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 and rose to the rank of sub-lieutenant. While serving he was selected to contest a Conservative seat in the Parliament.
The 1945 elections saw a landslide victory for Labour; accordingly Callaghan defeated his incumbent opponent. He then served in several minor ministerial roles until the 1951 general elections returned Churchill to government.
Callaghan was appointed to the shadow cabinet and served in several roles. Wilson led Labour to victory in the October 1964 general elections and appointed Callaghan chancellor. He introduced capital gains taxes, raised income taxes and tariffs, and raised the bank borrowing rate. These measures were 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 stabilization 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.
- EEC decided against the pound as a reserve currency.
- 1967 oil shocks
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, but regained it in the February 1974 general elections. Callaghan remained in the shadow cabinet throughout this interregnum, again in several roles, and was appointed foreign secretary at the start of Wilson's second term. In that role he negotiated entry into the European Communities.
Labour again lost the majority through by-elections, and in 1976 Wilson announced his resignation. After three rounds of voting, Callaghan won a divisive leadership contest. He was quickly forced to form a supply and confidence agreement with the Liberals.
Late 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. The so-called Winter of Discontent led into the devastating general elections in May 1979. Callaghan remained as party leader until late 1980, as he was working to reform the leadership contest process. When he finally did step down, he returned to the backbenches.
Callaghan declined to contest the June 1987 elections. He was created baron of Cardiff and entered the Lords.