The government’s recent, palpable turn to the right seems to be gaining pace. In the past few weeks, Keir Starmer has slashed overseas aid, proposed a radical downsizing of the civil service, abolished NHS England and vowed to make serious cuts to welfare. As the Labour left pick up their weapons and prepare to do battle, conservative commentators are lauding the Prime Minister as being ‘to the Right of the Tories’ and cheering him on.
For all his quiet bonhomie, Callaghan never flinched from levelling with the public when it counted
The situation calls to mind an earlier Labour prime minister who died exactly 20 years ago today and took his government in a similar direction: Jim Callaghan. Callaghan led his party and the country in that chaotic quasi-interregnum between the resignation of Harold Wilson in March 1976 and the accession of Margaret Thatcher three years later – a period when the economy tanked, Britain went begging for a huge IMF loan, and the country descended into the industrial havoc of the Winter of Discontent. Through all this, ‘Sunny Jim’ Callaghan – robust, soft-spoken, seemingly unflappable – kept his hand firmly on the tiller, steering his way through the choppiest of waters, desperate to keep Britain afloat but having to bear sharp right to do so.
The marine imagery is apt. Callaghan was the son of a Chief Petty Officer in the Royal Navy, whose tragic early death left the future PM and his widowed mother, a devout Baptist, living in grinding poverty. Later as war broke out, following a spell working for the Inland Revenue and rising through the ranks as a union secretary, he joined the navy himself, and was to remain eternally fond of it, often reaching for a seafaring metaphor at critical moments, of which there were many. ‘Crisis,’ said his biographer Harry Conroy, ‘appeared to follow Jim Callaghan around.’
Yet so, in a strange way, did success. Callaghan was the only prime minister ever to have held the other three great offices of state – he had three-year spells under Harold Wilson as both Chancellor and Home Secretary, and was serving as Foreign Secretary when Wilson resigned. Though a shoo-in to replace him – trouncing Michael Foot (his own successor) for the role – he was nonetheless amazed, at 64, to get the top job. ‘And I never went to university!’ he marvelled, moved to tears, writing later, ‘For me, it was a boyhood dream come true.’
As a politician, he now seems a figure from another age and is a mass of contradictions. He could be at times both political bully and chauvinist (‘Now now, little lady,’ he once addressed Thatcher across the despatch box, leaving her apoplectic). But there was, as historian Dominic Sandbrook pointed out, something both comforting and authoritative about this leader, his soft Hampshire accent and his thoughtful delivery, which made him frequently more popular than the party he was leading.
Callaghan was a trade union man through and through but was instinctively conservative, with an ingrained respect for the royal family, a love of the armed forces, and a loathing of the new permissiveness abroad in the 60s and 70s. Though elected MP for South Cardiff in 1945 and a parliamentary secretary two years later, he was also a politician with a notable second life, never happier than when gathering up the harvest on his Sussex farm.
Politically, he never committed himself too closely to the left or right of his party, but seemed to steer a calm course through the middle and was popular on all sides. When Wilson departed in 1976 and Callaghan took over, even left-wing firebrands like Tony Benn were impressed. ‘Jim is a much better prime minister than Wilson,’ Benn wrote in his diary. ‘He is much more candid and open with people and he does not try to double-talk them as Wilson did.’
This honeymoon, though, was over all too quickly. Callaghan’s sharp rightwards turn came later that year, when the pound was plunging against the dollar, inflation stood at nearly 17 per cent, and public spending was bloating out of control. The prime minister, with a perilously thin majority, was slowly steeling himself – and the country – for an IMF loan and a range of cuts. Yet it was his speech at party conference that autumn in Blackpool – a wake-up call to Britain and a decisive break with the Keynesian consensus of the postwar years – that seemed to unleash squalls and rock the boat.
One by one, to an increasingly ashen-faced audience, time-honoured Labour policies were ditched by Callaghan: ‘The cosy world we were told would go on forever, where full employment would be guaranteed by a stroke of the Chancellor’s pen… that cosy world has gone.’ As for the tendency of governments to spend their way out of a recession or boost employment with tax cuts, ‘that option,’ said a stern Callaghan, ‘no longer exists.’ There would have to be a clear relationship from now on between productivity and wages: Britain would sink, he added, if it thought it could keep increasing a supply of ‘“confetti money” to pay ourselves more than we can produce.’
For the Labour left, this was end of times stuff. Many of the National Executive were paralysed with shock, refusing to applaud even at the end of Callaghan’s speech. Yet the Express – hardly a Labour paper – enthused about ‘Jim’s facts of life warning’, and monetarist Milton Friedman called it ‘one of the most remarkable talks… which any government leader has ever given’. The IMF loan was duly signed up for. Labour’s Chancellor Dennis Healey was, over the next two years, able to restore sterling’s value and bring inflation down to 8 per cent.
As for Callaghan, the 1976 speech was perhaps his finest – and most courageous – moment, in a career which seemed thereafter to implode. Having failed to seize the chance of an election in autumn 1978 – which he might well have won – he watched helplessly as the country, during the coldest winter in nearly two decades, descended into industrial anarchy. There were strikes among haulage workers, train drivers, hospital staff, dustmen and even gravediggers.
‘Crisis? What Crisis?’ the newspapers jeered as Callaghan returned suntanned from a conference in the Caribbean and seemed in a state of denial: ‘I don’t think other people in the world would share the view that there is mounting chaos,’ he muttered airily as the nation’s jaws collectively dropped. Finally, defeated by one vote in a no-confidence debate, he went to the country in May 1979, an exhausted man, to be routed by Thatcher. Labour would be out of power for 18 years.
Two decades after his death, it’s difficult to know what to make of Callaghan’s legacy as PM. He’d held his government together amidst a tempest when other, less smoothly captained ships might well have disintegrated. Though, as Harry Conroy pointed out, Callaghan ‘was no free marketeer’, his monetarist policies are widely credited with laying the foundations for the Thatcher revolution that followed.
Perhaps, though, Callaghan’s real achievement was just to be himself – not so much ‘avuncular’ (the word so often used about him), as the nation’s benevolent, soothing grandfather in a time of national crisis. Was he, as some would have it, ‘a disaster as a prime minister’ – a man made by union power but then broken by it – or, as others more charitably argue, ‘the right man in the wrong time’?
Even his old adversary Margaret Thatcher inclined to the latter view, calling him a ‘superb poker player’ who’d been dealt ‘an appalling hand by history’. For all his quiet bonhomie, Callaghan never flinched from levelling with the public when it counted. ‘I believe in the people,’ he said in a 1979 interview, adding that he wanted to win ‘the [next election] as honestly as possible’. To his credit, he was one of the few politicians who could make either statement and be taken at face value. That is an achievement in itself.
When it comes to the Spring Statement today from Chancellor Rachel Reeves – a mini-budget put together, her critics say, in a climate of emergency – will we get the same kinds of bracing home truths Callaghan delivered, to such effect, in autumn 1976? It seems unlikely: Reeves, for her detractors, is arguably the wrong woman in the wrong time – but it’s only a matter of hours till we find out.
