The man who killed old Labour

To understand why it happened. we need to look at Callaghan's background. Most Labour leaders get a comfortable middle-class upbringing. Attlee, Gaitskell, Wilson, they were all middle-class and though, of course, committed to an improvement in the conditions of working-class life, they had no personal experience of a working-class childhood. But Jim Callaghan knew very well what it was like to be young and clever and poor. His father died at the early age of 44, leaving behind

an impoverished family that moved

from house to house, living in

rented rooms.

Now, childhood deprivation doesn't necessarily produce great unhappiness, but it's certainly a defining experience. It teaches you what's what and who's who, who's for you, who's against you, who helps and

who doesn't. When you're at the

bottom of the heap, that kind of

thing gets more sharply etched into your mind, which is why poverty often produces great resentment and

great gratitude.

I think it did in Callaghan's case. though sadly enough the gratitude was to do him more damage than

the resentment. The gratitude was bestowed upon the Labour movement, and the section of it that he

held in the highest esteem was the trade unions. He'd been a senior

official in a small Inland Revenue union. He did the job very well, made a lot of contacts, deservedly got on in life and became a Labour Member of Parliament in 1945. Quite obviously this intimate relationship with the trade-unions had advanced his political career, but he paid a price for it.

Jim had a very old-fashioned view of trade unionism, regarding it as the noble struggle of the downtrodden against exploitation. A catch used to come into his voice when he spoke about the men of Tolpuddle. Some of the rest of us who also knew modern trade union leaders couldn't see much resemblance between them and the Tolpuddle martyrs - probably Jim didn't either, but I think he felt he ought to. That was his gratitude.

His resentment was centred upon

a missed opportunity. Young Callaghan was qualified for university entrance but, of course, the

circumstances of his family didn't give him the slightest chance of taking up that option. One can sympathise with a sensitive, clever young man who was denied a chance through no fault of his own. Unhappily, the wound never really healed. Bernard Donoughue, who was the head of his policy unit in Downing Street, said of Jim's non-attendance at university: ''This mattered, only because apparently he felt it did''. And he felt it did because for many years Callaghan had a quite mistaken view that his parliamentary colleagues didn't rate him at his true worth because he hadn't been to university. Now, I never met a member of the parliamentary party who took that view at all, but nobody could ever convince Jim of that.

And I think it was his insecurity that led him to a rather odd way of

furthering his career. When still comparatively young, he became a wise old bird. Wise old birdery consisted of becoming a repository of political folk wisdom. Jim let it be known that he wasn't a man for new-fangled, complicated theories. Nothing la-di-da about him, plain common sense was his forte. Son-of-the-soil type. He played the role quite superbly.

Members of Parliament are a case-hardened, cynical lot on the whole. not easily impressed by anybody. But it was universally believed, in every section of the Labour movement, that Jim had enormous sagacity.

And he looked the part. He was tall, well-built, with a grumbling voice, and he exuded bluff geniality. And he had no vices. He was devoted to his wife and his family, and he didn't chase women and he didn't get drunk. Obviously a stable, dependable

judicious type, with his finger on the nation's pulse. He had a junior appointment in the Attlee government and during the long years in Opposition he rose steadily, so that when Labour came to power, in 1964, he was appointed Chancellor of the Exchequer. He was never at ease in that job, and after devaluation he switched to the Home Office. And then came 1969, the crucial year in

his career.

In 1969, Barbara Castle, strongly supported by Harold Wilson, produced a White Paper, In Place

of Strife, which was meant to be a forerunner of legislation to use legal sanctions against unofficial strikes. It was milk-and-water stuff compared with the present legal situation of the trade unions, but it outraged Jim. He didn't think the legal sanctions would work, but he was against them on

the principle anyway. Jim's view was that the trade unions should be allowed to regulate their own affairs, the law must under no circumstances come into the matter. He completely out-manoeuvred Harold Wilson and Barbara Castle, no mean feat in itself. And, amid all the usual acrimony with complaints of bad faith on all sides, the proposal was withdrawn, in return for a solemn and binding

declaration from the TUC which was, of course, entirely worthless.

It was a seminal moment. The trade unions had learned just how powerful they were, and they'd also learned that Jim Callaghan would fight to preserve that power. So when Wilson went in 1976, the great majority of trade union-sponsored MPs in the Labour Party voted for Jim, who comfortably became Leader and Prime Minister. I think the

general impression in the country at that time was that old Jim would

have some problems with the finer points of his new job, but at least

he'd have the trade unions well under

his thumb.

The country was wrong on both counts. Callaghan had a masterly grasp of the day-to-day business of government. In calmer times, when no great strategic decisions need be made, I don't have much doubt that he'd have got the reputation as a

great Prime Minister. It was what was supposed to be his strong point that let him down. Surprisingly enough, given all his expertise in the matter, he was actually out of touch with the trends in modern trade unionism.

Trade-union leaders, whatever their protestations to the contrary, weren't as prepared as they used to be to help a Labour government when it was in trouble. Worse still, they couldn't guarantee to deliver their membership even when they wanted to. There had been an accelerating and very significant delegation of authority to local officials, many of whom were militants and utterly indifferent to what Jim Callaghan might happen to want. On one famous occasion, Jim was laying down the law and appealing for the loyalty of

a group of trade-union leaders, when one of them told him the awful

truth: ''We all agree with what you say, Jim. But there's nothing we can do about it.''

Things were decidedly edgy from the beginning of Callaghan's premiership. There was in existence a

so-called ''Social Contract''. An extraordinary arrangement, all cooked up in Labour's 1974 manifesto, born, in my opinion, out of muddle and

desperation. And under this social contract, the trade unions promised some measure of wage restraint in return for which they would be

consulted about - which meant allowed to meddle in - social priorities and policy. There was just enough life left in the social contract to save Jim's neck in 1976, though even then he had to pull out all the stops to get another round of pay restraint. He threatened the unions with the immediate end of the Labour government unless a deal could be stitched up. After prolonged wrangling, they finally grumpily agreed.

The omens could hardly have been worse, though few people in the

government seemed to think so, and least of all Jim Callaghan, who treated the whole thing as a triumph. But if at the start of his premiership he had to have protracted arguments with the trade unions to get a deal, when their only alternative was an immediate election and a Thatcher government, the weakness of his

position was obvious.

Nor could government by trade- union consent be good for democracy. Jim was always curiously blind on this essential point. He couldn't see the trade unions for what they really were: a vested interest. He couldn't take the idea on board, and the powers that were surrendered to them were democratically indefensible - and would have been even if the trade- union leadership had accurately reflected the views of ordinary trade unionists, which very often it didn't.

Jim kept noticing this, by the way. He was perpetually being surprised in his encounters with them, by discovering that ordinary trade unionists, for the good of the country, were prepared to accept all sorts of restraints that the trade-union leadership said were unthinkable. Jim never made a detailed defence of what he was doing - I suppose he thought it was obvious. He simply asserted that what he was doing was good for everybody. The Social Contract, he said, was of great value, to the trade unions, the party and the country. The private hints were that it was smart politics. Labour could control the unions, the Tories couldn't, and the electorate was to be told that it was only for the Labour government that the trade unions would do what was needed. Smart politics.

But was it so smart? It staked everything on one card. Suppose the unions turned really nasty, what would the public think then? And yet, you know, with a more rational strategy, the Callaghan government might have been relatively successful. Certainly, the left-wing case against it, as, for instance, put by Tony Benn in his heyday, that what Callaghan did was to betray everything that the Labour Party held most dear, was very wide of the mark. When you got him away from his sentimental myopia about anything to do with trade unions, Callaghan could be startlingly successful. He had good judgment over a whole range of things. and he could be courageous, too, always allowing, of course, that this didn't involve him in any direct confrontation with the trade unions.

The speech Callaghan made to the Labour Party Annual Conference in 1976 is probably the best speech any leader has ever made to that truculent body. And if it wasn't the best, it was certainly the bravest. Callaghan told the delegates that the country was paying itself in wages more than the value of what it produced. And then he further affronted their

feelings by telling them that the days of more government spending to come out of a recession were over. In effect, he was repudiating their deepest convictions. And it had an important practical value. By stressing that monetary discipline was essential to economic management, Callaghan managed to cheer up a lot of foreign governments and international bankers just at the moment that he most needed to.

And that wasn't an isolated success by any means. Callaghan's handling of the International Monetary Fund's loan was a masterpiece of statecraft. The IMF arrived with very tough terms, and Callaghan had no majority in the Cabinet for the acceptance of any terms. He had a very weak hand with very few good cards in it - but he played it brilliantly. He swung the Cabinet in favour of the loan, with only a few dissenters and no resignations, and he persuaded the IMF to offer much easier terms.

The proof that Callaghan must have been doing something right for the first two years or so of his

premiership arrived in the autumn of 1978, when Labour went ahead of

the Tories in the opinion polls.

And then the roof fell in - the Winter of Discontent arrived. It's a favourite device of dramatists to give their central character great talents and to allow him many successes, while steadily signalling a major flaw in his outlook. And then in the finale, despite his merits, the flaw destroys him. That's exactly what happened to Jim Callaghan.

He was wrong about the trade unions and he was to discover, in the most painful way imaginable, just how wrong. He'd spent his life polishing and sharpening the dagger that was about to be shoved into his back. He hadn't been able to stitch up another deal with the TUC on a pay norm, and therefore the Government unilaterally declared a norm of 5%. Some Ministers said it ought to have been 10%, but that wouldn't have made any difference at all, because many people in the trade unions weren't prepared to accept any norm. After the Ford Motor Company, which had had a very good year in

the private sector, conceded to its workers 17%, all hell broke out in the

public sector. The water workers demanded 30%; the manual workers in the health service demanded 40%, as did the manuals in the local authorities. Since this wave of claims was much more than five times what the Government had expected to be the norm, it assumed that it would get some help from the trade-union leadership. It was cruelly disillusioned. The trade-union leadership capitulated to the militants. It made the most of the wave of official strikes that broke out and it turned a blind eye to the unofficial strikes.

But the claims and the strikes weren't the worst of it. It was the way the strikes were conducted that shocked everybody, especially Jim Callaghan. The sick were refused admittance to some hospitals. When a union official was challenged about this, he replied: '' If people die, so be it.'' NUPE wouldn't allow the dead to be buried. And nobody could do

anything about the health hazard of the stinking piles of refuse that were littered on the streets. And union behaviour on the picket line was

often vicious.

The whole thing was shown in graphic detail every night on television. Peter Shore, a Cabinet colleague of Jim Callaghan's, a man of good sense and calm disposition, described what was happening as a nightmare, an outbreak of collective barbarity. Plainly the unions had called off all bets, and the time had come for the Government, in the public interest, to get tough. Callaghan couldn't. He'd grown up alongside the trade-union movement and he seemed to be

quite incapable of fighting against it. Instead of declaring a state of

emergency, his mind turned towards

some more conciliation. At the very moment that these huge claims were being paid, Callaghan was busily engaged in a negotiation with the TUC to get them to agree to a fatuous statement, that they favoured an inflation rate of 5% over a three-year period. Well, he got his statement, but, of course, nobody believed it.

Things quietened down a bit after the January peak of all this uproar, but it had finished off Jim. He knew it. He admitted privately that it no longer matter what he did or said. The government staggered on for a bit, lost a vote of confidence and then decisively lost the May 1979 General Election. It's an ironic footnote to

that election, and to Jim's relations with the unions, that for the first time ever in the election more than 50% of all trade unionists failed to vote Labour. Jim had said that the Social Contract was of great value to the trade unions, the party, and the country. Well, the trade unions were manhandled by the Thatcher government and lost most of their legal immunities - to great public approval, by the way. As for the country, well, it was stuck with a roaring inflation, which was only reduced by a huge increase in unemployment.

What about the party? Ah, yes, the Labour Party, we mustn't forget to have a word about the Labour Party, because the Callaghan story doesn't end with Jim's loss of the premiership. He wanted to resign the party leadership, of course. He'd been humiliated and he knew perfectly well that he wasn't coming back. But so great was the faith in the wise old bird, and so ugly was the situation in the Labour Party, that he was persuaded to stay on, to see if he could

do something, anything, to hold the party together.

The Labour Party was in open rebellion against Jim's leadership. The NEC had been in the hands of the left ever since 1974. And the

left had a plan for the party. Dissatisfied with Labour governments that didn't produce a socialist state, and utterly fed up with Labour Members of Parliament who elected trimmers like Jim, the left wanted the control of the parliamentary party's policy and actions under the supervision of the Annual Conference. And having for years, of course, denounced the Callaghan government under the guise of looking at future policy, it eventually came straight out for

the removal from the PLP of

the right to elect the Leader, and the granting of it to the Annual Conference.

It says a lot for the dedication of Jim Callaghan to the Labour movement that he had led

his demoralised and dwindling forces for 18 months, a miserable 18 months, in a hope-

less cause. He'd lost the power

of patronage of Prime Minister, the only thing he'd got left

was a certain residual loyalty, and there wasn't much of that left either.

Jim was spared nothing. Thrashing about to try and save something from the wreckage, he finally, reluctantly, agreed to the Electoral College, thus surrendering the PLP's right to exclusively control the election of Leader. When he reported back to the Shadow Cabinet the next day he was violently attacked and abused, by David Owen and Bill Rodgers, for selling out the parliamentary party. Now he'd lost the confidence of the right as well.

Well, the Labour Party Annual Conference of 1980 sanctified the victory of the left, who got nearly all of what they wanted. And Callaghan then resigned the party leadership. I don't think that was the worst for him. Even more belittling than the victory of the left was that in January of the next year, a new party, the SDP, came into existence, with his old colleague Roy Jenkins as leader and three of his recent Cabinet Ministers, Shirley Williams, David Owen, and Bill Rodgers, as members of it, plus a host of old friends.

It had come to pieces in his hands. And it was, I think, for him in many ways not merely a cruel but also a bewildering experience. So much of what he'd done had been sensible. He'd played by all the old rules. He'd tried to compromise when he could compromise. He'd tried to be courageous, at least where the unions weren't involved, and yet it had all come to pieces in his hands. Jim was shocked because, you see, he loved the old Labour Party, quite genuinely he loved it. Regrettably he didn't have the vision to see the extent to which it must change if it was to remain a party of government. Nearly a generation of election defeats were needed to produce the changes.

Yes, he loved the old party. But Oscar Wilde wrote that ''each man kills the thing he loves''. And by seeking to preserve old Labour, by cherishing its antique alliances and ideo-

logy, Jim Callaghan killed it.

This is an edited version of Walden on Callaghan, a BBC Education programme which was screened on BBC2.