In 1945 Callaghan was elected to Parliament as Labour MP for Cardiff South. He quickly established his reputation as an effective debater and in the 1950s became recognized as a Gaitskellite. In 1960 he was defeated in the deputy leadership election by George Brown. After Gaitskell's untimely death in 1963 Callaghan stood for leader but came third behind Harold Wilson and Brown.
When Labour assumed power in 1964 Callaghan became chancellor of the Exchequer. However, his authority was challenged by the creation of a new Department of Economic Affairs under Brown. Callaghan's term was dogged by speculation against sterling which prompted a series of financial crises resulting in the devaluation of the pound on 17 November 1967. He was unhappy in the post, aware of his own limitations when it came to economic management.
Callaghan moved to the Home Office, where he attempted to deal with the problem of immigration from Commonwealth countries and was responsible for sending British troops into Northern Ireland in August 1969. As the only senior minister with trade union connections, Callaghan thwarted measures put forward by Barbara Castle and Wilson, in 1969, to reform trade union law.
Callaghan's term as foreign secretary coincided with the controversy surrounding Britain's entry into the EEC. The issue had split the Labour Party, Callaghan having criticized the idea of entry without fully opposing it. He set out to renegotiate the terms of entry agreed by the Heath government. Between June 1974 and March 1975 he visited foreign capitals using his union skills as a negotiator to settle details concerning the EEC budget, Common Agricultural Policy, and arrangements for Commonwealth countries. But the changes were largely cosmetic.
In 1976 Wilson announced his resignation and Callaghan beat Michael Foot to assume the party leadership and prime ministership. The election was won mainly due to the desire of the party centre-right to stop Foot rather than on Callaghan's own merits. The outlook for Callaghan's term was gloomy from the outset, a fact he recognized. Inflation was rampant and he was aware that the country was not earning the standard of living it enjoyed, the deficit being covered by borrowing. In September 1976, the government was forced to apply to the International Monetary Fund for stand-by credit of £2.3 billion. The government had no effective majority and in 1977 Callaghan had to strike a deal with the Liberals to survive, the price being devolution bills for Scotland and Wales.
During the ‘winter of discontent’ (1978–9) the country was crippled by strikes as protests against wage restraint, despite the ‘social contract’ which Labour claimed to have with the unions. In March 1979 the devolution referenda failed. The Labour government lost a vote of no confidence by one vote and the subsequent general election. In October 1980 Callaghan resigned as leader and in 1987 became a life peer. An experienced and capable politician with a conciliatory and pleasant manner, he lacked the vision and decisiveness necessary for leadership.
Richard A. Smith
Morgan, K. O. , Callaghan (Oxford, 1997).
"Callaghan, James." The Oxford Companion to British History. . Encyclopedia.com. (December 12, 2017). http://www.encyclopedia.com/history/encyclopedias-almanacs-transcripts-and-maps/callaghan-james
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