James Callaghan
James Callaghan was a Labour politician, member of the Parliament, and prime minister of the United Kingdom.
Contents
History
Callaghan, as a clerk for Inland Revenue, entered politics through the Association of the Officers of Taxes (AOT) union. He rose quickly, and in 1933 was elected to the AOT national executive council. By 1936 he had resigned from the civil service to work for the union.
During World War 2 he enlisted in the Navy. He acheived the rank of sub-lieutenant.
He was selected to contest a Conservative seat in Parliament while serving, and in the 1945 general elections won. He would serve in several minor ministerial roles until the 1951 general elections returned Churchill to government.
Callaghan was then appointed to the shadow cabinet and remained there (in several roles) until the October 1964 general elections. When Wilson became PM, Callaghan was appointed chancellor.
He introduced capital gains taxes, raised income taxes and tariffs, and raised the bank borrowing rate. These measures wete intended to reduce the correct the balance of payments without depreciating the pound. The tariffs were met with stiff opposition diplomatically, forcing him to make them temporary. The conservative monetary policy was opposed by the Bank of England itself. And the pension increases (that were promised in the party platform to follow any tax increases) were unpopular with municipal governments. Despite a brief stablization after a year, the pound remained under heavy pressure to devalue.
There were several further economic stressors that added to the pressure to devalue.
- In 1966, Callaghan introduced a budget that included a new Selective Employment tax. The structure of it generally favored manufacturing jobs at the expense of others. This led to strikes.
- The 1967 oil shocks
- The EEC deciding against the pound as a reserve currency
Ultimately, in November 1967, he was forced to devalue the pound by about 14%. He offered his resignation and was swapped into the role as home secretary.
In that role, Callaghan oversaw the deployment of British troops into Ireland in response to sectarian violence. This led into the Troubles.
Labour lost the majority in the June 1970 general elections, and moved into the opposition. Callaghan remained in the shadow cabinet.
Wilson was returned to power with a slim majority in the February 1974 general elections, and Callaghan was promptly made foreign secretary. He negotiated the UK's entry into the European Communities.
Wilson lost the majority through by elections. He announced his resignation in 1976, leading into a divisive leadership contest. After three rounds of voting, Callaghan emerged as the new party leader and new PM. He was quickly forced to form a supply and confidence agreement with the Liberals.
The Winter of 1978 was characterized by general strikes for higher wages, whereas Callaghan had instituted limits to pay raises so as to curb inflation. It was also a remarkably cold year. This became known as the Winter of Discontent, and led into the devastating general elections in May 1979. Callaghan remained as party leader until late 1980, as he sought to reform the leadership contest process.
After stepping down as leader, he returned to the backbenches. He did not stand for the June 1987 elections.
Callaghan was created baron of Cardiff and entered the Lords.