist ex-MP bitterly complained at the 1979 party conference. Conversely, apostles of New Labour saw Callaghan’s premiership as part of the failures of Old Labour: a private fix with the unions, economic decline, a debilitating dependency culture – its götterdämmerung coming in the overflowing dustbins and unburied corpses of the Winter of Discontent.
To one author, the Callaghan era hardly existed in its own right: it implied a moral vacuum between the hedonism of the ‘swinging 60s’ and the free-market ethic of Thatcherism. Hugo Young’s chronicle of British policy towards Europe saw Callaghan’s years as a mere interlude, jammed in between Harold Wilson and Margaret Thatcher, and lost in the historical amnesia of the left – much as the Thatcherites tried to write Ted Heath out of their history.
And yet, when Callaghan died last year, it was felt that a political giant had passed away, comparable with Arthur Henderson or Herbert Morrison as a central organising figure in Labour’s history. A poll of historians on December 31 1999 placed him twelfth among 19 20th century prime ministers (the last seven were all Tories). His cabinet included gifted people like Healey, Anthony Crosland, Michael Foot, Tony Benn, Peter Shore, Harold Lever, Roy Hattersley, Edmund Dell and Shirley Williams. Callaghan led it robustly, repeatedly outshining Thatcher in debate.
In contrast to Tony Blair’s emphasis on personal leadership, he ran his government, like Clement Attlee’s, as a collective team, reviving a sense of trust lost in Wilson’s last phase. This emerged to full advantage in the IMF crisis of December 1976, when collective decisions were arrived at without the extreme cuts or ministerial splits of 1931. Despite its precarious standing as a minority government (overcome for 18 months through the Lib-Lab pact), it was, from December 1976 to October 1978, one of the more effective post-war administrations. Douglas Jay observed that it succeeded in ‘reducing inflationary pressures and unemployment at one and the same time,’ with the blessings of North Sea oil to follow on.
Callaghan also ran an impressive governmental machine: with Tom McNally ably directing the political office; Tom McCaffrey, a press officer, respected for avoiding spin; and able advisers in the policy unit and ‘thinktank’, like Bernard Donoughue, Tessa Blackstone and Gavyn Davies, drawn from the ‘best and brightest’ of their day. Callaghan’s own economic seminars were genuinely innovative, a possible alternative to the views of the Treasury (of which, as an ex-chancellor, he was inclined to be suspicious).
Parts of the government’s record were disappointing – Northern Ireland for example. But in international affairs, Callaghan drew fruitfully both upon his background as a foreign secretary (for instance, his strong relationship with the German SPD chancellor, Helmut Schmidt) and his old links with leaders like Kenneth Kaunda, Julius Nyerere and Lee Kuan Yew, when shadow colonial secretary in the late 1950s.
Callaghan acted more effectively as a bridge between the US and Europe than Tony Blair has been able to do. The Falklands were defended without a war. He gave Britain a genuine European role, including in discussions of possible monetary union. He created bonds with Jimmy Carter and Helmut Schmidt, who cordially disliked each other. In the Middle East, with his strong ties with both the Israeli Labour party and President Anwar Sadat of Egypt, he was an honest broker in Carter’s success in negotiating the Camp David agreement between Sadat and the Israeli prime minister, Menachem Begin, in 1978, being seen as impartial by both sides.
At home, Callaghan began a long-overdue questioning of traditional Keynesian doctrines, focussing prime attention on inflation rather than on growth and unemployment. The pound and the balance of payments grew stronger, while a policy of cash limits on expenditure was balanced by a strong emphasis on social reconstruction, as in regional policy. On education, Callaghan’s 1976 Ruskin speech first made ‘education, education, education’ a priority, especially over teaching quality and standards.
The government placed a strong emphasis on community values and the family, it passed a major race relations act and sought to establish Labour as the party of law and order. The latter was appropriate for Callaghan as a former Police Federation spokesman, symbolising the bobby on the beat like a latter-day Dixon of Dock Green. His positive view of the state went alongside a willingness to reform and devolve. Callaghan placed Scottish and Welsh devolution on the public agenda for the first time, even if the electoral consequences were at first calamitous. It is not unreasonable to see much of the New Labour of the 1990s in so-called Old Labour 20 years earlier.
The later reputation of Callaghan’s government suffered from its downfall. Whether it could have been rescued by going to the country in October 1978 is highly debatable: Callaghan himself read in the electoral entrails only another hung parliament. But things fell away thereafter. Callaghan himself, a famously adroit politician, made serious mistakes – the insistence on a five per cent pay norm, the mishandling of the TUC, the notorious remark when returning back from Guadeloupe, translated as ‘crisis, what crisis?’ But his own unions bore the main responsibility. The Winter of Discontent may have been exaggerated by journalists; but widespread strikes, not only among hard-pressed public sector employees but more affluent workers like lorry drivers, created a disastrous impression of unions out of control. The outcome was Thatcher’s 11-year hegemony, blamed on Callaghan, the opponent of union reform during the ‘In Place of Strife’ debates a decade earlier.
On balance, Callaghan’s was a decent government. Its leader embodied calm judgement and the instinctive naval patriotism of a son of Portsmouth. He responded to Pompey and its Chimes as did Michael Foot to Plymouth and the throb of Drake’s Drum. As prime minister he ran well ahead of his party in the polls, and he was to prove himself an outstanding ex-prime minister in the Lords. He was most impressive in No 10 rather than departmental office, because premiership gave him scope to reflect on issues at large. Sometimes called ‘Labour’s conservative’, he was actually a searching thinker on global issues, who confounded the disparaging of his intellectual powers by Hugh Gaitskell and Richard Crossman. He was certainly not the genial ‘Sunny Jim’ of legend any more than Arthur Henderson was cuddly ‘Uncle Arthur’, but he built up warm relations with ministers as different as Shirley Williams and Michael Foot.
Crucially, he was a good Labour prime minister, deeply aware of the history, ideology and roots of his party. He was a social patriot of 1945-vintage, indelibly stamped by the extreme poverty of his youth. As a former union official, he embodied in his own person the historic Labour alliance of party and unions. He regretted the marginalisation of the unions after 1997. In Labour’s pantheon, Callaghan may never rival Keir Hardie, Nye Bevan and all the saints who for their labours rest. But, as the premiership beckons of Gordon Brown, another great democratic socialist, the values of ‘Big Jim’s’ original Labour could offer hope for a new beginning.